All right, let's move on. Now. Joining us is John Lee, president and CEO at m k S Instruments. It's a nasdack listed company. He's here to discuss earnings as well as that acquisition of Carlile's Atto Tech. Uh. John, good morning, good evening to you. We want to talk about that acquisition, of course, but of course we're Bloomberg. We need to dig into some of the uh, the issues in the in the supply chain, in the chip industry and the like. On that second quarter earnings call, m KS said it's
still going to be supply constrained throughout the year. Can you give us kind of an update on the supply and backlog situation? How long your chip equipment customers have to wait to get your products now, et cetera. Yeah, sure, and thanks for having us on. We still remain supply chain constrained, um. You know, some of the components that we've seen in the past, electronic components remain constrained. Um.
But I think things are getting a little better. Uh. The industry and a m CAST themselves are handling better with much more collaboration between us and our plot and our customers. So things are gradually getting better, but it still remains a constrained environment. The acquisition of auto Tech, I'm curious about um why and what it brings to you? And then also how what are you expecting from the
integration process? Yes, well, you know, m CASS is a strategy of being a provider of foundational technologies for advanced electronics, next generation electronics. And the best example is your smartphone. And in that smartphone, of course is semic connectors, which are always getting better. But inside as well are all
these other components. And these other components require packaging. And the packaging is where at a Tech plays, So they're the leader in putting the metal interconnects in these packages that allows all these chips to work together. And so with at a Tech and with the legacy m CAST, we believe we are now the broadest supplier enabling the next generation electronics. John, with the US efforts to reshore chip production, how beneficial will that be for your business?
How will your company benefit from the Chips Act? But we certainly will benefit as more fabs get built. But you know, in in the way MCAST looks at it is the fabs that get built no matter where they're built, they're gonna need advanced equipment to make those chips, and m CAST provides of the various components that go into that equipment. So we're really looking at really overall demand of the semi country industry and the fabs that get built.
Certainly having it built in the United States is beneficial, but we really look at where the total number of fabs are being built, regardless of where the geography is. One positive note, I know you spoke to this a little bit, but I wanted to get to this note from Susquehanna Financial Group that chip delivery time so shrank again in August and that that could be a sign that the global shortage of semiconductors is easing further. Can
you shed any light on that, Yeah, that's certainly. You know, we read the same things and we've seen some some of that in our own supply chain. Um, you know, in the semi country industry does go through cycles. Uh In many companys have looked at d RAM being the next area of memory being the next area that might go through kind of a dip. But you know, we've been through this many times in our sixty year history and semic connectors we have a playbook. We know how
to react to it. And actually downturns are great, great times to continue investing in R and D and come out even stronger. A John, your your major customer. Land Research mentioned in its latest learnings called that the US is now forbidding American equipment suppliers to ship equipment that can make fourteen or more advanced chips to China. Do you do you see a big impact from the new US restrictions? Yeah, it's hard to tell. Uh, Certainly, we're going to be abiding by any kind of laws that
the United States puts there. But as I said before, you know, if the equipment doesn't go to China to have the chips built in China, they'll go somewhere else. And as I said, we are going to be the provider for some of that critical technology no matter where that that chip is built. And I'd like to hear a comment just about overall demand. A lot of people are worried about because of what we've seen from semiconductors that it's a kind of a leading indicator on perhaps
the economy turning lower. Do you do you see that? How is your business? Our business remains really strong, actually, and you know, the bookings and the backlob remain very strong. As I said earlier, we're still supply chain constrained. Um, you know, things can change. We read the same things where you know chip demand could be going down. But as I said, we really look at chip demand in the long term and long term semicunter chip demand, I think we could all agree it's a great place to be.
It's it's ubiquitous in all of our lives, and so we're really bullish about the long term transfer semic counter demand. Well, in the next six months or so, we're gonna likely have even higher interest rates and a possible recession. How are you factoring those in? Well, certainly. Uh, you know, we have a playbook if if things do turn down a little bit. We have a variable cost structure. We've done this many times. We watch costs, we uh, we
watch our bookings and very quickly react to that. And so we've done that pretty well over the last sixty years. So the biggest challenge at the moment, then, our biggest challenge is getting parts so we can ship. As I said, yeah, we still supply and constraint all right, John, thanks very much for being with this best of Luck, John Lee, President and CEO at m k S Instruments, discussing m KS earnings and also the acquisition of out of Tech