Richard Shannon

Richard Shannon asked for clarification on the competitive dynamics surrounding the top 5 OEM program, specifically whether Aeva faces significant competition. He also inquired about the distribution of the targeted four commercial wins for the current year, asking how many are expected to be in the automotive sector with high-volume potential.

Answer

Soroush Salehian, Aeva's Co-Founder and CEO, acknowledged that competition always exists but has consolidated. He stated that the top 5 OEM intends to transition to FMCW, with Aeva working on timing and potential acceleration for next-generation vehicle platforms. Mr. Salehian emphasized Aeva's technology, automotive capabilities, certifications, and strong balance sheet as key differentiators. Regarding the four targeted wins for the year, he expects a fairly even split, approximately two in automotive and two in non-automotive applications, with potential to exceed this target.

Richard Shannon asked for clarification on the competitive dynamics for the top five OEM, specifically if Aeva faces direct competition and the OEM's intent to transition to FMCW. He also sought a breakdown of the four targeted wins for 2026, particularly how many are expected in the automotive space with higher volume opportunities.

Answer

Soroush Salehian, Aeva's Co-Founder and CEO, acknowledged that competition exists but has consolidated, with fewer capable pure-play companies. He confirmed the top five OEM's intent to transition to FMCW, working on timing for next-generation vehicle platforms, potentially accelerating adoption or following existing programs. He highlighted Aeva's technology, automotive capabilities, Tier-1 experience, and strong balance sheet as key differentiators, with the top 10 OEM win and NVIDIA partnership acting as catalysts. For the 2026 target of four wins, he expects a fairly even split between automotive and non-automotive, dependent on customer decision-making, and hopes to exceed this aggressive target.

Richard Shannon from Craig-Hallum asked for details on the automotive pipeline, the reasons why some OEMs may not have engaged with Aeva yet, and the company's perspective on FMCW becoming the end-state technology for LiDAR.

Answer

CEO Soroush Salehian stated that Aeva is engaged in nearly every active RFQ from OEMs for Level 3+ automation. He cited the new Bendix collaboration as an example of a previously unannounced engagement. He acknowledged that Aeva might not win programs with very near-term SOPs where its technology was not mature at the time of selection. Salehian also emphasized the role of the strategic partnership with LG Innotek in leveraging established relationships to pursue broader opportunities, and reiterated that Aeva's focus extends beyond automotive to industrial and other markets.

Richard Shannon inquired about the extent to which Navitas' AI data center opportunities stem from its partnership with Infineon, potential cross-fertilization of wins within the rack, and the revenue level required to achieve gross margin leverage.

Answer

CEO Chris Allexandre clarified that Navitas partners with Infineon via a cross-license to enable GaN adoption but does not 'leverage or benefit' from them, noting they often 'bump into each other' due to similar visions and technologies. He stated the current focus is on pivoting to high-power markets with existing products, while looking at future portfolio expansion like circuit protection. CFO Todd Glickman stated that as the mix changes, margins will grow, but the scale issue remains. He expects margins to start expanding again in Q2 2026 and beyond, indicating that as the 'tipping point' for leverage.

Richard Shannon asked about the extent to which Navitas' AI data center opportunities stem from its partnership with Infineon versus other avenues, and whether there's cross-fertilization of wins within the rack. He also inquired about the revenue level needed to achieve gross margin leverage.

Answer

CEO Chris Allexandre clarified that Navitas does not 'leverage' Infineon but partners via a cross-license, often encountering similar customers and technology views. He mentioned future consideration for portfolio expansion but is currently focused on existing products. CFO Todd Glickman indicated that gross margin leverage is expected to begin in Q2 2026 and beyond, marking a 'tipping point' as revenue grows and mix shifts.

Richard Shannon asked about the catalyst for shifting away from the mobile market and inquired about the near-term gross margin trajectory.

Answer

CEO Gene Sheridan explained that the decision was driven by a continuing trend of aggressive pricing and poor margin profiles in the price-sensitive, lower-power mobile segments in China. CFO Todd Glickman added that gross margin is expected to be flat near-term at around 38.5%, as the benefit of exiting low-margin business is offset by tariff pressures on SiC. A margin inflection will require revenue growth from other sectors.

Richard Shannon asked for the expected timing of the solar microinverter ramp, Navitas's competitive position, and the relative dollar growth contribution from key end markets like EV, solar, and data center in 2026.

Answer

CEO Eugene Sheridan confirmed the solar ramp will begin in H2, with more significant revenue in Q4 and 2026. He expressed confidence in Navitas's position due to its first-to-market GaN bidirectional switch (BDS). Regarding 2026 growth, he indicated it would be well-distributed across mobile, EV, AI data centers, and solar, rather than being dominated by a single market.

Richard Shannon asked about the relative 2025 sales outlook for GaN versus silicon carbide, the quarterly revenue needed to reach EBITDA breakeven, the dynamics behind the Q4 acceleration in data center design wins, and the impact of the current geopolitical environment.

Answer

CEO Gene Sheridan expects healthy growth for both GaN and SiC, as they are often used in combination in key growth markets like data center and EV onboard chargers. CFO Todd Glickman stated the new OpEx level brings the quarterly revenue for EBITDA breakeven to the high $30 million range. Sheridan attributed the data center acceleration to market momentum and share gains, and noted Navitas is well-positioned geopolitically with its US manufacturing and 'China for China' strategy.

Richard Shannon asked about the company's strategy for the solar market, given its exclusion from the newly emphasized core markets. He also requested more details on the origin and revenue timeline for the dual-sourcing partnership with Infineon.

Answer

CEO Eugene Sheridan explained that while solar is not a primary strategic focus, Navitas will continue to pursue opportunities, particularly in the solar microinverter niche where its bidirectional GaN is on track for a mid-2025 ramp. Regarding the Infineon deal, he stated it has been in development for months to address the strong demand for dual-sourcing in AI data centers. He announced that Navitas will begin sampling its low-voltage GaN in Q4 2024, with production ramps expected in late 2025.

Richard Shannon asked for clarification on Q1 revenue guidance, insights into the export permit licensing process including any denials, and details on the indium phosphide backlog and customer long-term ordering trends. He also inquired about capacity additions, CapEx requirements for 2026 and beyond, and the scale of future opportunities.

Answer

Gary Fischer (CFO, AXT Inc.) clarified the Q1 revenue guidance of $26 million, noting potential upside if more permits are received, and explained that manufacturing builds to forecast, not permits. Tim Bettles (VP of Business Development, AXT Inc.) described the permit process as non-transparent with variable timing, mentioning recent denials with instructions for resubmission, which is seen as a positive sign by Morris Young (CEO, AXT Inc.). Morris Young and Tim Bettles discussed the indium phosphide backlog exceeding $60 million, with customers placing longer-term orders and providing forecasts beyond 2030 due to rapidly increasing demand. Morris Young detailed plans to double capacity by the end of 2026 with an estimated $30 million CapEx, and potentially double again in 2027 requiring $100-$150 million for greenfield expansion.

Richard Shannon inquired about AXT's Q1 2026 revenue guidance, the current status and transparency of the export licensing process, and the company's Indium Phosphide backlog and customer ordering patterns.

Answer

CFO Gary Fischer clarified the Q1 2026 revenue guidance, noting a high degree of confidence in $26 million with potential upside from additional permits. VP of Business Development Tim Bettles and CEO Morris Young explained the variability and lack of transparency in the MOFCOM permit process, including recent denials with instructions for resubmission. They also discussed the record Indium Phosphide backlog of over $60 million, with customers placing longer-term orders and providing forecasts extending beyond 2030, driven by increasing weekly demand. Morris Young detailed plans to double capacity by the end of 2026 with an estimated $30 million CapEx, and potentially double again in 2027 with a $100-$150 million CapEx for greenfield expansion.

Richard Shannon questioned why the gallium arsenide yield fix would take more than one quarter, sought assurances on the indium phosphide permit process, asked for quantification of the shippable backlog, and requested clarification on the 20% growth outlook for 2025 versus 2026.

Answer

CEO Dr. Morris Young clarified that high-volume production with changing customer specs requires careful recalibration, justifying a measured approach. On indium phosphide (InP), he expressed confidence in securing permits for the "several million dollars" of backlog, which could ship within 10 days of approval. Executive Tim Bettles added that while the 20% InP market growth trend is intact, the company is conservatively forecasting the full capture of this growth into the second half of 2025 and 2026 due to permit timing uncertainty.

Richard Shannon from Craig-Hallum Capital Group inquired about the drivers behind the Q4 gross margin decline and increased OpEx, asking how long these trends would persist. He also sought more detail on indium phosphide growth in datacenters, specifically the opportunities in lasers versus photodetectors and a potential 2026 customer qualification. Finally, he asked if the new indium phosphide export control process would be similar to the prior experience with gallium arsenide.

Answer

CFO Gary Fischer stated that gross margins should remain low in Q1 due to export restrictions but are expected to recover to the mid-20s range thereafter. CEO Dr. Morris Young added that the increased R&D spending on 6-inch indium phosphide and 8-inch gallium arsenide is nearing completion. Executive Tim Bettles detailed the indium phosphide opportunity, noting growth in both photodetectors and lasers for EML and silicon photonics, and expressed confidence in securing export permits for non-military applications, similar to the gallium arsenide process.

Richard Shannon from Craig-Hallum inquired about several key areas, including the challenging pricing environment and future strategy for the germanium business, the specific growth drivers within indium phosphide such as data centers and silicon photonics, and the company's strategy for gaining share in the HBT market. He also asked about the potential impact of China's economic stimulus, the outlook for the telecom market, and for any positive updates on the Tongmei STAR Market listing process.

Answer

CEO Morris Young explained that the company is selectively participating in the germanium market due to high raw material costs but sees long-term potential from low-orbit satellites. Executive Tim Bettles detailed the indium phosphide growth, highlighting strong demand for photodetectors in AI/data centers and design wins for lasers in silicon photonics and EML applications. Dr. Young added that AXT is gaining traction in the HBT market due to customer diversification needs and applying learnings from its 8-inch development to its 6-inch products. He also noted that China's stimulus could boost demand for industrial lasers and LEDs and positively impact the Tongmei IPO process, though the timeline remains uncertain.

Richard Shannon of Craig-Hallum inquired about Atomera's increased confidence and definitive timeframe for significant next steps in Gate-All-Around (GAA) technology, specifically regarding expected adoption by customers in the coming quarters. He also asked about alternative diffusion blocking solutions considered by customers and Atomera's market coverage in the power space.

Answer

CEO Scott Bibaud explained that Atomera has achieved definitive proof in the last month for Gate-All-Around technology, demonstrating MST's ability to be deposited effectively into 2nm nanosheet structures and its superior performance in blocking phosphorus dopant diffusion compared to alternatives like Silicon Arsenic. This breakthrough, validated on silicon, underpins the high confidence for future adoption by leading GAA customers. Regarding the power market, Mr. Bibaud noted it's a larger, more diverse segment than RF SOI, making it difficult to quantify market coverage precisely, but confirmed engagement with leaders in Trench FET and HBT applications, alongside GaN power initiatives.

Richard Shannon of Craig-Hallum inquired about Atomera's heightened confidence and definitive timeline for next steps in Gate-All-Around (GAA) technology, particularly regarding major milestones expected in the coming quarters. He also asked about alternative diffusion blocking solutions considered by customers and Atomera's market coverage in the power space compared to RF SOI.

Answer

CEO Scott Bibaud detailed recent technical breakthroughs in GAA, confirming MST's effective deposition into 2nm nanosheet structures and its superior diffusion blocking capabilities compared to industry alternatives like Silicon Arsenic. He expressed high confidence in driving adoption with leading GAA customers over the next few quarters. Regarding the power market, Bibaud noted its larger and more diverse nature compared to RF SOI, indicating expanding engagement with key players in Trench FET, HBT, and GaN power, though not yet claiming majority market coverage.

Richard Shannon of Craig-Hallum Capital Group LLC inquired about the STMicro production delay, specifically the transferability of 200mm work to 300mm, the confidence in next year's milestone payments, and the potential impact on other customers. He also sought updates on two 'transformative' customers, the collaboration with an unnamed equipment partner, and clarification on OpEx guidance versus hiring plans.

Answer

President & CEO Scott Bibaud explained that STMicro's expertise gained in MST deposition and integration on 200mm wafers is highly leverageable for the 300mm transition, expressing confidence in achieving milestones next year. He detailed that one transformative customer is conducting a large-scale demo across two business units, while another is testing multiple MST applications. Regarding the equipment partner, Bibaud confirmed the strategic collaboration is focused on Gate-All-Around and expanding. CFO Frank Laurencio clarified that OpEx guidance is maintained because hiring is primarily for backfilling roles and meeting current demand, not signaling a major expense growth trend for 2026.

Richard Shannon inquired about the new partnership with a semiconductor equipment company, asking about the partner's commitment and the technology focus. He also sought updates on STMicroelectronics, including interest from new internal groups, the potential for the RFSOI LNA improvements to accelerate adoption, progress with the two 'transformative' customers, and clarification on the full-year operating expense guidance.

Answer

CEO Scott Bibaud explained that the new partner is committing significant resources to help win designs, which will then use their equipment in production. The partnership is initially focused on Gate-All-Around but is expected to expand. Regarding STMicroelectronics, Bibaud confirmed that credibility from the initial smart power engagement has led to inbound interest from three other product areas within ST. He also noted that a new industry-wide demand for LNA improvements in RFSOI is a 'very hot area' that could accelerate adoption. On the transformative customers, he stated progress is moving very quickly. CFO Frank Laurencio narrowed the full-year 2025 non-GAAP OpEx guidance to a range of $17.25 million to $17.75 million, reflecting planned hiring and increased outsourced fabrication.

Richard Shannon of Craig-Hallum Capital Group inquired about the stalled "transformative" customer deal, asking if it was a pricing or technology issue. He also sought updates on progress with leading-edge logic and memory customers, the Gallium Nitride (GaN) opportunity's timeline, and the reasons for the extended STMicroelectronics (STMicro) production schedule.

Answer

CEO Scott Bibaud clarified the stalled deal was not a technology issue but a complex business negotiation involving a new royalty model for the customer. He highlighted significant progress in advanced nodes, driven by the industry's shift to gate-all-around (GAA) architecture. For GaN, Bibaud stated they are awaiting key electrical data before advancing customer engagements. Regarding STMicro, he attributed the timeline extension to a third-party logistics delay in tool installation, while emphasizing the strong ongoing collaboration.

Richard Shannon of Craig-Hallum Capital Group LLC inquired about several key business developments, including the nature of a potential "transformative" customer agreement, progress in moving other customers through the qualification funnel, and specific updates on the RF-SOI and advanced node segments. He also asked for clarification on the status of JDA 1, the dynamics of the 7-48 volt power market, and whether Atomera could accelerate adoption timelines for legacy process nodes.

Answer

President and CEO Scott Bibaud explained that the "transformative" deal involves a large customer with significant high-margin revenue potential and is now in active negotiation. He noted that while legacy node customers take longer to adopt changes, advanced node customers in gate-all-around and memory may move faster due to the massive resources they deploy. Regarding technology segments, Bibaud confirmed ongoing progress in RF-SOI and clarified that advanced node work is primarily with chip manufacturers, not fabless companies. For JDA 1, he stated that Atomera is providing additional data for a specific application, a typical step. He also highlighted that the company has developed a new MST-SPX variant specifically for the 48-volt data center market and acknowledged that accelerating legacy node adoption is challenging, but expects ST's production launch to be a major catalyst.

Richard Shannon from Craig-Hallum asked for clarification on the "three-year window" mentioned by management regarding LightPath's competitive advantage. He then inquired about the company's resource allocation, identifying key constraints in manufacturing capacity, product development, and headcount. Finally, he asked for an update on the conversion timeline for all G5 cameras and subsystems to Black Diamond.

Answer

CEO Sam Rubin explained the three-year window as the period during which LightPath's proprietary solutions provide a significant advantage while competitors struggle with germanium supply, emphasizing the goal to capture substantial market share during this time. He identified capacity (especially glass production) and product development as the primary areas for resource focus and investment, with CFO Al Miranda adding that the company is prepared for these investments. Sam Rubin stated that the goal is to convert all relevant G5 cameras to Black Diamond by the autumn of the current calendar year.

Richard Shannon inquired about the 'three-year window' mentioned by the CEO, seeking a full explanation of this strategic timeframe. He also asked about the company's resource allocation and greatest constraints in manufacturing capacity, product development, and headcount, and the timeline for converting all relevant G5 cameras to Black Diamond.

Answer

CEO Sam Rubin explained the three-year window as a period where LightPath's germanium alternative solutions provide a significant competitive advantage before competitors potentially catch up. He noted that programs won during this time would secure long-term engagement. CEO Sam Rubin and CFO Al Miranda identified capacity and product development as key resource allocation areas, with glass production being a past constraint now addressed by the Amorphous acquisition. CEO Sam Rubin stated the goal is to convert all relevant G5 cameras to Black Diamond by autumn of the current calendar year.

Richard Shannon sought clarification on LightPath's backlog definition, including its measurement period and whether it includes multi-year orders. He also asked about the size and nature of the remaining sales pipeline, particularly opportunities arising from the 'big beautiful bill.' Additionally, he inquired about the trajectory and goals for gross margin improvement, and the updated timeline for a decision on the Lockheed Martin NGSRI program.

Answer

CFO Al Miranda clarified that the $90 million backlog consists of 100% real, multi-year orders, with approximately 57% expected to ship in fiscal year 2026 and the remainder in fiscal years 2027-2028. CEO Sam Rubin indicated that the counter-UAS pipeline is just beginning, with over $10 million in backlog, and the recent $40 million order was largely incremental. CFO Al Miranda projected adjusted gross margins near 30%, with a potential increase to 35% in one to two quarters, and a midterm goal of 40% as the product mix shifts. CEO Sam Rubin stated he could not provide further details on the Lockheed decision beyond the formal timeline of next fall, though earlier indications exist.

Richard Shannon requested clarification on LightPath's backlog definition, including its measurement date and period covered. He also inquired about the size of the current pipeline, especially following the G5 acquisition and the 'Big Beautiful Bill' opportunities, and the expected dynamics and timeframe for gross margin improvement. Finally, he asked for an update on the Lockheed decision timeline.

Answer

CFO Al Miranda clarified that backlog represents real, 100% confirmed orders, including multi-year commitments, with approximately 57% expected to ship in fiscal year 2026 and the remainder in fiscal years 2027 and 2028. CEO Sam Rubin indicated that the counter-UAS market is just beginning, with the recent $40 million order being largely incremental. Al Miranda projected adjusted gross margins to quickly reach 35% within one to two quarters, eventually settling at 40% midterm as the product mix shifts towards infrared camera systems. Sam Rubin stated that while the formal Lockheed program decision is by next fall, indications suggest it could be sooner, but he could not comment further due to confidentiality.

Richard Shannon sought clarification on LightPath's backlog definition, including its measurement period and the proportion of multi-year orders. He also inquired about the size of the remaining pipeline, particularly from the 'big beautiful bill,' and the expected timeframe and goals for gross margin improvement.

Answer

CFO Albert Miranda confirmed backlog represents real, multi-year orders, with about 57% shipping in fiscal year 2026 and the balance in 2027/2028. CEO Sam Rubin noted that counter-UAS and the $40 million border order represent significant, largely unplanned growth. CFO Albert Miranda projected gross margins could reach 35% quickly and settle at 40% midterm as the product mix shifts. CEO Sam Rubin could not provide further specifics on the Lockheed decision timeframe beyond what was publicly stated.

Asked about the June quarter EBITDA breakeven outlook, the timeline for the final decision on the Lockheed Martin missile program, and the market penetration progress for Mantis cameras.

Answer

June quarter EBITDA breakeven will be close but is less certain than previously stated due to the timing of large system shipments. A decision on the Lockheed program could come earlier than the formal 2026 deadline, with key customer testing happening this summer/fall. For Mantis cameras, furnace inspection sales are going 'extremely well', but optical gas imaging is progressing slower pending a delayed EPA qualification test.

Richard Shannon questioned whether the company still expects to achieve positive EBITDA in the June quarter, asked for an update on the decision timeline for the Lockheed Martin missile program, and inquired about the market penetration progress of the Mantis camera products.

Answer

CFO Albert Miranda stated that achieving EBITDA breakeven in the June quarter will be "close," as some significant system shipments are scheduled late in the period. Executive Sam Rubin clarified that a decision on the Lockheed missile program could come as early as fall 2025, following customer testing, ahead of the formal 2026 deadline. Rubin also reported strong progress for Mantis cameras in furnace inspection but noted delays in the optical gas imaging market pending a required EPA qualification test.

Richard Shannon requested quantification of G5's sales pipeline and more detail on the Counter-UAS (CUAS) application, including its importance and market potential.

Answer

CEO Sam Rubin characterized G5's key programs of record as having the potential for $5 million to $20 million in annual revenue each, suggesting G5's business could reach $50-60 million within 2-3 years. He described CUAS as a major growth driver, emphasizing the critical need for passive infrared detection to avoid revealing a user's position. He highlighted the technological strength of G5's cameras and noted the future opportunity to integrate LightPath's BlackDiamond materials for even more advanced multispectral solutions.

Richard Shannon of Craig-Hallum Capital Group asked CFO Jeff Bertelsen about the general profile of gross margins for future revenues, particularly in light of the lower gross margins reported in the third quarter.

Answer

CFO Jeff Bertelsen attributed the lower Q3 gross margins to contract variability and strategic deals with lower margin profiles, such as those with the U.K.'s National Quantum Computing Centre. He anticipates improved margins with future sales, especially from Novera system sales.

Richard Shannon asked about Rigetti's 10Q disclosure regarding a potential significant increase in CapEx for upgrading or building a new chip fab facility, inquiring about the timing, scale of investment, and the rationale. He also explored the pros and cons of a standalone versus shared fab model, considering IP leakage. Additionally, he asked CFO Jeff Bertelsen about the general gross margin profile for future revenues, especially given the lower Q3 2025 margins.

Answer

President and CEO Subodh Kulkarni explained that the current 150mm fab is sufficient for the 2026-2027 roadmap but a new 200mm or 300mm fab would be needed beyond three years for higher fidelity and qubit counts, costing hundreds of millions. He noted that a quantum fab is simpler and cheaper than a CMOS fab. He discussed the potential for a foundry model, similar to TSMC, to address IP concerns, or a standalone/partnership approach if national initiatives don't materialize. CFO Jeff Bertelsen stated that Q3 gross margins were lower due to contract composition and variability, but future Novera sales are expected to have better margins.

Richard Shannon asked about the importance of optical signaling for scaling quantum computers and when this technology might realistically enter Rigetti's product roadmap. He also inquired about the expected revenue recognition timeline for the NQCC and Air Force contracts.

Answer

CEO Subodh Kulkarni described optical signaling as crucial for scaling to tens of thousands of qubits, as it overcomes the physical space and thermal load limitations of current coax and future flex cables. He projected that fiber optics would enter the roadmap in about three to four years. CFO Jeffrey Bertelsen stated that the NQCC revenue would be recognized over the next year, while the Air Force contract would see about $1 million in revenue over the next year as part of a three-year agreement.

Richard Shannon of Craig-Hallum asked for clarification on the technical approach to reaching 100+ qubits, questioning if it relied on the new tiling method or the existing monolithic design. He also inquired about how the joint research with Qphox and Qblox accelerates the roadmap and asked for details on the process and potential revenue from the DARPA benchmarking opportunity.

Answer

CEO Subodh Kulkarni confirmed that the primary path to 100+ qubits is through tiling, building on the 4x9 qubit demonstration planned for mid-year. He explained that the research with Qphox and Qblox is critical for long-term scaling, enabling a transition from bulky coax cables to flex cables and eventually fiber optics, which is necessary for systems with thousands of qubits. Regarding DARPA, he described it as a 'moonshot' project to build a utility-scale quantum computer by 2033 with a budget over $300 million, and he expressed confidence in Rigetti's competitive position to win a significant role.

Richard Shannon asked about the Rushmore family of DSPs, specifically if the potential for incumbency (being the first supplier) discussed in the last earnings call is playing out, given the company's enthusiasm. He also inquired about the industrial multi-market business, which has declined significantly, asking about its potential scale in the next one to two years and if MaxLinear is actively investing in its growth or if it's a lower priority compared to other business segments.

Answer

CEO Kishore Seendripu clarified that the Keystone family is currently driving revenues, while Rushmore (200 Gb per lane) was demoed at OFC, with incumbents having announced products earlier. He stated that MaxLinear's Rushmore product is highly differentiated and expected to be in production in 2026, but revenues from 200 Gb per lane are not anticipated until late 2026 or 2027, as 800 Gb is not yet fully rolled out. For the industrial multi-market business, Dr. Seendripu explained that past significant revenue loss was due to geopolitical issues (expiry of licenses) and deliberate pricing discipline. He confirmed that MaxLinear is making 'sustainable growth rate investments' in this segment, specifically focusing on edge, cloud, and data center-level applications to reposition the portfolio.

Richard Shannon inquired about the industrial multi-market business, its potential scale in the next 1-2 years, and whether MaxLinear is actively investing in its growth or if it's a lower priority.

Answer

CEO Kishore Seendripu explained that the business was impacted by geopolitical issues (license expiry) and deliberate pricing discipline. He stated that current investments are focused on 'sustainable growth rate investments' around edge, cloud, and data center infrastructure, repositioning the portfolio to align with these high-dollar markets.

Richard Shannon inquired about the confidence in the wireless infrastructure ramp for later this year and the strategy for gaining market share with the Keystone and Rushmore optical DSPs.

Answer

CEO Kishore Seendripu expressed confidence in doubling the wireless business revenue this year, driven by a recovery in backhaul and new content growth from Sierra radio products and E-Band millimeter-wave solutions. For optical DSPs, he clarified that near-term revenue growth is anchored on the Keystone (800G) platform, targeting a 20% market share and a $200-$300 million revenue opportunity over 3-4 years. The Rushmore (1.6T) product is aimed at later ramps in non-NVIDIA markets.

Richard Shannon asked for an update on the wireless infrastructure business, seeking visibility on bookings and the timing of a potential recovery. He also inquired about progress toward the previously stated $50-$75 million revenue goal for the Panther storage business by 2026.

Answer

CEO Kishore Seendripu described the wireless business as horribly down but now showing signs of steady booking improvements and recovery through 2025, driven by 5G upgrades in developing markets. Regarding storage, he said the timeline for the revenue goal might shift out slightly due to customer-side inventory delays, but the long-term view of the market size for Panther remains unchanged.

Richard Shannon of Craig-Hallum asked for details on the design win pipeline for the edge infrastructure market and for a breakdown of the consumer versus enterprise mix within the growing portable video opportunity.

Answer

CEO Fermi Wang explained that the first edge infrastructure design win is one of several engagements with new and existing customers for appliances that aggregate endpoints and run advanced AI models like LLMs. VP Louis Gerhardy reiterated a conservative SAM estimate of $125M this year, growing to $500M in five years. Regarding portable video, Gerhardy clarified that the mix is weighted more heavily toward the consumer side, which contributes to a faster time-to-revenue, though some categories like body-worn cameras are enterprise-heavy.

Richard Shannon requested an update on Ambarella's Gen AI initiatives and asked if the current pushouts in the automotive market could be a net positive for the company by allowing it to catch up.

Answer

President and CEO Dr. Fermi Wang explained that the CV7 chip family is well-suited for edge Gen AI, capable of running models like CLIP on a low-power budget, with revenue expected next year. He believes the auto market delays are a net positive, as Ambarella's solutions for lower cost and scalable software directly address the core reasons for the pushouts, positioning the company favorably.

Richard Shannon of Craig-Hallum Capital Group LLC inquired about the expected level of the upcoming gross margin dip, the status of the UAE defense MOU, and the composition of the expanded $725 million sales pipeline.

Answer

CFO Harminder Sehmi stated the gross margin dip is due to third-party hardware in new contracts and depends on the product mix. CEO Dinakar Munagala noted the UAE project is now targeted for 2026, with current priority on the Starshine and South Asia deals. Mr. Sehmi added the pipeline contains 20-40 applications, with $300 million in advanced stages expected to convert in 2026.

Richard Shannon of Craig-Hallum Capital Group LLC inquired about the expected level of the upcoming gross margin dip, the sales mix from the two large contracts, the status of the previously announced UAE MOU for defense applications, and the composition of the expanded $725 million pipeline.

Answer

CFO Harminder Sehmi stated the gross margin dip will depend on the product mix, as the Starshine contract includes lower-margin third-party hardware, but noted future software license revenue could provide an offset. CEO Dinakar Munagala clarified that the UAE project is now targeted for a 2026 deployment, with current priority on the Starshine and South Asia orders to recognize near-term revenue. Sehmi added that the $725M pipeline is separate from the $176M in new contracts and that $300M of the pipeline is in late-stage discussions for expected 2026 deployment.

Richard Shannon of Craig-Hallum Capital Group LLC inquired about the uniqueness of QuickLogic's new strategic rad-hard initiative, asking if competitors are pursuing similar onshore solutions and if the resulting opportunities are expected to be sole-sourced. He also sought clarity on whether the focus is limited to the 'Golden Dome' program, if the new devices are inherently higher density than those on older nodes, and if delaying other contracts would have negative repercussions. Finally, he asked for more detail on the full-year revenue outlook.

Answer

President and CEO Brian Faith stated he is unaware of any competitor developing a strategic rad-hard FPGA on GlobalFoundries' 12LP process, leading him to believe the opportunities will be sole-sourced and represent a differentiated, high-value investment. He confirmed the initiative targets a broad range of defense programs beyond 'Golden Dome' and involves high-density designs not feasible on older nodes. Faith assured that contract schedule changes were communicated transparently to customers with no material negative impact. CFO Elias Nader reiterated guidance for a significant Q4 revenue rebound but a modest full-year decline compared to 2024, without providing a specific figure.

Richard Shannon of Craig-Hallum Capital Group LLC asked if QuickLogic's new SRH FPGA initiative is a sole-source opportunity and whether it is limited to the 'Golden Dome' program. He also questioned if the new high-density 12nm products overlap with existing rad-hard efforts, the impact of contract delays on customer relationships, and sought clarity on the Q4 revenue outlook. He later followed up on whether similar enthusiasm for onshore manufacturing exists for other government programs.

Answer

President and CEO Brian Faith asserted high confidence that the initiative is a differentiated, sole-source opportunity for programs much broader than just 'Golden Dome,' targeting a new market for high-density, onshore rad-hard FPGAs that does not overlap with prior efforts. He assured that customers are aligned with the new schedules and there are no negative impacts. CFO Elias Nader confirmed a 'significant uptick' in Q4 revenue is expected but did not provide a specific number. Faith also confirmed seeing interest in other rad-hard programs but was limited in providing further detail.

Richard Shannon of Craig-Hallum Capital Group LLC probed the uniqueness of the new SRH FPGA initiative, asking about competitors, the likelihood of sole-source positioning, and if the opportunity extends beyond the 'Golden Dome' program. He also sought confirmation that this is a new, non-overlapping high-density market and questioned if delaying other contracts would have negative impacts. Finally, he asked for clarity on the full-year revenue guidance and if similar enthusiasm for onshore manufacturing exists for QuickLogic's other rad-hard programs.

Answer

President and CEO Brian Faith asserted that he knows of no direct competitor for this specific SRH FPGA on GlobalFoundries' 12LP process and expressed high confidence in winning significant, differentiated business. He confirmed the opportunity is broad, focused on rad-hard applications, and represents a new market. Faith assured that customers understand the schedule shifts for Australis 2.0 and there are no material negative impacts. CFO Elias Nader reiterated guidance for a significant Q4 rebound but a modest full-year decline.

Richard Shannon asked if competitors are pursuing similar onshore rad-hard FPGAs, implying these are sole-source opportunities for QuickLogic. He sought clarity on whether the market is broader than the 'Golden Dome' program, if the new 12nm initiative is an entirely new market, and if there were negative impacts from delaying other contracts. He also asked for more detail on the Q4 revenue outlook and if similar customer enthusiasm exists for QuickLogic's other rad-hard programs.

Answer

President and CEO Brian Faith stated he is unaware of any direct competitors developing a strategic rad-hard FPGA on GlobalFoundries' 12LP process, affirming his belief in winning differentiated, sole-source designs. He confirmed the opportunity is much broader than 'Golden Dome' and focuses on rad-tolerant/hard applications, creating a new market for high-density onshore FPGAs. He assured that contract delays had no negative impact. CFO Elias Nader confirmed a significant Q4 revenue rebound is expected but maintained the full-year guidance of a 'modest' decline without providing a specific number.

Richard Shannon from Craig-Hallum Capital Group LLC inquired about the competitive landscape for the new strategic rad-hard (SRH) FPGA, asking if QuickLogic has a sole-source position. He also sought clarity on whether the opportunity is limited to the 'Golden Dome' program, the density of the new devices, the impact of delaying other contracts, and the scale of the projected Q4 revenue rebound. He later followed up on whether similar enthusiasm for onshore manufacturing was being seen for QuickLogic's other rad-hard programs.

Answer

President & CEO Brian Faith asserted a high degree of confidence in winning sole-source positions, stating he wouldn't have approved the investment otherwise, and sees a potential for hundreds of millions in revenue. He confirmed the opportunity is much broader than 'Golden Dome' and focuses on high-density designs on a 12nm node, which is an entirely new, self-funded initiative separate from existing government contracts. He assured that customers are aligned with revised schedules for other contracts. CFO Elias Nader confirmed a 'significant' Q4 revenue rebound is expected, though the full year would still be modestly down from 2024. Regarding other programs, Faith confirmed continued interest but was limited in the details he could provide.

Richard Shannon of Craig-Hallum Capital Group LLC asked for details on the new SRH FPGA initiative, questioning if it creates a sole-source opportunity and if it extends beyond the 'Golden Dome' program. He sought clarification on whether the target market is exclusively for high-density, rad-hard applications and if it overlaps with existing rad-hard programs. Shannon also inquired about potential negative impacts from contract delays and asked for more specific guidance on the Q4 revenue outlook.

Answer

President and CEO Brian Faith affirmed his high confidence that the initiative is a differentiated, sole-source opportunity, stating he would not have approved the internally-funded tape-out otherwise. He confirmed the opportunity is much broader than 'Golden Dome' and focuses on high-density, rad-tolerant/hard applications, representing a new market. Faith assured that there were no negative impacts on other contracts. CFO Elias Nader projected a 'significant' revenue rebound in Q4 but maintained a 'modest' full-year decline compared to 2024, declining to provide a specific Q4 number.

Richard Shannon of Craig-Hallum Capital Group LLC sought clarification on the scope of the $1.5 billion USMAG FPGA market, the expected timing for storefront revenues from the strategic rad-hard program, and quantification of the 'solid revenue growth' outlook for the full year.

Answer

CEO Brian C. Faith clarified that the $1.5 billion figure represents the total annual FPGA market for USMAG, not specific to any process node. He could not provide a specific timeline for rad-hard storefront revenue due to confidentiality but confirmed development progress and increased customer engagement. CFO Elias Nader addressed the growth outlook, stating that while a specific number is not provided, a 'decent rebound in the second half' is expected, enabling the company to achieve full-year profitability and positive cash flow.

Richard Shannon of Craig-Hallum inquired about the outlook for Q2 revenue, the rationale for no longer providing a quantitative funnel metric, the opportunities and risks associated with Intel 18A, the timeline for converting former Flex Logix customers, the strategy for diversifying end markets, the revenue outlook for the strategic rad-hard project, and the definition of the term 'direct to storefront'.

Answer

CEO Brian C. Faith explained that Q2 revenue is expected to be 'north of $6 million,' driven by a recently closed $1.1 million contract and an anticipated mid-7-figure Intel 18A deal, both expected to be recognized in the quarter. He stated that while the opportunity funnel grew, the company is shifting focus to reporting on concrete contract wins rather than a quantitative funnel metric. Faith expressed strong conviction in the demand for Intel 18A, particularly from the U.S. government and defense sectors, positioning QuickLogic as the sole eFPGA provider for that node. He highlighted that the new VP of Sales, formerly of Flex Logix, has already helped close a $1.1 million deal, indicating a shorter conversion timeline for new customers. Faith also noted that diversification into industrial, communications, and consumer markets is accelerating. Regarding the rad-hard project, he projected revenue would be comparable to the previous year, with more details pending government approval. Finally, he defined 'direct to storefront' as a contract model where the customer commits to a storefront partnership from the outset, streamlining the engagement.

Richard Shannon from Craig-Hallum asked for more detail on the large DIB-related contract that was delayed due to an expanded scope, questioned the source of the company's increased confidence in the Intel 18A opportunity, and inquired about the revenue and OpEx outlook for 2025. He also sought clarification on the expected timing of a higher run rate for the Strategic Rad Hard FPGA contract.

Answer

President and CEO Brian C. Faith clarified the contract delay was due to an expanded technical scope on a new process, which will create capabilities applicable to other customers. He expressed high confidence in Intel 18A, citing its importance to the US Defense Industrial Base and QuickLogic's position as potentially the sole eFPGA IP source for it. While declining to give a full 2025 revenue forecast, he expects growth. CFO Elias Nader added that OpEx is expected to remain flat. Mr. Faith also stated the higher run rate for the Strategic Rad Hard contract is expected to be awarded in the current quarter (Q4).

Richard Shannon of Craig-Hallum Capital Group LLC inquired about the significance of the defense market, the pricing strategy for new products using L4 and Cronos chips, and sought clarification on the automotive strategy, particularly regarding robotaxis versus consumer ADAS.

Answer

CEO Angus Pacala clarified that while defense is a growing opportunity, industrial and automotive were the top verticals in Q2. He explained the pricing strategy aims to maintain 35-40% gross margins while enabling customer business models. Pacala also distinguished that the upcoming digital flash (DF) products use the Cronos chip, not L4, and reiterated that while Ouster is prepared for the long-term consumer ADAS market, its financial growth targets are not dependent on it.

Richard Shannon of Craig-Hallum Capital Group questioned Ouster's gross margin framework and product roadmap. He asked why the 35-40% gross margin target hasn't been raised despite recent outperformance, and sought more detail on how new L4 and Chronos chips will double the company's total addressable market (TAM). He also inquired about competitive dynamics from rivals pivoting into Ouster's non-automotive markets.

Answer

Interim CFO Chen Geng affirmed the 35-40% gross margin range remains appropriate, noting they are at the high end on a GAAP basis and will break out software revenue when it becomes more significant. CEO Angus Pacala described the upcoming product releases as the most transformational in Ouster's history, stating that while details are confidential, the roadmap is already cementing long-term relationships with Tier 1 customers. Pacala also noted he has only seen 'fits and starts' from auto-focused competitors attempting to enter Ouster's diversified verticals, not a consistent push.

Tyler on for Richard Shannon asked about market interest for the new 3D Zone monitoring feature, the impact of manufacturing reshoring, and potential new revenue streams from the Gemini Portal.

Answer

CEO Angus Pacala explained that 3D Zone monitoring is primarily targeted at the industrial market as a required feature to compete with legacy 2D lidar. He clarified that Ouster has always maintained a 'Buy American' certified manufacturing presence, so reshoring is an ongoing benefit, not a new trend. For the Gemini Portal, he described it as a cloud hub for managing deployments, with future revenue potential from analytics and data services.

Richard Shannon of Craig-Hallum Capital Group LLC asked for a breakdown of revenue between the industrial and defense portions of the I&D segment, the percentage of sales from GaN products, and relative growth expectations for fiscal 2026.

Answer

SVP and CFO John Kober estimated the Industrial and Defense split is now approximately 65% defense and 35% industrial, a shift from previous years, but declined to break out GaN revenue specifically. President and CEO Stephen Daly stated it was too early to discuss 2026 segment growth in detail but noted the company's overall secular trends are intact and that MACOM should achieve over 30% growth in fiscal 2025.

Richard Shannon inquired about the drivers of the strong defense business, asking if large programs were key and if the I&D segment could lead growth into fiscal 2026. He also asked for the timing of new Data Center products like CW lasers and LPO.

Answer

President and CEO Stephen Daly confirmed that a refresh cycle in radar systems, driven by counter-drone applications, is a major growth driver and that MACOM's strategy to bring more optical and mixed-signal technology to defense is succeeding. For new Data Center products, Daly was reluctant to predict which would have the biggest impact but reiterated strong interest in developing a competitive CW laser offering, though significant work remains.

Richard Shannon asked for a characterization of the potential contribution from 1.6T solutions, photodetectors, and CW lasers in fiscal 2025. He also inquired if the guided increase in operating expenses for Q1 represented a decision to 'open the spigot' on spending.

Answer

CEO Stephen Daly identified 1.6T (200G per lane) solutions as one of the fastest-growing areas for fiscal 2025 and said photodetector and CW laser components could have a 'meaningful contribution.' CFO John Kober confirmed the step-up in OpEx, attributing it to investments in design capabilities (including the ENGIN-IC acquisition), employee merit increases, and other activities to support growth, while assuring that spending is managed carefully and allocated to growth areas.

Richard Shannon of Craig-Hallum Capital Group LLC inquired about product gross margin trends, the ramp-up timeline for new products, end-market dynamics including inventory levels, the status of key development contracts, and progress on the Lattice Semiconductor partnership.

Answer

CFO Bill Cooper stated that while product gross margins are currently in the 45-50% range due to newer products, the long-term target remains above 50%. He also clarified that a Q4 pickup in 'other income' is expected from the Amentum contract. CEO Sanjeev Aggarwal added that new X Spy products are already contributing to the 20% sequential growth in industrial automation, customer inventories are depleting in key regions, the Front Grid contract's first phase is complete awaiting renewal, and the QuickLogic and Lattice Semiconductor collaborations are progressing as planned.

Inquired about product gross margins, the ramp-up of new products, end-market dynamics in industrial and data center, the status of the Amentum, QuickLogic, and Front Grid contracts, and the progress of the collaboration with Lattice Semiconductor.

Answer

The company reported product gross margins are currently in the 45-50% range with a target above 50%. New products are gaining traction, contributing to growth, particularly in industrial automation. They are seeing positive inventory trends in Asia and strong demand in data centers. The Amentum contract is expected to have a strong second half. The Front Grid project's first phase is complete and awaiting renewal, while the QuickLogic contract is a multi-year ongoing project. The Lattice collaboration is progressing, with evaluation boards available, but significant revenue impact is a few quarters away.

Inquired about the dynamics of Q1 product gross margins, the drivers for the expected second-half revenue weighting, clarification on the 'other income' pickup, and the outlook for operating expenses.

Answer

The company expects overall gross margins to remain consistently above 50% for the year. The second-half revenue weighting is attributed to the end of inventory correction, building backlogs, and new STT products converting to production revenue. The 'other income' pickup is related to increased activity on a DoD contract. Operating expenses are expected to remain in a similar range for the rest of the year.

Richard Shannon of Craig-Hallum Capital Group LLC inquired about the key drivers for the Q1 2025 net loss guidance, the potential revenue contribution from the Lattice Semiconductor partnership, the recovery timeline for industrial markets, details of the Purdue University AI contract, and the long-term outlook for the RAD-Hard defense business.

Answer

CFO Bill Cooper explained that the Q1 net loss guidance is primarily due to lower 'other income' from a milestone-based DoD contract, which is expected to be more weighted to the second half of 2025. CEO Sanjeev Aggarwal clarified that the Lattice partnership is a joint solution to accelerate customer adoption rather than a direct revenue source. He noted that while macroeconomic uncertainty persists, low inventory levels suggest a more promising second half for industrial markets. Aggarwal also detailed that the Purdue project is a multi-year, milestone-driven contract valued at approximately $10.5 million over four years. Regarding the defense sector, he expressed confidence in current projects moving forward, though new project timelines could be affected by future policy decisions.

Inquired about the DoD contract's recognition method and its impact on Q4 guidance, the reasons for flat product revenue guidance despite signs of inventory improvement, the expected timing for new PERSYST products to contribute to growth, specific geographies showing weakness, and details on the expected outcomes and financial contribution of the Purdue program.

Answer

The DoD contract is recognized ratably over 2.5 years based on effort, using revenue recognition principles by analogy. The Q4 guidance implies a mix of factors including conservatism, as market signals are mixed. Flat product revenue guidance is due to these mixed signals and the long qualification times for new PERSYST products, which are expected to ramp in 2025. Market weakness is concentrated in Japan and Germany. The Purdue program is an R&D project to learn how to tune MRAM for AI solutions and is not expected to lead directly to a product; financial contributions are not yet defined.

Richard Shannon inquired about the recognition timing of the DoD contract and its impact on Q4 guidance, questioned the flat product revenue forecast amid signs of inventory recovery, and asked about the revenue ramp for new PERSYST products, specific geographic weaknesses, and the expected outcomes from the Purdue University AI project.

Answer

Interim CFO Matthew Tenorio clarified the DoD award will be recognized ratably over 2.5 years based on effort and milestones, contributing to the Q4 outlook. Executive Sanjeev Aggarwal explained the flat product revenue guidance reflects conservatism due to mixed market signals, particularly weakness in Japan and Germany. He noted new PERSYST products will ramp in 2025 after customer qualifications. Regarding the Purdue project, Aggarwal stated it is a research effort to tune MRAM for AI, with learnings to inform future products, but financial details are not yet finalized.

Richard Shannon from Craig-Hallum Capital Group LLC questioned the key 2026 growth drivers, seeking details on business development progress for advanced packaging and the scope of modalities, beyond superconducting, that SkyWater supports in quantum computing.

Answer

CEO Thomas Sonderman detailed that for advanced packaging, the focus is on tool installation in Florida to enable prototype availability within a year, initially targeting the defense industrial base with plans for commercial expansion. For quantum, he confirmed the focus on superconducting films but also highlighted work with photonics (via their SciQuantum engagement) and ongoing evaluation of other modalities like ion trap. He emphasized that SkyWater's interposer and chiplet capabilities are foundational for building scalable quantum systems.

Richard Shannon requested a broader view on the number of expected ATS to Wafer Services conversions for the year, differentiating between defense and other markets. He also asked for an update on the RadHard program's progress and whether it was impacted by the budget stalemate in Washington.

Answer

CEO Thomas Sonderman noted that last year's conversions in the bio-diagnostic space are ramping at a different pace than ThermaView due to varying qualification cycles. He stated that as more programs convert, the business will become more predictable. Regarding the RadHard program, Sonderman confirmed the technology continues to evolve but is one of the programs being reassessed for priority due to government funding dynamics, emphasizing SkyWater's strategic value as a domestic foundry.

Richard Shannon asked for more context on the conservative yearly outlook, specifically how much it was adjusted down due to Department of Defense budget cycles. He also inquired about the nature of the expected efficiency improvements at the newly acquired Infineon fab and how quickly that could free up capacity for new revenue.

Answer

Executive Thomas Sonderman stated that the conservative outlook is a precaution due to the timing dynamics of federal budget approvals and continuing resolutions, not a reflection of the health of their critical A&D programs. Regarding Fab 25, he explained that efficiencies will come from transitioning the fab from a single-entity IDM to a multi-customer foundry model, leveraging their ATS business to engage new customers almost immediately and capitalizing on the demand for U.S.-based supply chains.

Richard Shannon of Craig-Hallum Capital Group asked about the Q1 cost accrual reversal, seeking to understand if the program is now back on track. He also inquired about the impact of government budget softness on the A&D business in Q4 and the potential effects of a new administration on current programs.

Answer

CFO Steve Manko clarified that with the $5.6 million reversal in Q3, the entire $8 million accrual from Q1 is now fully reversed from an accounting perspective. CEO Thomas Sonderman added that the underlying rad-hard technology development program has resolved its earlier technical issues and is progressing in line with customer expectations. Regarding the A&D business, Sonderman stated that program funding and commitment for the new fiscal year are very strong and that the company is focused on execution, expressing confidence regardless of administrative changes.

Richard Shannon inquired about the technical specifics of recent acquisitions, including LightSync's operating temperature, the integration plan for IonQ and Oxford Ionics processors, the potential for parallel gate execution, the number of deployed QPUs, and plans for securing data at rest.

Answer

SVP of Engineering & Technology Dean Kassmann explained that LightSync's technology requires mild cryogenic temperatures and that the IonQ and Oxford Ionics technology stacks are being fully integrated to scale out. CEO & Chairman Niccolo de Masi noted that all systems ever made have been sold and that demand is high. President & GM of Quantum Networking Jordan Shapiro clarified that their QKD solutions secure data in transit, a key vulnerability. Kassmann concluded that the new electronic gate control allows for a massive increase in parallelism and gate speed, driving throughput and improving unit economics.

Richard Shannon of Craig-Hallum Capital Group LLC asked about the market timing and revenue impact of the networking acquisitions, plans for ID Quantique's product expansion, expectations for gross margin and OpEx, and the typical cadence of contract revenue recognition.

Answer

Executive Chair Peter Chapman noted the ID Quantique deal's full impact would be more significant in the following year due to its closing timeline. He stated it was too early for specific product expansion plans but highlighted the strategic value of IDQ's global footprint. An executive explained that while specific margin guidance isn't provided, margins are expected to improve with more enterprise sales, while government contracts currently offset R&D costs. Contract revenue recognition varies from 6 to 48 months depending on the project type and system delivery lead times.

Richard Shannon of Craig-Hallum Capital Group LLC inquired about the new silicon photonics capability for receive functions, the drivers of the RF mobile recovery, the company's progress toward its long-term $2.7B revenue model, and expectations for depreciation and free cash flow.

Answer

CEO Russell Ellwanger explained the new SiPho receive function could grow its served market by ~20% for a specific application and that 2026 SiPho demand is forecasted to double Q4 2025 levels. He attributed the RF mobile rebound to inventory burn-off and customer market share gains. He also affirmed the 2028-2029 timeline for the $2.7B revenue target. CFO Oren Shirazi added that depreciation should remain stable at $65-75M quarterly and that while CapEx will stay high, improving cash from operations will support free cash flow.

Richard Shannon asked about the competitive dynamics in Silicon Photonics, the revenue outlook for the 1.6T generation, and fab utilization for SiGe and SiPho. He also requested a ranking of long-term growth drivers, clarification on the expected RF Mobile business snapback, and a timeline for the New Mexico fab's qualification, production, and depreciation.

Answer

CEO Russell Ellwanger estimated Tower's SiPho market share at around 80% and stated the 1.6T ramp is underway. He confirmed that SiGe and SiPho capacity is expanding, leading to expected sequential revenue growth throughout 2025. Ellwanger ranked RF infrastructure as the top growth and margin driver, followed by Power Management. He attributed the expected RF Mobile snapback in 2026-27 to new customer wins and re-engagement with larger players. He anticipates production shipments from the New Mexico fab in H2 2025, which will trigger depreciation.

Richard Shannon inquired about the growth outlook for RF infrastructure, the revenue mix shift in RF SOI from 200mm to 300mm, the full-year depreciation load, and the net growth expectation for the Power Management business unit.

Answer

CEO Russell Ellwanger projected the RF SOI revenue mix would shift heavily towards 300mm in 2025 (approximately 4/5 300mm vs 1/5 200mm) and confirmed the overall Power Management business is targeted to grow year-over-year, despite a decline in the discrete sub-segment. CFO Oren Shirazi stated that the quarterly depreciation run rate would be stable at around $65 million, with no significant impact from the New Mexico facility expected in 2025.

Richard Shannon from Craig-Hallum Capital Group asked about the timing for 1.6T silicon germanium revenue becoming a material contributor. He also questioned the lower-than-expected gross margin fall-through despite strong silicon photonics performance, sought a framework for 2025 growth expectations, and inquired about the company's strategy for cash usage and potential M&A.

Answer

CEO Russell Ellwanger projected that 1.6T revenue would become material in the second half of 2025. CFO Oren Shirazi explained that the strong margin contribution from silicon photonics was offset by weaker-than-expected performance in the high-margin CIS (image sensor) business. For 2025, Russell Ellwanger expects strong growth in infrastructure (SiGe/SiPho) and power, with imaging remaining stable. He also confirmed the company is actively but cautiously evaluating M&A opportunities, prioritizing deals that are accretive to shareholders.

Richard Shannon sought details on the recent patent litigation settlement, including its structure and the counterparty. He also asked about the go-forward IP enforcement strategy, the sources of the 'wide range of outcomes' for the year, and the expected near-term impact of new products.

Answer

CEO Patrizio Vinciarelli declined to provide specific details of the settlement but emphasized that no license was granted in connection with the action. He reiterated a crystal-clear strategy of enforcing IP against the entire supply chain to end the practice of copying. Vinciarelli clarified that the primary source of near-term uncertainty is the licensing and litigation practice, not product revenue, and that new products will contribute in H2 but not 'move the needle big time' this year.

Richard Shannon probed whether a former licensee's new product is considered infringing, the path back to licensing revenue growth, and the drivers of product growth across different end markets.

Answer

CEO Patrizio Vinciarelli confirmed the unlicensed product is viewed as infringing and that future growth will come from both increased product revenues and licensing income. VP Philip Davies highlighted broad-based product growth opportunities across HPC, Defense & Aerospace, and Industrial segments. Management declined to provide specific gross margin guidance but noted that one-time pressures from the Q1 SAP implementation have abated.

Richard Shannon of Craig-Hallum Capital Group questioned if the 2025 "uncertainty and opportunity" is mainly concentrated in HPC, asked for details on the Gen 2 VPD's new ASIC, inquired about the ChiP fab's operational readiness, and asked if licensing talks now include point-of-load products.

Answer

CEO Patrizio Vinciarelli confirmed the 2025 outlook is primarily tied to AI/HPC opportunities. He stated the new ASIC is a broadly applicable component for the entire 5G product line. He detailed the fab's progress with improved cycle times and high yields, noting readiness involves perfecting the entire system solution for various customers. He also explained that licensing discussions can be broad, covering the entire IP portfolio, or narrow, depending on the licensee.

Richard Shannon of Craig-Hallum sought to understand the scale of the opportunity for the Gen 5 VPD product, asking if management could quantify its pipeline. He also inquired about customer perception of Vicor's Gen 5 supply chain robustness and whether Vicor expects to be a sole-source supplier for initial engagements.

Answer

Corporate VP Philip Davies described the HPC pipeline as a 'rebuild' with high interest in Gen 5 VPD. CEO Patrizio Vinciarelli expressed confidence in the supply chain, stating that for the next 1-1.5 years, customers recognize the Vicor foundry as the primary source for these high-performance products. He added that second and third foundries are expected beyond that timeframe to add capacity and robustness.

Richard Shannon asked for details on a significant 800G DSP win, including its size and whether it was a full DSP or LRO solution, and also inquired about the long-term outlook for Credo's IP business.

Answer

CEO Bill Brennan confirmed the 800G win is a full DSP implementation and described it as likely the company's largest optical revenue opportunity to date, given the 100G per lane rate. On the IP business, Brennan explained that due to rapid product revenue growth, IP is now less than 5% of total revenue. Going forward, the IP business will be viewed strategically, used to enable larger system-level solutions with key customers rather than as a primary revenue driver.

Richard Shannon asked for an update on the competitive landscape in the AEC space, particularly regarding customer efforts to dual-source. He also inquired if other hyperscalers are close to adopting Credo's AECs for back-end network applications and the potential timing.

Answer

CEO William Brennan acknowledged the natural desire for dual-sourcing but emphasized Credo's strategy is to be the best partner by delivering innovation, reliability, and predictable production ramps first. He stated there are no significant changes on the competitive front. For new customers, he said adoption plays out similarly to existing ones: starting with one project and expanding. He cited a new customer that started with a switch rack project and quickly expanded to two more SKUs for future AI clusters at 100-gig lane speeds.

Richard Shannon asked if the AEC product line achieved record revenue in the quarter and requested the revenue concentration for the two 10% customers. He also asked for more detail on the trend of AI clusters shifting from optics to active copper solutions.

Answer

CFO Dan Fleming confirmed AECs were a large driver but did not specify if it was a record. He disclosed the first AEC hyperscaler was at 10% of revenue, while the second was the largest customer. CEO William Brennan explained the shift to AECs is driven by a need for higher network quality to avoid costly 'link flap' issues common with laser-based optics. This, combined with denser racks, is making rack-to-rack AECs more viable and expanding the TAM.

Richard Shannon of Craig-Hallum asked about the dynamics required to achieve positive gross profit and sought an update on the stability of autonomy roadmaps across major OEMs, questioning if timelines were firming up or being pushed out.

Answer

CFO Tom Fennimore explained that achieving sustainable positive gross margin will likely require the launch of the Halo platform, as current Iris volumes are too low. On OEM roadmaps, he noted that while pushouts have been common, he has seen some 'early signs' of timelines being pulled in recently, though he cautioned it is not yet a definitive trend.

Richard Shannon asked for an update on the potential revenue outcomes for the mobile business in 2025, the expected product mix and ASP profile, and details about the new TrueCut collaboration with a post-production company.

Answer

Executive Todd DeBonis stated that given Q2 guidance, replicating 2023's mobile revenue of approximately $30 million would be difficult, and that 2025 is more likely to be flat or slightly above 2024 levels. He confirmed the revenue profile would be predominantly from low-end solutions with ASPs under $2. Regarding the TrueCut partnership, he confirmed it is a signed agreement with a large, mature post-production house that sees the value in motion grading and wants to expand its service offerings to filmmakers.

Inquired about the long-term revenue balance between high-end and low-end mobile processors, their relative ASPs, the timing of the mobile business inflection, clarification on cost savings figures, and the strategic rationale for exploring options for the Pixelworks Shanghai subsidiary.

Answer

The executive expects the high-end mobile business to remain dominant in the near term, but the low-end could become a much larger part of the business long-term, with an ASP about half that of the premium version. A revenue inflection is anticipated to start late Q1 or Q2 2025, ramping in the second half of the year. The $10 million cost savings figure over six quarters includes the $4 million annualized savings from headcount reduction plus other operational cuts. Engaging a banker for the Shanghai subsidiary is a response to inbound interest and a way to evaluate structures that could alleviate geopolitical challenges and enhance growth, even if it delays a potential IPO.

Richard Shannon of Craig-Hallum inquired about the impact of the quantum supremacy paper on the academic community and commercial customers, particularly in changing opinions about annealing technology. He also asked for clarity on the relationship between the strong Q4 bookings and Q1 revenue guidance, specifically regarding the Jülich contract's revenue recognition timing.

Answer

CEO Alan Baratz stated the paper is a huge step forward, noting it was a collaboration with 11 institutions and is changing the dialogue with government and commercial entities, helping to 'melt away that rhetoric around annealing versus gate.' CFO John Markovich clarified that the Jülich system booking was a significant part of Q4 bookings, and a substantial portion of the Q1 revenue guidance relates to the installation and acceptance of that system in Q1.

Richard Shannon requested details on the sales cycle and customer experience with NTT DOCOMO to understand how it could inform future go-to-market strategies. He also asked for clarification on which international regions are showing the most promise for government spending.

Answer

CEO Alan Baratz described the NTT DOCOMO engagement as an 'ideal scenario' where the customer was highly self-sufficient, moving from initial sign-up to trial in approximately 6-9 months with minimal professional services support. He cautioned that this is not typical for all customers. Regarding international government opportunities, Baratz identified Europe as the region with the most current activity, primarily for larger research-focused projects and smaller near-term application deployments.

Richard Shannon asked about the competitive dynamics for Astera's P-Series switches against incumbents and inquired about the expected size of scale-up domains that would drive Scorpio X-Series growth.

Answer

President and COO Sanjay Gajendra highlighted two key differentiators for Scorpio: its COSMOS software suite and its ground-up architecture for AI workloads, unlike incumbent switches designed for storage. He also noted a first-mover advantage with PCIe Gen 6 switches. CEO Jitendra Mohan reiterated that the market for X-Series scale-up interconnect is projected to grow to over $2.5 billion by 2028 from nearly zero today, which underpins the company's confidence that Scorpio will become its largest product line.

Richard Shannon of Craig-Hallum inquired about the competitive response to the COSMOS software platform and Astera Labs' strategy for maintaining its lead. He also asked for an update on hyperscalers' adoption of CXL use cases and whether the current development timeline aligns with prior expectations.

Answer

Executive Jitendra Mohan and President/COO Sanjay Gajendra emphasized that COSMOS's strength lies in its software-centric chip architecture and years of accumulated field knowledge, making it difficult for competitors to replicate. Regarding CXL, Sanjay Gajendra noted that concrete use cases are now becoming established, and while the timeline is solidifying, the technology remains in an early 'crawl to walk' adoption phase.

Richard Shannon from Craig-Hallum asked about the ramp timeline for optical circuit switching and for an update on any growth catalysts in the 3D sensing market.

Answer

President and CEO Alan Lowe indicated that optical circuit switch deployment is realistic for calendar 2025, with more meaningful growth in 2026, noting the product is already being qualified in their Thailand facility. SVP and CSO Chris Coldren commented that the 3D sensing market remains mature, with no immediate catalysts, as potential growth areas like automotive and AR/VR have been slow to adopt.

Richard Shannon asked about Coherent's 1.6T transceiver time-to-market relative to competitors and the expected breadth of the customer base at launch. He also requested a sense of how large the DCI market is relative to traditional telecom transport.

Answer

CEO James Anderson stated that with samples already delivered, Coherent expects a 1.6T revenue ramp in calendar 2025 and is working to accelerate it, with an initial customer base similar in breadth to the early 800G ramp. He clarified that while DCI is currently a smaller portion of the telecom business, it is growing rapidly and is expected to become a more significant component over time.

Sought clarification on the potential major OEM award, the competitive landscape for that award, industry-wide software integration challenges, and the timeline for the company's next-generation long-range lidar.

Answer

The company confirmed the potential award is with a major OEM, could be larger than their current one, and a decision is expected by year-end with competition narrowed to one or two companies. They acknowledged ADAS software integration is challenging industry-wide but stated their tools prevent their lidar from being a bottleneck. The next-gen lidar samples will be ready for calendar year 2026 programs and are already being demonstrated to OEMs.