Kulicke and Soffa Industries Annual Report 2013

FY2013 Annual Report · Kulicke and Soffa Industries

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More than Solutions

Kulicke & Soffa is committed to enabling customer success by
leveraging its optimized business model, strengthening balance sheet and
ongoing investment in Research & Development. This broad strategy is
targeted to deliver continual shareholder value creation.

Enabling Customer Success

450+

Global Research &
Development Team

80%

300+

Engineering Focused on
New Product Development

Global Sales, Service &
Support Team

Optimized Business Model

60%+ 1 Trillion

78%

Market Share in Core
Equipment Markets

Incremental Wires to Be
Bonded in 2014

2013 Bonders Sold
Were Copper Capable

Ongoing Value Creation

30%

$1 Billion+ 21%

Emerging-Market Tablet
CAGR 2013–2015

2014 K&S Core Equipment TAM

Emerging-Market Smart
Phone CAGR 2013–2015

Source(s): Gartner, September 2013; VLSI Research, September 2013; K&S Internal Estimates

KulicKe & Soffa 2013 annual RepoRtKULICKE & SOFFA 2013 FORM 10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended September 28, 2013

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 0-121

KULICKE AND SOFFA INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

PENNSYLVANIA
(State or other jurisdiction of incorporation)

23-1498399
(IRS Employer Identification No.)

6 Serangoon North Avenue 5, #03-16, Singapore

(Address of principal executive offices)

554910

(Zip Code)

(215) 784-7518
(Registrants telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, WITHOUT PAR VALUE
(Title of each class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):

Large accelerated filer

Accelerated filer

Non-accelerated filer
(Do not check if a smaller reporting
company)

Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

As of March 30, 2013, the aggregate market value of the registrant's common stock held by non-affiliates of the registrant was
approximately $869.1 million based on the closing sale price as reported on The NASDAQ Global Market (reference is made to
Part II, Item 5 herein for a statement of assumptions upon which this calculation is based).

As of November 9, 2013 there were 75,969,839 shares of the registrant's common stock, without par value, outstanding.

Documents Incorporated by Reference

Portions of the registrant's Proxy Statement for the 2014 Annual Meeting of Shareholders to be filed on or about January 7,
2014 are incorporated by reference into Part II, Item 5 and Part III, Items 10, 11, 12, 13 and 14 herein of this Report. Such
Proxy Statement, except for the parts therein which have been specifically incorporated by reference, shall not be deemed
“filed” for the purposes of this Report on Form 10-K.

KULICKE AND SOFFA INDUSTRIES, INC.
2013 Annual Report on Form 10-K
September 28, 2013
Index

Page Number

Item 1.

Business

Part I

Item 1A. Risks Related to Our Business and Industry

Item 1B. Unresolved Staff Comments

Item 2.

Properties

Item 3.

Legal Proceedings

Item 4. Mine Safety Disclosures

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities

Part II

Item 6.

Selected Consolidated Financial Data

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Item 8.

Financial Statements and Supplementary Data

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

Item 10. Directors, Executive Officers and Corporate Governance

Part III

Item 11. Executive Compensation

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters

Item 13. Certain Relationships and Related Transactions and Director Independence

Item 14.

Principal Accounting Fees and Services

Item 15. Exhibits and Financial Statement Schedules

Part IV

Signatures

Forward-Looking Statements

PART I

In addition to historical information, this filing contains statements relating to future events or our future results. These statements
are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and are subject to the safe harbor provisions created by statute. Such forward-looking statements include,
but are not limited to, our future revenue, sustained, increasing, continuing or strengthening demand for our products, the continuing
transition from gold to copper wire bonding, replacement demand, our research and development efforts, our ability to identify
and realize new growth opportunities, our ability to control costs and our operational flexibility as a result of (among other factors):

•

projected growth rates in the overall semiconductor industry, the semiconductor assembly equipment
market, and the market for semiconductor packaging materials; and
projected demand for ball, wedge and for expendable tools.

Generally, words such as “may,” “will,” “should,” “could,” “anticipate,” “expect,” “intend,” “estimate,” “plan,” “continue,”
“goal” and “believe,” or the negative of or other variations on these and other similar expressions identify forward-looking
statements. These forward-looking statements are made only as of the date of this filing. We do not undertake to update or revise
the forward-looking statements, whether as a result of new information, future events or otherwise.

Forward-looking statements are based on current expectations and involve risks and uncertainties. Our future results could differ
significantly from those expressed or implied by our forward-looking statements. These risks and uncertainties include, without
limitation, those described below and under the heading “Risk Factors” within this Annual Report on Form 10-K for the fiscal
year ended September 28, 2013 (the “Annual Report”) and our other reports and registration statements filed from time to time
with the Securities and Exchange Commission. This discussion should be read in conjunction with the Consolidated Financial
Statements and Notes included in this report, as well as our audited financial statements included in the Annual Report.

We operate in a rapidly changing and competitive environment. New risks emerge from time to time and it is not possible for us
to predict all risks that may affect us. Future events and actual results, performance and achievements could differ materially from
those set forth in, contemplated by or underlying the forward-looking statements, which speak only as of the date on which they
were made. Except as required by law, we assume no obligation to update or revise any forward-looking statement to reflect actual
results or changes in, or additions to, the factors affecting such forward-looking statements. Given those risks and uncertainties,
investors should not place undue reliance on forward-looking statements as predictions of actual results.

Item 1. BUSINESS

Kulicke and Soffa Industries, Inc. (the "Company" or "K&S") designs, manufactures and sells capital equipment and expendable
tools used to assemble semiconductor devices, including integrated circuits (“ICs”), high and low powered discrete devices, light-
emitting diodes (“LEDs”), and power modules. We also service, maintain, repair and upgrade our equipment. Our customers
primarily consist of semiconductor device manufacturers, outsourced semiconductor assembly and test providers (“OSATs”),
other electronics manufacturers and automotive electronics suppliers.

We operate two main business segments, Equipment and Expendable Tools. Our goal is to be the technology leader and the most
competitive supplier in terms of cost and performance in each of our major product lines. Accordingly, we invest in research and
engineering projects intended to enhance our position at the leading edge of semiconductor assembly technology. We also remain
focused on cost structure through continuing improvements and optimization of our operations. Cost reduction efforts remain an
important part of our normal ongoing operations and are expected to generate savings without compromising overall product
quality and service levels.

K&S was incorporated in Pennsylvania in 1956. Our principal offices are located at 6 Serangoon North Avenue 5, #03-16, Singapore
554910 and our telephone number in the United States is (215) 784-7518. We maintain a website with the address www.kns.com.
We are not including the information contained on our website as a part of, or incorporating it by reference into, this filing. We
make available free of charge (other than an investor's own Internet access charges) on or through our website our annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to these reports, as soon as
reasonably practicable after the material is electronically filed with or otherwise furnished to the Securities and Exchange
Commission (“SEC”). Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to those reports are also available on the SEC website at www.sec.gov and at the SEC's Public Reference Room at
100 F Street, NE, Washington, DC 20549 or by calling the SEC at 1-800-SEC-0330.

Our year end for each of fiscal 2013, 2012 and 2011 was September 28, 2013, September 29, 2012, and October 1, 2011, respectively.

Business Environment

The semiconductor business environment is highly volatile, driven by internal dynamics, both cyclical and seasonal, in addition
to macroeconomic forces. Over the long term, semiconductor consumption has historically grown, and is forecast to continue to
grow. This growth is driven, in part, by regular advances in device performance and by price declines that result from improvements
in manufacturing technology. In order to exploit these trends, semiconductor manufacturers, both integrated device manufacturers
(“IDMs”) and OSATs, periodically invest aggressively in latest generation capital equipment. This buying pattern often leads to
periods of excess supply and reduced capital spending - the so called semiconductor cycle. Within this broad semiconductor cycle
there are also, generally weaker, seasonal effects that are specifically tied to annual, end-consumer purchasing patterns. Typically,
semiconductor manufacturers prepare for heightened demand by adding or replacing equipment capacity by the end of the September
quarter. Occasionally, this results in subsequent reductions in the December quarter. This annual seasonality can occasionally be
overshadowed by effects of the broader semiconductor cycle. Macroeconomic factors also affect the industry, primarily through
their effect on business and consumer demand for electronic devices, as well as other products that have significant electronic
content such as automobiles, white goods, and telecommunication equipment.

Our Equipment segment is primarily affected by the industry's internal cyclical and seasonal dynamics in addition to broader
macroeconomic factors that positively and negatively affect our financial performance. The sales mix of IDM and OSAT customers
in any period also impacts financial performance, as this mix can affect our products' average selling prices and gross margins due
to differences in volume purchases and machine configurations required by each customer type.

Our Expendable Tools segment is less volatile than our Equipment segment. Expendable Tools sales are more directly tied to
semiconductor unit consumption rather than capacity requirements and production capability improvements.

We continue to position our business to leverage our research and development leadership and innovation and to focus our efforts
on mitigating volatility, improving profitability and ensuring longer-term growth. We remain focused on operational excellence,
expanding our product offerings and managing our business efficiently throughout the business cycles. Our visibility into future
demand is generally limited, forecasting is difficult, and we may experience typical industry seasonality.

To limit potential adverse cyclical, seasonal and macroeconomic effects on our financial position, we have de-leveraged and
strengthened our balance sheet. In fiscal 2012, we fully repaid our 0.875% Convertible Subordinated Notes (the “Notes”) with
cash in the principal amount of $110.0 million at maturity. As of September 28, 2013, our total cash, cash equivalents and
investments were $525.0 million, an $84.8 million increase from the prior fiscal year end. We believe this strong cash position
will allow us to continue to invest in organic product development and non-organic opportunities.

Technology Leadership

We compete largely by offering our customers among the most advanced equipment and expendable tools available for the wire
and wedge bonding processes. Our equipment is typically the most productive and has the highest levels of process capability,
and as a result, has a lower cost of ownership compared to other equipment in its market. Our expendable tools are designed to
optimize the performance of the equipment in which they are used. We believe our technology leadership contributes to the leading
market share positions of our various wire bonders and expendable tools products. To maintain our competitive advantage, we
invest in product development activities designed to produce a stream of improvements to existing products and to deliver next-
generation products. These investments often focus as much on improvements in the semiconductor assembly process as on specific
pieces of assembly equipment or expendable tools. In order to generate these improvements, we often work in close collaboration
with customers, end users, and other industry members. In addition to producing technical advances, these collaborative
development efforts strengthen customer relationships and enhance our reputation as a technology leader and solutions provider.

In addition to gold, silver alloy wire and aluminum wire, our leadership in the industry's use of copper wire for the bonding process
is an example of the benefits of our collaborative efforts. By working with customers, material suppliers, and other equipment
suppliers, we have developed a series of robust, high-yielding production processes that have made copper wire commercially
viable, significantly reducing the cost of assembling an integrated circuit. During fiscal 2010, many of our customers began
converting their bonding wire from gold to copper wire, and we believe the conversion was accelerated by fabless companies in
the consumer segment. Gradually, the level of confidence and the reliability of data collected have enabled a larger segment of
the customer base to increase copper capabilities. Since this initial conversion, a majority of our wire bonder sales are copper
capable bonders. We expect this conversion process to continue throughout the industry for the next several years. Based on our
industry leading copper bonding processes and the continued high price of gold, we believe the demand for copper configured
wire bonders is likely to remain robust.

Our leadership has allowed us to maintain a competitive position in the latest generations of gold and copper ball bonders, which
enable our customers to handle the leading technologies in terms of bond pad pitch, silicon with the latest node and complex wire
bonding requirement. We continue to see demand for our large bondable area (“LA”) configured machines. This LA option is
now available on all of our Power Series (“PS”) models and allows our customers to gain added efficiencies and to reduce the cost
of packaging.

We also leverage the technology leadership of our equipment by optimizing our bonder platforms, and we deliver variants of our
products to serve emerging high-growth markets. For example, we have developed extensions of our main ball bonding platforms
to address opportunities in LED assembly, for general lighting in particular. We expect the next wave of growth in the LED market
to be high brightness LED for general lighting. We also see an opportunity in wire bonding at wafer level using our ATPremier
Plus.

Furthermore, we gain synergies by leveraging technologies between our unique platforms. Our leading technology for wedge
bonder equipment uses aluminum ribbon or heavy wire as opposed to fine gold and fine copper wire used in ball bonders. In
March 2013, we launched a new line of high performance wedge bonder products, PowerFusionPS. The advanced interconnect
capabilities of PowerFusionPS improve the processing of high-density power packages, due to an expanded bondable area, wider
leadframe capability, superior indexing accuracy and teach mode. We also intend to initiate design of our next power module
wedge bonder. In both cases, we are making a concerted effort to develop commonality of subsystems and design practices, in
order to improve performance and design efficiencies. We believe this will benefit us in maintaining our leadership position in the
wedge bonding market and increase synergies between the various engineering product groups. Furthermore, we continually
research adjacent market segments where our technologies could be used. Many of these initiatives are in the early stages of
development and may become business opportunities in the future.

Another example of our developing equipment for high-growth niche markets is our ATPremier Plus. This machine utilizes a
modified wire bonding process to mechanically place bumps on devices in a wafer format, for variants of the flip chip assembly
process. Typical applications include complementary metal-oxide semiconductor (“CMOS”) image sensors, surface acoustical
wave (“SAW”) filters and high brightness LEDs. These applications are commonly used in most, if not all, smartphones available
today in the market. We also expanded the use of ATPremier Plus for wafer level wire bonding for micro-electro-mechanical
systems (“MEMS”) and other sensors.

Our technology leadership and bonding process know-how are enabling us to develop highly function-specific equipment with
best-in-class throughput and accuracy. This forms the foundation for our advanced packaging equipment development. We have
established a development team to develop advanced packaging bonders for the emerging three-dimensional integrated circuit
(“3DIC”) market. 3DIC saves space and reduces form factor by stacking separate chips in a single package. It also improves
performance while reducing power consumption. Mobile devices such as smartphones and tablets are the main drivers of this
market.

We bring the same technology focus to our expendable tools business, driving tool design and manufacturing technology to optimize
the performance and process capability of the equipment in which our tools are used. For all our equipment products, expendable
tools are an integral part of their process capability. We believe our unique ability to simultaneously develop both equipment and
tools is a core strength supporting our products' technological differentiation.

Products and Services

The Company operates two segments: Equipment and Expendable Tools. The following table reflects net revenue by business
segment for fiscal 2013, 2012, and 2011:

2013

Fiscal
2012

2011

(dollar amounts in thousands) Net revenues
472,567
Equipment
62,371
Expendable Tools
534,938

% of total
net revenue

Net revenues
727,082
63,941
791,023

88.3% $
11.7%
100.0% $

% of total
net revenue

Net revenues
759,331
71,070
830,401

91.9% $
8.1%
100.0% $

% of total
net revenue

91.4%
8.6%
100.0%

See Note 11 to our Consolidated Financial Statements included in Item 8 of this report for our financial results by business segment.

Equipment Segment

We manufacture and sell a line of ball bonders, heavy wire wedge bonders and wafer level bonders that are sold to semiconductor
device manufacturers, OSATs, other electronics manufacturers and automotive electronics suppliers. Ball bonders are used to
connect very fine wires, typically made of gold or copper, between the bond pads of the semiconductor device, or die, and the
leads on its package. Heavy wire wedge bonders use either aluminum wire or ribbon to perform the same function in packages
that cannot use gold or copper wire because of either high electrical current requirements or other package reliability issues. Wafer
level bonders mechanically apply bumps to die, typically while still in the wafer format, for some variants of the flip chip assembly
process. We believe our equipment offers competitive advantages by providing customers with high productivity/throughput,
superior package quality/process control, and as a result, a lower cost of ownership.

Our principal Equipment segment products include:

Business Unit

Product Name (1)

Typical Served Market

Ball bonders

IConnPS

Advanced and ultra fine pitch applications

IConnPS ProCu

High-end copper wire applications demanding advanced process
capability and high productivity

IConnPS ProCu Plus

High-end copper wire applications demanding advanced process
capability and high productivity

IConnPS ProCu LA

Large area substrate and matrix applications for copper wire

IConnPS ProCu Plus LA

Large area substrate and matrix applications for copper wire

IConnPS LA

Large area substrate and matrix applications

ConnXPS Plus

High productivity bonder for low-to-medium pin count applications

ConnXPS LED

LED applications

ConnXPS VLED

Vertical LED applications

ConnXPS Plus LA

Cost performance large area substrate and matrix applications

AT Premier Plus

Advanced wafer level bonding application

Wedge bonders

3600Plus

Power hybrid and automotive modules using either heavy aluminum wire
or PowerRibbon®

3700Plus

7200Plus

7200HD

Hybrid and automotive modules using thin aluminum wire

Power semiconductors using either aluminum wire or PowerRibbon®

Smaller power packages using either aluminum wire or PowerRibbon®

PowerFusionPS TL

Power semiconductors using either aluminum wire or PowerRibbon®

PowerFusionPS HL

Smaller power packages using either aluminum wire or PowerRibbon®

(1) Power Series (“PS”)

Ball Bonders

Automatic ball bonders represent the largest portion of our semiconductor equipment business. Our main product platform for ball
bonding is the Power Series - a family of assembly equipment that is setting new standards for performance, productivity,
upgradeability, and ease of use. Our Power Series consists of our IConnPS high-performance ball bonders and our ConnXPS cost-
performance ball bonders, both of which can be configured for either gold or copper wire. In addition, targeted specifically at the
fast growing LED market, the Power Series includes our ConnXPS LED and our ConnXPS VLED. Targeted for large bondable area
applications, the Power Series includes our IConnPS LA and ConnXPS LA. In August 2013, we introduced our next generation
IConnPS ProCu Plus and IConnPS ProCu Plus LA, which further improved wire bonding production capability for advanced wafer
nodes at 28 nanometer and below.

• Our Power Series products are setting new standards in wire bonding.

• Our ball bonders are capable of bonding advanced devices with very fine pitch, creating complex loop shapes needed
in the assembly of advanced semiconductor packages as well as bonding on the latest 28 nanometer silicon node.

• Our installed base of gold wire ball bonders can also be retrofitted for copper wire applications with kits, which we sell

separately.

• Our AT Premier Plus machine utilizes a modified wire bonding process to mechanically place bumps on devices, while
still in a wafer format for variants of the flip chip assembly process. Typical applications include CMOS image sensors,
SAW filters, MEMS and high brightness LEDs. These applications are commonly used in most, if not all, smartphones
available today in the market.

Heavy Wire Wedge Bonders

We are the leaders in the design and manufacture of heavy wire wedge bonders for the power semiconductor and automotive power
module markets. Heavy wire wedge bonders may use either aluminum wire or aluminum ribbon to connect semiconductor chips
in power packages, power hybrids and automotive modules for products such as motor control modules or inverters for hybrid
cars. In addition, we see some potential use for our wedge bonder products in select solar applications.

Our portfolio of wedge bonding products includes:

• The 3600Plus: high speed, high accuracy wire bonders designed for power modules, automotive packages and other heavy

wire multi-chip module applications.

• The 3700Plus: wire bonders designed for hybrid and automotive modules using thin aluminum wire.

• The 7200Plus: dual head wedge bonders designed specifically for power semiconductor applications.

• The 7200HD: heavy wire wedge bonders designed for smaller power packages using either aluminum wire or ribbon.

While wedge bonding traditionally utilizes aluminum wire, all of our heavy wire wedge bonders are also available to be modified
to bond aluminum ribbon using our proprietary PowerRibbon® process. Aluminum ribbon offers device makers performance
advantages over traditional round wire and is being increasingly used for high current packages and automotive applications.

In March 2013, we introduced PowerFusionPS, which is driven by new powerful direct-drive motion systems and expanded pattern
recognition capabilities. The advanced interconnect capabilities of PowerFusionPS improves the processing of high-density power
packages, due to an expanded bondable area, wider leadframe capability and superior indexing accuracy and teach mode.

Other Equipment Products and Services

We also sell manual wire bonders, and we offer spare parts, equipment repair, training services, and upgrades for our equipment
through our Support Services business unit.

In September 2012, we introduced a next-generation manual wire bonder series for use with gold, copper or aluminum wire.

In March 2013, we introduced K&S Care, a new professional service, designed to help customers operate their machines at an
optimum level under the care our trained specialists. K&S Care includes a range of programs, offering different levels of service
depending on customer needs.

Expendable Tools Segment

We manufacture and sell a variety of expendable tools for a broad range of semiconductor packaging applications. Our principal
Expendable Tools segment products include:

• Capillaries: expendable tools used in ball bonders. Made of ceramic and other elements, a capillary guides the wire during
the ball bonding process. Its features help control the bonding process. We design and build capillaries suitable for a broad
range of applications, including for use on our competitors' equipment. In addition to capillaries used for gold wire bonding,
we have developed capillaries for use with copper wire to achieve optimal performance in copper wire bonding.

• Bonding wedges: expendable tools used in heavy wire wedge bonders. Like capillaries, their specific features are tailored
to specific applications. We design and build bonding wedges for use both in our own equipment and in our competitors'
equipment.

• Dicing blades: expendable tools used by semiconductor manufacturers to cut silicon wafers into individual semiconductor

die and to cut semiconductor devices that have been moulded in a matrix configuration into individual units.

In March 2013, we introduced the Optoceramic and OptoPCB package singulation blades for the LED market. The blades enable an
improvement on package singulation quality, precision and productivity by providing a significantly longer life blade, and improved
stability.

In August 2013, we introduced ACS Pro Capillary, which is a new generation of copper capillary for advanced copper wire bonding
applications.

Customers

Our major customers include IDMs and OSATs, industrial manufacturers and automotive electronics suppliers. Revenue from our
customers may vary significantly from year-to-year based on their respective capital investments, operating expense budgets, and
overall industry trends.

The following table reflects our top ten customers, based on net revenue, for each of the last three fiscal years:

Fiscal 2013

Fiscal 2012

Fiscal 2011***

1 Siliconware Precision Industries, Ltd. *

1 Advance Semiconductor Engineering *

2 Advance Semiconductor Engineering

2 Siliconware Precision Industries, Ltd. *

2 Siliconware Precision Industries, Ltd.

3 STATS ChipPAC Ltd

3 Haoseng Industrial Co., Ltd. **

3 STATS ChipPAC Ltd

4 Haoseng Industrial Co., Ltd. **

4 Rohm Intergrated Systems

4 First Technology China, Ltd. **

5 Amkor Technology Inc.

6 Rohm Intergrated Systems

5 Amkor Technology Inc.

6 STATS ChipPAC Ltd

5 Haoseng Industrial Co., Ltd. **

6 Samsung

7 Orient Semiconductor Electronics, Ltd.

7 LG Innotek Co. Ltd.

7 ST Microelectronics

8 Super Power International Ltd **

8 First Technology China, Ltd. **

8 Amkor Technology Inc.

9 ST Microelectronics

9 Super Power International Ltd **

9 Rohm Intergrated Systems

10 First Technology China, Ltd. **

10 ST Microelectronics

10 Super Power International Ltd **

* Represents more than 10% of our net revenue for the applicable fiscal year.
** Distributor of our products.
***Updated for finalized data for fiscal 2011.

Approximately 97.3%, 98.3%, and 97.8% of our net revenue for fiscal 2013, 2012, and 2011, respectively, were for shipments to
customer locations outside of the U.S., primarily in the Asia/Pacific region, and we expect sales outside of the U.S. to continue to
represent a substantial majority of our future net revenue.

See Note 11 to our Consolidated Financial Statements included in Item 8 of this report for sales to customers by geographic location.

Sales and Customer Support

We believe long-term customer relationships are critical to our success, and comprehensive sales and customer support are an
important means of establishing those relationships. To maintain these relationships, we primarily utilize our direct sales force, as
well as a number of distribution channels such as agents and distributors, depending on the product, region, or end-user application.
In all cases, our goal is to position our sales and customer support resources near our customers' facilities so as to provide support
for customers in their own language and consistent with local customs. Our sales and customer support resources are located

primarily in Singapore, Taiwan, China, Korea, Malaysia, the Philippines, Japan, Thailand, the U.S., and Germany. Supporting
these local resources, we have technology centers offering additional process expertise in Singapore, China, Israel, and the U.S.

By establishing relationships with semiconductor manufacturers, OSATs, and vertically integrated manufacturers of electronic
systems, we gain insight into our customers' future semiconductor packaging strategies. These insights assist us in our efforts to
develop products and processes that address our customers' future assembly requirements.

Backlog

Our backlog consists of customer orders scheduled for shipment within the next twelve months. A majority of our orders are subject
to cancellation or deferral by our customers with limited or no penalties. Also, customer demand for our products can vary
dramatically without prior notice. Because of the volatility of customer demand, possibility of customer changes in delivery
schedules or cancellations and potential delays in product shipments, our backlog as of any particular date may not be indicative
of net revenue for any succeeding period.

The following table reflects our backlog as of September 28, 2013 and September 29, 2012:

(in thousands)
Backlog

As of

September 28, 2013
52,100

September 29, 2012
90,000

Our net revenues for fiscal 2013 decreased significantly as compared to our net revenues for fiscal 2012 due to reduced customer
demand. The semiconductor industry is volatile and our operating results have fluctuated significantly in the past. Customer
demand for our products could continue to remain weak and lead to a decline in our net revenues. If there is a significant slowdown
of transition from gold to copper wire bonding by our customers, then our net revenues may continue to decline.

Manufacturing

We believe excellence in manufacturing can create a competitive advantage, both by producing at lower costs and by providing
superior responsiveness to changes in customer demand. To achieve these goals, we manage our manufacturing operations through
a single organization and believe that fewer, larger factories allow us to capture economies of scale and generate cost savings
through lower manufacturing costs.

Equipment

Our equipment manufacturing activities consist mainly of integrating outsourced parts and subassemblies and testing finished
products to customer specifications. While we largely utilize an outsource model, allowing us to minimize our fixed costs and
capital expenditures, for certain low-volume, high customization parts, we manufacture subassemblies ourselves. Just-in-time
inventory management has reduced our manufacturing cycle times and lowered our on-hand inventory requirements. Raw materials
used in our equipment manufacturing are generally available from multiple sources; however, many outsourced parts and
components are only available from a single or limited number of sources.

Our ball bonder and wedge bonder manufacturing and assembly is done at our facility in Singapore. We have ISO 9001 and ISO
14001 certifications for our equipment manufacturing facilities in Singapore.

Expendable Tools

We manufacture saw blades, capillaries and a portion of our bonding wedge inventory at our facility in Suzhou, China. The
capillaries are made using blanks produced at our facility in Yokneam, Israel. We both produce and outsource the production of
our bonding wedges. Both the Suzhou and Yokneam facilities are ISO 9001 certified. The Suzhou facility is also ISO 14001 and
ISO 18001 certified.

Research and Product Development

Many of our customers generate technology roadmaps describing their projected packaging technology requirements. Our research
and product development activities are focused on delivering robust production solutions to those projected requirements. We
accomplish this by regularly introducing improved versions of existing products or by developing next-generation products. We
follow this product development methodology in all our major product lines. Research and development expense was $61.6 million,
$63.4 million, and $65.1 million during fiscal 2013, 2012, and 2011, respectively.

Intellectual Property

Where circumstances warrant, we apply for patents on inventions governing new products and processes developed as part of our
ongoing research, engineering, and manufacturing activities. We currently hold a number of U.S. patents, many of which have
foreign counterparts. We believe the duration of our patents often exceeds the life cycles of the technologies disclosed and claimed
in the patents. Additionally, we believe much of our important technology resides in our trade secrets and proprietary software.

Competition

The market for semiconductor equipment and packaging materials products is intensely competitive. Significant competitive
factors in the semiconductor equipment market include price, speed/throughput, production yield, process control, delivery time
and customer support, each of which contribute to lower the overall cost per package being manufactured. Our major equipment
competitors include:

• Ball bonders: ASM Pacific Technology and Shinkawa

• Wedge bonders: ASM Pacific Technology, Cho-Onpa, F&K Delvotec, and Hesse Mechatronics

Significant competitive factors in the semiconductor packaging materials industry include performance, price, delivery, product
life, and quality. Our significant expendable tools competitors include:

• Capillaries: PECO, Small Precision Tools, Inc., and Coorstek (formerly Gaiser)
• Saw blades: Disco Corporation

• Bonding wedges: Small Precision Tools, Inc.

In each of the markets we serve, we face competition and the threat of competition from established competitors and potential
new entrants, some of which may have greater financial, engineering, manufacturing, and marketing resources.

Environmental Matters

We are subject to various federal, state, local and foreign laws and regulations governing, among other things, the generation,
storage, use, emission, discharge, transportation and disposal of hazardous materials and the health and safety of our employees.
In addition, we are subject to environmental laws which may require investigation and cleanup of any contamination at facilities
we own or operate or at third-party waste disposal sites we use or have used.

We have incurred in the past, and expect in the future to incur costs to comply with environmental laws. We are not, however,
currently aware of any material costs or liabilities relating to environmental matters, including any claims or actions under
environmental laws or obligations to perform any cleanups at any of our facilities or any third-party waste disposal sites, that we
expect to have a material adverse effect on our business, financial condition or operating results. However, it is possible that
material environmental costs or liabilities may arise in the future.

Business Continuity Management Plan

We have developed and implemented a global Business Continuity Management Plan ("Plan") for our business operations. The
Plan is designed to facilitate the prompt resumption of our business operations and functions arising from an event which impacts
or potentially impacts our business operations. As the scale, timing, and impact of disasters and disruptions are unpredictable, the
Plan has been designed to be flexible in responding to actual events as they occur. The Plan provides a structured framework for
safeguarding our employees and property, making a financial and operational assessment, protecting our books and records,
perpetuating critical business functions, and enabling the continuation of customer transactions.

Employees

As of September 28, 2013, we had approximately 1,914 regular full-time employees and 250 temporary workers worldwide.

Item 1A. RISKS RELATED TO OUR BUSINESS AND INDUSTRY

Our operating results and financial condition are adversely impacted by volatile worldwide economic conditions.

Though the semiconductor industry's cycle can be independent of the general economy, global economic conditions may have
direct impact on demand for semiconductor units and ultimately demand for semiconductor capital equipment and expendable
tools. Accordingly, our business and financial performance is impacted, both positively and negatively, by fluctuations in the
macroeconomic environment. Our visibility into future demand is generally limited and forecasting is difficult. There can be no
assurances regarding levels of demand for our products and we believe historic industry-wide volatility will persist.

Unpredictable corporate spending due to uncertainties in the macroeconomic environment could adversely affect our net
revenue and profitability.

We depend upon demand from our customers including IDMs and OSATs, industrial manufacturers and automotive electronics
suppliers. Our net revenue and profitability is based upon corporate spending. Reductions or other fluctuations in corporate spending
as a result of uncertain conditions in the macroeconomic environment, such as government economic or fiscal instability, restricted
global credit conditions, reduced demand, unbalanced inventory levels, fluctuations in interest rates, higher energy prices, or other
conditions, could adversely affect our net revenue and profitability. The impact of general economic slowdowns could make our
customers cautious and delay orders until the current economic environment becomes clearer.

The semiconductor industry is volatile with sharp periodic downturns and slowdowns. Cyclical industry downturns are made
worse by volatile global economic conditions.

Our operating results are significantly affected by the capital expenditures of semiconductor manufacturers, both IDMs and OSATs.
Expenditures by our customers depend on the current and anticipated market demand for semiconductors and products that use
semiconductors, including mobile devices, personal computers, consumer electronics, telecommunications equipment, automotive
goods and other industrial products. Significant downturns in the market for semiconductor devices or in general economic
conditions reduce demand for our products and can materially and adversely affect our business, financial condition and operating
results.

The semiconductor industry is volatile, with periods of rapid growth followed by industry-wide retrenchment. These periodic
downturns and slowdowns have adversely affected our business, financial condition and operating results. Downturns have been
characterized by, among other things, diminished product demand, excess production capacity, and accelerated erosion of selling
prices. Historically these downturns have severely and negatively affected the industry's demand for capital equipment, including
assembly equipment and, to a lesser extent, expendable tools. There can be no assurances regarding levels of demand for our
products. In any case, we believe the historical volatility of our business, both upward and downward, will persist.

We may experience increasing price pressure.

Typically our average selling prices have declined over time. We seek to offset this decline by continually reducing our cost structure
by consolidating operations in lower cost areas, reducing other operating costs, and by pursuing product strategies focused on
product performance and customer service. These efforts may not be able to fully offset price declines; therefore, our financial
condition and operating results may be materially and adversely affected.

Our quarterly operating results fluctuate significantly and may continue to do so in the future.

In the past, our quarterly operating results have fluctuated significantly. We expect quarterly results will continue to fluctuate.
Although these fluctuations are partly due to the cyclical and volatile nature of the semiconductor industry, they also reflect other
factors, many of which are outside of our control.

Some of the factors that may cause our net revenue and operating margins to fluctuate significantly from period to period are:

• market downturns;

•

industry inventory level;

the mix of products we sell because, for example:

certain lines of equipment within our business segments are more profitable than others; and
some sales arrangements have higher gross margins than others;

cancelled or deferred orders;

seasonality;

competitive pricing pressures may force us to reduce prices;

•
•
•

•

higher than anticipated costs of development or production of new equipment models;
the availability and cost of the components for our products;
delays in the development and manufacture of our new products and upgraded versions of our products and market
acceptance of these products when introduced;

customers' delay in purchasing our products due to anticipation that we or our competitors may introduce new or upgraded
products; and

our competitors' introduction of new products.

Many of our expenses, such as research and development, selling, general and administrative expenses, and interest expense, do
not vary directly with our net revenue. Our research and development efforts include long-term projects lasting a year or more,
which require significant investments. In order to realize the benefits of these projects, we believe that we must continue to fund
them during periods when our revenue has declined. As a result, a decline in our net revenue would adversely affect our operating
results as we continue to make these expenditures. In addition, if we were to incur additional expenses in a quarter in which we
did not experience comparable increased net revenue, our operating results would decline. In a downturn, we may have excess
inventory, which could be written off. Some of the other factors that may cause our expenses to fluctuate from period-to-period
include:

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•
•

•

timing and extent of our research and development efforts;

severance, restructuring, and other costs of relocating facilities;
inventory write-offs due to obsolescence; and

an increase in the cost of labor or materials.

Because our net revenue and operating results are volatile and difficult to predict, we believe consecutive period-to-period
comparisons of our operating results may not be a good indication of our future performance.

We may not be able to rapidly develop, manufacture and gain market acceptance of new and enhanced products required to
maintain or expand our business.

We believe our continued success depends on our ability to continuously develop and manufacture new products and product
enhancements on a timely and cost-effective basis. We must introduce these products and product enhancements into the market
in a timely manner in response to customers' demands for higher performance assembly equipment and leading-edge materials
customized to address rapid technological advances in integrated circuits, and capital equipment designs. Our competitors may
develop new products or enhancements to their products that offer improved performance and features, or lower prices which may
render our products less competitive. The development and commercialization of new products requires significant capital
expenditures over an extended period of time, and some products we seek to develop may never become profitable. In addition,
we may not be able to develop and introduce products incorporating new technologies in a timely manner that will satisfy our
customers' future needs or achieve market acceptance.

The pace of transition from gold to copper wire bonding by our customers and the industry may slowdown.

Beginning in fiscal 2010, many of our customers began converting their bonding wire from gold to copper wire. Since this initial
conversion, a majority of our wire bonder sales are copper capable bonders. In fiscal 2013, 78% of total ball bonders sold by the
Company were copper capable bonders. If the pace of transition from gold to copper wire bonding by our customers slows down
or customers transition away from copper wire bonding, there may be a reduced demand for our wire bonders and our financial
condition and operating results may be materially and adversely affected.

Substantially all of our sales and manufacturing operations are located outside of the U.S., and we rely on independent foreign
distribution channels for certain product lines, all of which subject us to risks, including risks from changes in trade regulations,
currency fluctuations, political instability and war.

Approximately 97.3%, 98.3%, and 97.8% of our net revenue for fiscal 2013, 2012, and 2011, respectively, were for shipments to
customers located outside of the U.S., primarily in the Asia/Pacific region. Our future performance will depend on our ability to
continue to compete in foreign markets, particularly in the Asia/Pacific region. Some of these economies have been highly volatile,
resulting in significant fluctuation in local currencies, and political and economic instability. These conditions may continue or
worsen, which may materially and adversely affect our business, financial condition and operating results.

We also rely on non-U.S. suppliers for materials and components used in our products, and substantially all of our manufacturing
operations are located in countries other than the U.S. We manufacture our ball and wedge bonders in Singapore, our saw blades,
capillaries and bonding wedges in China and capillary blanks in Israel. In addition, our corporate headquarters is in Singapore and

we have sales, service and support personnel in China, Israel, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand,
the U.S. and Germany. We also rely on independent foreign distribution channels for certain of our product lines. As a result, a
major portion of our business is subject to the risks associated with international, and particularly Asia/Pacific, commerce, such
as:

•

•
•

•

risks of war and civil disturbances or other events that may limit or disrupt manufacturing and markets;

seizure of our foreign assets, including cash;

longer payment cycles in foreign markets;

foreign exchange restrictions and capital controls;

restrictions on the repatriation of our assets, including cash;

significant foreign and U.S. taxes on repatriated cash;

difficulties of staffing and managing dispersed international operations;

possible disagreements with tax authorities;

episodic events outside our control such as, for example, outbreaks of influenza;

natural disasters such as earthquakes, fires or floods;

tariff and currency fluctuations;

changing political conditions;
labor work stoppages and strikes in our factories or the factories of our suppliers;

foreign governments' monetary policies and regulatory requirements;

less protective foreign intellectual property laws; and

legal systems which are less developed and may be less predictable than those in the U.S.

In addition, there is a potential risk of conflict and instability in the relationship between Taiwan and China. Conflict or instability
could disrupt the operations of our customers and/or suppliers in both Taiwan and China. Additionally, our manufacturing operations
in China could be disrupted by any conflict.

Our international operations also depend upon favorable trade relations between the U.S. and those foreign countries in which our
customers, subcontractors and materials suppliers have operations. A protectionist trade environment in either the U.S. or those
foreign countries in which we do business, such as a change in the current tariff structures, export compliance or other trade policies,
may materially and adversely affect our ability to sell our products in foreign markets.

Increased labor costs and competition for qualified personnel may reduce the efficiency of our flexible manufacturing model
and adversely impact our operating results.

There is some uncertainty with respect to the pace of rising labor costs in the various countries in which we operate. In addition,
there is substantial competition in China and Singapore for qualified and capable personnel, which may make it difficult for us to
recruit and retain qualified employees. If we are unable to staff sufficient personnel at our China and Singapore facilities or if there
are increases in labor costs that we are unable to recover in our pricing to our customers, we may experience increased manufacturing
costs, which would adversely affect our operating results.

We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.

Because most of our foreign sales are denominated in U.S. dollars, an increase in value of the U.S. dollar against foreign currencies
will make our products more expensive than those offered by some of our foreign competitors. In addition, a weakening of the
U.S. dollar against foreign currencies could make our costs in non-U.S. locations more expensive to fund. Our ability to compete
overseas may be materially and adversely affected by a strengthening of the U.S. dollar against foreign currencies.

Because nearly all of our business is conducted outside the U.S., we face exposure to adverse movements in foreign currency
exchange rates which could have a material adverse impact on our financial results and cash flows. Historically, our primary
exposures have related to net working capital exposures denominated in currencies other than the foreign subsidiaries' functional
currency, and remeasurement of our foreign subsidiaries' net monetary assets from the subsidiaries' local currency into the
subsidiaries' functional currency. In general, an increase in the value of the U.S. dollar could require certain of our foreign subsidiaries
to record translation and remeasurement gains. Conversely, a decrease in the value of the U.S. dollar could require certain of our
foreign subsidiaries to record losses on translation and remeasurement. An increase in the value of the U.S. dollar could increase
the cost to our customers of our products in those markets outside the U.S. where we sell in U.S. dollars, and a weakened U.S.
dollar could increase the cost of local operating expenses and procurement of raw materials, both of which could have an adverse

effect on our cash flows. Our primary exposures include the Singapore Dollar, Chinese Yuan, Japanese Yen, Malaysian Ringgit,
Swiss Franc, Philippine Peso, Taiwan Dollar, South Korean Won, Israeli Shekel and Euro. We have not entered into foreign
exchange forward contracts but may enter into foreign exchange forward contracts or other instruments in the future. Our attempts
to hedge against these risks may not be successful and may result in a material adverse impact on our financial results and cash
flows.

We may not be able to consolidate manufacturing and other facilities without incurring unanticipated costs and disruptions to
our business.

As part of our ongoing efforts to drive further efficiency, we may consolidate other manufacturing facilities. Should we consolidate,
we may experience unanticipated events, including the actions of governments, suppliers, employees or customers, which may
result in unanticipated costs and disruptions to our business.

Our business depends on attracting and retaining management, marketing and technical employees as well as on the succession
of senior management.

Our future success depends on our ability to hire and retain qualified management, marketing, finance, accounting and technical
employees, including senior management. Experienced personnel with the relevant and necessary skill sets in our industry are in
high demand and competition for their talents is intense, especially in Asia, where most of the Company’s key personnel are located.
If we are unable to continue to attract and retain the managerial, marketing, finance, accounting and technical personnel we require,
and if we are unable to effectively provide for the succession of senior management, our business, financial condition and operating
results may be materially and adversely affected.

Difficulties in forecasting demand for our product lines may lead to periodic inventory shortages or excesses.

We typically operate our business with limited visibility of future demand. As a result, we sometimes experience inventory shortages
or excesses. We generally order supplies and otherwise plan our production based on internal forecasts for demand. We have in
the past failed, and may again in the future fail, to accurately forecast demand for our products. This has led to, and may in the
future lead to, delays in product shipments or, alternatively, an increased risk of inventory obsolescence. If we fail to accurately
forecast demand for our products, our business, financial condition and operating results may be materially and adversely affected.

Alternative packaging technologies may render some of our products obsolete and materially and adversely affect our overall
business and financial results.

Alternative packaging technologies have emerged that may improve device performance or reduce the size of an integrated circuit
package, as compared to traditional wire bonding. These technologies include flip chip and wafer level packaging. Some of these
alternative technologies eliminate the need for wires to establish the electrical connection between a die and its package. The
semiconductor industry may, in the future, shift a significant part of its volume into alternative packaging technologies, such as
those discussed above, which do not employ our products. If a significant shift to alternative packaging technologies were to occur,
demand for our equipment and related packaging materials may be materially and adversely affected. Given the lack of a significant
alternate revenue stream other than wire bonding, a reduced demand for our equipment could materially and adversely affect our
financial results.

Because a small number of customers account for most of our sales, our net revenue could decline if we lose a significant
customer.

The semiconductor manufacturing industry is highly concentrated, with a relatively small number of large semiconductor
manufacturers and their subcontract assemblers and vertically integrated manufacturers of electronic systems purchasing a
substantial portion of our semiconductor assembly equipment and packaging materials. Sales to a relatively small number of
customers account for a significant percentage of our net revenue. Sales to our largest customers, defined as more than 10% of
our net revenue, was 11.0%, 37.3%, and 21.8%, for fiscal 2013, 2012, and 2011, respectively.

We expect a small number of customers will continue to account for a high percentage of our net revenue for the foreseeable future.
Thus, our business success depends on our ability to maintain strong relationships with our customers. Any one of a number of
factors could adversely affect these relationships. If, for example, during periods of escalating demand for our equipment, we were
unable to add inventory and production capacity quickly enough to meet the needs of our customers, they may turn to other suppliers
making it more difficult for us to retain their business. Similarly, if we are unable for any other reason to meet production or
delivery schedules, particularly during a period of escalating demand, our relationships with our key customers could be adversely
affected. If we lose orders from a significant customer, or if a significant customer reduces its orders substantially, these losses or
reductions may materially and adversely affect our business, financial condition and operating results.

We maintain a backlog of customer orders that is subject to cancellation, reduction or delay in delivery schedules, which
may result in lower than expected revenues.

We manufacture products primarily pursuant to purchase orders for current delivery or to forecast, rather than pursuant to long-
term supply contracts. The semiconductor industry is occasionally subject to double-booking and rapid changes in customer
outlooks or unexpected build ups of inventory in the supply channel as a result of shifts in end market demand and macro-economic
conditions. Accordingly, many of these purchase orders or forecasts may be revised or canceled without penalty. As a result, we
must commit resources to the manufacture of products without binding purchase commitments from customers. Even in cases
where our standard terms and conditions of sale or other contractual arrangements do not permit a customer to cancel an order
without penalty, we may from time to time accept cancellations to maintain customer relationships or because of industry practice,
custom or other factors. Our inability to sell products after we devote significant resources to them could have a material adverse
effect on both our levels of inventory and revenues. While we currently believe our inventory levels are appropriate for the current
economic environment, continued global economic uncertainty may result in lower than expected demand.

Undetected problems in our products could directly impair our financial results.

If flaws in design, production, assembly or testing of our products (by us or our suppliers) were to occur, we could experience a
rate of failure in our products that would result in substantial repair, replacement or service costs and potential damage to our
reputation. Continued improvement in manufacturing capabilities, control of material and manufacturing quality and costs and
product testing are critical factors in our future growth. There can be no assurance that our efforts to monitor, develop, modify and
implement appropriate tests and manufacturing processes for our products will be sufficient to permit us to avoid a rate of failure
in our products that results in substantial delays in shipment, significant repair or replacement costs or potential damage to our
reputation, any of which could have a material adverse effect on our business, results of operations or financial condition.

Costs related to product defect and errata may harm our results of operations and business.

Costs of product defects and errata (deviations from product specifications) due to, for example, problems in our design and
manufacturing processes, could include:

•

writing off the value of inventory;

disposing of products that cannot be fixed;

retrofitting products that have been shipped;

providing product replacements or modifications; and

defending against litigation.

These costs could be large and may increase expenses and lower gross margin. Our reputation with customers or end users could
be damaged as a result of product defects and errata, and product demand could be reduced. These factors could harm our business
and financial results.

We depend on our suppliers, including sole source suppliers, for critical raw materials, components and subassemblies. If our
suppliers do not deliver their products to us, we would be unable to deliver our products to our customers.

Our products are complex and require raw materials, components and subassemblies having a high degree of reliability, accuracy
and performance. We rely on subcontractors to manufacture many of these components and subassemblies and we rely on sole
source suppliers for many components and raw materials. As a result, we are exposed to a number of significant risks, including:

•

decreased control over the manufacturing process for components and subassemblies;

changes in our manufacturing processes, in response to changes in the market, which may delay our shipments;

our inadvertent use of defective or contaminated raw materials;

the relatively small operations and limited manufacturing resources of some of our suppliers, which may limit their
ability to manufacture and sell subassemblies, components or parts in the volumes we require and at acceptable quality
levels and prices;

the inability of suppliers to meet customer demand requirements during volatile cycles;

the reliability or quality issues with certain key subassemblies provided by single source suppliers as to which we may
not have any short term alternative;

•

shortages caused by disruptions at our suppliers and subcontractors for a variety of reasons, including work stoppage or
fire, earthquake, flooding or other natural disasters;

delays in the delivery of raw materials or subassemblies, which, in turn, may delay shipments to our customers;

loss of suppliers as a result of consolidation of suppliers in the industry; and

loss of suppliers because of their bankruptcy or insolvency.

If we are unable to deliver products to our customers on time for these or any other reasons, or we are unable to meet customer
expectations as to cycle time, or we are unable to maintain acceptable product quality or reliability, our business, financial condition
and operating results may be materially and adversely affected.

New regulations related to “conflict minerals” may force us to incur additional expenses, may make our supply chain more
complex and may result in damage to our reputation with customers.

On August 22, 2012, under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act,
the SEC adopted new requirements for companies that use certain minerals and metals, known as conflict minerals, in their products,
whether or not these products are manufactured by third parties. These requirements will require companies to conduct due
diligence and disclose whether or not such minerals originate from the Democratic Republic of Congo and adjoining countries.
The implementation of these new requirements could adversely affect the sourcing, availability and pricing of minerals used in
the manufacture of semiconductor devices, including our products. In addition, we will incur additional costs to comply with the
disclosure requirements, including costs related to determining the source of any of the relevant minerals and metals used in our
products. Since our supply chain is complex, we may not be able to sufficiently verify the origins for these minerals and metals
used in our products through the due diligence procedures that we implement, which may harm our reputation. In such event, we
may also face difficulties in satisfying customers who require that all of the components of our products are certified as conflict
mineral free.

We may acquire or divest businesses or enter into joint ventures or strategic alliances, which may materially affect our business,
financial condition and operating results.

We continually evaluate our portfolio of businesses and may decide to buy or sell businesses or enter into joint ventures or other
strategic alliances. We may be unable to successfully integrate acquired businesses with our existing businesses and successfully
implement, improve and expand our systems, procedures and controls to accommodate these acquisitions. These transactions place
additional constraints on our management and current labor force. Additionally, these transactions require significant resources
from our legal, finance and business teams. In addition, we may divest existing businesses, which would cause a decline in revenue
and may make our financial results more volatile. If we fail to integrate and manage acquired businesses successfully or to manage
the risks associated with divestitures, joint ventures or other alliances, our business, financial condition and operating results may
be materially and adversely affected.

The market price of our common shares and our earnings per share may decline as a result of any acquisitions or divestitures.

The market price of our common shares may decline as a result of any acquisitions or divestitures made by us if we do not achieve
the perceived benefits of such acquisitions or divestitures as rapidly or to the extent anticipated by financial or industry analysts
or if the effect on our financial results is not consistent with the expectations of financial or industry analysts. In addition, the
failure to achieve expected benefits and unanticipated costs relating to our acquisitions could reduce our future earnings per share.

We may be unable to continue to compete successfully in the highly competitive semiconductor equipment and packaging
materials industries.

The semiconductor equipment and packaging materials industries are very competitive. In the semiconductor equipment industry,
significant competitive factors include performance, quality, customer support and price. In the semiconductor packaging materials
industry, competitive factors include price, delivery and quality.

In each of our markets, we face competition and the threat of competition from established competitors and potential new entrants.
In addition, established competitors may combine to form larger, better capitalized companies. Some of our competitors have or
may have significantly greater financial, engineering, manufacturing and marketing resources. Some of these competitors are Asian
and European companies that have had, and may continue to have, an advantage over us in supplying products to local customers
who appear to prefer to purchase from local suppliers, without regard to other considerations.

We expect our competitors to improve their current products' performance, and to introduce new products and materials with
improved price and performance characteristics. Our competitors may independently develop technology similar to or better than
ours. New product and material introductions by our competitors or by new market entrants could hurt our sales. If a particular

semiconductor manufacturer or subcontract assembler selects a competitor's product or materials for a particular assembly operation,
we may not be able to sell products or materials to that manufacturer or assembler for a significant period of time. Manufacturers
and assemblers sometimes develop lasting relationships with suppliers and assembly equipment providers in our industry and
often go years without requiring replacement. In addition, we may have to lower our prices in response to price cuts by our
competitors, which may materially and adversely affect our business, financial condition and operating results. If we cannot
compete successfully, we could be forced to reduce prices and could lose customers and experience reduced margins and
profitability.

Our success depends in part on our intellectual property, which we may be unable to protect.

Our success depends in part on our proprietary technology. To protect this technology, we rely principally on contractual restrictions
(such as nondisclosure and confidentiality provisions) in our agreements with employees, subcontractors, vendors, consultants
and customers and on the common law of trade secrets and proprietary “know-how.” We also rely, in some cases, on patent and
copyright protection. We may not be successful in protecting our technology for a number of reasons, including the following:

•

employees, subcontractors, vendors, consultants and customers may violate their contractual agreements, and the cost of
enforcing those agreements may be prohibitive, or those agreements may be unenforceable or more limited than we
anticipate;

foreign intellectual property laws may not adequately protect our intellectual property rights; and

our patent and copyright claims may not be sufficiently broad to effectively protect our technology; our patents or copyrights
may be challenged, invalidated or circumvented; or we may otherwise be unable to obtain adequate protection for our
technology.

In addition, our partners and alliances may have rights to technology developed by us. We may incur significant expense to protect
or enforce our intellectual property rights. If we are unable to protect our intellectual property rights, our competitive position may
be weakened.

Third parties may claim we are infringing on their intellectual property, which could cause us to incur significant litigation
costs or other expenses, or prevent us from selling some of our products.

The semiconductor industry is characterized by rapid technological change, with frequent introductions of new products and
technologies. Industry participants often develop products and features similar to those introduced by others, creating a risk that
their products and processes may give rise to claims they infringe on the intellectual property of others. We may unknowingly
infringe on the intellectual property rights of others and incur significant liability for that infringement. If we are found to have
infringed on the intellectual property rights of others, we could be enjoined from continuing to manufacture, market or use the
affected product, or be required to obtain a license to continue manufacturing or using the affected product. A license could be
very expensive to obtain or may not be available at all. Similarly, changing or re-engineering our products or processes to avoid
infringing the rights of others may be costly, impractical or time consuming.

Occasionally, third parties assert that we are, or may be, infringing on or misappropriating their intellectual property rights. In
these cases, we defend, and will continue to defend, against claims or negotiate licenses where we consider these actions appropriate.
Intellectual property cases are uncertain and involve complex legal and factual questions. If we become involved in this type of
litigation, it could consume significant resources and divert our attention from our business.

We may be materially and adversely affected by environmental and safety laws and regulations.

We are subject to various federal, state, local and foreign laws and regulations governing, among other things, the generation,
storage, use, emission, discharge, transportation and disposal of hazardous material, investigation and remediation of contaminated
sites and the health and safety of our employees. Increasingly, public attention has focused on the environmental impact of
manufacturing operations and the risk to neighbors of chemical releases from such operations.

Proper waste disposal plays an important role in the operation of our manufacturing plants. In many of our facilities we maintain
wastewater treatment systems that remove metals and other contaminants from process wastewater. These facilities operate under
permits that must be renewed periodically. A violation of those permits may lead to revocation of the permits, fines, penalties or
the incurrence of capital or other costs to comply with the permits, including potential shutdown of operations.

Compliance with existing or future, land use, environmental and health and safety laws and regulations may: (1) result in significant
costs to us for additional capital equipment or other process requirements, (2) restrict our ability to expand our operations and/or
(3) cause us to curtail our operations. We also could incur significant costs, including cleanup costs, fines or other sanctions and
third-party claims for property damage or personal injury, as a result of violations of or liabilities under such laws and regulations.

Any costs or liabilities to comply with or imposed under these laws and regulations could materially and adversely affect our
business, financial condition and operating results.

We have the ability to issue additional equity securities, which would lead to dilution of our issued and outstanding common
shares.

The issuance of additional equity securities or securities convertible into equity securities will result in dilution of our existing
shareholders' equity interests in us. Our board of directors has the authority to issue, without vote or action of shareholders, preferred
shares in one or more series, and has the ability to fix the rights, preferences, privileges and restrictions of any such series. Any
such series of preferred shares could contain dividend rights, conversion rights, voting rights, terms of redemption, redemption
prices, liquidation preferences or other rights superior to the rights of holders of our common shares. In addition, we are authorized
to issue, without shareholder approval, up to an aggregate of 200 million common shares, of which approximately 75.3 million
shares were outstanding as of September 28, 2013. We are also authorized to issue, without shareholder approval, securities
convertible into either common shares or preferred shares.

Weaknesses in our internal controls and procedures could result in material misstatements in our financial statements.

Pursuant to the Sarbanes-Oxley Act, management is responsible for establishing and maintaining adequate internal control over
financial reporting. Our internal controls over financial reporting are processes designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements in accordance with U.S. generally accepted
accounting principles. A material weakness is a control deficiency, or combination of control deficiencies, that results in a more
than remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected.

Our internal controls may not prevent all potential errors or fraud. Any control system, no matter how well designed and
implemented, can only provide reasonable and not absolute assurance that the objectives of the control system will be achieved.
We or our independent registered public accountants may identify material weaknesses in our internal controls which could
adversely affect our ability to ensure proper financial reporting and could affect investor confidence in us and the price of our
common shares.

We may be subject to disruptions or failures in our information technology systems and network infrastructures that could
have a material adverse effect on us.

We maintain and rely extensively on information technology systems and network infrastructures for the effective operation of
our business. We also hold large amounts of data in data center facilities around the world, primarily in Singapore and the U.S.,
which our business depends upon. A disruption, infiltration or failure of our information technology systems or any of our data
centers as a result of software or hardware malfunctions, computer viruses, cyber-attacks, employee theft or misuse, power
disruptions, natural disasters or accidents could cause breaches of data security and loss of critical data, which in turn could
materially adversely affect our business. Our security procedures, such as virus protection software and our business continuity
planning, such as our disaster recovery policies and back-up systems, may not be adequate or implemented properly to fully address
the adverse effect of such events, which could adversely impact our operations. In addition, our business could be adversely affected
to the extent we do not make the appropriate level of investment in our technology systems as our technology systems become
out-of-date or obsolete and are not able to deliver the type of data integrity and reporting we need to run our business. Furthermore,
when we implement new systems and or upgrade existing systems, we could be faced with temporary or prolonged disruptions
that could adversely affect our business.

Other Risks

Our ability to recognize tax benefits on future domestic U.S. tax losses and our existing U.S. net operating loss position may
be limited.

We have generated net operating loss carry-forwards and other tax attributes for U.S. tax purposes (“Tax Benefits”) that can be
used to reduce our future federal income tax obligations. Under the Tax Reform Act of 1986, the potential future utilization of our
Tax Benefits for U.S. tax purposes may be limited following an ownership change. An ownership change is generally defined as
a greater than 50% point increase in equity ownership by 5% shareholders in any three-year period under Section 382 of the Internal
Revenue Code. An ownership change may significantly limit our ability to fully utilize our net operating losses which could
materially and adversely affect our financial condition and operating results. As of September 28, 2013, we have foreign net
operating loss carryforwards of $80.6 million, domestic state net operating loss carryforwards of $200.2 million, and tax credit
carryforwards of $1.6 million.

Potential changes to U.S. and foreign tax laws could increase our income tax expense.

We are subject to income taxes in the U. S. and many foreign jurisdictions. There have been proposals to reform U.S. tax laws that
would significantly impact how U.S. multinational corporations, such as us, are taxed on foreign earnings. It is unclear whether
these proposed tax revisions will be enacted, or, if enacted, what the scope of the revisions will be. Changes in U.S. and foreign
tax laws, if enacted, could materially and adversely affect our financial condition and operating results.

Anti-takeover provisions in our articles of incorporation and bylaws, and under Pennsylvania law may discourage other
companies from attempting to acquire us.

Some provisions of our articles of incorporation and bylaws as well as Pennsylvania law may discourage some transactions where
we would otherwise experience a fundamental change. For example, our articles of incorporation and bylaws contain provisions
that:

•

classify our board of directors into four classes, with one class being elected each year;

permit our board to issue “blank check” preferred shares without shareholder approval; and

prohibit us from engaging in some types of business combinations with a holder of 20% or more of our voting securities
without super-majority board or shareholder approval.

Further, under the Pennsylvania Business Corporation Law, because our shareholders approved bylaw provisions that provide for
a classified board of directors, shareholders may remove directors only for cause. These provisions and some other provisions of
the Pennsylvania Business Corporation Law could delay, defer or prevent us from experiencing a fundamental change and may
adversely affect our common shareholders' voting and other rights.

Terrorist attacks, or other acts of violence or war may affect the markets in which we operate and our profitability.

Terrorist attacks may negatively affect our operations. There can be no assurance that there will not be further terrorist attacks
against the U.S. or U.S. businesses. Terrorist attacks or armed conflicts may directly impact our physical facilities or those of our
suppliers or customers. Our primary facilities include administrative, sales and research and development facilities in Singapore
and the U.S. and manufacturing and research and development facilities in China, and Israel. Additional terrorist attacks may
disrupt the global insurance and reinsurance industries with the result that we may not be able to obtain insurance at historical
terms and levels for all of our facilities. Furthermore, additional attacks may make travel and the transportation of our supplies
and products more difficult and more expensive and ultimately affect the sales of our products in the U.S. and overseas. Additional
attacks or any broader conflict, could negatively impact our domestic and international sales, our supply chain, our production
capability and our ability to deliver products to our customers. Political and economic instability in some regions of the world
could negatively impact our business. The consequences of terrorist attacks or armed conflicts are unpredictable, and we may not
be able to foresee events that could have an adverse effect on our business.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. PROPERTIES

The following table reflects our major facilities as of September 28, 2013:

Facility (1)

Approximate Size Function

Singapore

135,000 sq. ft.

Corporate headquarters,
manufacturing, technology, sales and
service center

Suzhou, China

155,000 sq. ft.

Manufacturing and technology
center

Business Segment and
Products
Manufactured

Lease Expiration
Date

Equipment: ball and
wedge bonders

Expendable Tools:
capillaries, dicing
blades and bonding
wedges

December 2013 (2)

(3)

September 2033
(4)

Fort Washington,
Pennsylvania

Santa Ana,
California

88,000 sq. ft.

Technology, sales and service center

Not applicable

65,000 sq. ft.

Technology, sales and service center

Not applicable

August 2036 (5)

Yokneam, Israel

21,000 sq. ft.

Manufacturing and technology
center

Expendable Tools:
capillary blanks (semi-
finish)

January 2018 (6)

Damansara
Uptown,
Malaysia

12,000 sq ft

Shared service, sales and service
center

Not applicable

July 2017 (7)

(1) Each of the facilities listed in this table is leased other than the facility in Suzhou, China - see (3) below.

(2) The current lease is set to expire in December 2013, at which point the Company is planning to lease a new building from
the same landlord, Mapletree Industrial Trust under the Agreement to Develop and Lease, as discussed in Item 7.

(3) On July 11, 2012, the Company exercised the option to purchase the Suzhou building in accordance with the purchase
option clause in the lease agreement that was in place at the time. On September 25, 2013, the Company completed the
building purchase.

(4) Includes lease extension periods at the Company's option. Initial lease expires in September 2023.

(5) Includes lease extension periods at the Company's option. Initial lease expires in August 2026.

(6) Includes lease extension periods at the Company's option. Initial lease expires in January 2015.

(7) Includes lease extension periods at the Company's option. Initial lease expires in July 2015.

The Company owned a building in Berg, Switzerland of approximately 65,208 square feet that was used as a technology center.
The building was sold on January 14, 2013.

In addition, the Company rents space for sales and service offices and administrative functions in Taiwan, China, Korea, Malaysia,
the Philippines, Japan, Thailand, Germany and Switzerland. The Company believes the facilities are generally in good condition
and suitable to the extent of utilization needed.

Item 3. LEGAL PROCEEDINGS

From time to time, we may be a plaintiff or defendant in cases arising out of our business. We cannot be assured of the results of
any pending or future litigation, but we do not believe resolution of these matters will materially or adversely affect our business,
financial condition or operating results.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER

PURCHASES OF EQUITY SECURITIES

PART II

Our common stock is traded on The Nasdaq Global Market (“Nasdaq”) under the symbol “KLIC.” The following table reflects
the ranges of high and low sale prices for our common stock as reported on Nasdaq for the periods indicated:

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Fiscal 2013

Fiscal 2012

High

Low

High

Low

$
$
$
$

12.04
12.95
12.56
12.27

$
$
$
$

9.41
10.58
10.08
10.91

$
$
$
$

11.10
12.78
13.69
12.07

$
$
$
$

6.71
9.32
8.30
8.05

On November 9, 2013, there were approximately 326 holders of record of the shares of outstanding common stock. The payment
of dividends on our common stock is within the discretion of our board of directors; however, we have not historically paid any
dividends on our common stock. In addition, we do not expect to declare dividends on our common stock in the near future, since
we intend to retain earnings to finance our business.

For the purpose of calculating the aggregate market value of shares of our common stock held by non-affiliates, as shown on the
cover page of this report, we have assumed all of our outstanding shares were held by non-affiliates except for shares held by our
directors and executive officers. However, this does not necessarily mean that all directors and executive officers of the Company
are, in fact, affiliates of the Company, or there are no other persons who may be deemed to be affiliates of the Company. Further
information concerning the beneficial ownership of our executive officers, directors and principal shareholders will be included
in our Proxy Statement for the 2014 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission
on or about January 7, 2014.

Recent Sales of Unregistered Securities and Use of Proceeds

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 6. SELECTED CONSOLIDATED FINANCIAL DATA

The following tables reflect selected historical consolidated financial data derived from the consolidated financial statements of
Kulicke and Soffa Industries, Inc. and subsidiaries as of and for each of the five fiscal years ended 2013, 2012, 2011, 2010, and
2009.

As of October 4, 2009, we adopted Financial Accounting Standards Board, ASC No. 470.20, Debt, Debt With Conversion Options
on a retrospective basis for all prior periods. Fiscal 2009 includes the assets of Orthodyne Electronics Corporation which were
acquired on October 3, 2008.

This data should be read in conjunction with our consolidated financial statements, including notes and other financial information
included elsewhere in this report or current reports on Form 8-K filed previously by us in respect of the fiscal years identified in
the column headings of the tables below.

(in thousands)
Statement of Operations Data:

Net revenue:

Equipment

Expendable Tools

Total net revenue

Cost of sales:

Equipment

Expendable Tools

Total cost of sales

Operating expenses:

Equipment

Expendable Tools

Impairment of goodwill: Equipment

2013

2012

Fiscal

2011

2010

2009

472,567

727,082

759,331

691,988

170,536

62,371

534,938

261,270

26,723

287,993

158,306

22,833

—

63,941

791,023

397,210

26,423

423,633

164,081

24,083

—

71,070

830,401

412,914

29,578

442,492

189,631

28,218

—

70,796

762,784

399,042

28,069

427,111

155,625

32,013

—

54,704

225,240

111,103

25,294

136,397

135,465

24,193

2,709

Total operating expenses (1)

181,139

188,164

217,849

187,638

162,367

Income (loss) from operations:

Equipment

Expendable Tools

Interest expense, net

Gain on extinguishment of debt

Income (loss) from continuing operations before
income tax

Provision (benefit) for income taxes from continuing
operations (2)

Income (loss) from continuing operations

Income from discontinued operations, net of tax (3)

52,991

12,815

862

—

165,791

156,786

137,321

13,435
(4,975)
—

13,274
(7,632)
—

10,714
(7,930)
—

(78,741)
5,217
(7,082)
3,965

66,668

174,251

162,428

140,105

(76,641)

7,310

59,358

—

13,671

160,580

—

34,818

127,610

—

(2,037)
142,142

—

(13,029)
(63,612)
22,011
(41,601)

Net income (loss)

59,358

160,580

127,610

142,142

(1) During fiscal 2013, 2012, 2011, 2010 and 2009, we recorded $1.9 million, $1.7 million, $2.5 million, $2.4 million and $7.4

million, respectively, in operating expense for restructuring-related severance.

During fiscal 2013, 2012, 2011, 2010, and 2009, we recorded $17.2 million, $22.0 million, $24.3 million, $17.4 million, and
$2.7 million, respectively, in operating expense for incentive compensation.

(2) The following are the most significant factors that affected our provision for income taxes: implementation of our international
restructuring plan in fiscal 2011 and 2010; volatility in our earnings each fiscal year and variation in earnings among various
tax jurisdictions in which we operate; changes in assumptions regarding repatriation of earnings; changes in tax legislation;

and our provision for various tax exposure items.

(3) Reflects the operations of the Company's Wire business, which was sold in fiscal 2009.

Per Share Data:

Income (loss) per share from continuing operations: (1)

Basic

Diluted

Income per share from discontinued operations, net of tax:

Basic

Diluted

Net income (loss) per share: (2) (3)

Basic
Diluted

Weighted average shares outstanding: (2) (3)

Basic

Diluted

2013

2012

Fiscal

2011

2010

2009

$
$

0.79

0.78

2.17

2.13

1.77

1.73

2.01

1.92

(1.02)
(1.02)

— $

0.35

0.79
0.78

$
$

2.17
2.13

$
$

1.77
1.73

$
$

2.01
1.92

$
$

(0.67)
(0.67)

75,132

76,190

73,887

75,502

71,820

73,341

70,012

73,548

62,188

(1) For fiscal 2011 and 2010, $0.7 million and $1.5 million, respectively, of net income applicable to participating securities

and the related participating securities were excluded from the computation of basic income per share.

(2) For fiscal 2012, 2011 and 2010, the exercise of dilutive stock options and expected vesting of time-based and market-
based restricted stock were included. Due to the Company's net loss from continuing operations for fiscal 2009, potentially
dilutive shares were excluded since the effect would have been anti-dilutive.

(3) For fiscal 2010, expected vesting of performance-based restricted stock and conversion of the 1% Convertible
Subordinated Notes were included. For fiscal 2010, $0.3 million of after-tax interest expense related to our 1% Convertible
Subordinated Notes was added to the Company's net income to determine diluted earnings per share.

(in thousands)
Balance Sheet Data:

2013

2012

Fiscal

2011

2010

2009

Cash, cash equivalents, investments and restricted cash $

525,040

$ 440,244

$ 384,552

$ 181,334

$ 144,841

Working capital excluding discontinued operations

Total assets excluding discontinued operations

Long-term debt and current portion of long-term debt

Built-to-suit liability

Shareholders' equity

676,986

862,994

—

19,396

589,947

815,609

—

405,659

728,391

105,224

—

347,560

580,169

98,475

—

172,401

412,635

92,217

—

716,665

$ 643,667

$ 469,877

$ 322,480

$ 170,803

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

•

Introduction

We operate two main business segments, Equipment and Expendable Tools. Our goal is to be the technology leader and the most
competitive supplier in terms of cost and performance in each of our major product lines. Accordingly, we invest in research and
engineering projects intended to enhance our position at the leading edge of semiconductor assembly technology. We also remain
focused on our cost structure through continuing improvement and optimization of operation. Cost reduction efforts remain an
important part of our normal ongoing operations and are expected to generate savings without compromising overall product
quality and service levels.

Business Environment

overshadowed by effects of the broader semiconductor cycle. Macroeconomic factors also affect the industry, primarily through
their effect on business and consumer demand for electronic devices, as well as other products that have significant electronic
content such as automobiles, white goods, and telecommunication equipment.

To limit potential adverse cyclical, seasonal and macroeconomic effects on our financial position, we have de-leveraged and
strengthened our balance sheet. In fiscal 2012, we fully repaid our 0.875% Convertible Subordinated Notes (the “Notes”) with
cash in the principal amount of $110.0 million at maturity. As of September 28, 2013, our total cash, cash equivalents and investments
were $525.0 million, a $84.8 million increase from the prior fiscal year end. We believe this strong cash position will allow us to
continue to invest in product development and pursue organic and non-organic opportunities.

Technology Leadership

We compete largely by offering our customers among the most advanced equipment and expendable tools available for the wire
and wedge bonding processes. Our equipment is typically the most productive and has the highest levels of process capability,
and as a result, has a lower cost of ownership compared to other equipment in its market. Our expendable tools are designed to
optimize the performance of the equipment in which they are used. We believe our technology leadership contributes to the leading
market share positions of our various wire bonder and expendable tools products. To maintain our competitive advantage, we
invest in product development activities designed to produce a stream of improvements to existing products and to deliver next-
generation products. These investments often focus as much on improvements in the semiconductor assembly process as on specific
pieces of assembly equipment or expendable tools. In order to generate these improvements, we often work in close collaboration
with customers, end users, and other industry members. In addition to producing technical advances, these collaborative
development efforts strengthen customer relationships and enhance our reputation as a technology leader and solutions provider.

Our leadership has allowed us to maintain a competitive position in the latest generations of gold and copper ball bonders, which
enable our customers to handle the leading technologies in terms of Bond pad pitch, silicon with the latest node and complex wire
bonding requirement. We continue to see demand for our large bondable area (“LA”) configured machines. This LA option is
now available on all of our Power Series (“PS”) models and allows our customers to gain added efficiencies and to reduce the cost
of packaging.

Products and Services

We supply a range of bonding equipment and expendable tools. The following tables reflect net revenue by business segment for
fiscal 2013, 2012, and 2011:

2013

Fiscal
2012

2011

(dollar amounts in thousands) Net revenues
472,567
Equipment
62,371
Expendable Tools
534,938

% of total
net revenue

Net revenues
727,082
63,941
791,023

88.3% $
11.7%
100.0% $

% of total
net revenue

Net revenues
759,331
71,070
830,401

91.9% $
8.1%
100.0% $

% of total
net revenue

91.4%
8.6%
100.0%

See Note 11 to our Consolidated Financial Statements included in Item 8 of this report for our financial results by business segment.

Equipment Segment

Our principal Equipment segment products include:

Business Unit

Product Name (1)

Typical Served Market

Ball bonders

IConnPS

Advanced and ultra fine pitch applications

IConnPS ProCu

High-end copper wire applications demanding advanced process capability
and high productivity

IConnPS ProCu Plus

High-end copper wire applications demanding advanced process capability
and high productivity

IConnPS ProCu LA

Large area substrate and matrix applications for copper wire

IConnPS ProCu Plus LA

Large area substrate and matrix applications for copper wire

IConnPS LA

Large area substrate and matrix applications

ConnXPS Plus

High productivity bonder for low-to-medium pin count applications

ConnXPS LED

LED applications

ConnXPS VLED

Vertical LED applications

ConnXPS Plus LA

Cost performance large area substrate and matrix applications

AT Premier Plus

Advanced wafer level bonding application

Wedge bonders

3600Plus

Power hybrid and automotive modules using either heavy aluminum wire or
PowerRibbon®

3700Plus

Hybrid and automotive modules using thin aluminum wire

7200Plus

Power semiconductors using either aluminum wire or PowerRibbon®

7200HD

Smaller power packages using either aluminum wire or PowerRibbon®

PowerFusionPS TL

Power semiconductors using either aluminum wire or PowerRibbon®

PowerFusionPS HL

Smaller power packages using either aluminum wire or PowerRibbon®

(1) Power Series (“PS”)

Ball Bonders

• Our Power Series products are setting new standards in wire bonding.

• Our installed base of gold wire ball bonders can also be retrofitted for copper wire applications with kits, which we sell

separately.

Heavy Wire Wedge Bonders

Our portfolio of wedge bonding products includes:

• The 3600Plus: high speed, high accuracy wire bonders designed for power modules, automotive packages and other heavy

wire multi-chip module applications.

• The 3700Plus: wire bonders designed for hybrid and automotive modules using thin aluminum wire.

• The 7200Plus: dual head wedge bonders designed specifically for power semiconductor applications.

• The 7200HD: heavy wire wedge bonders designed for smaller power packages using either aluminum wire or ribbon.

Other Equipment Products and Services

We also sell manual wire bonders, and we offer spare parts, equipment repair, training services, and upgrades for our equipment
through our Support Services business unit. In September 2012, we introduced a next-generation manual wire bonder series for
use with gold, copper or aluminum wire.

Expendable Tools Segment

We manufacture and sell a variety of expendable tools for a broad range of semiconductor packaging applications. Our principal
Expendable Tools segment products include:

range of applications, including for use on our competitors' equipment. In addition to capillaries used for gold wire bonding,
we have developed capillaries for use with copper wire to achieve optimal performance in copper wire bonding.

• Dicing blades: expendable tools used by semiconductor manufacturers to cut silicon wafers into individual semiconductor

die and to cut semiconductor devices that have been moulded in a matrix configuration into individual units.

In August 2013, we introduced ACS Pro Capillary, which is a new generation of copper capillary for advanced copper wire bonding
applications.

Critical Accounting Policies

The preparation of consolidated financial statements requires us to make assumptions, estimates and judgments that affect the
reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of contingent
assets and liabilities as of the date of the consolidated financial statements. On an on-going basis, we evaluate estimates, including
but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying value and lives of fixed
assets, goodwill and intangible assets, valuation allowances for deferred tax assets and deferred tax liabilities, tax provisions,
repatriation of un-remitted foreign subsidiary earnings, equity-based compensation expense, restructuring, and warranties. We
base our estimates on historical experience and on various other assumptions that we believe to be reasonable. As a result, we
make judgments regarding the carrying values of our assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies, which have been reviewed with the Audit Committee of our Board of
Directors, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

In accordance with ASC No. 605, Revenue Recognition, we recognize revenue when persuasive evidence of an arrangement exists,
delivery has occurred or services have been rendered, the price is fixed or determinable, the collectability is reasonably assured,
and equipment installation obligations have been completed and customer acceptance, when applicable, has been received or
otherwise released from installation or customer acceptance obligations. If terms of the sale provide for a customer acceptance
period, revenue is recognized upon the expiration of the acceptance period or customer acceptance, whichever occurs first. Our
standard terms are ex works (our factory), with title transferring to our customer at our loading dock or upon embarkation. We
have a small percentage of sales with other terms, and revenue is recognized in accordance with the terms of the related customer
purchase order. Revenue related to services is recognized upon performance of the services requested by a customer order. Revenue
for extended maintenance service contracts with a term more than one month is recognized on a prorated straight-line basis over
the term of the contract.

Our business is subject to contingencies related to customer orders as follows:

• Right of Return: A large portion of our revenue comes from the sale of machines used in the semiconductor assembly
process. Other product sales relate to consumable products, which are sold in high-volume quantities, and are generally
maintained at low stock levels at our customer's facility. Customer returns have historically represented a very small
percentage of customer sales on an annual basis.

• Warranties: Our equipment is generally shipped with a one-year warranty against manufacturing defects. We establish
reserves for estimated warranty expense when revenue for the related equipment is recognized. The reserve for estimated
warranty expense is based upon historical experience and management's estimate of future expenses.

• Conditions of Acceptance: Sales of our consumable products generally do not have customer acceptance terms. In certain
cases, sales of our equipment have customer acceptance clauses which may require the equipment to perform in accordance
with customer specifications or when installed at the customer's facility. In such cases, if the terms of acceptance are
satisfied at our facility prior to shipment, the revenue for the equipment will be recognized upon shipment. If the terms of
acceptance are satisfied at our customers' facilities, the revenue for the equipment will not be recognized until acceptance,
which typically consists of installation and testing is received from the customer.

Shipping and handling costs billed to customers are recognized in net revenue. Shipping and handling costs paid by us are included
in cost of sales.

Allowance for Doubtful Accounts

We maintain allowances for doubtful accounts for estimated losses resulting from our customers' failure to make required payments.
If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required. We are subject to concentrations of customers and sales to concentrated geographic locations,
which could also impact the collectability of certain receivables. If global economic conditions deteriorate or political conditions
were to change in some of the countries where we do business, it could have a significant impact on our results of operations, and
our ability to realize the full value of our accounts receivable.

Inventories

Inventories are stated at the lower of cost (on a first-in first-out basis) or market value. We generally provide reserves for obsolete
inventory and for inventory considered to be in excess of demand. Demand is generally defined as 18 months future consumption
for equipment, 24 months consumption for all spare parts, and 12 months consumption for expendable tools. Forecasted demand
is based upon internal projections, historical sales volumes, customer order activity and a review of consumable inventory levels
at customers' facilities. We communicate forecasts of our future demand to our suppliers and adjust commitments to those suppliers
accordingly. If required, we reserve the difference between the carrying value of our inventory and the lower of cost or market
value, based upon assumptions about future demand, and market conditions. If actual market conditions are less favorable than
projections, additional inventory reserves may be required.

Accounting for Impairment of Goodwill

The Company operates two reportable segments: Equipment and Expendable Tools. Goodwill was recorded in 2009 for the
acquisition of Orthodyne Electronics Inc., which added wedge bonder products to the Equipment business.

Accounting Standard Update 2011-08, Testing Goodwill for Impairment provides companies with the option to assess qualitative
factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, after
assessing the qualitative factors, a company determines that it is not more likely than not that the fair value of a reporting unit is
less than its carrying value, then performing the two-step impairment test is unnecessary. However, if a company concludes
otherwise, then it is required to perform the first step of the two-step goodwill impairment test. If the carrying value of a reporting
unit exceeds its fair value, then a company is required to perform the second step of the two-step goodwill impairment test.

We chose to skip the qualitative assessment and proceed directly to performing the quantitative evaluation of the fair value of the
goodwill of the reporting unit, to compare against the carrying value of the goodwill recorded in the books. If the fair value exceeds
the carrying value, there is no impairment. Any excess carrying value is equal to the goodwill impairment charge.

As part of the annual evaluation of the goodwill, we perform an impairment test of our goodwill in the fourth quarter of each fiscal
year to coincide with the completion of our annual forecasting process and refreshing of our business outlook processes. On an
ongoing basis, we monitor whether a "triggering" event has occurred that may have the effect of reducing the fair value of a
reporting unit below its respective carrying value. Adverse changes in expected operating results and/or unfavorable changes in
other economic factors used to estimate fair values could result in a non-cash impairment charge in the future.

Impairment assessments inherently involve judgment as to assumptions about expected future cash flows and the impact of market
conditions on those assumptions. Future events and changing market conditions may impact our assumptions as to prices, costs,
growth rates or other factors that may result in changes in our estimates of future cash flows. Although we believe the assumptions
we have used in testing for impairment are reasonable, significant changes in any one of our assumptions could produce a
significantly different result. Indicators of potential impairment may lead us to perform interim goodwill impairment assessments,
including significant and unforeseen customer losses, a significant adverse change in legal factors or in the business climate, a
significant adverse action or assessment by a regulator, a significant stock price decline or unanticipated competition.

For further information on goodwill and other intangible assets, see Note 3 of Item 8.

Income Taxes

In accordance with ASC No. 740, Income Taxes, deferred income taxes are determined using the liability method. We record a
valuation allowance to reduce our deferred tax assets to the amount we expect is more likely than not to be realized. While we
have considered future taxable income and our ongoing tax planning strategies in assessing the need for the valuation allowance,
if we were to determine that we would be able to realize our deferred tax assets in the future in excess of our net recorded amount,
an adjustment to the deferred tax asset would increase income in the period such determination was made. Likewise, should we

determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred
tax asset would decrease income in the period such determination was made.

In accordance with ASC No. 740 Topic 10, Income Taxes, General (“ASC 740.10”), we account for uncertain tax positions taken
or expected to be taken in the Company's income tax return. Under ASC 740.10, we utilize a two-step approach for evaluating
uncertain tax positions. Step one, or recognition, requires us to determine if the weight of available evidence indicates a tax
position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any.
Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement
with the taxing authority.

Equity-Based Compensation

We account for equity-based compensation under the provisions of ASC No. 718, Compensation, Stock Compensation (“ASC
718”). ASC 718 requires the recognition of the fair value of equity-based compensation in net income. Compensation expense
associated with market-based restricted stock is determined using a Monte-Carlo valuation model, and compensation expense
associated with time-based and performance-based restricted stock is determined based on the number of shares granted and the
fair value on the date of grant. The fair value of our stock option awards are estimated using a Black-Scholes option valuation
model.

The calculation of equity-based compensation costs requires us to estimate the number of awards that will be forfeited during the
vesting period. We have estimated forfeitures at the time of grant based upon historical experience, and review the forfeiture rates
periodically and make adjustments as necessary. In addition, the fair value of equity-based awards is amortized over the vesting
period of the award and we have elected to use the straight-line method for awards granted after the adoption of ASC 718. In
general, equity-based awards vest annually over a three year period. Our performance-based restricted stock entitles the employee
to receive common shares of the Company on the three-year anniversary of the grant date (if employed by the Company) if return
on invested capital and revenue growth targets set by the Management Development and Compensation Committee of the Board
of Directors on the date of grant are met. If return on invested capital and revenue growth targets are not met, performance-based
restricted stock does not vest. Estimated attainment percentages and the corresponding equity-based compensation expense
reported may vary from period to period.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 to the consolidated financial statements in Item 8 for a description of certain recent accounting pronouncements
including the expected dates of adoption and effects on our consolidated results of operations and financial condition.

RESULTS OF OPERATIONS

Results of Operations for fiscal 2013 and 2012

The following table reflects our income from operations for fiscal 2013 and 2012:

(dollar amounts in thousands)
Net revenue
Cost of sales
Gross profit

Selling, general and administrative
Research and development
Operating expenses

Fiscal

2013

2012

$ Change

% Change

534,938
287,993
246,945

791,023
423,633
367,390

(256,085)
(135,640)
(120,445)

119,519
61,620
181,139

124,718
63,446
188,164

(5,199)
(1,826)
(7,025)

(32.4)%
(32.0)%
(32.8)%

(4.2)%
(2.9)%
(3.7)%

Income from operations

65,806

179,226

(113,420)

(63.3)%

Bookings and Backlog

A booking is recorded when a customer order is reviewed and it is determined that all specifications can be met, production (or
service) can be scheduled, a delivery date can be set, and the customer meets our credit requirements. Our backlog consists of
customer orders scheduled for shipment within the next twelve months. A majority of our orders are subject to cancellation or
deferral by our customers with limited or no penalties. Also, customer demand for our products can vary dramatically without
prior notice. Because of the volatility of customer demand, possibility of customer changes in delivery schedules or cancellations
and potential delays in product shipments, our backlog as of any particular date may not be indicative of net revenue for any
succeeding period.

The following tables reflect our bookings and backlog for fiscal 2013 and 2012:

(in thousands)
Bookings

(in thousands)
Backlog

Fiscal

2013

2012

497,335

778,000

As of

September 28, 2013
52,100
$

September 29, 2012
90,000
$

Net Revenue

Approximately 97.3% and 98.3% of our net revenue for fiscal 2013 and 2012, respectively, was for shipments to customer locations
outside of the U.S., primarily in the Asia/Pacific region, and we expect sales outside of the U.S. to continue to represent a substantial
majority of our future revenue.

The following table reflects net revenue by business segment for fiscal 2013 and 2012:

(dollar amounts in thousands)
Equipment
Expendable Tools
Total net revenue

Equipment

Fiscal

2013

2012

$ Change

% Change

472,567
62,371
534,938

727,082
63,941
791,023

(254,515)
(1,570)
(256,085)

(35.0)%
(2.5)%
(32.4)%

The following table reflects the components of Equipment net revenue change between fiscal 2013 and 2012:

(in thousands)
Equipment

Price

Fiscal 2013 vs. 2012
Volume

$ Change

(10,255) $

(244,260) $

(254,515)

For fiscal 2013, the lower Equipment net revenue as compared to fiscal 2012 was due primarily to the lower volume from our ball
bonders and heavy wire wedge bonders. The volume reduction in ball bonders and heavy wire wedge bonders was mainly attributable
to the lower demand in the market due to uncertainties around technology migration and the weakness in the discrete market. In
addition to lower volume, pricing on our ball bonders was also lower due to change in customer and product mix.

Expendable Tools

The following table reflects the components of Expendable Tools net revenue change between fiscal 2013 and 2012:

(in thousands)
Expendable Tools

Price

Fiscal 2013 vs. 2012
Volume

$ Change

1,176

(2,746) $

(1,570)

For fiscal 2013, the Expendable Tools net revenue decreased 2.5% as compared to the prior year. This was due primarily to the
volume decrease in both our wire bonding tools business and wedge bonder tools businesses as a result of the lower demand in
the market due to uncertainties around technology migration and the weakness in the discrete market. The lower volume was
partially offset by favorable selling prices due to change in product mix.

Gross Profit

The following table reflects gross profit by business segment for fiscal 2013 and 2012:

(dollar amounts in thousands)
Equipment
Expendable Tools
Total gross profit

Fiscal

2013

2012

$ Change

% Change

211,297
35,648
246,945

329,872
37,518
367,390

(118,575)
(1,870)
(120,445)

(35.9)%
(5.0)%
(32.8)%

The following table reflects gross profit as a percentage of net revenue by business segment for fiscal 2013 and 2012:

Equipment
Expendable Tools
Total gross margin

Equipment

Fiscal

2013

2012

Basis Point
Change

44.7%
57.2%
46.2%

45.4%
58.7%
46.4%

(70)
(150)
(20)

The following table reflects the components of Equipment gross profit change between fiscal 2013 and 2012:

(in thousands)
Equipment

Price

Fiscal 2013 vs. 2012
Cost

Volume

$ Change

(10,255) $

10,631

(118,951) $

(118,575)

For fiscal 2013, the lower Equipment gross profit as compared to fiscal 2012 was due primarily to the lower volume from our ball
bonders and heavy wire wedge bonders. The volume reduction in ball bonders and heavy wire wedge bonders was mainly attributable
to lower demand in the market due to uncertainties around technology migration and the weakness in the discrete market. In
addition to volume, pricing on our ball bonders was lower due to changes in customer and product mix.

The lower volume and less favorable pricing were offset partially by lower costs for our die bonders and heavy wire wedge bonders
as compared to fiscal 2012. The manufacturing costs were lower due to the continued consolidation of our production facilities
and die bonder costs were lower due to sales of certain die bonders that were previously reserved, which resulted in lower costs
of goods sold. In addition, in 2012, we recorded a reserve for inventory relating to heavy wire wedge bonders legacy spares.

Expendable Tools

The following table reflects the components of Expendable Tools gross profit change between fiscal 2013 and 2012:

(in thousands)
Expendable Tools

Price

Fiscal 2013 vs. 2012
Cost

Volume

$ Change

1,176

(1,317) $

(1,729) $

(1,870)

For fiscal 2013, Expendable Tools gross profit decreased 5.0% as compared to the prior year was due primarily to lower volume
in both our wire bonding tools business and wedge bonder tools business. The lower volume resulted in increased manufacturing
costs due to lower absorption of the fixed manufacturing costs.

Operating Expenses

The following table reflects operating expenses as a percentage of net revenue for fiscal 2013 and 2012:

Selling, general & administrative
Research & development
Total

Selling, General and Administrative (“SG&A”)

Fiscal

2013

2012

Basis point
change

22.3%
11.5%
33.9%

15.8%
8.0%
23.8%

650
350
1,010

SG&A decreased by $5.2 million during fiscal 2013 as compared to fiscal 2012, in which we experienced a $1.6 million gain in
foreign exchange rates due to the strengthening of foreign currencies against the U.S. dollar and we recorded a favorable change
in the accounts receivable reserve of $0.9 million as we were able to collect outstanding balances from customers that were
previously reserved. In the twelve months ended September 28, 2013, sales commissions and incentive compensation decreased
by $6.7 million driven by lower net revenue for the current fiscal year. We also experienced a favorable variance of $2.6 million
for severance expenses relating to the our continued consolidation of our operations and a gain of $0.4 million relating to the
curtailment of our Swiss pension plan. Offsetting this was a loss of $1.9 million in foreign exchange rates due to the strengthening
of the U.S. dollar against foreign currencies.

Research and Development (“R&D”)

R&D expense decreased $1.8 million during fiscal 2013 as compared to fiscal 2012 due primarily to a $0.9 million reduction in
staff costs as a result of consolidation and reduction of headcount to further streamline our R&D technology centers and release
of a reserve of $0.8 million for a Research Incentive Scheme for Companies (“RISC”) grant relating to product development
activities. The RISC grant reserve was released after receiving confirmation of the grant from the Economic Development Board,
Singapore.

Income from Operations

For fiscal 2013, total income from operations was lower by $113.4 million. This was due primarily to lower revenue and margin
for equipment sales as explained above.

Interest Income and Expense

The following table reflects interest income and interest expense for fiscal 2013 and 2012:

(dollar amounts in thousands)
Interest income
Interest expense: cash
Interest expense: non-cash

Fiscal

2013

2012

$ Change

% Change

$
$
$

$
883
(21) $
— $

$
833
(633) $
(5,175) $

50
612
5,175

6.0 %
(96.7)%
(100.0)%

The non-cash interest expense for fiscal 2012 was attributable to the amortization of the debt discount relating to the Notes, which
matured on June 1, 2012. We repaid the entire principal balance of the Notes in cash in fiscal 2012. See Note 6 of Item 1 for
additional details.

Provision for Income Taxes

The following table reflects the provision for income taxes and the effective tax rate for fiscal 2013 and 2012:

(in thousands)
Income from operations before income taxes
Provision for income taxes
Net income

Effective tax rate

Fiscal

2013

66,668
7,310
59,358

2012
174,251
13,671
160,580

11.0%

7.8%

For fiscal 2013, the effective income tax rate increased from fiscal 2012 by 3.2% due primarily to a shift in foreign earnings to
tax jurisdictions with higher effective tax rates, certain changes in estimates that were recorded upon filing tax returns in foreign
jurisdictions and the recording of a valuation allowance against certain deferred tax assets in foreign jurisdictions.

For fiscal 2012, the effective income tax rate differed from the federal statutory rate due primarily to tax from foreign operations
at a lower effective tax rate than the U.S. statutory rate and the impact of tax holidays, offset by an increase for deferred taxes on
un-remitted earnings as well as other U.S. current and deferred taxes. In addition, during the fourth quarter of fiscal 2012, we
reached a favorable settlement with the tax authorities of a foreign jurisdiction and we reversed an accrual for an uncertain tax
position of $7.5 million, recording it as an income tax benefit. This benefit was offset by additional taxes due to deemed distributions
from certain foreign subsidiaries.

Our future effective tax rate would be affected if earnings were lower than anticipated in countries where we have lower statutory
rates and higher than anticipated in countries where we have higher statutory rates, by changes in the valuation of our deferred tax
assets and liabilities, or by changes in tax laws, regulations, accounting principles, or interpretations thereof. We regularly assess
the effects resulting from these factors to determine the adequacy of our provision for income taxes.

Results of Operations for fiscal 2012 and 2011

The following table reflects our income from operations for fiscal 2012 and 2011:

(dollar amounts in thousands)
Net revenue
Cost of sales
Gross profit

Selling, general and administrative
Research and development
Operating expenses

Fiscal

2012

2011

$ Change

% Change

791,023
423,633
367,390

830,401
442,492
387,909

124,718
63,446
188,164

152,714
65,135
217,849

(39,378)
(18,859)
(20,519)

(27,996)
(1,689)
(29,685)

(4.7)%
(4.3)%
(5.3)%

(18.3)%
(2.6)%
(13.6)%

Income from operations

179,226

170,060

9,166

5.4 %

Bookings and Backlog

The following tables reflect our bookings and backlog for fiscal 2012 and 2011:

(in thousands)
Bookings

(in thousands)
Backlog

Net Revenue

Fiscal

2012

2011

778,000

681,000

As of

September 29, 2012
90,000
$

October 1, 2011

103,000

Approximately 98.3% and 97.8% of our net revenue for fiscal 2012 and 2011, respectively, was for shipments to customer locations
outside of the U.S., primarily in the Asia/Pacific region.

The following table reflects net revenue by business segment for fiscal 2012 and 2011:

(dollar amounts in thousands)
Equipment
Expendable Tools
Total net revenue

Equipment

Fiscal

2012

2011

$ Change

% Change

727,082
63,941
791,023

759,331
71,070
830,401

(32,249)
(7,129)
(39,378)

(4.2)%
(10.0)%
(4.7)%

The following table reflects the components of Equipment net revenue change between fiscal 2012 and 2011:

(in thousands)
Equipment

Price

Fiscal 2012 vs. 2011
Volume

$ Change

(14,492) $

(17,757) $

(32,249)

For fiscal 2012, the lower equipment net revenue as compared to the prior year period was due primarily to the lower volume from
our wedge bonders and less favorable pricing for our ball bonders.

The volume reduction in wedge bonders was attributable mainly to decreased demand from our key markets: power semiconductor,
automotive power modules and industrial power hybrids. Slowing demand from the end users of our customers' devices resulted
in our customers cutting back their production, reducing their need for new equipment. This volume reduction was partially offset
by higher ATPremier volume driven by a change in technology used in smartphones and tablet applications.

In addition, pricing on our ball bonders was less favorable, as we sold higher volumes of our most popular ball bonder model to
large OSAT customers.

Expendable Tools

The following table reflects the components of Expendable Tools net revenue change between fiscal 2012 and 2011:

(in thousands)
Expendable Tools

Price

Fiscal 2012 vs. 2011
Volume

$ Change

479

(7,608) $

(7,129)

Expendable Tools net revenue decreased 10.0% for fiscal 2012 as compared to fiscal 2011. The decrease was due primarily to the
volume decrease in the overall Expendable Tools business. The decrease in volume was most concentrated in our wedge bonder
tools business due to lower sales as a result of lower customer utilization.

Gross Profit

The following tables reflect gross profit and gross profit as a percentage of net revenue by business segment for fiscal 2012 and
2011:

(dollar amounts in thousands)
Equipment
Expendable Tools
Total gross profit

Fiscal

2012

2011

$ Change

% Change

329,872
37,518
367,390

346,417
41,492
387,909

(16,545)
(3,974)
(20,519)

(4.8)%
(9.6)%
(5.3)%

Equipment
Expendable Tools
Total gross margin

Equipment

Fiscal

2012

2011

Basis Point
Change

45.4%
58.7%
46.4%

45.6%
58.4%
46.7%

(20)
30
(30)

The following table reflects the components of Equipment gross profit change between fiscal 2012 and 2011:

(in thousands)
Equipment

Price

Fiscal 2012 vs. 2011
Cost

Volume

$ Change

(14,490) $

518

(2,573) $

(16,545)

For fiscal 2012, the lower Equipment gross profit as compared to the prior year period was due primarily to the lower pricing from
our ball bonders. Pricing on our ball bonders was less favorable as we sold higher volumes of our most popular ball bonder model
to large OSAT customers.

In addition, the volume in wedge bonders declined mainly as result of decreased demand from our key markets: power
semiconductor, automotive power modules and industrial power hybrid. Slowing demand from the end users of our customers'
devices resulted in our customers cutting back their production, reducing their need for new equipment. This volume reduction
was partially offset by higher ATPremier volume driven by a change in technology used in smartphones and tablet applications,
as well as favorable changes in product mix from our ball bonders.

Expendable Tools

The following table reflects the components of Expendable Tools gross profit change between fiscal 2012 and 2011:

(in thousands)
Expendable Tools

Price

Fiscal 2012 vs. 2011
Cost

Volume

$ Change

479

(720) $

(3,733) $

(3,974)

Expendable Tools gross profit decreased 9.6% during fiscal 2012 as compared to the prior year period due primarily to lower
volumes for our Expendable Tools business.

Operating Expenses

The following table reflects operating expenses as a percentage of net revenue for fiscal 2012 and 2011:

Selling, general and administrative
Research and development
Total

Fiscal

2012

2011

Basis Point
Change

15.8%
8%
23.8%

18.4%
7.8%
26.2%

(260)
20
(240)

Selling, General and Administrative (“SG&A”)

SG&A expenses decreased by $28.0 million during fiscal 2012 as compared to fiscal 2011, which was driven by a number of
factors. Sales commissions and incentives decreased by $10.9 million due to lower net revenue for the fiscal year. We experienced
a $5.2 million favorable variance in foreign exchange rates due to the strengthening of foreign currencies against the U.S. dollar.
We also recorded a favorable variance of $2.8 million relating to the curtailment of our pension plan for our Switzerland operation.
We also recorded a favorable change in the Accounts Receivable reserve of $2.5 million as we were able to collect outstanding
balances from customers that were previously reserved. Depreciation and amortization expense was also lower by $2.1 million
due mainly to less equipment being sent to customers for demonstration and evaluation. During fiscal 2011, we recorded a valuation
loss of $3.0 million in connection with our Switzerland property.

Research and Development (“R&D”)

R&D expense decreased $1.7 million during fiscal 2012 as compared to fiscal 2011 due primarily to a decrease of $2.7 million in
staff costs as a result of the consolidation and reduction of headcount to further streamline our R&D technology centers. The
decrease was partially offset by $1.0 million higher project based professional services for products development.

Income from Operations

The following table reflects income from operations by business segment for fiscal 2012 and 2011:

(dollar amounts in thousands)
Equipment
Expendable Tools
Total income from operations

Equipment

Fiscal

2012

2011

$ Change

% Change

165,791
13,435
179,226

156,786
13,274
170,060

9,005
161
9,166

5.7%
1.2%
5.4%

In fiscal 2012 our Equipment income from operations was higher as compared to the prior year due primarily to decreases in our
operating expenses. Overall operating expense decreases were offset by the lower equipment gross profit as compared to the prior
year as explained above.

Expendable Tools

Expendable Tools income from operations was comparable from fiscal 2011 to fiscal 2012. Gross profit was lower due to decreased
volumes, but was offset by lower operating expenses in fiscal 2012 as compared to fiscal 2011, as explained above.

Interest Income and Interest Expense

The following table reflects interest income and interest expense for fiscal 2012 and 2011:

(dollar amounts in thousands)
Interest income
Interest expense
Interest expense: non-cash

Fiscal

2012

2011

$ Change

% Change

$
$
$

833
$
(633) $
(5,175) $

648
$
(965) $
(7,315) $

185
332
2,140

28.5%
34.4%
29.3%

Interest income for fiscal 2012 was higher as compared to the prior year period due to higher invested cash balances.

The decrease in interest expense for fiscal 2012 as compared to the prior year period was attributable to the repayment of our
0.875% Convertible Subordinated Notes in June 2012.

Provision for Income Taxes for fiscal 2012 and 2011

The following table reflects the provision for income taxes and the effective tax rate for fiscal 2012 and 2011:

(dollar amounts in thousands)
Income from operations before income tax
Provision for income taxes
Income from operations

Effective tax rate

Fiscal

2012
174,251
13,671
160,580

2011
162,428
34,818
127,610

7.8%

21.4%

For fiscal 2012, the effective income tax rate differed from the federal statutory rate primarily due to tax from foreign operations
at a lower effective tax rate than the U.S. statutory rate and the impact of tax holidays, offset by an increase for deferred taxes on
un-remitted earnings as well as other U.S. current and deferred taxes. In addition, during the fourth quarter of fiscal 2012, we
reached a favorable settlement with the tax authorities of a foreign jurisdiction and we reversed an accrual for an uncertain tax
position of $7.5 million, recording it as an income tax benefit. This benefit was offset by additional taxes due to deemed distributions
from certain foreign subsidiaries.

For fiscal 2011, the effective income tax rate differed from the federal statutory rate primarily due to tax from foreign operations
at a lower effective tax rate than the U.S. statutory rate, the impact of tax holidays, decreases in the valuation allowance offset by
an increase for deferred taxes on un-remitted earnings as well as other U.S. current and deferred taxes. During the second quarter
of fiscal 2011, negotiations with a foreign tax jurisdiction were finalized which resulted in a decreased effective tax rate of 5% in
that jurisdiction until February 1, 2020. In addition, during the fourth quarter of fiscal 2011, a $7.5 million accrual related to a
certain unrecognized tax position taken in past years was recorded based upon new information received from the tax authorities.
Our future effective tax rate would be affected if earnings were lower than anticipated in countries where we have lower statutory
rates and higher than anticipated in countries where we have higher statutory rates, by changes in the valuation of our deferred tax
assets and liabilities, or by changes in tax laws, regulations, accounting principles, or interpretations thereof. We regularly assess
the effects resulting from these factors to determine the adequacy of our provision for income taxes.

LIQUIDITY AND CAPITAL RESOURCES

The following table reflects total cash and investments as of September 28, 2013 and September 29, 2012:

(dollar amounts in thousands)
Cash and cash equivalents
Percentage of total assets

As of

September 28, 2013
521,788
$

September 29, 2012
440,244
$

Change

81,544

60.5%

54.0%

The following table reflects summary Consolidated Statement of Cash Flow information for fiscal 2013 and 2012:

(in thousands)
Net cash provided by continuing operations
Net cash used in discontinued operations
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Changes in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
Short-term investments

Total cash and investments

Fiscal 2013

Continuing Operations

Fiscal

2013

2012

94,824
—
94,824
(15,114)
1,733
101
81,544
440,244
521,788
3,252
525,040

183,969
(1,498)
182,471
(15,386)
(105,138)
109
62,056
378,188
440,244
—
440,244

Net cash provided by operating activities was due primarily to net income of $59.4 million plus non-cash adjustments of $35.5
million contributed to net cash provided by continuing operations.

Net cash used by investing activities was due primarily to capital expenditures of $17.2 million and purchase of short term
investments of $3.2 million, offset by proceeds from a building disposal of $5.3 million.

Net cash provided by financing activities related to proceeds from the exercise of stock options.

Fiscal 2012

Continuing Operations

Net cash provided by operating activities was primarily the result of net income of $160.6 million plus non-cash adjustments of
$36.7 million. The cash provided by net income and non-cash items was partially offset by working capital changes of $13.3
million driven by net increases in accounts and notes receivable and net income tax payable.

Net cash used in investing activities related to the expansion of our manufacturing operations and infrastructure in Asia. In the
first quarter of 2012, we also paid $14.8 million in relation to the acquisition of Orthodyne Electronics Corporation, which we
acquired in 2008. See Note 3 of Item 8 for further details.

Net cash used in financing activities was for the repayment of our 0.875% Convertible Subordinated Notes, partially offset by
proceeds from the exercise of common stock options.

Discontinued Operations
Net cash used in operating activities related to facility payments for our former Test business.

Fiscal 2014 Liquidity and Capital Resource Outlook

We expect our fiscal 2014 capital expenditures to be between $17.0 to $18.0 million, of which approximately $6.4 million is
expected to relate to leasehold improvements for our Singapore facility under the ADL. Expenditures are anticipated to be used
for R&D projects, enhancements to our manufacturing operations in Asia and improvements to our information technology
infrastructure.

We believe that our existing cash and investments and anticipated cash flows from operations will be sufficient to meet our liquidity
and capital requirements for at least the next twelve months. Our liquidity is affected by many factors, some based on normal
operations of our business and others related to global economic conditions and industry uncertainties, which we cannot predict.
We also cannot predict economic conditions and industry downturns or the timing, strength or duration of recoveries. We intend
to continue to use our cash for working capital needs and for general corporate purposes.

We may seek, as we believe appropriate, additional debt or equity financing which would provide capital for corporate purposes,
working capital funding, additional liquidity needs or to fund future growth opportunities. The timing and amount of potential
capital requirements cannot be determined at this time and will depend on a number of factors, including our actual and projected
demand for our products, semiconductor and semiconductor capital equipment industry conditions, competitive factors, and the
condition of financial markets.

Other Obligations and Contingent Payments

Agreement to Develop and Lease

On May 7, 2012, Kulicke & Soffa Pte Ltd. (“Pte”), the Company's wholly owned subsidiary Pte entered into the ADL with DBS
Trustee Limited as trustee of Mapletree Industrial Trust (the “Landlord”). Pursuant to the ADL, the Landlord agreed to develop
a building at Lot 17622A Pt Mukim 18 at Serangoon North Avenue 5 (the “Building”) and Pte expects to lease from the Landlord
198,134 square feet (the “Initial Premises”), representing approximately 69% of the Building. The Building is estimated to be
completed and ready for occupancy in the first quarter of 2014.

The facility is currently being constructed. In accordance with ASC No. 840, Leases, we are considered to be the owner of the
building during the construction phase due to our involvement in the asset construction. The estimated construction costs incurred
to date in relation to the relevant proportion of our lease are recognized on the Consolidated Balance Sheet as of September 28,
2013. The applicable ground lease expense was accrued. See Note 12 of Item 1 for additional details.

Other Obligations and Contingent Payments

In accordance with U.S. generally accepted accounting principles, certain obligations and commitments are not required to be
included in the Consolidated Balance Sheets and Statements of Operations. These obligations and commitments, while entered
into in the normal course of business, may have a material impact on our liquidity. Certain of the following commitments as of
September 28, 2013 are appropriately not included in the Consolidated Balance Sheets and Statements of Operations included in
this Form 10-K; however, they have been disclosed in the table below for additional information.

The following table reflects obligations and contingent payments under various arrangements as of September 28, 2013:

(in thousands)
Current and long-term liabilities:
Pension plan obligations
Severance (1)
Obligations related to Chief Executive Officer
transition (2)
Operating lease retirement obligations
Long-term income taxes payable
Total Obligations and Contingent Payments reflected on
the Consolidated Financial Statements
Contractual Obligations:
Inventory purchase obligations (3)
Operating lease obligations (4)
Total Obligations and Contingent Payments not
reflected on the Consolidated Financial Statements

Payments due by fiscal period

Total

Less than 1
year

1 - 3 years

3 - 5 years

More than
5 years

1,711
3,843

9
1,967
2,547

— $

1,468

9
1,167
—

10,077

2,644

57,229
31,211

57,229
3,700

— $
746

— $
—

—
315
—

—
—
—

1,711
1,629

—
485
2,547

1,061

— $

6,372

— $

6,141

4,713

—
16,657

88,440

60,929

6,141

4,713

16,657

(1) In accordance with regulations in some of our foreign subsidiaries, we are required to provide for severance obligations

that are payable when an employee leaves the Company.

(2) In connection with the September 2010 retirement of our former Chief Executive Officer, we entered into a three year

consulting arrangement with him.

(3) We order inventory components in the normal course of our business. A portion of these orders are non-cancelable and

a portion may have varying penalties and charges in the event of cancellation.

(4) We have minimum rental commitments under various leases (excluding taxes, insurance, maintenance and repairs, which
are also paid by us) primarily for various facility and equipment leases, which expire periodically through 2026 (not
including lease extension options, if applicable).

Under the ADL, Pte expects to enter into a lease agreement (the “Lease Agreement”) with the Landlord. The term for the
rental of the Initial Premises is expected to be 10 years, (the “Initial Term”). Pte will have the option to renew for two
additional ten-year terms. The combined annual rent and service charge for the Initial Term will range between
approximately $4.0 to $5.0 million Singapore dollars. Subject to renting a minimum amount of space, Pte will have a
right of first refusal for all space that becomes available in the Building, and the Landlord has agreed to make available
a certain amount of additional space for rental at Pte's option which may be exercised at certain points during the second
half of the Initial Term. Subject to renting a minimum amount of space for a certain period, Pte will have partial surrender
rights. In addition, Pte will have termination rights after renting the Initial Premises for a certain period of time. The Lease
Agreement is not in effect as of the date of this report and is not reflected in the above table.

We are considered the owner of the building during the construction phase of the ADL. As of September 28, 2013, we
recorded a financing obligation of $19.4 million relating to the building and we are expecting to record an additional $0.6
million over the construction term, which is expected to be completed in the first quarter of fiscal 2014. This financing
obligation is not reflected in the table above.

Off-Balance Sheet Arrangements

On May 9, 2012, Pte obtained a Bank Guarantee from DBS Bank Ltd. in the amount of $3.4 million Singapore dollars. Pte furnished
the Bank Guarantee to the Landlord in lieu of a cash deposit in connection with the building and leasing of a new facility in
Singapore as discussed above. On May 9, 2013, the Bank Guarantee expired and Pte replaced the Bank Guarantee with a cash
deposit of an equivalent amount, which is included in our Consolidated Balance Sheet as part of prepaid expenses and other current
assets.

We currently do not have any other off-balance sheet arrangements, such as derivatives, contingent interests or obligations associated
with variable interest entities.

Item 7A. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our available-for-sale securities, if applicable, may consist of short-term investments in highly rated debt instruments of the U.S.
Government and its agencies, financial institutions, and corporations. We continually monitor our exposure to changes in interest
rates and credit ratings of issuers with respect to any available-for-sale securities and target an average life to maturity of less than
18 months. Accordingly, we believe that the effects to us of changes in interest rates and credit ratings of issuers are limited and
would not have a material impact on our financial condition or results of operations. As of September 28, 2013, we had no available-
for-sale investments.

Foreign Currency Risk

Our international operations are exposed to changes in foreign currency exchange rates due to transactions denominated in currencies
other than the location's functional currency. Our international operations are also exposed to foreign currency fluctuations that
impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their
respective local currencies, most notably in Israel, Malaysia, Singapore and Switzerland. In addition to net monetary remeasurement,
we have exposures related to the translation of subsidiary financial statements from their functional currency, the local currency,
into its reporting currency, the U.S. dollar, most notably in China, Taiwan, Japan and Germany. Our U.S. operations also have
foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar.

Based on our foreign currency exposure as of September 28, 2013, a 10.0% fluctuation could impact our financial position, results
of operations or cash flows by $3.0 to $4.0 million. We may enter into foreign exchange forward contracts and other instruments
in the future; however, our attempts to hedge against these risks may not be successful and may result in a material adverse impact
on our financial results and cash flow. We had no foreign exchange forward contracts or other instruments as of September 28,
2013.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of Kulicke and Soffa Industries, Inc. listed in the index appearing under Item 15 (a)(1)
herein are filed as part of this Report under this Item 8.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Kulicke and Soffa Industries, Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, comprehensive
income, changes in shareholders’ equity, and cash flows present fairly, in all material respects, the financial position of Kulicke
and Soffa Industries, Inc. and its subsidiaries at September 28, 2013 and September 29, 2012, and the results of their operations
and their cash flows for each of the two years in the period ended September 28, 2013 in conformity with accounting principles
generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule for the two years
ended September 28, 2013 listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of September 28, 2013, based on criteria
established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement
schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in Management's Report on Internal Control over Financial Reporting included under
Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the
Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and
whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial
statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures
as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP
Singapore
November 14, 2013

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Kulicke & Soffa Industries, Inc.:

In our opinion, the consolidated statements of operations, comprehensive income, changes in shareholders’ equity and cash flows
for the year ended October 1, 2011, present fairly, in all material respects, the results of operations and cash flows of Kulicke &
Soffa Industries, Inc. and its subsidiaries for the year ended October 1, 2011, in conformity with accounting principles generally
accepted in the United States of America. In addition, in our opinion, the financial statement schedule for the year ended October
1, 2011 listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements. These financial statements and financial statement
schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December 8, 2011

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS
(in thousands)

As of
September 28, 2013 September 29, 2012

ASSETS
Current assets:
Cash and cash equivalents
Short-term investments
Accounts and notes receivable, net of allowance for doubtful accounts of $504 and
$937, respectively
Inventories, net
Prepaid expenses and other current assets
Deferred income taxes
Total current assets

Property, plant and equipment, net
Goodwill
Intangible assets, net
Other assets
TOTAL ASSETS

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
Accrued expenses and other current liabilities
Income taxes payable
Total current liabilities

Built-to-suit liability
Deferred income taxes
Other liabilities
TOTAL LIABILITIES

Commitments and contingent liabilities (Note 12)

SHAREHOLDERS' EQUITY:
Preferred stock, without par value:
Authorized 5,000 shares; issued - none
Common stock, no par value:
Authorized 200,000 shares; issued 80,237 and 79,099, respectively; outstanding
75,283 and 74,145 shares, respectively
Treasury stock, at cost, 4,954 shares
Accumulated income
Accumulated other comprehensive income
TOTAL SHAREHOLDERS' EQUITY

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

521,788
3,252

162,714
38,135
24,012
4,487
754,388

47,541
41,546
11,209
8,310
862,994

37,030
38,868
1,504
77,402

19,396
40,709
8,822
146,329

440,244
—

188,986
58,994
21,577
3,515
713,316

28,441
41,546
20,387
11,919
815,609

57,231
57,946
8,192
123,369

—
37,875
10,698
171,942

— $

—

467,525
(46,356)
291,878
3,618
716,665

862,994

455,122
(46,356)
232,520
2,381
643,667

815,609

The accompanying notes are an integral part of these consolidated financial statements.

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

Net revenue
Cost of sales
Gross profit

Selling, general and administrative
Research and development
Operating expenses

Income from operations

Interest income
Interest expense
Income from operations before income taxes
Provision for income taxes
Net income

Net income per share:
Basic
Diluted

Weighted average shares outstanding:
Basic
Diluted

2013

534,938
287,993
246,945

Fiscal
2012

791,023
423,633
367,390

119,519
61,620
181,139

124,718
63,446
188,164

2011

830,401
442,492
387,909

152,714
65,135
217,849

65,806

179,226

170,060

883
(21)
66,668
7,310
59,358

0.79
0.78

$
$

833
(5,808)
174,251
13,671
160,580

2.17
2.13

$
$

648
(8,280)
162,428
34,818
127,610

1.77
1.73

$
$

75,132
76,190

73,887
75,502

71,820
73,341

The accompanying notes are an integral part of these consolidated financial statements.

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)

Net income

Other comprehensive income (loss):

Foreign currency translation adjustment

Unrecognized actuarial gain, Switzerland pension plan, net of tax

Total other comprehensive income (loss)

Comprehensive income

2013

Fiscal
2012

2011

59,358

160,580

127,610

1,186

1,237

60,595

207

(370)
(163)
160,417

1,022

731

1,753

129,363

The accompanying notes are an integral part of these consolidated financial statements.

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands)

Balances as of October 2, 2010

70,475

423,715

(46,356) $

(55,670) $

791

322,480

Common Stock

Amount

Treasury
Stock

Accumulated
Income
(Deficit)

Accumulated
Other
Comprehensive
Income

Shareholders'
Equity

Employer contribution to the Company's 401(k) plan

Issuance of stock for services rendered

Exercise of stock options

Issuance of shares for time-based restricted stock

Excess tax benefits from stock based compensation

Equity-based compensation expense

Components of comprehensive income:

Net income

Translation adjustment

Unamortized pension costs

Total comprehensive income

Balances as of October 1, 2011

Issuance of stock for services rendered

Exercise of stock options

Issuance of shares for market-based restricted stock
and time-based restricted stock

Excess tax benefits from stock based compensation

Equity-based compensation expense

Components of comprehensive income:

Net income

Translation adjustment

Unamortized pension costs

Total comprehensive income

Balances as of September 29, 2012

Issuance of stock for services rendered

Exercise of stock options

Issuance of shares for market-based restricted stock
and time-based restricted stock

Excess tax benefits from stock based compensation

Equity-based compensation expense

Components of comprehensive income:

Net income

Translation adjustment

Unamortized pension costs

Total comprehensive income

Balances as of September 28, 2013

1,245

927

—

279

720

9,296

—

2,099

5,640

—

127,610

—

127,610

—

1,022

731

1,753

279

720

9,296

—

2,099

5,640

127,610

1,022

731

129,363

72,779

441,749

(46,356) $

71,940

2,544

469,877

436

852

—

720

3,325

—

1,537

7,791

—

160,580

—

160,580

—

207

(370)

(163)

720

3,325

—

1,537

7,791

160,580

207

(370)

160,417

74,145

455,122

(46,356) $

232,520

2,381

643,667

101

963

—

840

908

—

825

9,830

—

59,358

—

59,358

—

1,186

1,237

840

908

—

825

9,830

59,358

1,186

60,595

75,283

467,525

(46,356) $

291,878

3,618

716,665

The accompanying notes are an integral part of these consolidated financial statements.

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Amortization of debt discount and debt issuance costs
Equity-based compensation
Excess tax benefits from stock based compensation
Adjustment for doubtful accounts
Adjustment for inventory valuation
Deferred taxes
Impairment of buildings and building improvements
Switzerland pension plan curtailment gain
Gain on disposal of building
Asset retirement obligation
Changes in operating assets and liabilities, net of businesses acquired or sold:

Accounts and notes receivable
Inventory
Prepaid expenses and other current assets
Accounts payable, accrued expenses and other current liabilities
Income taxes payable
Other, net

Net cash provided by continuing operations
Net cash used in discontinued operations
Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of short term investment
Sales (purchase) of investments classified as available-for-sale
Earnout payment related to prior acquisition
Changes in restricted cash, net

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on debt
Proceeds from exercise of common stock options
Excess tax benefits from stock-based compensation arrangements
Net cash provided by(used in) financing activities
Effect of exchange rate changes on cash and cash equivalents

Changes in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

CASH PAID FOR:
Interest
Income taxes

2013

Fiscal
2012

2011

59,358

160,580

127,610

18,489
—
10,670
(825)
371
3,561
5,901
—
(2,100)
(147)
(368)

26,408
17,056
(2,421)
(36,066)
(6,832)
1,769
94,824
—
94,824

(17,172)
5,310
(3,252)
—
—
—
(15,114)

17,265
5,174
8,511
(1,537)
(1,239)
6,060
3,964
206
(1,690)
—
—

(49,111)
8,144
(46)
33,550
(6,071)
209
183,969
(1,498)
182,471

(6,902)
—
—
6,364
(14,848)
—
(15,386)

—
908
825
1,733
101
81,544
440,244
521,788

(110,000)
3,325
1,537
(105,138)
109
62,056
378,188
440,244

— $
$

8,382

633
10,854

$
$

17,761
7,315
7,496
—
1,219
6,701
19,773
3,002
—
—
—

55,313
(6,122)
(5,621)
(43,449)
13,063
(1,804)
202,257
(1,861)
200,396

(7,688)
—
—
(3,655)
—
237
(11,106)

—
9,296
—
9,296
1,490
200,076
178,112
378,188

963
11,466

The accompanying notes are an integral part of these consolidated financial statements.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: BASIS OF PRESENTATION

These consolidated financial statements include the accounts of Kulicke and Soffa Industries, Inc. and its subsidiaries (the
“Company”), with appropriate elimination of intercompany balances and transactions.

Fiscal Year

Each of the Company's first three fiscal quarters ends on the Saturday that is 13 weeks after the end of the immediately preceding
fiscal quarter. The fourth quarter of each fiscal year ends on the Saturday closest to September 30th. In fiscal years consisting of
53 weeks, the fourth quarter will consist of 14 weeks. The fiscal year end for 2013, 2012, and 2011 ended on September 28, 2013,
September 29, 2012 and October 1, 2011, respectively.

Nature of Business

The Company designs, manufactures and sells capital equipment and expendable tools as well as services, maintains, repairs and
upgrades equipment, all used to assemble semiconductor devices. The Company's operating results depend upon the capital and
operating expenditures of semiconductor manufacturers and outsourced semiconductor assembly and test providers (“OSATs”)
worldwide which, in turn, depend on the current and anticipated market demand for semiconductors and products utilizing
semiconductors. The semiconductor industry is highly volatile and experiences downturns and slowdowns which can have a severe
negative effect on the semiconductor industry's demand for semiconductor capital equipment, including assembly equipment
manufactured and sold by the Company and, to a lesser extent, expendable tools, including those sold by the Company. These
downturns and slowdowns have in the past adversely affected the Company's operating results. The Company believes such
volatility will continue to characterize the industry and the Company's operations in the future.

Use of Estimates

The preparation of consolidated financial statements requires management to make assumptions, estimates and judgments that
affect the reported amounts of assets and liabilities, net revenue and expenses during the reporting periods, and disclosures of
contingent assets and liabilities as of the date of the consolidated financial statements. On an ongoing basis, management evaluates
estimates, including but not limited to, those related to accounts receivable, reserves for excess and obsolete inventory, carrying
value and lives of fixed assets, goodwill and intangible assets, valuation allowances for deferred tax assets and deferred tax
liabilities, repatriation of un-remitted foreign subsidiary earnings, equity-based compensation expense, restructuring, and
warranties. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable.
As a result, management makes judgments regarding the carrying values of its assets and liabilities that are not readily apparent
from other sources. Authoritative pronouncements, historical experience and assumptions are used as the basis for making estimates,
and on an ongoing basis, management evaluates these estimates. Actual results may differ from these estimates under different
assumptions or conditions.

Vulnerability to Certain Concentrations

Financial instruments which may subject the Company to concentrations of credit risk as of September 28, 2013 and September 29,
2012 consisted primarily of short-term investments and trade receivables. The Company manages credit risk associated with
investments by investing its excess cash in highly rated debt instruments of the U.S. Government and its agencies, financial
institutions, and corporations. The Company has established investment guidelines relative to diversification and maturities
designed to maintain safety and liquidity. These guidelines are periodically reviewed and modified as appropriate. The Company
does not have any exposure to sub-prime financial instruments or auction rate securities.

The Company's trade receivables result primarily from the sale of semiconductor equipment, related accessories and replacement
parts, and expendable tools to a relatively small number of large manufacturers in a highly concentrated industry. Write-offs of
uncollectible accounts have historically not been significant; however, the Company closely monitors its customers' financial
strength to reduce the risk of loss.

The Company's products are complex and require raw materials, components and subassemblies having a high degree of reliability,
accuracy and performance. The Company relies on subcontractors to manufacture many of these components and subassemblies
and it relies on sole source suppliers for some important components and raw material inventory.

The Company's international operations are exposed to changes in foreign currency exchange rates due to transactions denominated
in currencies other than the location's functional currency. The Company is also exposed to foreign currency fluctuations that
impact the remeasurement of net monetary assets of those operations whose functional currency, the U.S. dollar, differs from their
respective local currencies, most notably in Israel, Malaysia, Singapore and Switzerland. In addition to net monetary remeasurement,

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

the Company has exposures related to the translation of subsidiary financial statements from their functional currency, the local
currency, into its reporting currency, the U.S. dollar, most notably in China, Taiwan, Japan and Germany. The Company's U.S.
operations also have foreign currency exposure due to net monetary assets denominated in currencies other than the U.S. dollar.

Foreign Currency Translation

The majority of the Company's business is transacted in U.S. dollars; however, the functional currencies of some of the Company's
subsidiaries are their local currencies. In accordance with ASC No. 830, Foreign Currency Matters (“ASC 830”), for a subsidiary
of the Company that has a functional currency other than the U.S. dollar, gains and losses resulting from the translation of the
functional currency into U.S. dollars for financial statement presentation are not included in determining net income, but are
accumulated in the cumulative translation adjustment account as a separate component of shareholders' equity (accumulated other
comprehensive income (loss)). Under ASC 830, cumulative translation adjustments are not adjusted for income taxes as they relate
to indefinite investments in non-U.S. subsidiaries. Gains and losses resulting from foreign currency transactions are included in
the determination of net income.

Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash
equivalents. Cash equivalents are measured at fair value based on level one measurement, or quoted market prices, as defined by
ASC No. 820, Fair Value Measurements and Disclosures. As of September 28, 2013 and September 29, 2012, fair value
approximated the cost basis for cash equivalents.

Investments

Investments, other than cash equivalents, are classified as “trading,” “available-for-sale” or “held-to-maturity,” in accordance with
ASC No. 320, Investments-Debt & Equity Securities, and depending upon the nature of the investment, its ultimate maturity date
in the case of debt securities, and management's intentions with respect to holding the securities. Investments classified as “trading”
are reported at fair market value, with unrealized gains or losses included in earnings. Investments classified as “available-for-
sale” are reported at fair market value, with net unrealized gains or losses reflected as a separate component of shareholders' equity
(accumulated other comprehensive income (loss)). The fair market value of trading and available-for-sale securities is determined
using quoted market prices at the balance sheet date. Investments classified as held-to-maturity are reported at amortized cost.
Realized gains and losses are determined on the basis of specific identification of the securities sold.

Allowance for Doubtful Accounts

The Company maintains allowances for doubtful accounts for estimated losses resulting from its customers' failure to make required
payments. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to
make payments, additional allowances may be required. The Company is also subject to concentrations of customers and sales to
a few geographic locations, which could also impact the collectability of certain receivables. If global economic conditions
deteriorate or political conditions were to change in some of the countries where the Company does business, it could have a
significant impact on the results of operations, and the Company's ability to realize the full value of its accounts receivable.

Inventories

Inventories are stated at the lower of cost (on a first-in first-out basis) or market value. The Company generally provides reserves
for obsolete inventory and for inventory considered to be in excess of demand. Demand is generally defined as 18 months future
consumption for equipment, 24 months consumption for all spare parts, and 12 months consumption for expendable tools.
Forecasted demand is based upon internal projections, historical sales volumes, customer order activity and a review of consumable
inventory levels at customers' facilities. The Company communicates forecasts of its future demand to its suppliers and adjusts
commitments to those suppliers accordingly. If required, the Company reserves the difference between the carrying value of its
inventory and the lower of cost or market value, based upon assumptions about future demand, and market conditions. If actual
market conditions are less favorable than projections, additional inventory reserves may be required.

Property, Plant and Equipment

Property, plant and equipment are carried at cost. The cost of additions and those improvements which increase the capacity or
lengthen the useful lives of assets are capitalized while repair and maintenance costs are expensed as incurred. Depreciation and
amortization are provided on a straight-line basis over the estimated useful lives as follows: buildings 25 years; machinery and
equipment 3 to 10 years; and leasehold improvements are based on the shorter of the life of lease or life of asset. Purchased
computer software costs related to business and financial systems are amortized over a five-year period on a straight-line basis.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Valuation of Long-Lived Assets

In accordance with ASC No. 360, Property, Plant & Equipment ("ASC 360"), the Company's property, plant and equipment is
tested for impairment based on undiscounted cash flows when triggering events occur, and if impaired, written-down to fair value
based on either discounted cash flows or appraised values. ASC 360 also provides a single accounting model for long-lived assets
to be disposed of by sale and establishes additional criteria that would have to be met to classify an asset as held for sale. The
carrying amount of an asset or asset group is not recoverable to the extent it exceeds the sum of the undiscounted cash flows
expected to result from the use and eventual disposition of the asset or asset group. Estimates of future cash flows used to test the
recoverability of a long-lived asset or asset group must incorporate the entity's own assumptions about its use of the asset or asset
group and must factor in all available evidence.

ASC 360 requires that long-lived assets be tested for recoverability whenever events or changes in circumstances indicate that
their carrying amount may not be recoverable. Such events include significant under-performance relative to the expected historical
or projected future operating results; significant changes in the manner of use of the assets; significant negative industry or economic
trends; and significant changes in market capitalization. During the fiscal year ended September 28, 2013, no triggering events
occurred.

Accounting for Impairment of Goodwill

The Company operates two reportable segments: Equipment and Expendable Tools. Goodwill was recorded in 2009 for the
acquisition of Orthodyne Electronics Corporation ("Orthodyne"), which added wedge bonder products (also known as "reporting
unit") to the Equipment business.

Accounting Standard Update 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”), provides companies with the option
to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its
carrying value. If, after assessing the qualitative factors, a company determines that it is not more likely than not that the fair value
of a reporting unit is less than its carrying value, then performing the two-step impairment test is unnecessary. However, if a
company concludes otherwise, then it is required to perform the first step of the two-step goodwill impairment test. If the carrying
value of a reporting unit exceeds its fair value, then a company is required to perform the second step of the two-step goodwill
impairment test.

The Company chose to skip the qualitative assessment and proceed directly to performing the quantitative evaluation of the fair
value of the goodwill of the reporting unit, to compare against the carrying value of the goodwill recorded in the books. If the fair
value exceeds the carrying value, there is no impairment. Any excess carrying value is equal to the goodwill impairment charge.

As part of the annual evaluation, the Company performs an impairment test of its goodwill in the fourth quarter of each fiscal year
to coincide with the completion of its annual forecasting and refreshing of its business outlook processes. On an ongoing basis,
the Company monitors if a “triggering” event has occurred that may have the effect of reducing the fair value of a reporting unit
below its respective carrying value. Adverse changes in expected operating results and/or unfavorable changes in other economic
factors used to estimate fair values could result in a non-cash impairment charge in the future.

As of September 28, 2013, the Company concluded that the fair value of the reporting unit exceeded book value, and management
does not believe that an impairment is probable at this time. The near term profitability forecast of the wedge bonder business unit
is expected to be higher than that experienced in the prior year, and the expected improvement in profitability in future periods
will sustain its carrying value. However, if the performance of the business unit does not meet or exceed those expectations, a
future impairment could result for a portion or all of the goodwill valued at $41.5 million as of September 28, 2013. The quantification
of any impairment would be dependent on the performance of the business unit, which inherently involves judgment as to
assumptions about expected future cash flows and the impact of market conditions on those assumptions. Future events and
changing market conditions may impact the assumptions as to prices, costs, growth rates or other factors that may result in changes
in the estimates of future cash flows. Although the Company believes the assumptions that it has used in testing for impairment
are reasonable, significant changes in any one of the assumptions could produce a significantly different result. Indicators of
potential impairment that may lead the Company to perform interim goodwill impairment assessments include significant and
unforeseen customer losses, a significant adverse change in the business climate, unanticipated competition or unforeseen changes
in technology.

For further information on goodwill and other intangible assets, see Note 3 below.

Revenue Recognition

In accordance with ASC No. 605, Revenue Recognition, the Company recognizes revenue when persuasive evidence of an
arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, the collectability is

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

reasonably assured, and equipment installation obligations have been completed and customer acceptance, when applicable, has
been received or otherwise released from installation or customer acceptance obligations. If terms of the sale provide for a customer
acceptance period, revenue is recognized upon the expiration of the acceptance period or customer acceptance, whichever occurs
first. The Company’s standard terms are ex works (the Company’s factory), with title transferring to its customer at the Company’s
loading dock or upon embarkation. The Company has a small percentage of sales with other terms, and revenue is recognized in
accordance with the terms of the related customer purchase order. Revenue related to services is recognized upon performance of
the services requested by a customer order. Revenue for extended maintenance service contracts with a term more than one month
is recognized on a prorated straight-line basis over the term of the contract.

Shipping and handling costs billed to customers are recognized in net revenue. Shipping and handling costs paid by the Company
are included in cost of sales.

Research and Development

The Company charges research and development costs associated with the development of new products to expense when incurred.
In certain circumstances, pre-production machines which the Company intends to sell are carried as inventory until sold.

Income Taxes

In accordance with ASC No. 740, Income Taxes, deferred income taxes are determined using the liability method. The Company
records a valuation allowance to reduce its deferred tax assets to the amount it expects is more likely than not to be realized. While
the Company has considered future taxable income and its ongoing tax planning strategies in assessing the need for the valuation
allowance, if it were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded
amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Likewise,
should the Company determine it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment
to the deferred tax asset would decrease income in the period such determination was made.

In accordance with ASC No. 740 Topic 10, Income Taxes, General (“ASC 740.10”), the Company accounts for uncertain tax
positions taken or expected to be taken in its income tax return. Under ASC 740.10, the Company utilizes a two-step approach for
evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence
indicates a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation
processes, if any. Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized
on settlement with the taxing authority.

Equity-Based Compensation

The Company accounts for equity-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation
(“ASC 718”). ASC 718 requires the recognition of the fair value of the equity-based compensation in net income. Compensation
expense associated with market-based restricted stock is determined using a Monte-Carlo valuation model, and compensation
expense associated with time-based and performance-based restricted stock is determined based on the number of shares granted
and the fair value on the date of grant. The fair value of the Company's stock option awards are estimated using a Black-Scholes
option valuation model. In addition, the calculation of equity-based compensation costs requires that the Company estimate the
number of awards that will be forfeited during the vesting period. The fair value of equity-based awards is amortized over the
vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of ASC
718.

Earnings per Share

Earnings per share (“EPS”) are calculated in accordance with ASC No. 260, Earnings per Share. Basic EPS include only the
weighted average number of common shares outstanding during the period. Diluted EPS includes the weighted average number
of common shares and the dilutive effect of stock options, restricted stock and share unit awards and convertible subordinated
notes outstanding during the period, when such instruments are dilutive.

In accordance with ASC No. 260.10.55, Earnings per Share - Implementation & Guidance, the Company treats all outstanding
unvested share-based payment awards that contain rights to nonforfeitable dividends as participating in undistributed earnings
with common shareholders. Awards of this nature are considered participating securities and the two-class method of computing
basic and diluted EPS must be applied.

Prior Period Adjustment

During the three months ended December 29, 2012, the Company identified a prior period adjustment of $1.1 million relating to
the recognition of government grants that resulted in increased R&D expenses and a reduction of grants receivable. This error was

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

corrected during the quarter ended December 29, 2012 and management deemed that the adjustment was not material to the
previous fiscal year ended September 29, 2012. This amount impacted the operating results for the fiscal year ended September 28,
2013.

Recent Accounting Pronouncements

In January 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-01, Balance Sheet (Topic 210): Clarifying
the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”). ASU 2013-01 contains no amendments to
disclosure requirements. The amendments clarify that the scope of ASU 2011-11, Disclosures about Offsetting Assets and Liabilities,
which introduced new disclosure requirements, applies to derivatives accounted for in accordance with Topic 815, Derivatives
and Hedging, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities
borrowing and securities lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or
subject to an enforceable master netting arrangement or similar agreement. ASU 2013-01 is effective for fiscal years beginning
on or after January 1, 2013 and interim periods within those annual periods. The Company believes adoption of this new guidance
will not have a material impact on the Company's financial statements as these updates have an impact on presentation only.

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of
Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 amended certain paragraphs in Comprehensive
Income (Topic 220), the amendments require an entity to provide information about the amounts reclassified out of accumulated
other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where
net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the
respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in
its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety
to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide additional detail
about those amounts. ASU 2013-02 is effective prospectively for reporting periods beginning after December 15, 2012. The
Company believes adoption of this new guidance will not have a material impact on the Company’s financial statements as these
updates have an impact on presentation only.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 2: BALANCE SHEET COMPONENTS

The following tables reflect the components of significant balance sheet accounts as of September 28, 2013 and September 29,
2012:

(in thousands)
Short term investments, available-for-sale:
Deposits maturing within one year (1)

Inventories, net:
Raw materials and supplies
Work in process
Finished goods

Inventory reserves

Property, plant and equipment, net:
Land
Buildings and building improvements
Leasehold improvements
Data processing equipment and software
Machinery, equipment, furniture and fixtures
Construction in progress (2)

Accumulated depreciation (3)

Accrued expenses and other current liabilities:
Wages and benefits
Accrued customer obligations (4)
Commissions and professional fees
Severance
Other

As of

September 28, 2013

September 29, 2012

3,252

—

19,703
12,219
20,333
52,255
(14,120)
38,135

— $

3,060
15,763
24,549
48,998
19,396
111,766
(64,225)
47,541

19,779
8,270
2,640
1,468
6,711
38,868

26,660
23,352
27,599
77,611
(18,617)
58,994

2,086
4,830
16,005
23,819
40,580
3,219
90,539
(62,098)
28,441

18,734
22,984
2,776
2,840
10,612
57,946

(1) All short-term investments were classified as available-for-sale and were measured at fair value based on level one measurement,
or quoted market prices, as defined by ASC 820. As of September 28, 2013, fair value approximated the cost basis for short-
term investments. The Company did not recognize any realized gains or losses on the sale of investments during fiscal 2013.

(2) Pursuant to ASC No. 840, Leases, the Company is considered the owner of the building during the construction phase for the
Agreement to Develop and Lease (the “ADL”) facility being developed by Mapletree Industrial Trust (the “Landlord”) in
Singapore—see Note 12 below. The estimated construction costs incurred to date in relation to the relevant proportion of the
Company's lease is recognized on the Consolidated Balance Sheet as at September 28, 2013 and September 29, 2012. Applicable
ground lease expense of $0.5 million was accrued as of September 28, 2013.

(3) The depreciation expense for the years ended September 28, 2013 and September 29, 2012 are $9.3 million and $8.1 million

respectively.

(4) Represents customer advance payments, customer credit program, accrued warranty expense and accrued retrofit costs.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 3: GOODWILL AND INTANGIBLE ASSETS

Goodwill

Intangible assets classified as goodwill are not amortized. The Company performs an annual impairment test of its goodwill during
the fourth quarter of each fiscal year, which coincides with the completion of its annual forecasting and refreshing of its business
outlook processes. The Company performed its annual impairment test in the fourth quarter of fiscal 2013 and concluded that no
impairment charge was required. The Company also tests for impairment if a “triggering” event occurs that may have the effect
of reducing the fair value of a reporting unit below its respective carrying value.

On October 3, 2008, the Company completed the acquisition of Orthodyne and agreed to pay Orthodyne an additional amount in
the future based upon the gross profit realized by the acquired business over a three year period from date of acquisition pursuant
to an Earnout Agreement entered into in connection with the acquisition. At the end of fiscal 2011, the Company accrued $14.8
million as an earnout payment related to the Orthodyne acquisition to goodwill which was paid during the first quarter of fiscal
2012. Following the acquisition of Orthodyne, wedge bonder products were added to the Equipment business.

Intangible Assets

Intangible assets with determinable lives are amortized over their estimated useful lives. The Company's intangible assets consist
primarily of wedge bonder developed technology and customer relationships.

The following table reflects net intangible assets as of September 28, 2013 and September 29, 2012:

(dollar amounts in thousands)
Wedge bonder developed technology
Accumulated amortization

Net wedge bonder developed technology

As of

September 28, 2013
33,200
$
(23,715)
9,485

September 29, 2012
33,200
$
(18,973)
14,227

Average estimated
useful lives (in years)
7.0

Wedge bonder customer relationships
Accumulated amortization

Net wedge bonder customer relationships

Wedge bonder trade name
Accumulated amortization

Net wedge bonder trade name

Wedge bonder other intangible assets
Accumulated amortization

Net wedge bonder other intangible assets

19,300
(19,300)
—

4,600
(2,876)
1,724

2,500
(2,500)
—

19,300
(15,440)
3,860

4,600
(2,300)
2,300

2,500
(2,500)
—

Net intangible assets

11,209

20,387

5.0

8.0

1.9

The following table reflects estimated annual amortization expense related to intangible assets as of September 28, 2013:

(in thousands)
Fiscal 2014
Fiscal 2015
Fiscal 2016
Total amortization expense

As of
September 28, 2013
5,318
$
5,318
573
11,209

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 4: CASH AND CASH EQUIVALENTS

Cash equivalents consist of instruments with remaining maturities of three months or less at the date of purchase. In general, these
investments are free of trading restrictions. We carry these investments at fair value, based on quoted market prices or other readily
available market information.

Cash and cash equivalents consisted of the following as of September 28, 2013:

(dollar amounts in thousands)

Current assets:

Cash

Cash equivalents

Money market funds

Time deposits

Total cash and cash equivalents

Short-term investments

Time deposits

Total short-term investments

Amortized
Cost

Unrealized
Gains

Unrealized
Losses

Estimated
Fair Value

113,295

— $

113,295

226,272

182,221

521,788

3,252
3,252

—

—
—

—

—
—

226,272

182,221

521,788

3,252
3,252

Total cash, cash equivalents and short-term investments

525,040

— $

525,040

Cash and cash equivalents consisted of the following as of September 29, 2012:

(dollar amounts in thousands)

Current assets:

Cash

Cash equivalents

Money market funds

Time deposits

Amortized
Cost

Unrealized
Gains

Unrealized
Losses

Estimated
Fair Value

100,853

— $

100,853

279,940

59,451

—

279,940

59,451

Total cash and cash equivalents

440,244

— $

440,244

NOTE 5: FAIR VALUE MEASURMENTS

Accounting standards establish three levels of inputs that may be used to measure fair value: quoted prices in active markets for
identical assets or liabilities (referred to as Level 1), inputs other than Level 1 that are observable for the asset or liability either
directly or indirectly (referred to as Level 2) and unobservable inputs to the valuation methodology that are significant to the
measurement of fair value of assets or liabilities (referred to as Level 3).

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

We measure certain financial assets and liabilities at fair value on a recurring basis. There have been no transfers between fair
value measurement levels during the year ended September 28, 2013.

Fair Value Measurements on a Nonrecurring Basis

Our non-financial assets such as property and property, plant equipment are carried at cost unless impairment is deemed to have
occurred.

Fair Value of Financial Instruments

Amounts reported as cash and equivalents, short-term investments receivables, accounts payable and accrued expenses approximate
fair value.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The fair value of our financial assets and liabilities at September 28, 2013 were determined using the following inputs:

(dollar amounts in thousands)

Fair Value Measurements at Reporting Date Using

Assets:

Cash

Cash equivalents

Money market funds

Time deposits

Short-term investments

Time deposits

Total assets

Quoted Prices
in Active
Markets for
Identical Assets

Significant
Other
Observable
Inputs

Significant
Unobservable
Inputs

Total

(Level 1)

(Level 2)

(Level 3)

113,295

— $

226,272

182,221

226,272

182,221

3,252

—

525,040

— $

—

The fair value of our financial assets and liabilities at September 29, 2012 were determined using the following inputs:

(dollar amounts in thousands)

Fair Value Measurements at Reporting Date Using

Assets:

Cash

Cash equivalents

Money market funds

Time deposits

Total assets

Quoted Prices
in Active
Markets for
Identical Assets

Significant
Other
Observable
Inputs

Significant
Unobservable
Inputs

Total

(Level 1)

(Level 2)

(Level 3)

100,853

— $

279,940

59,451

279,940

59,451

—

440,244

— $

—

NOTE 6: DEBT AND OTHER OBLIGATIONS

Bank Guarantee

On May 9, 2012, Kulicke & Soffa Pte Ltd. (“Pte”), the Company's wholly owned subsidiary, obtained a bank guarantee (“Bank
Guarantee”) from DBS Bank Ltd. in the amount of $3.4 million Singapore dollars. Pte furnished the Bank Guarantee to the Landlord
in lieu of a cash deposit in connection with building and leasing of a new facility in Singapore (See Note 12).

On May 9, 2013, the Bank Guarantee expired and Pte replaced the Bank Guarantee with a cash deposit to the landlord of an
equivalent amount, which is included in the Consolidated Balance Sheet as part of prepaid expenses and other current assets.

0.875% Convertible Subordinated Notes

The Company previously held 0.875% Convertible Subordinated Notes (the “Notes”) which matured on June 1, 2012. Prior to
maturity, holders of the Notes were entitled to convert their Notes based on an initial conversion rate of approximately 69.6621
shares per $1,000 principal amount of Notes (equal to an initial conversion price of approximately $14.355 per share, subject to
adjustment for certain events) only under specific circumstances. The Company had the option to elect to satisfy the conversion
obligations in cash, common stock or a combination thereof. The Company repaid the entire principal balance of the Notes of
$110.0 million plus interest of $0.5 million in cash in fiscal 2012. No common shares were issued in connection with repayment
of the Notes.

For the fiscal years ended September 29, 2012 and October 1, 2011, $0.4 million and $0.6 million of amortization expense was
incurred, respectively, relating to the Notes. There was no amortization expense for the fiscal year ended September 28, 2013.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company adopted ASC 470.20, Debt, Debt with Conversion Options, which requires that issuers of convertible debt that may
be settled in cash upon conversion record the liability and equity components of the convertible debt separately. The liability
component of the Company's Notes was classified as debt and the equity component of the Notes was classified as common stock
on the Company's Consolidated Balance Sheets.

Agreement to Develop and Lease

On May 7, 2012, Kulicke & Soffa Pte Ltd. (“Pte”), the Company’s wholly owned subsidiary Pte entered into the ADL with DBS
Trustee Limited as trustee of Mapletree Industrial Trust (the “Landlord”). Pursuant to the ADL, the Landlord agreed to develop
a building at Lot 17622A Pt Mukim 18 at Serangoon North Avenue 5 (the “Building”) and Pte expects to lease from the Landlord
198,134 square feet (the “Initial Premises”), representing approximately 69% of the Building. The Building is estimated to be
completed and ready for occupancy in the first quarter of 2014.

The facility is currently being constructed. In accordance with ASC No. 840, Leases ("ASC 840"), we are considered to be the
owner of the building during the construction phase due to our involvement in the asset construction. Since the Company is
considered the owner of the building during the construction period, a sale and leaseback of the building will occur when construction
is completed and the lease term begins. As a result of the Company's continued involvement, the Company will be unable to use
sale-leaseback accounting under ASC 840. Therefore, at completion, the building will remain on the Consolidated Balance Sheet,
and the corresponding financing obligation will be reclassified to long-term liability.

The estimated construction costs incurred to date in relation to the relevant proportion of our lease recognized as of September
28, 2013 is $19.4 million.

NOTE 7: SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS

Common Stock and 401(k) Retirement Income Plan

The Company has a 401(k) retirement income plan (the “Plan”) for its employees. Historically, the Company's matching
contributions to the Plan were made in the form of issued and contributed shares of Company common stock; however, beginning
January 2, 2011, matching contributions to the Plan are made in cash instead of stock. The Plan allows for employee contributions
and matching Company contributions up to 4% or 6% of the employee's contributed amount based upon years of service.

The following table reflects the Company’s matching contributions to the Plan during fiscal 2013 and 2012:

(in thousands)
Cash

Accumulated Other Comprehensive Income

Fiscal

2013

2012

1,478

1,707

The following table reflects accumulated other comprehensive income reflected on the Consolidated Balance Sheets as of
September 28, 2013 and September 29, 2012:

(in thousands)
Gain from foreign currency translation adjustments
Unrecognized actuarial gain, Switzerland pension plan, net of tax
Switzerland pension plan curtailment
Accumulated other comprehensive income

Equity-Based Compensation

As of

September 28, 2013
4,182
$
(227)
(337)
3,618

September 29, 2012
2,996
$
(227)
(388)
2,381

As of September 28, 2013, the Company had seven equity-based employee compensation plans (the “Employee Plans”) and three
director compensation plans (the “Director Plans”) (collectively, the “Plans”). Under these Plans, market-based share awards
(collectively, “market-based restricted stock”), time-based share awards (collectively, “time-based restricted stock”), performance-
based share awards (collectively, “performance-based restricted stock”), stock options, or common stock have been granted at
100% of the market price of the Company's common stock on the date of grant. As of September 28, 2013, the Company’s one
active plan, the 2009 Equity Plan, had 4.6 million shares of common stock available for grant to its employees and directors.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

• Market-based restricted stock entitles the employee to receive common shares of the Company on the award vesting date
if market performance objectives which measure relative total shareholder return (“TSR”) are attained. Relative TSR is
calculated based upon the 90-calendar day average price of the Company's stock as compared to specific peer companies
that comprise the Philadelphia Semiconductor Index. TSR is measured for the Company and each peer company over a
performance period, which is generally three years. Vesting percentages range from 0% to 200% of awards granted. The
provisions of the market-based restricted stock are reflected in the grant date fair value of the award; therefore,
compensation expense is recognized regardless of whether or not the market condition is ultimately satisfied.
Compensation expense is reversed if the award is forfeited prior to the vesting date.

•

In general, stock options and time-based restricted stock awarded to employees vest annually over a three-year period
provided the employee remains employed by the Company. The Company follows the non-substantive vesting method
for stock options and recognizes compensation expense immediately for awards granted to retirement-eligible employees,
or over the period from the grant date to the date retirement eligibility is achieved.

In general, performance-based restricted stock (“PSU”) entitles the employee to receive common shares of the Company
on the three-year anniversary of the grant date (if employed by the Company) if return on invested capital and revenue
growth targets set by the Management Development and Compensation Committee (“MDCC”) of the Board of Directors
on the date of grant are met. If return on invested capital and revenue growth targets are not met, performance-based
restricted stock does not vest. Certain PSUs vest based on achievement of strategic goals over a certain time period or
periods set by the MDCC. If the strategic goals are not achieved, the PSUs do not vest.

Equity-based compensation expense recognized in the Consolidated Statements of Operations for fiscal 2013, 2012 and 2011 was
based upon awards ultimately expected to vest. In accordance with ASC No. 718, Stock Based Compensation, forfeitures have
been estimated at the time of grant and were based upon historical experience. The Company reviews the forfeiture rates periodically
and makes adjustments as necessary.

The following table reflects total equity-based compensation expense, which includes restricted stock, stock options and common
stock, included in the Consolidated Statements of Operations for fiscal 2013, 2012, and 2011:

(in thousands)
Cost of sales
Selling, general and administrative
Research and development
Total equity-based compensation expense

2013

295
8,457
1,918
10,670

Fiscal
2012

312
6,602
1,777
8,691

2011

213
5,671
1,328
7,212

The following table reflects equity-based compensation expense, by type of award, for fiscal 2013, 2012, and 2011:

(in thousands)
Market-based restricted stock
Time-based restricted stock
Performance-based restricted stock
Stock options
Common stock
Total equity-based compensation expense

2013

Fiscal
2012

2011

4,135
5,545
107
43
840
10,670

2,929
4,732
269
41
720
8,691

1,961
4,003
442
86
720
7,212

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Equity-Based Compensation: employee market-based restricted stock

The following table reflects employee market-based restricted stock activity for fiscal 2013, 2012, and 2011:

Number of shares
(in thousands)

Unrecognized
compensation
expense (in
thousands)

Average remaining
service period (in
years)

Weighted average
grant date fair
value per share

Market-based restricted stock
outstanding as of October 2, 2010

Granted

Forfeited or expired

Vested

Market-based restricted stock
outstanding as of October 2, 2011

Granted

Forfeited or expired

Market-based restricted stock
outstanding as of September 29, 2012

Granted

Forfeited or expired

Vested

667

3,674

6,175

314

442

(165)

(104)

487

437

(10)

914

344

(49)

(124)

Market-based restricted stock
outstanding as of September 28, 2013

1,085

5,913

11.32

12.56

13.89

1.3

1.9

1.5

1.1

Equity-Based Compensation: employee time-based restricted stock

The following table reflects employee time-based restricted stock activity for fiscal 2013, 2012, and 2011:

Number of shares
(in thousands)

Unrecognized
compensation
expense (in
thousands)

Average remaining
service period (in
years)

Weighted average
grant date fair
value per share

Time-based restricted stock
outstanding as of October 2, 2010

Granted

Forfeited or expired
Vested
Time-based restricted stock
outstanding as of October 1, 2011

Granted

Forfeited or expired

Vested

1,707

5,683

714

(259)
(563)

1,599

6,096

695

(76)

(686)

Time-based restricted stock
outstanding as of September 29, 2012

1,532

7,070

Granted

Forfeited or expired

Vested

620

(132)

(804)

Time-based restricted stock
outstanding as of September 28, 2013

1,216

6,028

6.56

9.15

10.59

1.4

1.7

1.4

1.2

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Equity-Based Compensation: employee performance-based restricted stock

No performance-based restricted stock was issued during fiscal 2012 or 2011.

The following table reflects employee performance-based restricted stock activity for fiscal 2013, 2012, and 2011:

Performance-based restricted stock outstanding as of October
2, 2010

Forfeited or expired

Vested

Performance-based restricted stock outstanding as of October
1, 2011

Vested

Performance-based restricted stock outstanding as of
September 29, 2012
Granted

Performance-based restricted stock outstanding as of
September 28, 2013

Number of shares
(in thousands)

Unrecognized
compensation
expense (in
thousands)

Average remaining
service period (in
years)

626
(275)
(182)

169
(169)

—
57

228

—

550

0.2

—

2.2

The following table reflects employee stock option activity for fiscal 2013, 2012, and 2011:

Number of
shares (in
thousands)

Weighted
average
exercise price

Average
remaining
contractual
life (in years)

Aggregate
intrinsic value
(in thousands)

Options outstanding as of October 2, 2010

Granted

Exercised

Forfeited or expired

Options outstanding as of October 1, 2011

Granted

Exercised
Forfeited or expired

Options outstanding as of September 29, 2012

Exercised

Forfeited or expired

Options outstanding as of September 28, 2013

Options vested and expected to vest as of September 28, 2013

Options exercisable as of September 28, 2013

In the money exercisable options as of September 28, 2013

3,310

—
(1,216)
(585)
1,509

—
(374)
(432)
703
(101)
(40)
562

560

555

339

9.80

—

7.50

13.79

10.11

—

7.70
13.35

9.40

9.57

9.60

3,498

829

292

1,210

1,189

1.9

Since 2007, on average, 14.5% of stock options granted by the Company become vested each year, and on average, 21% of stock
options granted by the Company are forfeited each year. Intrinsic value of stock options exercised is determined by calculating
the difference between the market value of the Company's stock price at the time an option is exercised and the exercise price,
multiplied by the number of shares. The intrinsic value of stock options outstanding and stock options exercisable is determined
by calculating the difference between the Company's closing stock price on the last trading day of fiscal 2013 and the exercise
price of in-the-money stock options, multiplied by the number of underlying shares. During fiscal 2013, the Company received

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

$0.9 million in cash from the exercise of employee and non-employee director stock options.

As of September 28, 2013, total unrecognized compensation cost related to unvested employee stock options was $20,600, which
will be amortized over the weighted average remaining service period of approximately 1 year.

The following table reflects outstanding and exercisable employee stock options as of September 28, 2013:

Range of
exercise prices
3.06 - 7.08
7.14 - 7.31
8.43 - 8.74
9.64 - 12.05

Options outstanding
(in thousands)

Options Outstanding
Weighted average
remaining contractual
life (in years)

Options Exercisable

Weighted
average exercise
price

Options exercisable
(in thousands)

Weighted
average exercise
price

29
85
230
218
562

5.75
1.1
3.62
0.05
1.97

5.48
7.14
8.63
12.03
9.56

24
85
228
218
555

5.29
7.14
8.63
12.03
9.6

Equity-Based Compensation: non-employee directors

The 2009 Equity Plan provides for the grant of common shares to each non-employee director upon initial election to the board
and on the first business day of each calendar quarter while serving on the board. The grant to a non-employee director upon initial
election to the board is that number of common shares closest in value to, without exceeding, $120,000. The quarterly grant to a
non-employee director upon the first business day of each calendar year quarter is that number of common shares closest in value
to, without exceeding, $30,000.

The following table reflects shares of common stock issued to non-employee directors and the corresponding fair value for fiscal
2013, 2012, and 2011:

(in thousands)
Number of commons shares issued
Fair value based upon market price at time of issue

2013

Fiscal
2012

74
908

78
720

2011

89
720

The following table reflects non-employee director stock option activity for fiscal 2013, 2012, and 2011:

Options outstanding as of October 2, 2010

Exercised

Forfeited or expired

Options outstanding as of October 1, 2011

Exercised

Forfeited or expired

Options outstanding as of September 29, 2012

Options outstanding as of September 28, 2013

Options vested and expected to vest as of
September 28, 2013

Options exercisable as of September 28, 2013

In the money exercisable options as of
September 28, 2013

Number of shares
(in thousands)

Weighted
average
exercise price

Average
remaining
contractual life
(in years)

Aggregate
intrinsic value
(in thousands)

11.25

6.16

11.50

11.78

6.89

17.62

11.45

348
(30)
(60)
258
(63)
(60)
135

135

170

300

1.3

No non-employee director stock options were granted during fiscal 2013, 2012, and 2011.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Pension Plan

The following table reflects the Company's defined benefits pension obligations as of September 28, 2013 and September 29,
2012 :

(in thousands)

Switzerland pension obligation

Taiwan pension obligation

Total pension obligation

As of

September 28, 2013

September 29, 2012

388

1,323

1,711

2,506

1,323

3,829

In accordance with regulations in Switzerland, the Company sponsors a Switzerland pension plan covering active employees whose
minimum benefits are guaranteed. During fiscal 2012, the Company announced the intention to reduce its Switzerland workforce
by approximately 41 employees, which triggered a further curtailment of the Switzerland pension plan under ASC No. 715, Topic
30, Compensation - Retirement Benefits, Defined Benefit Plans. As a result, the Company recognized a pretax curtailment and
settlement gain of $1.7 million and $2.1 million in fiscal 2012 and 2013, respectively.

Other Plans
Some of the Company's other foreign subsidiaries have retirement plans that are integrated with and supplement the benefits
provided by laws of the various countries. These other plans are not required to report nor do they determine the actuarial present
value of accumulated benefits or net assets available for plan benefits as they are defined contribution plans.

NOTE 8: EARNINGS PER SHARE

Basic income (loss) per share is calculated using the weighted average number of shares of common stock outstanding during the
period. In addition, net income applicable to participating securities and the related participating securities are excluded from the
computation of basic income per share.

Diluted income per share is calculated using the weighted average number of shares of common stock outstanding during the
period and, if there is net income during the period, the dilutive impact of common stock equivalents outstanding during the period.
In computing diluted income per share, if convertible debt is assumed to be converted to common shares, the after-tax amount of
interest expense recognized in the period associated with the convertible debt is added back to net income.

As of October 1, 2011, the Company determined that the Notes would not result in the issuance of any dilutive shares, since the
conversion option was not “in the money” as of October 1, 2011. The Notes matured on June 1, 2012. The Company repaid the
entire principal balance of the Notes of $110.0 million plus interest of $0.5 million in cash in fiscal 2012. No common shares
were issued in connection with repayment of the Notes. Accordingly, diluted EPS excludes the effect of the conversion of the
Notes.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following tables reflect a reconciliation of the shares used in the basic and diluted net income per share computation for fiscal
2013, 2012, and 2011:

(in thousands, except per share)

2013

Fiscal
2012

2011

Basic

Diluted

Basic

Diluted

Basic

Diluted

NUMERATOR:

Net income

Less: income applicable to
participating securities

Net income applicable to common
shareholders

DENOMINATOR:

Weighted average shares outstanding
- Basic

Stock options

Time-based restricted stock
Market-based restricted stock

Weighted average shares outstanding
- Diluted (1)

EPS:

59,358

160,580

127,610

—

(5)

(716)

59,358

160,575

126,894

75,132

73,887

71,820

110

512
436

76,190

660

813
142

442

846
233

75,502

73,341

Net income per share - Basic

0.79

Effect of dilutive shares

Net income per share - Diluted

2.17

0.79
(0.01)
0.78

1.77

2.17
(0.04)
2.13

1.77
(0.04)
1.73

(1) There were no potentially dilutive shares excluded for fiscal 2013. Fiscal 2012 and 2011 exclude 0.1 million and 0.4
million dilutive participating securities, respectively, as the income attributable to these shares was not included in
EPS.

NOTE 9: INCOME TAXES

The following table reflects income from continuing operations by location, the provision (benefit) for income taxes and the
effective tax rate for fiscal 2013, 2012, and 2011:

(dollar amounts in thousands)
United States operations
Foreign operations
Income from operations before tax
Provision for income taxes
Net income
Effective tax rate

2013

(4,340)
71,008
66,668
7,310
59,358

11.0%

Fiscal
2012

(6,111)
180,362
174,251
13,671
160,580

2011

33,531
128,897
162,428
34,818
127,610

7.8%

21.4%

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reflects the provision for income taxes from continuing operations for fiscal 2013, 2012, and 2011:

(in thousands)
Current:
Federal
State
Foreign
Deferred:
Federal
State
Foreign
Provision for income taxes

2013

Fiscal
2012

2011

(212) $
291
1,732

985
5
4,509
7,310

4,103
942
5,497

4,169
48
(1,088)
13,671

(90)
1,099
14,764

17,463
8
1,574
34,818

The following table reflects the difference between the provision for income taxes and the amount computed by applying the
statutory federal income tax rate for fiscal 2013, 2012, and 2011:

(in thousands)
Computed income tax expense based on U.S. statutory rate
Effect of earnings of foreign subsidiaries subject to different tax rates
Benefits from foreign approved enterprise zones
Effect of permanent items
Changes in valuation allowance

Foreign operations (withholding taxes, deferred taxes on unremitted
earnings, US taxation of foreign earnings)
Reserve for uncertain tax positions
State income tax expense
Other, net
Provision for income taxes

2013

23,334
(11,193)
(9,626)
664
1,429

1,789
683
(734)
964
7,310

Fiscal
2012

60,988
(30,067)
(22,138)
152
1,261

12,604
(7,626)
(394)
(1,109)
13,671

2011

56,850
(17,300)
(21,079)
669
(962)

6,917
7,406
1,230
1,087
34,818

Income tax expense for the current year includes approximately $0.3 million, $3.0 million and $4.4 million of taxes payable for
deemed distributions from earnings for the years ended September 28, 2013, September 29, 2012 and October 1, 2011, respectively.

Undistributed earnings of certain foreign subsidiaries for which taxes have not been provided were approximately $411.4 million
as of September 28, 2013. Such undistributed earnings are considered to be indefinitely reinvested in foreign operations.
Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.

Undistributed earnings of approximately $85.5 million are not considered to be indefinitely reinvested in foreign operations. As
of September 28, 2013, the Company has provided a deferred tax liability of approximately $17.5 million for withholding taxes
associated with future repatriation of earnings for certain subsidiaries.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reflects the net deferred tax balance, composed of the tax effects of cumulative temporary differences for fiscal
2013 and 2012:

(in thousands)
Inventory reserves
Other accruals and reserves
Net operating loss carryforwards
Valuation allowance
Total short-term deferred tax asset

Total short-term deferred tax liability
Net short-term deferred tax asset

Domestic tax credit carryforwards
Net operating loss carryforwards
Stock options
Other

Valuation allowance
Total long-term deferred tax asset (1)

Repatriation of foreign earnings, including foreign withholding taxes
Depreciable assets
Prepaid expenses and other
Total long-term deferred tax liability
Net long-term deferred tax liability
Total net deferred tax liability

Fiscal

2013

2012

1,127
3,349
779
(768)
4,487

221
4,266

1,611
28,138
1,299
926
31,974
(25,676)
6,298

41,322
1,887
—
43,209
36,911
32,645

$
$
$

2,933
3,343
—
(2,761)
3,515

—
3,515

628
29,384
1,322
769
32,103
(22,254)
9,849

40,770
(58)
—
40,712
30,863
27,348

$
$
$

(1) Included in other assets on the Consolidated Balance Sheets are deferred tax assets of $3.8 million and $7.0 million as of

September 28, 2013 and September 29, 2012, respectively.

As of September 28, 2013, the Company has foreign net operating loss carryforwards of $80.6 million, domestic state net operating
loss carryforwards of $200.2 million, and tax credit carryforwards of $1.6 million that will reduce future taxable income. These
carryforwards can be utilized in the future, prior to expiration of certain carryforwards in fiscal years 2014 through 2033 with the
exception of certain credits and foreign net operating losses that have no expiration date. Pennsylvania tax law limits the time
during which carryforwards may be applied against future taxes and Pennsylvania tax law limits the utilization of domestic state
net operating loss carryforwards to as little as $3.0 million annually, but recent tax law changes will increase this amount in future
years.

As of September 28, 2013 and September 29, 2012, approximately $0.8 million and $1.5 million were recorded as common stock
(additional paid in capital) in shareholders' equity on the Consolidated Balance Sheets attributable to stock option exercises and
restricted stock vesting.

The Company continues to evaluate the realizability of all of its net deferred tax assets at each reporting date and records a benefit
for deferred tax assets to the extent it has deferred tax liabilities that provide a source of income to benefit the deferred tax asset.
As a result of this analysis, the Company continues to maintain a valuation allowance against a majority of its state deferred tax
assets as the realization of these assets is not more likely than not given uncertainty of future earnings in these jurisdictions.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The beginning and ending balances of the Company's unrecognized tax benefits are reconciled below for fiscal 2013, 2012, and
2011:

(in thousands)
Unrecognized tax benefit, beginning of year
Additions for tax positions, current year
Additions for tax positions, prior year
Reductions for tax positions, prior year
Unrecognized tax benefit, end of year

2013

6,186
—
2,485
(1,802)
6,869

Fiscal
2012

13,702
—
110
(7,626)
6,186

2011

6,413
—
7,585
(296)
13,702

If recognized, the $6.9 million of unrecognized tax benefit as of September 28, 2013 would impact the Company's effective tax
rate.

In fiscal 2013, the Company recognized a benefit of $1.7 million related to the reversal of a reserve for uncertain tax positions
based on administrative practices in a foreign jurisdiction and an additional $0.1 million related to a position effectively settled
upon audit in a different foreign jurisdiction. The Company has also taken a position on a tax return in a foreign jurisdiction that
does meet the recognition and measurement criteria under ASC 740 and as a result it has provided a reserve for uncertain tax
position of $2.1 million.

In fiscal 2011, a tax application filed with a foreign jurisdiction was rejected by that country's tax authority and the Company filed
an appeal. As a result of the rejection of the application, the Company reconsidered its position and determined the benefit taken
on its previously filed tax returns no longer met the recognition standard required under ASC 740. Therefore, during fiscal 2011,
the Company provided a current liability of $7.5 million related to this certain unrecognized tax position, including penalties. No
interest was accrued, as it is not provided for under the tax laws of the foreign jurisdiction. During the fourth quarter of fiscal 2012,
the Company reached a favorable settlement with the tax authorities of a foreign jurisdiction. As a result, the current liability of
$7.5 million is no longer necessary and an income tax benefit was recorded to remove the liability in fiscal 2012.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense.
There were no additional accruals of interest expense on various uncertain tax positions during fiscal 2013 for matters involving
jurisdictions where interest is not assessed.

It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will
increase or decrease during the next 12 months; however, the Company does not expect the change to have a material effect on
its results of operations or its financial position.

The Company files U.S. federal income tax return, as well as income tax returns in various state and foreign jurisdictions. For the
U.S. federal income tax returns and most state tax returns, tax years following fiscal 2001 remain subject to examination as a result
of the generation of net operating loss carry-forwards. The statutes of limitations with respect to the foreign jurisdictions in which
the Company files vary from jurisdiction to jurisdiction and range from 4 to 6 years.

As a result of committing to certain capital investments and employment levels, income from operations in Singapore and Malaysia
is subject to reduced tax rates, and in some cases income from operations in Malaysia is wholly exempt from taxes. Malaysia, is
wholly tax exempt. In connection with Singapore operations, the Company has been granted a decreased effective tax rate of five
percent in that jurisdiction until February 1, 2020 subject to the fulfillment of certain continuing conditions. In fiscal 2013, 2012,
and 2011, the preferential rate reduced income tax expense by approximately $9.6 million or $0.13 per share, $22.1 million or
$0.30 per share and $21.1 million or $0.29 per share, respectively.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 10: OTHER FINANCIAL DATA

The following table reflects other financial data for fiscal 2013, 2012, and 2011:

(in thousands)
Selling, general and administrative incentive compensation expense (1)
Rent expense
Warranty and retrofit expense

2013

Fiscal
2012

$
$
$

17,194
7,765
711

$
$
$

21,988
7,202
3,726

$
$
$

2011

24,264
7,729
3,720

(1) Incentive compensation expense is based upon applicable fiscal year operating income.

NOTE 11: SEGMENT INFORMATION

The Company operates two reportable segments: Equipment and Expendable Tools. The Equipment segment manufactures and
sells a line of ball bonders and heavy wire wedge bonders that are sold to semiconductor device manufacturers, their outsourced
semiconductor assembly and test subcontractors, other electronics manufacturers and automotive electronics suppliers. The
Company also services, maintains, repairs and upgrades its equipment. The Expendable Tools segment manufactures and sells a
variety of expendable tools for a broad range of semiconductor packaging applications.

The following table reflects operating information by segment for fiscal 2013, 2012, and 2011:

(in thousands)
Net revenue:
Equipment
Expendable Tools
Net revenue
Cost of sales :
Equipment
Expendable Tools
Cost of sales
Gross profit :
Equipment
Expendable Tools
Gross profit
Operating expenses:
Equipment
Expendable Tools
Operating expenses
Income from operations:
Equipment
Expendable Tools
Income from operations

2013

Fiscal
2012

2011

472,567
62,371
534,938

727,082
63,941
791,023

261,270
26,723
287,993

211,297
35,648
246,945

158,306
22,833
181,139

397,210
26,423
423,633

329,872
37,518
367,390

164,081
24,083
188,164

52,991
12,815
65,806

165,791
13,435
179,226

759,331
71,070
830,401

412,914
29,578
442,492

346,417
41,492
387,909

189,631
28,218
217,849

156,786
13,274
170,060

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following tables reflect assets by segment, capital expenditures and depreciation expense as of and for fiscal 2013, 2012, and
2011:

(in thousands)
Segment assets:
Equipment (1)
Expendable Tools (1)
Total assets

September 28, 2013

As of
September 29, 2012

October 1, 2011

764,793
98,201
862,994

746,636
68,973
815,609

639,149
89,242
728,391

(1) Increase in the Company's Equipment segment and increase in Expendable Tools from fiscal 2012 to 2013 were due to
allocation, based upon fiscal year net revenue, of non-segment specific corporate assets. Corporate assets include:
cash, cash equivalents, restricted cash, short-term investments, deferred income tax assets and other assets.

(in thousands)
Capital expenditures:
Equipment
Expendable Tools
Capital expenditures

(in thousands)
Depreciation expense
Equipment
Expendable Tools
Depreciation expense

2013

11,704
5,468
17,172

6,936
2,375
9,311

Fiscal
2012

5,318
1,584
6,902

5,745
2,342
8,087

2011

4,229
3,459
7,688

5,955
2,257
8,212

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Geographic information

The following tables reflect destination sales to unaffiliated customers by country and long-lived assets by country for fiscal
2013, 2012, and 2011:

(in thousands)
Destination sales to unaffiliated customers:
Taiwan
China
Korea
Singapore
Philippines
Hong Kong
Malaysia
Japan
United States
Malta
Thailand
Germany
Vietnam
All other
Total destination sales to unaffiliated customers $

2013

Fiscal
2012

2011

150,271 $
124,272

36,949

35,833

30,257

28,911

23,799

17,680

14,652
9,552

9,143

5,822

4,639

43,158
534,938 $

251,128 $
160,573
71,552
23,045
33,715
76,964
39,447
24,755
13,433
6,089
21,828
7,319
10,019
51,156
791,023 $

240,390
132,933
114,130
33,503
16,806
104,481
46,831
28,747
17,955
10,009
19,539
9,217
5,715
50,145
830,401

(in thousands)
Long-lived assets:
Singapore
United States
China
Israel
Switzerland
All other
Total long-lived assets

2013

Fiscal
2012

2011

87,104 $
7,525
6,718
5,674
252
1,333
108,606 $

67,060 $
14,193
4,438
8,078
6,101
2,423
102,293 $

74,130
13,043
4,470
7,887
6,522
2,498
108,550

NOTE 12: COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

Agreement to Develop and Lease

On May 7, 2012, Pte entered into the ADL and a Lease Agreement with DBS Trustee Limited as trustee of the Landlord. Pursuant
to the ADL, the Landlord agreed to develop a building at Lot 17622A Pt Mukim 18 at Serangoon North Avenue 5 (the “Building”)
and Pte agreed to lease from the Landlord 198,134 square feet (the “Initial Premises”), representing approximately 69% of the
Building. The Building is expected to be completed and ready for occupancy in the first quarter of fiscal 2014.

Warranty Expense

The Company's equipment is generally shipped with a one-year warranty against manufacturing defects. The Company establishes
reserves for estimated warranty expense when revenue for the related equipment is recognized. The reserve for estimated warranty
expense is based upon historical experience and management's estimate of future warranty costs.

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reflects the reserve for product warranty activity for fiscal 2013, 2012, and 2011:

(in thousands)
Reserve for product warranty, beginning of period
Provision for product warranty
Product warranty costs paid
Reserve for product warranty, end of period

Other Commitments and Contingencies

2013

2,412
1,093
(2,311)
1,194

Fiscal
2012

2,245
3,521
(3,354)
2,412

2011

2,657
2,914
(3,326)
2,245

The following table reflects obligations not reflected on the Consolidated Balance Sheet as of September 28, 2013:

(in thousands)
Inventory purchase obligation (1)
Operating lease obligations (2)
Total

Total

2014

Payments due by fiscal year
2016

2015

2017

thereafter

57,229
31,211
88,440

57,229
3,700
60,929

— $

3,380
3,380

— $

2,761
2,761

— $

2,364
2,364

—
19,006
19,006

(1) The Company orders inventory components in the normal course of its business. A portion of these orders are non-

cancelable and a portion may have varying penalties and charges in the event of cancellation.

(2) The Company has minimum rental commitments under various leases (excluding taxes, insurance, maintenance and
repairs, which are also paid by the Company) primarily for various facility and equipment leases, which expire periodically
through 2023 (not including lease extension options, if applicable).

Pursuant to ASC No. 840, Leases, for lessee's involvement in asset construction, the Company is considered the owner
of the Building during the construction phase of the ADL. As of September 28, 2013, the Company has recorded a
financing obligation of $19.4 million related to the Building and is expected to record an additional $0.6 million over
the construction term, which is expected to be completed in the next twelve months. This financing obligation is not
reflected in the table above.

Under the lease agreement contemplated by the ADL, (the “Lease Agreement”), the term for the rental of the Initial
Premises is expected to be 10 years (the “Initial Term”). Pte will have the option to renew for two additional ten-year
terms. The combined annual rent and service charge for the Initial Term will range between approximately $4.0 to $5.0
million Singapore dollars. Subject to renting a minimum amount of space, Pte will have a right of first refusal for all
space that becomes available in the Building, and the Landlord has agreed to make available a certain amount of additional
space for rental at Pte's option which may be exercised at certain points during the second half of the Initial Term. Subject
to renting a minimum amount of space for a certain period, Pte will have partial surrender rights. In addition, Pte will
have termination rights after renting the Initial Premises for a certain period of time. The Lease Agreement is not in effect
as of the date of this report and is not reflected in the above table.

Concentrations

The following tables reflect significant customer concentrations as a percentage of net revenue for fiscal 2013, 2012, and 2011:

Siliconware Precision Industries Ltd.
Advanced Semiconductor Engineering

* Represents less than 10% of net revenue

2013

11.0%
*

Fiscal
2012

14.9%
22.4%

2011

*
21.8%

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reflects significant customer concentrations as a percentage of total accounts receivable as of
September 28, 2013 and September 29, 2012:

Siliconware Precision Industries Ltd.
STATS ChipPAC Ltd
Haoseng Industrial Co., Ltd

* Represents less than 10% of total accounts receivable

As of

September 28, 2013
19.5%
14.5%
11.9%

September 29, 2012
31.0%
*
15.0%

KULICKE AND SOFFA INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 13: SELECTED QUARTERLY FINANCIAL DATA (unaudited)

The following table reflects selected quarterly financial data for fiscal 2013 and 2012:

$
$

(in thousands, except per
share amounts)
Net revenue
Gross profit
Income from operations
Provision for income taxes
Net income

Net income per share (1):
Basic
Diluted

Weighted average shares
outstanding:
Basic
Diluted

(in thousands, except per
share amounts)
Net revenue
Gross profit
Income from operations
Provision for income taxes
Net income

Net income per share (1):
Basic
Diluted

Weighted average shares
outstanding:
Basic
Diluted

Fiscal 2013 for the Quarter Ended

December 29

March 30

June 29

September 28

Fiscal 2013

114,039

106,110

141,181

173,608

51,525

4,205

775

48,820

8,190

1,041

65,914

18,867

247

80,686

34,544

5,247

3,604

7,336

18,887

29,531

534,938

246,945

65,806

7,310

59,358

0.05
0.05

$
$

0.10
0.10

$
$

0.25
0.25

$
$

0.39 $
0.39 $

0.79
0.78

74,852

76,209

75,166

76,553

75,231

76,473

75,279

76,565

75,132

76,190

Fiscal 2012 for the Quarter Ended

December 31

March 31

June 30

September 29 (2)

Fiscal 2012

120,024

146,308

255,525

269,166

55,276

12,376

1,977

66,687

20,242

1,616

122,443

76,276

6,847

122,984

70,332

3,231

8,507

16,617

68,174

67,282

791,023

367,390

179,226

13,671

160,580

0.12

0.11

0.23

0.22

0.92

0.90

0.91

0.89

2.17

2.13

73,540

74,628

73,825

75,553

74,067

75,994

74,116

75,942

73,887

75,502

(1) EPS for the year may not equal the sum of quarterly EPS due to changes in weighted share calculations.

(2) Includes approximately $7.5 million of income tax expense associated with additional tax exposure in Asia which was

subsequently reversed in September 2012.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None

Item 9A. - CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness
of our disclosure controls and procedures as of September 28, 2013. Based on that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that, as of September 28, 2013 our disclosure controls and procedures were effective in providing
reasonable assurance the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934, as
amended, is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange
Commission's rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer
and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.

Management's Report on Internal Control Over Financial Reporting

The management of Kulicke and Soffa Industries, Inc. (the “Company”) is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended. The
Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. The Company's internal control over financial reporting includes those policies and procedures that pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, provide reasonable assurance that receipts and expenditures
of the Company are being made only in accordance with authorizations of management and directors of the Company; and provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's
assets that could have a material effect on the financial statements.

Management evaluated the Company's internal control over financial reporting as of September 28, 2013. In making this assessment,
management used the framework established in Internal Control-Integrated Framework (1992) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (“COSO”). Management's assessment included an evaluation of the design
of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial
reporting. Management reviewed the results of its assessment with the Audit Committee of the Company's Board of Directors.
Based on that assessment and based on the criteria in the COSO framework, management has concluded that, as of September 28,
2013, the Company's internal control over financial reporting was effective.

The effectiveness of the Company's internal control over financial reporting as of September 28, 2013 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report, which appears herein.

Changes in internal control over financial reporting

In connection with the evaluation by our management, including with the participation of our Chief Executive Officer and Chief
Financial Officer, of our internal control over financial reporting, no changes during the three months ended September 28, 2013
were identified to have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. OTHER INFORMATION

None.

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information required by Item 401 of Regulation S-K with respect to the directors and executive officers will appear under the
heading “ITEM 1 - ELECTION OF DIRECTORS” in the Company's Proxy Statement for the 2014 Annual Meeting of Shareholders,
which information is incorporated herein by reference. The other information required by Item 401 of Regulation S-K will appear
under the heading “CORPORATE GOVERNANCE” in the Company's Proxy Statement for the 2014 Annual Meeting of
Shareholders, which information is incorporated herein by reference.

The information required by Item 405 of Regulation S-K will appear under the heading “CORPORATE GOVERNANCE - Section
16(a) Beneficial Ownership Reporting Compliance” in the Company's Proxy Statement for the 2014 Annual Meeting of
Shareholders, which information is incorporated herein by reference.

The information required by Item 406 of Regulation S-K will appear under the heading “CORPORATE GOVERNANCE - Code
of Ethics” in the Company's Proxy Statement for the 2014 Annual Meeting of Shareholders, which information is incorporated
herein by reference.

The information required by Item 407(c)(3) of Regulation will appear under the headings “CORPORATE GOVERNANCE-
Nominating and Governance Committee” and “Shareholder Proposals” in the Company's Proxy Statement for the 2014 Annual
Meeting of Shareholders, which information is incorporated herein by reference.

The information required by Items 407(d)(4) and (d)(5) of Regulation S-K will appear under the heading “CORPORATE
GOVERNANCE-Audit Committee” in the Company's Proxy Statement for the 2014 Annual Meeting of Shareholders, which
information is incorporated herein by reference.

Item 11. EXECUTIVE COMPENSATION

The information required by Item 402 of Regulation S-K will appear under the heading “COMPENSATION OF EXECUTIVE
OFFICERS,” in the Company's Proxy Statement for the 2014 Annual Meeting of Shareholders, which information is incorporated
herein by reference.

The information required by Item 407(e)(4) of Regulation S-K will appear under the heading “CORPORATE GOVERNANCE-
Management Development and Compensation Committee Interlocks and Insider Participation” in the Company's Proxy Statement
for the 2014 Annual Meeting of Shareholders, which information is incorporated herein by reference.

The information required by Item 407(e)(5) of Regulation S-K will appear under the heading “MANAGEMENT DEVELOPMENT
AND COMPENSATION COMMITTEE REPORT” in the Company's Proxy Statement for the 2014 Annual Meeting of
Shareholders, which information is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The information required hereunder concerning security ownership of certain beneficial owners and management will appear under
the headings “CORPORATE GOVERNANCE - Security Ownership Of Certain Beneficial Owners” and “CORPORATE
GOVERANCE - SECURITY OWNERSHIP OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS”, in the Company's
Proxy Statement for the 2014 Annual Meeting of Shareholders, which information is incorporated herein by reference. The
information required by this item relating to securities authorized for issuance under equity compensation plans is included under
the heading “EQUITY COMPENSATION PLAN INFORMATION” in the Company's Proxy Statement for the 2014 Annual
Meeting of Shareholders, which is incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by Item 404 of Regulation S-K will appear under the heading “CORPORATE GOVERNANCE - Certain
Relationships and Related Transactions” in the Company's Proxy Statement for the 2014 Annual Meeting of Shareholders, which
information is incorporated herein by reference.

The information required by Section 407(a) of Regulation S-K will appear under the heading “CORPORATE GOVERNANCE -
Board Matters” in the Company's Proxy Statement for the 2014 Annual Meeting of Shareholders, which information is incorporated
herein by reference.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required hereunder will appear under the heading “AUDIT AND RELATED FEES” in the Company's Proxy
Statement for the 2014 Annual Meeting of Shareholders, which information is incorporated herein by reference.

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this report:

Part IV

(1)

Financial Statements - Kulicke and Soffa Industries, Inc.:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of September 28, 2013 and September 29, 2012
Consolidated Statements of Operations for fiscal 2013, 2012, and 2011
Consolidated Statements of Comprehensive Income for fiscal 2013, 2012, and 2011
Consolidated Statements of Changes in Shareholders' Equity for fiscal 2013, 2012, and 2011
Consolidated Statements of Cash Flows for fiscal 2013, 2012 and 2011
Notes to Consolidated Financial Statements

(2)

(3)

Financial Statements and Schedules:
Schedule II - Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable or the required information is
shown in the Consolidated Financial Statements or notes thereto.
Exhibits:

Page

43
45
46
47
48
49
50

EXHIBIT
NUMBER
2.1

2.1.1

2.2

2.2.1

2.2.2

3.1

3.2

4.1

4.2

10.1

ITEM

Master Sale and Purchase Agreement between W.C. Heraeus GmbH and the Company, dated July 31,
2008, incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
filed on July 31, 2008, SEC file number 000-00121.

Amendment No. 1 to the Master Sale and Purchase Agreement between W.C. Heraeus GmbH and the
Company, dated as of September 5, 2008, is incorporated herein by reference to Exhibit 2.2 to the
Company's Current Report on Form 8-K filed on October 2, 2008, SEC file number 000-00121.

Asset Purchase Agreement between Orthodyne Electronics Corporation and the Company, dated July
31, 2008, is incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form
8-K filed on July 31, 2008, SEC file number 000-00121.

Amendment to the Asset Purchase Agreement between Orthodyne and the Company, dated as of October
3, 2008, is incorporated herein by reference to Exhibit 2.2 to the Company's Current Report on Form
8-K filed on October 8, 2008, SEC file number 000-00121.

Earnout Agreement between the Company and Orthodyne Electronics Corporation, dated July 31, 2008,
is incorporated herein by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed
on July 31, 2008, SEC file number 000-00121.
The Company's Amended and Restated Articles of Incorporation, dated December 5, 2007, is
incorporated herein by reference to Exhibit 3(i) to the Company's Annual Report on Form 10-K for the
fiscal year ended September 29, 2007, SEC file number 000-00121.

The Company's Amended and Restated By-Laws, dated June 5, 2012, is incorporated herein by reference
to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2012.

Specimen Common Share Certificate of Kulicke and Soffa Industries Inc., is incorporated herein by
reference to Exhibit 4 to the Company's Form-8A12G/A dated September 11, 1995, SEC file number
000-00121.

Indenture between the Company and Bank of New York, as Trustee, dated as of June 6, 2007, is
incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated
June 6, 2007, SEC File number 000-00121.

1997 Non-Qualified Stock Option Plan for Non-Employee Directors (as amended and restated effective
March 21, 2003), is incorporated herein by reference to Exhibit 10(vi) to the Company's Annual Report
on Form 10-K for the fiscal year ended September 30, 2003, SEC file number 000-00121.*

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

10.19

10.20

2004 Israeli Addendum to 1998 Employee Incentive Stock Option and Non-Qualified Stock Option Plan
(as amended and restated effective March 21, 2003), is incorporated herein by reference to Exhibit 10
(vii) to the Company's Post-Effective Amendment No.4 on Form S-1 to the Registration Statement on
Form S-3 filed on December 14, 2004, SEC file number 333-111478.*

Form of Nonqualified Stock Option Agreement regarding the 1998 Employee Incentive Stock Option
and Non-Qualified Stock Option Plan, is incorporated herein by reference to Exhibit 99.1 to the
Company's Current Report on Form 8-K dated October 8, 2008, SEC file number 000-00121.*

Form of Incentive Stock Option Agreement regarding the Employee Incentive Stock Option and Non-
Qualified Stock Option Plan, is incorporated herein by reference to Exhibit 99.2 to the Company's
Current Report on Form 8-K dated October 8, 2008, SEC file number 000-00121.*

1999 Nonqualified Employee Stock Option Plan (as amended and restated effective March 21, 2003),
is incorporated herein by reference to Exhibit 10(xv) to the Company's Annual Report on Form 10-K
for the fiscal year ended September 30, 2003, SEC file number 000-00121.*

2004 Israeli Addendum to the 1999 Non-Qualified Stock Option Plan (as amended and restated effective
March 21, 2003), is incorporated herein by reference to Exhibit 10(ix) to the Company's Post-Effective
Amendment No.4 on Form S-1 to the Registration Statement on Form S-3 filed on December 14, 2004,
SEC file number 333-111478.*
2001 Employee Incentive Stock Option and Non-Qualified Stock Option Plan (as amended and restated
effective March 21, 2003), is incorporated herein by reference to Exhibit 10(xix) to the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 2003, SEC file number 000-00121.*

2004 Israeli Addendum to the 2001 Employee Incentive Stock Option and Non-Qualified Stock
Option Plan (as amended and restated effective March 21, 2003), is incorporated herein by reference
to Exhibit 10(xii) to the Company's Post-Effective Amendment No.4 on Form S-1 to the Registration
Statement on Form S-3 filed on December 14, 2004, SEC file number 333-111478.*

Officer Incentive Compensation Plan, dated August 2, 2005, is incorporated herein by reference to
Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2005, SEC file number 000-00121.*

2008 Equity Plan is incorporated herein by reference to Appendix A to the Company's Proxy Statement
on Schedule 14A for the annual meeting of shareholders on February 12, 2008, SEC file number
000-00121.*

2009 Equity Plan is incorporated herein by reference to Appendix A to the Company's Proxy Statement
on Schedule 14A for the annual meeting of shareholders on February 10, 2009.*

Amendment No. 1 to the Kulicke and Soffa Industries, Inc. 2009 Equity Plan, effective September 15,
2009, is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-
K filed on September 18, 2009.*

Amendment No. 2 to the Kulicke and Soffa Industries, Inc. 2009 Equity Plan, effective September 30,
2009, is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-
K filed on September 18, 2009.*

Amendment No. 3 to the Kulicke and Soffa Industries, Inc. 2009 Equity Plan, effective September 21,
2012.*

Form of Officer Performance Share Award Agreement regarding the 2009 Equity Plan, is incorporated
herein by reference to Exhibit 10(xxxiii) to the Company's Annual Report on Form 10-K for the fiscal
year ended October 3, 2009.*

Form of Officer Performance Share Award Agreement regarding the 2009 Equity Plan, is incorporated
herein by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K dated December 9,
2010.*

Form of Officer Restricted Share Award Agreement regarding the 2009 Equity Plan is incorporated
herein by reference to Exhibit 10(xxxiv) to the Company's Annual Report on Form 10-K for the fiscal
year ended October 3, 2009.*

Form of Officer Restricted Share Unit Award Agreement regarding the 2009 Equity Plan, is incorporated
herein by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K dated December 9,
2010.*
Form of Officer Restricted Share Unit Award Agreement regarding the 2009 Equity Plan.*

Kulicke & Soffa Industries, Inc. Executive Severance Pay Plan, dated as of August 9, 2011, is
incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed
on August 12, 2011.*

10.21

10.22

10.23

10.24

10.25

10.26

10.27

10.28

10.29

10.30

10.31

10.32

10.33

31.1

31.2

32.1

32.2

Kulicke & Soffa Industries, Inc. Officer Severance Pay Plan, dated as of August 9, 2011, is incorporated
herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on August 12,
2011.*

Form of Change of Control Agreement, dated as of March 25, 2009, is incorporated herein by reference
to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on March 31, 2009.*

Form of Change of Control Agreement, is incorporated herein by reference to Exhibit 10.3 to the
Company's Current Report on Form 8-K filed on August 12, 2011.*

Offer Letter between the Company and Bruno Guilmart dated August 6, 2010, is incorporated herein
by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated August 6, 2010.*

Offer Letter between the Company and Jonathan H. Chou, dated November 16, 2010, is incorporated
herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated November 16,
2010.*

Letter Agreement between the Company and Alan Schindler, dated March 9, 2011, is incorporated herein
by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period
ended April 2, 2011.*

Employment Agreement between the Company and Christian Rheault, dated June 25, 2009, is
incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended June 27, 2009.*

Letter Agreement between the Company and Shay Torton, dated March 15, 2011, is incorporated herein
by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period
ended April 2, 2011.*

Letter Agreement between the Company and Tek Chee Mak, as of October 26, 2011.*

Facilities Agreement between Kulicke and Soffa Ptd. Ltd. and DBS Bank Ltd., dated April 4, 2011, is
incorporated herein by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended April 2, 2011.

Debenture between Kulicke and Soffa Pte. Ltd. and DBS Bank Ltd., dated April 4, 2011, is incorporated
herein by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly
period ended April 2, 2011.

Agreement to Develop and Lease between DBS Trustee Limited, as trustee of Mapletree Industrial Trust,
and the Kulicke & Soffa Pte. Ltd, dated May 7, 2012, is incorporated herein by reference to Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012.
**
Form of Indemnification Agreement, is incorporated herein by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed on October 10, 2013.*
Subsidiaries of the Company.

Consent of PricewaterhouseCoopers LLP (Independent Registered Public Accounting Firm).

Certification of Bruno Guilmart, Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant
to Rule 13a-14(a) or Rule 15d-14(a).

Certification of Jonathan Chou, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant
to Rule 13a-14(a) or Rule 15d-14(a).

Certification of Bruno Guilmart, Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant
to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Jonathan Chou, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant
to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

101.SCH

101.CAL

101.LAB

101.PRE

XBRL Instance Document.

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document.

XBRL Taxonomy Extension Label Linkbase Document.

XBRL Taxonomy Extension Presentation Linkbase Document.

* Indicates a management contract or compensatory plan or arrangement

** Portions of this exhibit have been omitted pursuant to an order granted confidential treatment under the

Securities Exchange Act of 1934 issued by the Securities and Exchange Commission.

Fiscal 2013:

Allowance for doubtful
accounts

Inventory reserve

Valuation allowance for
deferred taxes

Fiscal 2012:

Allowance for doubtful
accounts

Inventory reserve

Valuation allowance for
deferred taxes

Fiscal 2011:

Allowance for doubtful
accounts

Inventory reserve

KULICKE AND SOFFA INDUSTRIES, INC.
Schedule II-Valuation and Qualifying Accounts

Beginning
of period

Charged to
Costs and
Expenses

Other
Additions

Other
Deductions

End of
period

937

18,617

25,015

2,194

15,099

23,777

980

10,140

(371)

3,561

1,429 (3) $

(1,239)

6,060

1,261

1,219

6,701

—

(62) (1) $

504

(8,058) (2) $

14,120

—

26,444

(18) (1) $

937

(2,542) (2) $

18,617

(23)

25,015

(5) (1) $

2,194

(1,742) (2) $

15,099

(1,980) (3) $

(2,099) (4)

—

23,777

Valuation allowance for
deferred taxes

27,856

(1) Represents write-offs of specific accounts receivable.
(2) Sale or scrap of previously reserved inventory.

(3)

Reflects increase/decrease in the valuation allowance primarily associated with the Company's U.S. and foreign net
operating losses and other deferred tax assets.

(4) Release of valuation allowance related to prior stock option exercises recorded to additional paid in capital.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

SIGNATURES

KULICKE AND SOFFA INDUSTRIES, INC.

By:

/s/ BRUNO GUILMART
Bruno Guilmart
President and Chief Executive Officer

Dated: November 14, 2013

Signature

Title

Date

/s/ BRUNO GUILMART

President and Chief Executive Officer and Director

November 14, 2013

Bruno Guilmart

(principal executive officer)

/s/ JONATHAN CHOU

Senior Vice President, Chief Financial Officer

November 14, 2013

Jonathan Chou

(principal accounting officer)

/s/ BRIAN R. BACHMAN

Director

November 14, 2013

Brian R. Bachman

/s/ JOHN A. O'STEEN

John A. O'Steen

Director

November 14, 2013

/s/ GARRETT E. PIERCE

Director

November 14, 2013

Garrett E. Pierce

/s/ MACDONELL ROEHM, JR.

Director

November 14, 2013

MacDonell Roehm, Jr.

/s/ CHIN HU LIM

Chin Hu Lim

/s/ MUI SUNG YEO

Mui Sung Yeo

Director

November 14, 2013

/s/ GREGORY F. MILZCIK

Director

November 14, 2013

Gregory F. Milzcik

EXHIBIT
NUMBER

2.1

2.1.1

2.2

2.2.1

2.2.2

3.1

3.2

4.1

4.2

10.1

10.2

10.3

10.4

10.5

10.6

10.7

EXHIBIT INDEX

ITEM

The Company's Amended and Restated Articles of Incorporation, dated December 5, 2007, is
incorporated herein by reference to Exhibit 3(i) to the Company's Annual Report on Form 10-K for the
fiscal year ended September 29, 2007, SEC file number 000-00121.

2001 Employee Incentive Stock Option and Non-Qualified Stock Option Plan (as amended and restated
effective March 21, 2003), is incorporated herein by reference to Exhibit 10(xix) to the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 2003, SEC file number 000-00121.*

10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

10.19

10.20

10.21

10.22

10.23

10.24

10.25

10.26

10.27

2009 Equity Plan is incorporated herein by reference to Appendix A to the Company's Proxy Statement
on Schedule 14A for the annual meeting of shareholders on February 10, 2009.*

Amendment No. 3 to the Kulicke and Soffa Industries, Inc. 2009 Equity Plan, effective September 21,
2012.*

Form of Officer Restricted Share Unit Award Agreement regarding the 2009 Equity Plan.*

Form of Change of Control Agreement, dated as of March 25, 2009, is incorporated herein by reference
to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on March 31, 2009.*

Form of Change of Control Agreement, is incorporated herein by reference to Exhibit 10.3 to the
Company's Current Report on Form 8-K filed on August 12, 2011.*

Offer Letter between the Company and Bruno Guilmart dated August 6, 2010, is incorporated herein
by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated August 6, 2010.*

10.28

10.29

10.30

10.31

10.32

10.33

23
31.1

31.2

32.1

32.2

Letter Agreement between the Company and Tek Chee Mak, as of October 26, 2011.*

Form of Indemnification Agreement, is incorporated herein by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed on October 10, 2013.*

Subsidiaries of the Company.

Consent of PricewaterhouseCoopers LLP (Independent Registered Public Accounting Firm).
Certification of Bruno Guilmart, Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant
to Rule 13a-14(a) or Rule 15d-14(a).

Certification of Jonathan Chou, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant
to Rule 13a-14(a) or Rule 15d-14(a).

Certification of Jonathan Chou, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant
to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

101.SCH

101.CAL

101.LAB

101.PRE

XBRL Instance Document.

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document.

XBRL Taxonomy Extension Label Linkbase Document.

XBRL Taxonomy Extension Presentation Linkbase Document.

* Indicates a management contract or compensatory plan or arrangement

** Portions of this exhibit have been omitted pursuant to an order granted confidential treatment under the

Securities Exchange Act of 1934 issued by the Securities and Exchange Commission.

Stock Performance Graph

The graph set forth below compares, for fiscal years 2009 through 2013, the yearly change in the cumulative total returns to
holders of common shares of the Company with the cumulative total return of a peer group selected by the Company and of
the NASDAQ Composite Index. The peer group is focused on companies that manufacture equipment and materials similar
to the equipment and materials manufactured by the Company, and is composed, in part, by reference to peer group lists that
the Company believes are commonly used by institutional investors and financial research analysts when evaluating
Company performance. The Company believes that the peer group provides a useful reference point for investors when
evaluating Company performance across the semiconductor assembly equipment industry business cycle. The peer group is
composed of ASM Pacific Technology Ltd., BE Semiconductor Industries, N.V., Brooks Automation Inc., Cohu, Inc.,
KLA-Tencor Corp., LAM Research Corp., LTX-Credence Corporation, Shinkawa Ltd., Teradyne Inc., Ultratech, Inc., and
Veeco Instruments Inc. The graph assumes that the value of the investment in the relevant stock or index was $100 at
September 28, 2008 and that all dividends were reinvested. Total returns are calculated based on the Kulicke & Soffa
Industries, Inc. fiscal year calendar. For purposes of the peer group index, the peer group companies have been weighted
based upon their relative market capitalization. The closing sale price of the Company’s common shares as of September 27,
2013 was $11.54.

Company Information
December 2013

Corporate Locations

Additional Information

Corporate Headquarters

Independent Accountants

Kulicke and Soffa Industries, Inc.
23A Serangoon North Avenue 5
#01-01
Singapore 554369

Technology Centers

Singapore
Fort Washington, Pennsylvania
Santa Ana, California
Berg, Switzerland
Yokneam Elite, Israel
Suzhou, China

Equipment Manufacturing Facilities

Singapore
Santa Ana, California

Expendable Tools Manufacturing Facilities

Suzhou, China
Yokneam Elite, Israel

PricewaterhouseCoopers, LLP
Singapore

Registrar and Transfer Agent

American Stock Transfer & Trust
6201 15th Avenue
Brooklyn, New York 11219
800-937-5449

NASDAQ Symbol: KLIC

Supplemental Investor Information

An electronic copy of the 2013 Annual Report,
the 2014 Proxy Statement, SEC filings and
supplemental investor information are available
in the Investors section of the Company’s
corporate website at investor.kns.com.

For additional information please contact:
Joseph Elgindy
Investor Relations & Strategic Planning
+1-215-784-7518
jelgindy@kns.com

Leadership Team

Kulicke & Soffa’s highly experienced Board of Directors and Executive Officers continue to
leverage the Company’s strengths and execute on new and challenging corporate objectives.
The unique perspective and broad diversity of the management team are important factors
to the Company’s ongoing success in the dynamic and evolving markets it serves.

eXeCutIVe oFFICeRS

BoARD oF DIReCtoRS

Bruno Guilmart

Jonathan Chou

Yih-Neng lee

Deepak Sood

Alan Schindler

Matthew Vorona

lester Wong

Nelson Wong

Bruno Guilmart
President and
Chief Executive Officer

Jonathan Chou
Senior Vice President, Chief Financial Officer
and Principal Accounting Officer

Yih-Neng lee
Senior Vice President,
Global Sales and Service

Deepak Sood
Vice President,
Global Engineering

Alan Schindler
Senior Vice President,
Global Operations

Matthew Vorona
Vice President,
Wedge Bonder Business Unit

lester Wong
Senior Vice President, Legal Affairs
and General Counsel

Nelson Wong
Vice President,
Wire Bond Solutions Business Unit

MacDonell Roehm, Jr.
Chairman of the Board
Kulicke & Soffa Industries, Inc.
Retired Chairman and CEO
Crooked Creek Capital LLC

Brian Bachman
Managing Partner
River Farm LLC
Retired Chief Executive Officer and
Vice Chairman
Axcelis Technologies, Inc.

Bruno Guilmart
President and Chief Executive Officer
Kulicke & Soffa Industries, Inc.
Director, Avago Technologies Limited

Chin Hu lim
Managing Partner
Stream Global Venture Catalyst Pte. Ltd.
Independent Director
Telstra Corporation Ltd.

Gregory F. Milzcik
Retired President and Chief Executive Officer
Barnes Group Inc.
Director, IDEX Corporation

John o’Steen
Retired Executive Vice President,
Business Development
Cornerstone Brands, Inc.

Garrett Pierce
Vice Chairman and
Chief Financial Officer
Orbital Sciences Corporation

Mui Sung Yeo
Chief Financial Officer
MediaCorp Pte. Ltd.

Annual Report Design by Curran & Connors, Inc. / www.curran-connors.com

Corporate Headquarters:
Kulicke and Soffa Industries, Inc. › 23A Serangoon North Avenue 5 › #01-01 Singapore 554369 › (P) +65-6880-9600 › (F) +65-6880-9580