Tristan Gerra

Tristan Gerra inquired about Rambus's RCD market share prospects, the current mid-40s share, and potential upside. He also asked if companion chips aid RCD share through cross-selling and for an update on the CAMM2 opportunity.

Answer

Luc Seraphin (CEO, Rambus) clarified that the mid-40s market share refers to DDR5 RCDs, driven by increased design wins, with room to grow towards 40-50%. He noted an indirect positive impact from companion chips due to interoperability needs at higher speeds. For CAMM2, he mentioned an SPD opportunity and stated Rambus would monitor its evolution for future chip definitions.

Tristan Gerra (Baird) asked if Rambus's increased RCD market share prospects were due to companion chips, inquiring about potential upside and cross-selling benefits, and sought an update on the CAMM2 opportunity, including participation in Blackwell or upcoming platforms.

Answer

CEO Luc Seraphin clarified that the mid-40s DDR5 RCD market share refers to the RCD chip itself, driven by design win footprint, with companion chips being additional revenue. He noted an indirect positive impact where interoperability needs at higher speeds favor getting chips from the same supplier. For CAMM2, he mentioned an SPD opportunity and future chip development for evolving standards, aligning with Rambus's strategy for all JEDEC standard modules.

Tristan Gerra inquired about the MRDIMM Total Addressable Market (TAM) opportunity, Rambus's potential to replicate its DDR5 market share, and the timeline for fully realizing this TAM, potentially by 2028. He also asked about licensing opportunities arising from the recently announced Ethernet scale-up networking architecture at OCP.

Answer

Luc Seraphin (CEO, Rambus Inc.) expressed satisfaction with MRDIMM progress, anticipating similar market share to DDR5 in the long run, with significant volume ramp expected late 2026/2027 and full market share realization by 2028, contingent on CPU platform rollouts from Intel and AMD. He highlighted MRDIMM's complexity as an opportunity for increased content due to critical interoperability. Regarding licensing, Mr. Seraphin noted Rambus's silicon IP focus on high-speed memory, interconnect (PCIe7), and security, seeing accelerated demand for the latest technologies like PCIe7 as a significant opportunity.

Tristan Gerra asked about the MRDIMM TAM opportunity, Rambus's ability to replicate its DDR5 market share, and the timeline for fully realizing the MRDIMM TAM, potentially by 2028. He also inquired about opportunities for Rambus on the licensing side from the recently announced Ethernet scale-up networking architecture at OCP.

Answer

Luc Seraphin (CEO) confirmed that Rambus is pleased with MRDIMM progress and believes it can achieve similar market share to DDR5 in the long run, with large volume ramps expected in late 2026/2027 and 2028 as a good target for market share realization. He noted MRDIMM's complexity offers opportunities for more content due to critical chip coupling. Regarding the Ethernet architecture, Luc Seraphin (CEO) highlighted Rambus's silicon IP focus on high-speed memory, interconnect (like PCIe7), and security, seeing accelerated demand for leading-edge technologies as a clear opportunity.

Tristan Gerra of Robert W. Baird & Co. asked if the quarter's customized IP revenue was primarily for custom ASICs and inquired about the typical timeline between IP licensing and product ramp. He also sought to confirm if the growing new product revenue was mainly from companion chips tied to a specific platform.

Answer

CEO Luc Seraphin confirmed the customized IP is mostly for custom ASICs targeting the AI market, with revenue typically recognized 12-24 months before the customer's product ramps. He clarified that the new product revenue growth comes from a combination of all eight companion chips introduced last year, not just for one specific platform, and that different customers are at different stages of adoption.

Tristan Gerra asked for the outlook on operating margin and whether the Q1 mid-single-digit price erosion on products was typical or influenced by unique factors.

Answer

CFO Desmond Lynch stated that he expects the second-half chip gross margin to improve and that the overall business model will continue operating at a mid-40% operating income level with strong cash generation. He confirmed that the mid-single-digit price erosion is a normal, annual cycle and was in line with the company's expectations, reiterating that Rambus's pricing is not directly tied to DRAM supply-demand dynamics.

Tristan Gerra sought clarity on the drivers for H2 2025 product revenue acceleration and asked how the company views the impact of non-module architectures like NVIDIA's Grace.

Answer

CEO Luc Seraphin and CFO Desmond Lynch explained the H2 2025 ramp will be driven by a combination of new server platforms with more memory channels and a larger design footprint for Rambus's new companion chips. Seraphin noted that NVIDIA's Grace platform serves a niche market and is not expected to impact demand for standard server DIMMs.

Tristan Gerra asked if lead times for hard drives are expected to remain similar or expand further, despite the ramp and migration to higher-density HAMR technology.

Answer

Dave Mosley, Chair and CEO, expects lead times to remain similar to current levels. He explained that the HAMR transition involved a significant, one-time increase in process content for wafers, which led to a step-up in lead times, but subsequent generations will not require the same magnitude of transition.

Tristan Gerra inquired about the duration and pricing component of long-term HAMR agreements, their percentage of total revenue compared to last year, and whether lead times are expected to remain similar or expand despite the HAMR ramp.

Answer

CFO Gianluca Romano stated that the duration, volume, and mix of build-to-order agreements vary, with the vast majority of nearline exabytes committed through calendar 2026. Seagate's Chair and CEO, Dave Mosley, expects lead times to remain similar due to the significant process content added for HAMR wafers.

Tristan Gerra from Baird asked whether a normalization of NAND production costs could create future pressure on HDD demand, or if Seagate's HAMR technology will maintain a sufficient cost-per-terabyte advantage.

Answer

CEO Dave Mosley asserted that Seagate's technology roadmap, which continuously increases drive capacity, maintains a strong value proposition for mass data storage. He argued that the fundamental economics and massive capital required to replace HDD exabytes with NAND mean the architectural roles of HDD and NAND in the cloud are not changing significantly.

Tristan Gerra asked if Seagate is increasing CapEx to ramp capacity following the recent supply shortfall and whether any capacity ramp plans are being paused due to tariff uncertainties.

Answer

CEO Dave Mosley clarified that the previous supply issue was specific to PMR products and that the CapEx for the HAMR ramp is already planned and sufficient. CFO Gianluca Romano added that the strategy is not to add more head and media production lines but to generate more exabytes from existing lines through technology transitions, which is a more capital-efficient way to meet growing demand.

Tristan Gerra inquired about the gross margin leverage on incremental utilization rates, current utilization rates across product lines, the specific gross margin impact from the specialty film ramp in Q3, and the status of distribution and industrial exposure within Precision Devices regarding inventory normalization.

Answer

Jeffrey Niew, President and CEO, explained that utilization rates vary by product line, making a blanket statement difficult. John Anderson, SVP and CFO, estimated a 35-40% drop-through on incremental revenue. Jeffrey Niew and John Anderson clarified that specialty film gross margin improvement would be linear sequentially through Q2 2026, with a significant jump in Q3 2026. Jeffrey Niew also confirmed that distribution (largely industrial) inventory levels have normalized, with ordering trends now aligning with demand, showing nice growth.

Tristan Gerra of Robert W. Baird & Co. inquired about broader macroeconomic demand patterns, including consumer, and the pricing environment for high-end capacitors outside of the Cornell business. He also asked for the sequential Q4 outlook for the Precision Devices segment's various end markets.

Answer

President and CEO Jeffrey Niew responded that the consumer-facing business is performing as expected and that pricing is stable in the Medtech & Specialty Audio segment. For the Precision Devices segment, he sees pricing opportunities in defense and stability in capacitors, supported by sole-source positions. For the Q4 sequential outlook, Mr. Niew projected modest overall growth for PD, driven by increases in defense and medtech, with electrification and industrial expected to be flat.

Tristan Gerra asked about the significance of PCIe packet switches to the company's AI-related growth and whether this opportunity is expanding. He also questioned Diodes' pricing strategy in light of competitors raising prices and sought an update on the timeline for migrating production to in-house facilities.

Answer

SVP of Worldwide Sales and Marketing, Emily Yang, confirmed that PCIe packet switches are a key driver but part of a broader AI ecosystem opportunity that is expanding into industrial and security applications. She emphasized that Diodes' strategy is to maintain stable pricing to build long-term partnerships, viewing competitor price hikes as an opportunity to gain share. President & CEO, Gary Yu, added that the qualification of internal wafer fabs is progressing well with key customers, which is a critical initiative for the company.

Tristan Gerra of Baird inquired about the specific catalysts and potential headwinds for gross margin improvement in the second half of the year, including the impact of in-sourcing. He also asked if Diodes sees an opportunity to acquire manufacturing assets from peers and whether channel inventories have fully normalized to target levels.

Answer

Executive Emily Yang explained that gross margin improvement will be driven by increased internal loading, higher revenue, manufacturing cost reductions, and an improved product mix, despite slower customer qualifications and some price pressure. Executive Gary Yu stated that Diodes' current capacity is stable and they are focused on optimizing utilization rather than acquiring new assets, with Executive Brett Whitmire adding that peer disruption is seen as a top-line opportunity. Regarding inventory, Emily Yang confirmed it is still slightly above the 11-14 week target but is at a comfortable level to support expected second-half growth.

Tristan Gerra inquired about automotive pricing negotiations for next year and how the company balances taking on potentially lower-margin business to improve factory utilization. He also asked about the materiality of the company's PCIe packet switch products for growth into next year.

Answer

Executive Emily Yang described automotive pricing as stable, with a 1-2% quarterly decline already factored into their model. She explained that the company evaluates overall account margin and strategic potential rather than a strict margin threshold for new business, balancing it with factory loading needs. Executive Gary Yu added that the focus remains on new product introductions. Regarding PCIe switches, Emily Yang noted that while it's still early in the deployment cycle, momentum is strong in AI servers and related subsystems, and she expects it to be a significant growth driver in 2025.

Tristan Gerra asked about the revenue lifecycle for the Nexus product line, questioning when it might roll over and how new products would offset that. He also asked about the risk of inventory obsolescence and if the cautious outlook could prompt a more acquisitive M&A strategy.

Answer

CEO Fouad Tamer explained that FPGAs have very long product ramps, with Nexus expected to accelerate in 2026 and Avant in 2027, ensuring sustained growth. CFO Lorenzo A. Flores added that the long-lived nature of FPGAs means inventory obsolescence is not a significant concern. Regarding M&A, Tamer stated the primary focus is organic growth, but they will consider inorganic opportunities that offer good shareholder value.

Tristan Gerra questioned when revenue from the Nexus product family might roll over and asked about the potential for inventory obsolescence. He also inquired if the macro outlook would make Lattice more acquisitive.

Answer

CEO Fouad Tamer and CFO Lorenzo A. Flores explained that FPGAs have very long product lives (20-30 years), with Nexus revenue expected to accelerate in 2026 and Avant in 2027. Flores stated that inventory obsolescence is not a significant concern. On M&A, Tamer said the primary focus is organic growth, but they will continue to evaluate inorganic opportunities that provide good shareholder value.

Tristan Gerra of Robert W. Baird & Co. asked about Lattice's long-term product roadmap, specifically if a successor to the Nexus platform is planned, and requested details on the company's traction and revenue sustainability in the AI market.

Answer

CEO Ford Tamer confirmed that Lattice is doubling down on its small and mid-range FPGA segments, with more to be revealed at the upcoming developer conference. He noted that AI revenue is growing as a percentage of total sales, highlighting significant design wins in servers, where one OEM partner uses over 50 Lattice devices per rack, and increasing adoption in clients, automotive, and industrial applications.

Tristan Gerra inquired about the outlook for free cash flow generation and the company's debt leverage ratio targets for next year. He also asked if Coherent's NVIDIA-based DSP announcement creates new TIA content opportunities for Semtech.

Answer

Executive Mark Lin noted strong Q3 free cash flow of $29.1 million and stated the company will continue to prioritize debt repayment, suggesting annualizing current EBITDA could indicate future leverage ratios. CEO Hong Hou confirmed that Semtech expects to have content in all DSP-retimed transceivers, including new ones, and that this market remains a core driver of data center revenue growth.

Tristan Gerra asked when software might become the primary revenue contributor for Luminar. He also questioned how a potential industry shift from EVs to hybrids would impact the company's revenue pipeline and asked for an update on engagements with other OEMs like Nissan and those in China.

Answer

CEO Austin Russell projected that software would become a significant part of the business in the second half of the decade, roughly three years behind the LiDAR hardware timeline. CFO Tom Fennimore stated that Luminar is powertrain-agnostic but acknowledged near-term headwinds from an industry-wide pause in LiDAR decisions as OEMs re-evaluate platform strategies. He confirmed ongoing relationships and progress with other OEM partners.