Oppenheimer Upgrades KLIC To Outperform, Raises Target To $11

Oppenheimer is upgrading Kulicke and Soffa Industries KLIC to Outperform “on checks indicating that Taiwan sub-cons: 1) are maintaining flattish Y/Y capex in 2011 (ASE) or, in SPIL's case, actively taking in the 600-700 wirebonders pushed out from CQ4 “2) plan to spend a greater percentage of capex on effecting assembly transition from gold to copper and “3) near term, this is materializing as a 20-30% Q/Q recovery in KLIC's revenue in FQ2 (Mar).” Oppenheimer said that in its view, “this is supported by better than seasonal semi chip unit volume forecasts for CQ1 at the sub-cons, driven by still-lean inventory levels and continuation of IDM outsourcing as more legacy 6", 8" fabs are decommissioned. Raising FY11/FY12E EPS to $1.10/$1.70 and raising price target to $11.” Kulicke and Soffa Industries closed Thursday at $7.64.