Ezra Weener

Ezra Weener inquired about the normalization timeline for apparel (Q2) versus logistics inventory burn, and how Impinj views pricing and value for the new custom ASIC solution.

Answer

Chris Diorio, Impinj's CEO, indicated that apparel normalization could occur as early as Q2. Cary Baker, Impinj's CFO, cautioned that while the logistics inventory burn is targeted for Q1, it might spill into Q2. Chris Diorio explained that the custom IC is tailored to specific end-user needs, driving operational efficiencies and enabling new customer business, marking a shift towards a solution-focused sale. Cary Baker added that the custom IC is currently priced to market.

Ezra Weener, on behalf of Jefferies, asked for quantification of the impact from new solutions like overhead reading on both reader and endpoint IC revenue. He also requested an update on the state of channel inventory, referencing prior commentary about partners building supply chain optionality.

Answer

CEO Chris Diorio explained that the solutions strategy, including overhead reading, is primarily focused on winning high endpoint IC market share to drive recurring revenue, rather than just one-time reader sales. CFO Cary Baker added that despite expectations of a build, channel inventory levels actually decreased in Q2 and are considered healthy relative to partner demand, a state she expects to continue.

Ezra Weener asked about the impact of component pricing, specifically how higher costs for externally sourced components are managed against internal Indium Phosphide production and long-term supply agreements, and the implications for gross margins. He also inquired about the timing and long-term strategy for the 6-inch Indium Phosphide ramp, including its competitive advantage.

Answer

CEO Jim Anderson explained that higher input costs for externally sourced EMLs are offset by the internal Indium Phosphide ramp, resulting in a net positive for gross margins, as internal Indium Phosphide becomes more valuable. He also noted continued opportunities for pricing optimization. CFO Sherry Luther added that gross margin improvements stemmed from cost reductions (lower product input costs, efficiency, yield gains) and pricing optimization, with a 470 basis point improvement from FY2024 towards a >42% target. Mr. Anderson stated that almost all new capacity additions are 6-inch, expecting it to comprise about half of internal capacity by year-end, offering a significant cost advantage (4x chips at <half cost) and being a key factor in customer decisions, including U.S.-based manufacturing.

Ezra Weener asked about the impact of rising component pricing for externally sourced components, the role of LTAs, and how these factors influence gross margins. He followed up on the timing and long-term outlook for the six-inch Indium Phosphide ramp, including its competitive advantages.

Answer

CEO Jim Anderson stated that higher external EML pricing is offset by the internal Indium Phosphide ramp, resulting in a net positive for cost. CFO Sherri Luther added that gross margin improvement is driven by cost reductions (lower product input costs, efficiency, yield) and pricing optimization, aiming for a >42% target. Jim Anderson clarified that over time, almost all new capacity will be six-inch, expecting half of internal capacity to be six-inch by year-end, offering >4x chips at <half the cost, a key competitive advantage.

Ezra Weener, on for Blayne Curtis, asked about the OCS competitive landscape, specifically the performance and cost benefits of liquid crystal versus mechanical MEMS technology. He also inquired about the supply-demand dynamics for 1.6T and 800G transceivers and the mix of internal versus external laser sourcing.

Answer

CEO Jim Anderson highlighted that Coherent's non-mechanical digital liquid crystal technology offers significantly higher reliability than competing MEMS-based solutions, a key advantage in AI data centers. Regarding transceivers, he noted that 800G continues to ramp into next year with 1.6T ramping on top. He confirmed Coherent uses a mix of internal and external lasers, with over half of EML-based transceivers utilizing internally sourced EMLs.

Ezra Weener with Jefferies asked about the Q3 revenue split between Foundry/Logic and Memory, noting a decline in the former and growth in the latter, despite record leading-edge foundry performance. He also inquired about Nova's business in China, particularly its impact on Foundry/Logic segments.

Answer

Gaby Waisman, President and CEO of Nova, explained that memory sales reached a record, comprising 30% of Q3 revenue, driven by DRAM recovery and new product adoptions. She noted that Nova's long-term model targets a 40% memory, 60% logic ratio. Regarding China, she stated that 2025 nominal revenue from China is expected to be slightly higher year-over-year, though its share of overall business will be lower (around 30%+ vs. 39% last year), with business levels normalizing in H2 2025 and expected to continue into H1 2026.

Ezra Weener asked about the revenue mix in the quarter, noting a decline in Foundry and Logic while Memory saw significant growth, and how this trend might continue. He also sought clarification on Nova's observations regarding the China market, particularly concerning trailing-edge Foundry Logic.

Answer

Gabby Waisman, President and CEO, confirmed record memory revenue, comprising 30% of sales, driven by DRAM recovery and new product adoptions. She expects this trend to continue into 2026. Regarding China, she noted that 2025 nominal revenue would be slightly higher year-over-year, with the business normalizing in the second half of 2025 and expected to continue into the first half of 2026.

Ezra Weener, on for Blayne Curtis, questioned Nova's geographic mix and outlook for China, contrasting it with peer commentary. He also asked about the drivers for the reported strength in High-Bandwidth Memory (HBM), which seemed different from trends seen at other companies.

Answer

President & CEO Gabriel Waisman explained that HBM is a growing part of Nova's advanced packaging business, which is expected to exceed 15% of revenue this year. For China, he updated the outlook to be 'moderately higher' in nominal value year-over-year, though its percentage of total revenue is forecasted to decrease due to strong investments in advanced nodes elsewhere.

Ezra Weener of Barclays inquired about Nova's progress on its cumulative $500 million gate-all-around (GAA) revenue opportunity, the expected shape of the ramp, and the key factors influencing gross margin guidance.

Answer

Executive Gabriel Waisman confirmed a strong GAA ramp in the first half of 2025, expecting business to grow as it moves to high-volume manufacturing in 2026. Executive Guy Kizner clarified that gross margins should be viewed annually, with the Q2 dip reflecting a 30-50 basis point impact from tariffs and some product mix effects, but reiterated the full-year target of 57% to 60%.

Ezra Weener, on for Blayne Curtis, asked about the transition between 100G and 200G EMLs, as well as the company's demand visibility, lead times, and inventory levels for these components.

Answer

President and CEO Michael Hurlston clarified that 200G EMLs are an additive opportunity on top of the strong 100G business. President of Cloud & Networking Wupen Yuen added that demand visibility is strong at 6-9 months, the market is supply-constrained, and inventory is very low as they are shipping everything they can produce.

Ezra Weener inquired about the content uplift opportunity for Camtek in the transition from HBM3/3E to HBM4. He also asked about the timing and shape of customer CapEx spending related to HBM4 qualification and ramp.

Answer

COO Ramy Langer noted that the transition to HBM4 is a positive opportunity, as it involves more layers, which means more wafers to inspect, and confirmed Camtek is already qualified at some customers. Regarding spending, he indicated that customers are beginning to provide initial forecasts for an HBM4-related uplift starting in early 2026, but declined to provide further specifics on the shape of the spend.

Ezra Weener of Jefferies LLC, on for Blayne Curtis, asked what gives Lattice confidence in its industrial and auto recovery timeline, given mixed commentary from peers, and requested details on what is driving that confidence.

Answer

CEO Ford Tamer cited several factors for their optimism: channel inventory outflows continue to exceed revenue, record-high starting backlog for Q3 and Q4, a strong book-to-bill ratio, and record design wins. He also noted that automotive is less than 5% of company revenue, making Lattice less exposed to weakness in that specific sub-segment compared to some peers.

Ezra Weener, on for Blayne Curtis, asked what provides management with the confidence to reiterate its full-year guidance despite inventory normalization taking longer than expected. He also asked for the key moving pieces within the guidance on a segment basis.

Answer

CEO Fouad Tamer attributed the confidence in the 2025 outlook to three improving demand signals: stronger customer consumption driven by Server, Comms, and Industrial markets; an improved beginning backlog each quarter; and a book-to-bill ratio that has been consistently above one. He stated the only reason for caution is the external uncertainty surrounding potential tariffs.

Ezra Weener, on for Blayne Curtis, asked what gives Lattice confidence in its full-year outlook despite a slower inventory drawdown and requested details on the moving pieces by segment for the guidance.

Answer

CEO Fouad Tamer reiterated confidence in the 2025 outlook based on three key signals: improved customer consumption driven by Server, Comms, and Industrial strength; a higher beginning backlog each quarter; and a book-to-bill ratio that remains above one. He specified that the only caution stems from external tariff uncertainty, not fundamental business weakness.