Robert Mertens

Robert Mertens sought clarification on whether the new High Bandwidth Memory (HBM) inspection win for an engineering lab was with an existing or new customer. He also asked if the multi-unit order for a new handler under development was related to the Eclipse handler and GPU opportunity or a separate initiative.

Answer

Luis Müller, Cohu's President and CEO, confirmed the HBM inspection win was with the same customer, for future HBM development. He clarified that the multi-unit order for the new handler is separate from the Eclipse/GPU commentary, targeting primarily automotive ADAS and Physical AI type devices.

Robert Mertens sought clarification on two specific wins: whether the HBM inspection win for an engineering lab was with an existing or new customer, and if the multi-unit order for a new handler under development was related to the Eclipse handler and GPU opportunity or a separate product.

Answer

President and CEO Luis Müller confirmed the HBM inspection win was with the same customer for future HBM development. He clarified that the multi-unit order for the new handler is separate from the Eclipse/GPU commentary, targeting automotive ADAS and physical AI devices.

Robert Mertens asked if there are typically different order patterns between OSATs and IDMs based on test cell utilization and which group tends to lead a recovery. He also inquired about the outlook for the automotive market following its sequential growth in Q1.

Answer

CEO Luis Müller explained that while buying is dictated by utilization for both OSATs and IDMs, historical trends show OSATs tend to lead both the downturn and the subsequent upswing in a cycle. Regarding the automotive market, Müller noted that while customers have called a trough, the recovery pace is still uncertain. He expects the auto recovery to be slow for the next quarter or two and to trail the recovery in the mobile market.

Robert Mertens sought to understand the reason for the lower Q1 guidance after previous optimism, asking if customer pushouts were the primary cause and when that revenue might return. He also asked if the HBM opportunity is focused on one customer or involves broader engagement.

Answer

Executive Jeffrey Jones confirmed the softer Q1 outlook was due to approximately $7 million in customer shipment pushouts, which are now expected to be spread throughout the remainder of 2025, not concentrated in Q2. President and CEO Luis Müller clarified that the current 2025 HBM forecast is based on scaling with the initial customer, but the company is actively working to sell these solutions to other memory suppliers, representing potential upside.

Robert Mertens of TD Cowen questioned if the automotive segment's better-than-expected performance was due to a single large customer. He also sought clarification on whether the stated $50 million revenue opportunity for die-level burn-in was for the total market or a single customer.

Answer

President and CEO Luis Müller explained that the automotive segment's improvement reflects a broader recovery in bookings from a cyclical low, describing it as a 'bathtub' curve, and is not solely dependent on one customer. Regarding the revenue opportunity, Müller confirmed the figure referenced was for the market at large, representing the potential as customers migrate to die-level processes, not the potential from a single customer.

Robert Mertens asked about the progress of qualifications for Astera Labs' 800G AECs within the Aries product offering and whether the company expects to ship 800G AECs to multiple hyperscalers this year. He also inquired about the potential size and scale of the additional Scorpio P-Series customers compared to Astera Labs' main hyperscaler, as volumes ramp in H2 2026 and beyond.

Answer

Jitendra Mohan, CEO and Co-founder, stated that 800G is ramping up, and Astera Labs is closely engaged with qualifications. Due to their business model, they expect to gain from 800G deployments as volumes expand, with multiple customers using AECs. He confirmed that the additional hyperscaler opportunities for Scorpio P-Series, specifically those called out, are mainstream use cases with the potential to reach the size and revenue impact of their current main hyperscaler.

Robert Mertens asked about the mix of demand for Astra processors (embedded industrial vs. consumer customers) and Synaptics' current view of channel inventory levels and potential near-term headwinds.

Answer

Rahul Patel, President and CEO, explained that initial Astra ramp will be majority consumer, with industrial designs following later, citing the humanoid engagement as an indicator of future industrial market presence with revenue expected in calendar 2028. Ken Rizvi, CFO, stated that their channel inventory (primarily logistics-oriented) is very lean and has been for the last three quarters, indicating they are shipping towards end-market demand.

Robert Mertens (on behalf of Chris Danakar) asked about the customer mix for the Astra processor platform (embedded industrial vs. consumer) and demand expectations, as well as Synaptics' current view of channel inventory levels.

Answer

Rahul Patel, President and CEO, explained that the initial ramp for Astra will be primarily in consumer, with industrial designs following later, citing examples like intelligent televisions and humanoids, with consumer revenue recognition in 2027 and industrial in 2028. Ken Rizvi, CFO, stated that their disti channel is primarily logistics-oriented and remains very lean, having normalized after the 'COVID boom and bust.'

Robert Mertens asked for the dollar amount of high-bandwidth memory (HBM) probe card sales in Q1 and color on the expected shakeout between traditional DDR and HBM designs for the calendar year.

Answer

CEO Mike Slessor estimated HBM revenue for Q1 to be in the low $50 million range, up from mid-$40 million in Q4, and noted the dynamic nature of customer wafer start choices between HBM and DDR, stating FormFactor is positioned to serve both but cannot speculate beyond 6-8 weeks of visibility due to market volatility.

Robert Mertens asked for a dollar amount for high-bandwidth memory (HBM) probe card sales in the current quarter and color on the expected mix between traditional DDR/DDR5 and HBM designs for the calendar year. He also inquired about the increased test intensity from HBM3 to HBM4 and whether a similar increase is expected for HBM5. Additionally, he asked about FormFactor's combined market share with the other two HBM players.

Answer

CEO Mike Slessor estimated Q1 HBM revenue to be in the low $50 millions, up from mid-$40 millions in Q4, driving DRAM to a new record. He noted the dynamic nature of customer wafer start choices between HBM and DDR, with FormFactor positioned to serve both. He stated that stack height is a key driver of test intensity, with a rule of thumb of 20%-25% increase on a like-for-like basis between HBM generations. He did not quantify combined market share for the other two HBM players but confirmed FormFactor is the 'number two source' from an overall DRAM standpoint, with significant opportunity due to low incumbent share in differentiated applications.

On behalf of Krish Sankar, Robert Mertens asked for color on the Systems business decline in Q1, its growth drivers for the year, and for a margin comparison between HBM and traditional DDR probe cards.

Answer

CEO Mike Slessor attributed the Systems Q1 decline to typical customer budget seasonality and identified silicon photonics transitioning to pilot production as a key 2025 growth driver. CFO Shai Shahar added that while specific margins aren't disclosed, HBM probe cards carry higher margins than other DRAM products due to their differentiated technology, though not always as high as Foundry & Logic.

Robert Mertens inquired about the $300 million decline in Android sales for the next year, specifically how higher memory prices and costs are affecting the mobile business and how this might play out. He also asked about current inventory levels at customers.

Answer

VP of Sales and Marketing Dave Fullwood explained that the decline is primarily due to Qorvo's strategic resizing of the Android business, with memory pricing and availability secondarily accelerating the exit from the mass tier. CFO Grant Brown added that historical seasonality no longer applies due to the Android exit and a seasonal downtick from the largest customer. Dave Fullwood stated that inventory levels are not abnormal, but build plans are adjusting due to memory.

Robert Mertens asked for more detail on the projected $300 million decline in Android sales for the next fiscal year, specifically how the strategic exit from the low-end space and the current higher memory prices are affecting the mobile business and how this might play out. He also inquired about any changes in customer inventory levels, asking if they are in line with, higher, or lower than typical expectations.

Answer

Dave Fullwood (VP of Sales and Marketing) explained that the $300 million decline is primarily due to the intentional resizing of the Android business, with memory pricing and availability secondarily accelerating this strategy by pressuring the mass tier. Grant Brown (CFO) added that this dynamic will change the revenue profile, impacting June seasonality. Dave Fullwood (VP of Sales and Marketing) stated that no abnormal inventory levels have been observed, rather it's a reaction to adjusted build plans due to memory.

Robert Mertens of TD Cowen asked for the expected operating expense in Q2 2025 and the anticipated trend for the remainder of the year following the recent acquisitions.

Answer

Interim CFO Keith Tainsky detailed that the incremental operating expense for the rest of the year from the acquisitions is forecasted to be approximately $3 million for PPC and $2 million for TechX. Tainsky emphasized that this guidance does not yet incorporate any potential cost synergies, which the company is actively evaluating during the integration process.

Robert Mertens asked for details on the major R&D investments planned for 2025 and the company's spending flexibility. He also inquired about the outlook for Silvaco's business exposure to China for the upcoming year.

Answer

CFO Ryan Benton noted that R&D growth includes costs from the recent acquisition. CEO Babak Taheri elaborated that investments are focused on key growth areas: power, memory (bolstered by the OPC acquisition), and photonics, where R&D is needed to support new customer wins and expansion. Regarding China, CFO Ryan Benton stated they expect revenue from the region to be between 15% to 20% of the total in 2025, which is flat to slightly down from the approximately 20% contribution in 2024.

Robert Mertens inquired about the end-market breakdown for the 14 new customers signed in Q3 and asked for clarification on the drivers behind the Q4 operating expense guidance.

Answer

CEO Babak Taheri detailed the new customer wins, noting over five were in the power sector, which constituted 58% of new logos, followed by MilAero, automotive, and IoT. CFO Ryan Benton explained that the sequential increase in Q4 operating expenses is driven by variable compensation structures with annual accelerators and some one-off costs, in addition to natural growth from recent hiring.

Speaking on behalf of Krish Sankar, Robert Mertens asked about the revenue contribution from the ThermaView platform in the first quarter and inquired about the expected ramp of this business and its potential market size over the next few years.

Answer

CEO Thomas Sonderman confirmed that ThermaView is the primary growth driver for the Wafer Services business. He noted the total addressable market is approximately $9 billion and that SkyWater's revenue mix is shifting significantly. He stated that while legacy products were 90% of Wafer Services revenue in 2024, the company expects new products to be 60% in 2025, a run-rate that was already achieved in Q1.

Speaking on behalf of Krish Sankar, Robert Mertens asked for factors supporting confidence in a second-half recovery for the Industrial & Medical market beyond inventory drawdowns. He also questioned the risk of customers delaying new semiconductor system rollouts due to the macro environment.

Answer

CEO Stephen Kelley pointed to four straight quarters of inventory reduction in the distribution channel and a rebound in order activity late in Q1 as reasons for optimism in the I&M segment. Regarding semiconductor systems, he acknowledged that schedules can shift but emphasized the high degree of urgency from customers to adopt AE's new technology to solve critical technical challenges at advanced nodes, which mitigates delay risks.

Robert Mertens, on behalf of Krish Sankar at TD Cowen, asked about the visibility and sustainability of demand in the Data Center market and sought clarification on the timeline for the guided 400 basis point gross margin improvement.

Answer

CEO Stephen Kelley noted that visibility in Data Center is improving due to compressed design cycles and that the influence of AI could extend the growth period. CFO Paul Oldham detailed the path to 40%+ gross margin, stating it would be driven by abating material costs, over 200 basis points from manufacturing efficiencies, volume recovery, and an additional 200-250 basis points from a better structural mix as new products ramp over the next 12-24 months.

Robert Mertens, on behalf of Krish Sankar, asked for an updated outlook on the domestic China semicap business for the year, inquiring if weakness was still customer-specific and about any potential inventory overhang. He also asked for details on the customers' technical delays and whether new export controls could impact the 'China for China' business.

Answer

Interim CEO Clarence Granger confirmed that part of the Q1 shortfall was due to a Chinese customer's technical issues with their end customer. He projected that China revenue would be up slightly in Q2 with a modest recovery in the second half, while emphasizing that China is less than 10% of total business. VP of Marketing Cheryl Knepfler added that Chinese demand spans NAND, DRAM, and foundry. Granger expressed confidence that potential export controls would not impact their localized China business.

Robert Mertens, on for Krish Sankar, asked for a breakdown of domestic China demand between foundry and memory, the level of visibility into 2025, and whether improved product margins were driven by mix or volume.

Answer

CEO James Scholhamer stated they do not segment China revenue by chip type but have high confidence in 2025 demand remaining at strong 2024 levels, based on recent discussions with Chinese CEOs. CFO Sheri Brumm explained that while mix is a factor, higher sales volume is the primary driver of product margin improvement due to better absorption of fixed costs.