Aehr Test Systems - Earnings Call - Q4 2021
July 15, 2021
Transcript
Speaker 0
Good day and welcome to the Aehr Test Systems Fiscal twenty twenty one Fourth Quarter and Full Year Financial Results Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Jim Byers of MKR Investor Relations. Please go ahead.
Speaker 1
Thank you, operator. Good afternoon, and welcome to Airtest Systems' fiscal twenty twenty one fourth quarter and full year financial results conference call. With me on today's call are Airtest Systems' President and Chief Executive Officer, Gayn Erickson and Chief Financial Officer, Ken Spink. Before I turn the call over to Gayn and Ken, I'd like to cover a few quick items. This afternoon, right after market close, Airetest issued a press release announcing its fiscal twenty twenty one fourth quarter and full year results.
That release is available on the company's website at air.com. This call is being broadcast live over the Internet for all interested parties, and the webcast will be archived on the Investor Relations page of Aehr Test's website. I'd like to remind everyone that on today's call, management will be making forward looking statements today that are based on current information and estimates and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. These factors that may cause results to differ materially from those in the forward looking statements are discussed in the company's most recent periodic and current reports filed with the SEC. These forward looking statements, including guidance provided during today's call, are only valid as of this date and Aehr Test Systems undertakes no obligation to update the forward looking statements.
Now with that said, I'd like to turn the conference call over to Gayn Erickson, President and CEO.
Speaker 2
Thanks, Jim, and good afternoon, and welcome to our fiscal twenty twenty one fourth quarter and full year's earnings conference call. Thank you for joining us today. Let's start with a quick summary of the highlights of the quarter and the improved business momentum we're experiencing, and then I'll dig deeper into our expectations for increased revenue growth in our new fiscal year, which is already underway. We saw continued signs of recovery and a strong increase in customer demand during the fourth quarter, which is a positive turnaround from the customer production ramp delays and push outs we experienced this past year related to COVID nineteen. I'm pleased to report improved revenue and operating profit for the fourth quarter that reflect a return to above pre pandemic levels.
Fourth quarter revenue was up 45% sequentially quarter on quarter and up over 100% from q four last year, and we're profitable for the quarter on a GAAP basis. Additionally, we're off to a strong start to fiscal twenty twenty two with $5,400,000 in bookings and an effective backlog of $7,000,000 as of today. We're seeing improvement in multiple test and burn in segments, including silicon carbide, silicon photonics, mobile sensors, each of which we expect will contribute to our expectations for significant revenue growth year over year in our new fiscal year. Now let me dig a little deeper into each of these opportunities starting with silicon carbide. This past fiscal year, we made significant inroads into the emerging silicon carbide device market, which continues to be a very promising key growth driver for AIR and will be a major focus in the coming fiscal year.
Silicon carbide power semiconductors have emerged as the preferred technology for battery electric vehicle power conversion in onboard and offboard electric vehicle battery chargers and the electric power conversion and control of the electric engine. Our FOX P family of products are very cost effective solutions for ensuring the critical quality and reliability of devices in this market, where performance and reliability can not only mean increased battery life, but also whether you have to walk home from a vehicle whose power semiconductor fails in the powertrain. I once heard from a very wise general manager of automotive semiconductor components supplier that the quality and reliability of devices such as these power semis in the engine drivetrain of vehicles should not be measured by how many failures per million they have, but how many walk homes per million they have, as a failure in this component results in the driver and passengers walking home after it fails in the vehicle. During this past fiscal year, our lead silicon carbide customer qualified Eris Fox XP system for high volume production burn in and infant mortality screening of silicon carbide power devices at wafer level for electric vehicles. This customer is a leading Fortune 500 supplier of semiconductor devices with a significant customer base in the automotive semiconductor market.
They have now qualified several devices for automotive applications on our solution, ordered multiple FOX XP systems, and have purchased multiple new WaferPak contactor designs that are expected to be qualified and moved to production during this new fiscal year. During our fiscal fourth quarter, we received and shipped a follow on order from this customer for an additional FOX XP system for higher volume production test and burn in of those devices. In this past week, we announced another follow on from them for an additional FOX XP system and multiple wafer packs to meet their increased production capacity needs. These follow on orders for additional FOXTech p systems and wafer packs are the result of our working close closely with this lead customer to achieve their test requirements and validation of our FOXTech p platform and WaferPak full wafer contactors as their production qualified solution. This customer is forecasting orders for multiple additional box x p systems and wafer packs this year and a significant number of systems and wafer packs over the next several years due to the electric vehicle semiconductor test and burn in demand.
Each of these silicon carbide focused FOX XP systems are configured to test 18 silicon carbide wafers in parallel in the footprint of a typical single wafer test solution while contacting and testing a 100% of the devices in parallel on each wafer. Our solution can not only test four inch and six inch silicon carbide wafers but can test the future 200 millimeter eight inch wafers planned to be introduced over the next several years. AIR provides a unique fully integrated solution that includes the test systems, full wafer, wafer pack contactors, and the wafer pack aligners. In addition to the very large opportunity for silicon carbide with our lead customer, we're currently engaged in detailed and very promising discussions with several other major suppliers of silicon carbide, some of which have also publicly indicated plans for significant capacity increases. We expect to move to on wafer evaluations with multiple potential new customers this fiscal year.
As I mentioned on our last call, we're very excited that a potential new customer I'm sorry, that a new potential customer that produces silicon carbide power devices has asked us to demonstrate our full wafer level burn in solution on their silicon carbide wafers, including putting the system on their manufacturing floor to demonstrate our capabilities. While this is a new customer for us for silicon carbide, they're actually currently a customer for us in other application and already have several FOX XP systems in production today for testing and burning in mobile sensors. They are a significant player in silicon carbide right now, and we're confident that we can prove to them that our solution will catch their infant mortality failures that otherwise show up in customer devices. As I've discussed many times, silicon carbide is an optimal material for high power and particularly high voltage devices for applications such as electric and hybrid electric vehicle powertrain and electric vehicle charging infrastructure. These devices reduce power loss by as much as greater than 75% over power silicon alternatives like IGBT devices, which has essentially changed the entire market dynamic.
With this development, we seen most, if not every automotive company that's working on electric vehicles moving to silicon carbide based powertrain and charging systems in the near future. The challenge with silicon carbide is that it's known to have high infant mortality rate. However, with the reliability burning and screening that Era is able to offer with our FOX product solutions, these defects can be removed to provide extremely reliable devices for these mission critical applications. AIR's FOX XP solution allows for one of the key reliability screening tests to be completed on an entire wafer full of devices, basically testing all of them at one time while also testing and monitoring every device for failures during the burn in process to provide critical information on those devices. This is an enormously valuable capability as it allows our customers to screen devices that would otherwise fail after they are packaged into multidimetres modules where the yield impact is 10 times or even a 100 times costly.
Okay. Sorry. We had some background noise going on. Silicon carbide appears to be one of the hottest potential application spaces Aehr Test has seen in many years, and we're extremely excited about our ability to service this emerging market. We anticipate that wafer level test in burn in will become the industry standard for quality and reliability screening for silicon carbide devices for the automotive market.
And with the most cost effective solution on the market to address this opportunity, we believe that air has a chance to build a dominant market share. Power semiconductor market for electric vehicles is expected to triple between 2020 and 2026, growing at nearly 26% CAGR to $5,600,000,000 according to YOLOL Research. And a report with Deloitte forecast total electric vehicle sales will grow at a CAGR of 29% from 2020 to 2025 before reaching 31,100,000 units by 2030 and securing approximately 32% of the total market share for new car sales. These stats highlight the tremendous opportunity AirTest has in front of it with its wafer level test and burning solution for electric vehicle semiconductors. Now turning to silicon photonics, we're seeing an improvement in the silicon photonics market, which is was significantly impacted by the pandemic this past year.
During the fourth quarter, fiscal fourth quarter, we shipped a FOX XP system in multiple WaferPak contactors to an existing customer that's transitioning from our FOX NP system for initial production burn in to our production FOX XP system to begin volume production of their high performance silicon photonics devices. This is a May this customer is a major supplier of fiber optic transceivers in the data center interconnect market today. Silicon photonics fiber optic transceivers, which are used in data storage and five g infrastructure, require a process step in manufacturing called stabilization, where the devices are subjected to high temperatures and power to stabilize their output power. Our customers are using our FOX wafer level test and burn in solution for production test and burn in of their integrated silicon photonics devices, and we currently have five silicon photonics customers that are shipping products to their end customers using our FOX solutions. We see a significant opportunity for growth as we expand within these customers and add additional new silicon photonics customers in this fiscal year.
Now let me touch on the mobile sensor market. This past year, we successfully implemented our FOG systems and DIPAC carriers for production test and burn in of two new applications for two d, three d sensors for mobile devices. ERA has now successfully executed on a number of programs for highly custom and unique sensors and packages and configurations unlike any other devices on the market. Air's engineering team has been able to design and develop custom die pack carriers and contactors to address the unique electrical, mechanical, optical, and thermal needs of these devices with our FOX XP systems and proprietary DiePak carriers. These solutions are turnkey with development of the proprietary carriers and test schematic, custom DiePak singulated die and module sockets and carriers, highly proprietary thermal conductivity and transfer solutions, custom application test plans, and automated handling systems to load and unload our die packs with 100% traceability of test results in BINI.
We feel we continue to meet and exceed the customer's expectations and are happy to continue to meet their needs on these extremely challenging test and burn in applications. We expect to see follow on orders for system capacity in DIPEX this year and continue to be optimistic about this market space. Now let me talk a little bit about our consumables and contactor business. As I've mentioned on past calls, our Fot family of test systems include our customized WaferPaks and DiePaks that are proprietary full wafer singulated die and module contactors and are needed not only for full for new system orders, but also for each new design win or each new device added to production test. During the fourth quarter, we launched our newest DiePak solution, which is capable of handling extremely small and complex devices and are very high power and very high power density devices with higher parallelism than ever before.
This new class of DiePak can handle devices small enough to rest on the tip of a pen or a pencil. Devices this small are extremely hard to handle and particularly in any kind of parallelism. Often, a discrete device this small is handled with special handling equipment and a tester that can only test one device at a time. This new FOX XP system and DIPAC solution is capable of testing very complex time modules in addition to them being tiny. This solution is a great addition to our product family, and we believe it further sets us apart from any other company in the industry.
As we increase our installed base of FOX systems with current and new customers, particularly with our FOX NP and XP multi wafer and singulated die module test and burn in systems, we expect this consumables business will continue to grow in absolute value and also as a percentage of our total sales. Over the long term, we expect these recurring consumable sales to account for up to a half or even more of our total annual revenues. And lastly, touching on our package part business. We continue to see indications of renewed demand for package part burn in applications, particularly from customers in automotive applications and those seeking high voltage capability. Our new packaged part burn in product with very high voltage test capabilities continues under development, and we expect to generate additional new opportunities with our planned shipments to begin later this fiscal year.
So let me go ahead and touch on supply chain. I've I've received many questions from customers and shareholders about our supply chain and ability to meet capacity demands for systems and contractors. Given all the issues with semiconductor shortages and rising cost in raw materials and lengthening lead times across many industries, I quickly have to acknowledge this is a reasonable concern and understand where the questions are coming from. AIR has a very robust supply chain with world class subcontract manufacturers on subsystems of our test systems, contactors, wafer pack aligners, and die pack handlers. These subcontractors have successfully supplied these subsystems for years to air and are very mature.
In all cases, these suppliers have capacity well in excess of air historical shipment and the ability to ramp significantly higher as well. We're very confident in our ability to meet the customer forecasted demand plus considerable upside. The one area that we do want to highlight is the risk associated with semi semiconductor component lead times that have been very irrational over the last six months, which is causing us to jump through many hoops to ensure we have near and long term volumes to meet both our forecast and considerable upside to this forecast. I don't wanna overstate the risk as we're confident in meeting our projected revenues that we're guiding for this fiscal year, and we believe we can meet a considerable upside to this forecast. However, we know there's a risk in the near term in particular with some semiconductor components, but also has seen logistics issues with shipping lead times that continue to make our team keep on their toes and may add to the lumpiness of our quarterly shipments and revenues.
So let me conclude my remarks. We're now a month and a half into fiscal twenty twenty two, and we're confident in our revenue growth projections for this new fiscal year. We're seeing a recovery across our customer base along with significant demand for wafer level test and burn in of silicon carbide devices for electric vehicles, silicon photonics devices for data center and five g infrastructure, and two d and three d sensors for mobile devices. For the fiscal year ending 05/31/2022, ERIC expects full year total revenue to be greater than $28,000,000, which would represent growth of approximately 70% year over year and to be profitable for the fiscal year. Now before I turn, over the call to Ken to go over our financials, I wanna note that during the quarter, we announced the appointment of Fariba Dinesh to our board of directors.
Fariba is a technology industry veteran with special emphasis on semiconductor, photonics, telecommunications, and data storage, and she brings incredible knowledge, experience, and contacts in the compound semiconductor and optical semiconductor spaces. We, and certainly, am really excited to have her on our board. With that, let me turn it over to Ken to review our financial results in more detail before we open up the line for questions.
Speaker 3
Thank you, Gayn, and good afternoon, everyone. As Gayn noted, we saw continued signs of recovery and a strong increase in customer demand during the fourth quarter, resulting in improved revenue and operating profit for the fourth quarter that reflect a return to above pre pandemic levels. To add some perspective on this, our fourth quarter revenue of $7,600,000 is our highest reported quarterly revenue since 2018. Looking at our financial results in more detail, starting with the fourth quarter. Fourth quarter net sales of $7,600,000 are up 45% sequentially from $5,300,000 in the third quarter and up 102% year over year from $3,800,000 in the fourth quarter last year.
The sequential increase in net sales from the preceding Q3 reflects an increase of $2,000,000 in wafer level burn in revenue and $386,000 in customer service revenues. The increase in wafer level burn in revenues is primarily due to an increase in system revenue of 1,400,000 and an increase in WaferPak DiePak revenues of $577,000 The increase from Q4 last year includes an increase in wafer level burn in revenue of $3,400,000 and customer services revenue of $509,000 The increase in wafer level burn in revenue is primarily due to an increase in system revenue of $3,800,000 partially offset by a decrease in WaferPakDipak revenue of 487,000 It is important to note that there were no system revenues in 2020. Non GAAP net income for the fourth quarter was $870,000 or $04 per diluted share compared to a non GAAP net loss of $464,000 or $02 per diluted share in the preceding third quarter and a non GAAP net loss of $720,000 or $03 per diluted share in the fourth quarter of the previous year. The non GAAP results exclude the impact of stock based compensation. And in the 2020, included a $1,600,000 excess and obsolescence provision and $220,000 in restructuring charges.
On a GAAP basis, net income for the fourth quarter was 567,000 or $02 per diluted share. This compares to GAAP net loss of $735,000 or $03 per diluted share, which included a $337,000 warranty provision in the preceding third quarter. And GAAP net loss of $2,900,000 or $0.13 per diluted share, which included the impact of $1,900,000 or $08 per share in inventory write down and restructuring charges taken in the fourth quarter of the previous year. Gross profit in the fourth quarter was $3,500,000 or 46 percent of sales, up from gross profit of $1,900,000 or 36% of sales in the preceding third quarter and gross loss of 93,000 or 2% of sales in the fourth quarter of the previous year. The increase in gross margin from the preceding Q3 is primarily due to a decrease in unabsorbed overhead cost as a percent of sales due to higher revenue levels in Q4 twenty twenty one, accounting for a 5.5 percentage point improvement in gross margin and a decrease in other cost of goods sold as Q3 twenty twenty one included a warranty provision accounting for 4.8 percentage point improvement in gross margin.
Because our manufacturing overhead costs are relatively fixed, we scale very well. As our revenues grow, the increases flow to the bottom line and our margin percentage are favorably impacted, which is reflected in our Q4 'twenty one results. Product mix also impacts our gross margin percentage. The increase in gross margin from the fourth quarter last year is primarily due to a decrease in inventory reserves as Q4 last year included a $1,600,000 charge related to the write down of excess and obsolete inventory, Accounting for a 43.2 percentage point improvement in gross margin, unabsorbed overhead costs decreased as a percentage of sales, resulting in a 7.2 percentage point improvement in gross margin due to higher revenue levels in Q4 twenty twenty one compared to Q4 twenty twenty. Operating expenses in the fourth quarter were $2,900,000 up $387,000 or 15% from $2,500,000 in the preceding third quarter and up $185,000 or 7% from $2,700,000 in the fourth quarter of last year.
The sequential and year over year increase in operating expenses is primarily due to an increase in employment related expenses for bonuses in Q4 'twenty one and annual pay increases to employees effective Q4 twenty twenty one and an increase in R and D project materials. This was partially offset by a reduction in restructuring charges as Q4 twenty twenty included $220,000 in costs related to the closure of our subsidiary in Japan and reduction of headcount in our Germany subsidiary. With customer activity and business improving, we eliminated the 30% pay reductions for our executive staff at the start of June twenty twenty one, the beginning of our current fiscal year. SG and A was $1,900,000 for the fourth quarter, up 261,000 from the preceding third quarter and up $230,000 from the prior year fourth quarter. R and D expenses were $1,000,000 for the fourth quarter, up $126,000 from the preceding third quarter and up $175,000 from the prior year fourth quarter.
Now turning to the results for the full fiscal year. Net sales for fiscal twenty twenty one were $16,600,000 down 26% from net sales of $22,300,000 in fiscal twenty twenty. The decrease includes a decrease in waiver level burn in system revenues of $5,800,000 Customer service revenues were relatively flat. While year over year net sales decreased, second half fiscal twenty twenty one revenues were $12,900,000 compared to $9,900,000 in the 2020, an increase of 31% over prior year. Fiscal twenty twenty one net sales were comprised of $13,100,000 in wafer level burn in revenues and $3,500,000 in customer service revenue.
For the full year 2021, system revenues accounted for 44% of revenues compared to 36% in prior 2020. WaferPak and DiePak consumable revenues accounted for 35% of total revenue in 2021 compared to forty eight percent of revenues in fiscal twenty twenty. Customer service revenues accounted for 21% of revenues in fiscal twenty twenty one, compared to 15% of revenues in fiscal twenty twenty. Non GAAP net loss for fiscal twenty twenty one was $3,300,000 or $0.14 per diluted share, which exclude the impact of stock based compensation and a noncash net gain of $2,200,000 and a tax benefit of $215,000 related to the closure of Ayers Japan subsidiary in the first quarter. This compares to a non GAAP net loss of $27,000 or $0.00 per diluted share, which excludes the impact of stock based compensation expense, inventory reserves of $1,600,000 and restructuring charges of $220,000 in fiscal twenty twenty.
On a GAAP basis, net loss for the fiscal year was $2,000,000 or $09 per diluted share. This compares to a GAAP net loss of $2,800,000 or $0.12 per diluted share, which included the impact of approximately 1,900,000 or $08 per share in inventory write down or restructuring charges taken in fiscal twenty twenty. Gross profit for fiscal twenty twenty one was $6,000,000 or 36% of net sales compared to a gross profit of $8,400,000 or 38 percent of net sales in fiscal twenty twenty. The decrease in gross margin percentage in FY 2021 compared to the prior year is primarily due to a decrease in unabsorbed overhead costs to cost of goods sold related to higher revenue levels in the prior year, a change in product mix and an increase in warranty costs as a percent of sales. This was partially offset by a reduction in inventory reserves as FY 2020 included the $1,600,000 provision for excess and obsolete inventory.
Operating expenses for fiscal twenty twenty one were $10,200,000 a decrease of $922,000 or 8% from $11,100,000 in fiscal twenty twenty. The decrease is primarily due to a decrease in SG and A of $960,000 and restructuring charges of $220,000 partially offset by an increase in R and D of $266,000 SG and
Speaker 2
six point Excuse me.
Speaker 3
SG and A A was $6,600,000 in fiscal twenty twenty one, down from $7,500,000 in fiscal twenty twenty. The decrease includes a decrease in labor related costs resulting from cost reduction initiatives implemented in fiscal twenty twenty one, lower commissions related to a decrease in bookings and revenues, and lower travel and sales expenses due to restrictions in place from the pandemic. R and D expenses were $3,700,000 in fiscal twenty twenty one, up from $3,400,000 in fiscal twenty twenty due to higher R and D project materials and employment costs due to headcount increases. Turning to the balance sheet for
Speaker 2
the fourth quarter. Our cash
Speaker 3
and cash equivalents were $4,600,000 at 05/31/2021, down $156,000 from $4,700,000 at the end of the preceding quarter. Included in the cash balance at Q4 twenty twenty one and Q3 twenty twenty one quarter ends were $1,400,000 of borrowings under our line of credit. Accounts receivable at quarter end was $5,200,000 an increase of $2,500,000 compared to $2,700,000 at the preceding quarter end related to the increase in revenue in Q4 compared to Q3, and an increase of $1,500,000 from Q4 last year. Inventories at May 31 were $8,800,000 an increase of $510,000 from $8,300,000 at the preceding quarter end. The increase in inventories at May 31 is to support forecasted revenues, obtain long lead time materials, and to ensure an adequate supply of critical components.
Property and equipment was $677,000 compared to $617,000 at the preceding quarter end. Customer deposits and deferred revenue, short and long term, were $288,000 a decrease of $379,000 at the preceding quarter end related primarily to the decrease in backlog from the prior quarter. Our current and long term debt of $1,700,000 is related to funds we received during the fourth quarter of the last fiscal year under the Paycheck Protection Program through the Small Business Administration. Last month, we received notice from Silicon Valley Bank that the Small Business Administration has forgiven the loan and accrued interest. We will be posting a benefit of $1,700,000 in our first quarter fiscal twenty twenty two results related to the loan forgiveness.
Booking in the fourth quarter totaled $5,500,000 Backlog at May 31 was $1,600,000 compared to $3,700,000 at the preceding quarter end. Effective backlog, which includes backlog at the end of the fiscal fourth quarter, plus orders since the end of the fourth quarter, is $7,000,000 Now turning to our outlook for the coming fiscal year. As Gayn noted, we're a month and a half into our fiscal twenty twenty two and off to a strong start. With $5,400,000 in bookings and effective backlog of $7,000,000 as of today, we are seeing a recovery across our customer base, along with significant demand for wafer level test and burn in across our markets, which is giving us confidence in our revenue growth projections for this new fiscal year. For our fiscal twenty twenty two year ended 05/31/2022, We expect full year total revenue to be greater than $28,000,000 which would represent growth of approximately 70% year over year and to be profitable for the fiscal year.
This concludes our prepared remarks. We're now ready to take your questions. Operator, please go ahead.
Speaker 2
Thank
Speaker 0
to allow your signal to reach our equipment. Again, press star, 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. Our first question comes from Christian Schwab of Craig Hallum Capital Group.
Speaker 4
Hey, congratulations guys on a great quarter and a solid outlook. Gain, in in your greater than 28,000,000 outlook, can can you tell us your expectations for how many 10% customers you'll have in that?
Speaker 2
Let me think. My guess is we'll have two or three three. I'm getting the signal three from Ken off to the left. We'll have three in our current estimates.
Speaker 4
Okay. Fantastic. And then and then by application, can you can you walk us through, you know, silicon carbide, silicon photonics and and and just maybe recovery orders from existing customers that were kind of pushed out, you know, last year. Can you give us an idea of the mix by application at all?
Speaker 2
Yeah. You know, I think I wanna be a little careful, not not for any proprietary reasons, but just, you know, always difficulty in understanding how it looks like. But let me just give you a little bit of windage and elevation. We I think we're quite confident that silicon carbide will be our largest segment this year. And I think as it plays out, then it would be followed by silicon photonics and then the two d, three d sensor market, each of those being, you know, substantial, 20% or more.
So you kinda do your own math there. I think we we do plan to get some see some package part burn in business, but it'll still be relatively small. I think we'd probably do about 10% of service and support. But, you know, clearly, we do see strength in silicon carbide, and I think pretty confidently it will be the largest segment this year.
Speaker 4
Fantastic. And then my last question has to you know, we talked a lot about, electric vehicles. Have you guys done the math as penetration rates look to improve meaningfully over the next five to ten years for sure? Do you have any idea of the potential market TAM that that your products could address, over kind of a a mid to long term basis?
Speaker 2
We do. And I I think what I do is I may defer and take that to, as we go forward with a little bit more clarity. But, you know, as we are engaging with multiple customers and we start to understand their, both their capacities and their anticipated, you know, test and burn in times and the level of quality expectations versus those times, it continues to reinforce a model that I think I shared in our last call, which is if you just start to take a look at the number of systems that are required for every, call it, million cars that are out there, it's it's it's substantial. I think we estimated about eight systems or so for every million incremental cars that are shipped per year. And so you start looking out at, you know, 30,000,000 cars in 2030, which fair enough, that's eight, nine years away, you know, the world needs to purchase a lot of our full, you know, full complement FOX XP class systems.
And currently, we have not only an enormous cost advantage and but footprint advantage. You know, if, you know, a a a large silicon carbide customer is likely to have, you know, tens of systems for certain on their floor, keeping in mind that each system has, you know, 18 wafers in it. And another way of thinking about it, for every 10 systems, they can, basically process a 180 wafers per day at one day test times, for example. And you start looking at capacity forecasts that are out there, that are well in excess of that in order to meet the silicon carbide requirements of the battery electric vehicle market and the on and off board chargers, and you can see that it's a it's a very significant number. So I maybe I'll give you a little bit more clarity.
I'd like to make sure I have all our math done. And as we as we capture and understand, you know, kinda consistently by the way, we're we're doing a lot of our own research, in in testability and quality reliability. So, you know, we're able to actually offer to customers unique proprietary test solutions. We are we are not, say you know, we're not going into a customer, and they tell us exactly how to test it, and then we're running around the world and and telling them. We actually got proprietary test schematics that we don't even share with our customers on how we're doing this, having to do with to to be able to take advantage of the FOX XP system and full wafer contacting on wafers that range from four six and going to eight inch and have, you know, device counts from 500 to 3,000 devices on a wafer that can all be tested on a one of our FOX XP blades.
So, as we do that and we understand, you know, how quality and reliability correlate to their test times, I think we'll be able to speak more confidently as a generic stance in the market on what it looks like. But, you know, data continues to to suggest that, you know, you will need to do twenty four hour plus burn in times on every wafer to try and remove the infant mortality issues before they sneak into even discrete and certainly modules. So, again, it's it it is certainly the biggest market we're addressing right now. And there is there are some estimates that suggest it's as large as the memory burn in market. Perfect.
Speaker 4
Alright. Fabulous. Thank you. No other questions.
Speaker 2
Okay. Our
Speaker 0
next question comes from John Gruber of Gruber McBain.
Speaker 5
Hey, John. I have a I guess it's a nitpick here. You said your effective backlog is the backlog plus the orders, but then it should be minus the shipments since, you know, the quarter is 60% over. I take it you did not take the shipments out of it. Is that right?
So it's really not backlog. Correct?
Speaker 2
Okay. That is correct. Yep. That's accurate. Yes.
Speaker 5
And it's not backlog then. Okay? So don't call it backlog. Okay. Second of all, you know, in excess of 28,000,000 in excess of 28,000,000, I mean, if things go well, are we talking '28 to 30, or are we talking, you know, '28 to '36?
I mean, give us sort of some range here that, because '28, you know, you were looking for twenty eight three years ago. And, you know, so '28, you know, in a good year is sort of a yawn. So how do you if if things go well, what what's the up upper end here on the shipment side?
Speaker 2
Yeah. I I I I appreciate the question, and I fully understand that, in fact, last year, we were talking about doing 28,000,000, and we clearly were much less than that. And, you know, I do I sit here with certainly more confidence because there with at least certainly in The US and US based customers and the customers that are talking about ramping, they seem to have gotten through the COVID aspects and are letting us get on their floor and do the installations and all at at will. I we chose the words prespecifically not to be coy. I actually don't wanna put a high end on it.
There is there there there is significant upside to the 28,000,000. And as we, get the bookings and, print them and give a confidence, you know, we'll we'll go from there. But, candidly, John, we've been we've been talking about how great it's gonna be for a while, and, we we continue to believe we're taking a conservative stance in in the forecast we gave you, I believe, stronger this year than ever before. But I will, we'll give you
Speaker 5
a better look. You're talking 28 to 36 more likely than 28 to 30. Correct?
Speaker 2
If you had to pick a number, and I'm not gonna have you do another one, yes. Okay. Thank you, guys. Bye. Thanks, John.
Thank
Speaker 0
you. We'll take our next question from Larry Chiblina with Chiblina Capital.
Speaker 6
Hi, Hi.
Speaker 7
Hey. Congratulations on the highest EPS quarter, I think, in six years. Right? Is that that correct?
Speaker 2
It sounds about right. Thank you.
Speaker 7
On on the next silicon carbide hope hopeful customer that you discussed, that's a current customer on your three d sensing. Are have you started the testing of those wafers yet?
Speaker 2
I'm gonna be yeah. Not not quite yet. Soon.
Speaker 7
That should start any anytime, though? Soon. Any like, within days?
Speaker 2
I'll tell you what, Larry. I'm I'm not trying to be coy to you folks. You know, competitive knowledge is there's lots of years out there. It I'm less concerned about being clear with my shareholders than I am with being, you know, letting everybody know what we're up to exactly. But, you know, we will we will be on wafer, with test results, this quarter, and we're only halfway through it.
Speaker 7
The the 4,300,000.0 system that you delivered in the May, and, you know, obviously, some something slipped on that application. Is that total is that application is there a problem with it where it may may actually not show up in the next product release, or is it just kinda delayed, I'll say, a month or two?
Speaker 2
It's You know, Larry, actually, I'm sorry. I I'm not really following you. The $4,300,000 in what segment?
Speaker 7
For for the, you know, the the pick and place application on the the sensor.
Speaker 2
Oh, okay. Okay. Okay. Okay. Yeah.
That I mean, actually, the the the revenue for that was, I think, was in, like, q three or something. Okay. Fair enough. What was the question again?
Speaker 7
At any rate, there there apparently was a problem in that that product launch the ultimate product launch may have slipped. But is it just a slippage of the of the launch of that product and why you haven't had a follow on?
Speaker 2
Yeah. Let me follow on order. Well, you guys keep these really good questions again. That particular customer in particular is unbelievably secure and understanding. What I will share is the following.
We we continue to believe that that program is going well. We continue to believe we are plan of record, and we do have forecast for incremental, you know, systems and, DIPACs in our fiscal year. And I think that's the most I can say right now. But generally speaking, at least I personally believe that that was gonna happen a little sooner, and I'll leave it at that rather than talking about whether there was actually a product slip or not. I think that's best.
But they're very happy with us.
Speaker 7
Alright. Then, lastly, yeah. Any opportunity on the big OSAT, that you're currently engaged with or other, you know
Speaker 2
You know what? The the OSAT and their kind of front end customer, each of which have have, systems now, there is active engagements with customers, beyond the first lead customer for those guys. And, you know, Vernon's been giving me updates on where they are. I still think you know, at some point, we wanna work this in. I still think there's still some front end, you know, new customer engagement impacts related to COVID.
I I I plan to fly to Europe next Sunday, and our reps there said, get on Teams. You know, the customers aren't gonna see you. That, you know, we're still doing everything face you know, over the phone, etcetera. So while The US, I mean, at least in California here for the most part, it's just wide open. I Ken and I are in the office, you know, now, and, you know, we're we actually are not masked in the facility for everybody has been vaccinated.
So but I'll tell you what, you know, customers still there's still a little bit of slowing on that. But, that's okay. I don't really need that to hit my plan or the upside. But, I you know, I'm still hopeful. We know that they're engaged.
They're serious about it. But we've heard some things too from the big OSAD that they're pretty booked out. That, you know, a lot of the interesting things with the whole semiconductor supply chain is they talk about, you know, oh, we're booked all the way, you know, for the next six or nine months. So, you know, I'm not currently all that, I'll call it, hopeful, and I'm certainly not forecasting a lot of volume in in sort of new customers in that that you know, through them this year, but maybe late in the year and definitely into next the following year, if that helps.
Speaker 7
Yep. And and you said you're you're traveling to Europe, next week, did you say?
Speaker 2
I I didn't say where. I don't think I did. Did I? Alright. You just said But I tell you what, it it actually I tell you what, it it was Europe.
That was where I was headed. And I was planning to go Sunday,
Speaker 7
and I'm not now. So Oh, you're not going. You're you're not going.
Speaker 2
A week from Sunday. No. I I'm I'm gonna sit here and do some more Teams meetings and things like that for right now. So, you know, even though I'm the CEO, I think they they you know, I'm a thinly disguised sales guy too sometimes. So I think, right now, they'll let applications engineers and and, support people to go and install things, but there a lot of the restrictions in Europe up and down are still with, salespeople.
So kind of interesting. And that's true also in Asia.
Speaker 7
One one last question then, on the CP opportunity for the data center. Is that still ongoing, and do you do you expect that to get kicked off anytime soon?
Speaker 2
It is still ongoing. They use it every day. In fact, I think last quarter or the quarter before, they were buying some parts and spares, and that system continues to have incredible uptime. I was curious why they were buying some parts since it hadn't gone down or anything. But I my understanding is they're using it, like, twenty four seven right now.
It's my understanding. And since we've been so elusive about who it is, like, I'll be a little bit more forward because actually no one's guessed yet who it is. My understanding is that that program has been pushed, out in time again, and I think we have very little to, if any, forecasted in this fiscal year again. But they're, they're continuing to operate with full intent to go down that path, but it's, that project is, kinda continue to push out. I'd say the total is, what, two years different than what we originally heard so far.
Speaker 7
Alright. That a silicon photonics application?
Speaker 2
I haven't said what it is. I called it a data storage application, and I've been wonderfully elusive that nobody's guessed who it is because once you find out, you'll know why. Sorry.
Speaker 7
Alright. That's all I have. Thanks for your time.
Speaker 2
Thanks, Larry.
Speaker 7
Alright.
Speaker 0
Thank you. We'll take our next question from Matt Winthrop of Aegis Capital.
Speaker 6
Hey. How are you, sir?
Speaker 2
We're good. Thank you.
Speaker 6
It sounds like things are doing much better. And I'm not gonna beat you up like these other guys. I'm excited for the story.
Speaker 2
You're just gonna ask me if it's greater than 36. I'm waiting for each one of you to ask just one question. I know. Alright. Go ahead, Matt.
Speaker 6
No problem. I have two, quickies. Can you sort of, in layman's terms because I talk to clients all the time. I'm a retail guy. I'm not an analyst.
On the electric vehicle, how can I explain in an elementary level what your product addresses in terms of something that average vehicle? Is that okay to ask?
Speaker 2
Yeah. Yeah. Yeah. I'll try I'll try to. Alright.
So on on you walk out to a Tesla. K? And the the Tesla basically has an onboard charger internally. K? And what it means is if you apply electric power to it from your grid in your garage, it actually converts that AC electricity to DC and charges the onboard batteries.
That AC to DC charger has, these power semiconductor FETs inside that are made out of silicon carbide, which are way better than IGBTs. And in fact, Tesla and Elon Musk are credited with the people that basically, I guess, had the the nerve to try silicon carbide without going through, you know, the tens of years of other things and have identified it as a superior product, put it in their model three, and immediately had, like, 20% extended battery range. Since then, they have put it in all of their cars. And, as we understand, all suppliers are following suit. And I think that's well publicized by multiple people out there.
So in that charger, it converts AC to DC, and it's extremely efficient. And what that means is you can do it faster, and you can do it with more efficiency. Then when the battery is charged, the funny thing is is the battery, which you can only charge battery with DC, direct current, just like, you know, a regular battery in your in your flashlight. Right? Yeah.
But then the motor in the Tesla and everyone else is actually an AC motor. So K. It's not a DC motor. So now you have to convert it back to AC in order to work, and that's called an inverter. And it uses the same MOSFETs.
K? So it's pretty interesting. And so their MOSFETs are there to efficiently charge your car, and they're there to efficiently power the car. And they're directly in line with the power to the electric engine. So if they fail, yeah, your car is dead.
Right? Okay. There's one other place, and that is they you know, more and more we're seeing them where, like, you know, the electric gas stations where you go and there's a electric charge pump. Yeah. They get the are big converters as well, and they also have silicon carbide electric MOSFETs in them.
And, you know, some of these modules, if you look at them I've got one in my hand that doesn't do you any good. But you look at this module, and it's, you know, some of them are are, you know, about the size of your hand or a small hand. And in there are eight or 10 different, semiconductors. In this case, they're the silicon carbide FETs switches. And they the reason they have eight or 10 of them in there is because they're all in parallel so they can have 400 amps of current.
So maybe each one of them can only do 50 amps, but if you put eight of them in parallel, you can do 400 amps. So what what what the first thing when the first customer that was using us was realizing that they put eight of these silicon carbide devices into this module. K? And then they had to burn it in. But every one of the devices had some, you know, material failure
Speaker 5
rate,
Speaker 2
let's say 1%. So they had an you know, on eight devices, you have an 8% failure rate in twenty four hours of that device, and you have to throw away the module. Those modules, if you go right now and click on DigiKey or Mouser or eBay, they're $600. K? And they're coming down quickly.
But imagine that you have one of the devices fail, and you have to throw away a $300 module or something. So our value proposition was we test the devices before they're put into the module. And not only is it cheaper per device, but now all of that all those failures are removed so you don't throw away the $100 package. The cost of that Is it fair to assume
Speaker 6
this technology also would be applicable to a Ford or a GM or an Audi?
Speaker 2
It's not just a Tesla thing. This is basically 100% of them. K. I got it. Every every electric vehicle is gonna have silicon carbide in it.
Just one of them.
Speaker 6
On the sales side, because last couple quarters, you were a little better last time. A couple quarters ago, you were pretty upset about how things were progressing, but it sounds like you're more excited. You had built this room in your facility where people would come and that corona hit. Is that starting to open up? Are you doing actual displays in this room now that
Speaker 2
Yeah. I I displays, I we're testing wafers. How's that? Customers still aren't coming, but that's okay. It actually works out pretty nice.
We kind of marketed as, hey. Look. It's a touch free environment, but, you know, we're kinda lonely. It'd be nice to have the people come here, but we're getting really good at Teams and Zoom and and Webex. But, for example, that customer wafers that are gonna be tested with silicon carbide will be in that room.
Speaker 6
So you can do it and and just virtually show it to them. They don't have to physically be there. They give you the product in advance to test or something like that?
Speaker 2
Absolutely. So, you know, the so, you know, silicon wafer has, say, a thousand die on it just to make it easy. Right? Those devices already have some level of actual failure to them, so they don't get a 100% yield. So let's say, whatever, it doesn't matter how many, ten, twenty, 30% of the dye are are failed.
They'll give us the wafer map or not. When we test it, I can tell you immediately which devices have failed. And over a twenty four, forty eight, ninety six hour period, I can tell you exactly when it failed on every single device with a 100% traceability. So, you know, if they're wondering if we're serious, they could give us the waiver without the waiver map. I'll tell them which way which die it failed, and it always correlates.
Speaker 6
Alright. So can
Speaker 2
I'll leave you with this
Speaker 6
on an on an up that's great. I appreciate I'll leave you this on an upside battle. Let's say you you you've scored up on your new sales manager, scored a bunch of really nice contracts. What what kind of run rate can you guys what is your capacity if, like, everything hit in the next three or four quarters? Now I'm not saying you're saying that sales, but what could you do out of California without having
Speaker 7
to expand
Speaker 6
on your factory, let's say?
Speaker 2
So there's there's a few ways to look at it. We have subcontractors that, yeah, it's a fair question. I mean, the the simple answer is, there is nothing in our supply chain that couldn't within six to nine months get us to, you know, even, 10 systems a month. Right? Right.
You just some of it your some of it would include some of the people growing and adding some people. But, you know, even on that,
Speaker 6
what's 10 systems retail out to you or wholesale out to
Speaker 2
You know, a if you include an ASP of, say, a silicon carbide configuration, let's say, and a half million dollars or so, and the complement of WaferPak set 1 and a half million, that's $4,000,000 apiece. So you still not You know? And and I that's correct. And that seems I'm sure people are like, okay.
Okay. But that's that's real. Even I mean, that seems like big numbers to us here, but that is not big. I mean, you know, 10 systems a month is you know, although they have 18 wafers of capacity in each one of them. So, you know, if you were comparing it to, say, a j seven fifty from Teradyne, Our each of our blades has more pins than a j seven fifty and more electrical channels.
So each next year, like
Speaker 6
She'll be excited. Listen. So I would suggest, because you guys are on a roll, get off this q and a as soon as you can and get on the phone and close a couple more because it sounds like you're
Speaker 2
really answer is That's my thought. Bernie's off Yeah.
Speaker 6
Bernie's off doing that right now. But some of these guys I'm tired of these guys whining and crying. We're we're finally here. Let's go out and close it, man. I think you've got the opportunity in my home.
That. Alright. Bye bye.
Speaker 0
Thank you. We'll take our next question from Frank Parisi with Ameripres.
Speaker 8
The people with all this COVID interfering with new installations and sales, a lot of these electric vehicles that are being sold now aren't using your I mean, they're not using your system in production, correct, as of yet?
Speaker 2
Correct. Correct.
Speaker 8
Okay. And so Tesla, of course, is using it for everything. Are there many other of of the other
Speaker 2
Frank, let me let me clarify this. Okay. There's there's a couple ways to look at this. So of the electric vehicles, k, all of them have this inverter and battery charger, etcetera. K?
Until 2018 till 02/2018, none of them used silicon carbide. And keep in mind, that's like Toyota, Priuses, all the hybrid electric vehicles, etcetera, and then Tesla. Zero market share of silicon carbide. K? Then the model three did it.
Then in 02/2019, Tesla did it. I believe there's an Audi out there right now. I believe that my understanding is that Toyota Taycan is still IGBT. So even some of the new models that are coming out do not use silicon carbide yet. Mhmm.
But projections from folks like, YOO, which is a big one, Exawatt, which is another big forecaster, they're projecting, you know, pretty dominant share to almost a 100% share of all of those power modules will will all of a sudden, the power fats in these devices will go to silicon carbide over the next, like, you know, three to eight years or something. And now so that's the devices. For us, today, we currently have one lead customer, right, who is currently, you know, moving everything to wafer level on our system. So you would have to say, well, how many of their customers how many, you know, how many design wins, how many cars have they gotten into, you know, who do they have, and we know more than, you know, we'll ever admit to. You know?
But they obviously don't have a 100% market share yet. So that's Right. We're also capturing other customers. You know? At some point, there's an opportunity for us to compete with every single customer and potentially, you know, everyone could use our tools.
Then it doesn't matter who wins. But for now, we you know, this is a pretty hot wave for us, and, our systems work. It's right in the sweet spot of the capability of this machine. Fully loaded, 18 wafers, you know, you know, this is a this is a great opportunity for this platform.
Speaker 8
And that's just in the well, it's charging the battery and discharging the battery needed on both sides, and then the chargers okay. That Okay. And so basically, like in a lot of the Teslas, say, then, they don't they have a 100 I don't know if it's a Teslas necessarily, but the companies that are using silicon carbide, a lot of them, they're not able to do you know, they're not able to use your system. So they must have a lot of these failures you're talking about.
Speaker 2
No. No. That's that's not fair. So what they'll do is just like our lead customer, they actually test them in a package form after they've already been packaged up in many cases with multiple devices per package. So it's they they, you know, they basically can do we sell packaged part burn in systems too.
We currently are forecasting zero for silicon carbide because, you know, why would you do that when you could do it at wafer level? So, yeah, so so everyone everyone is testing silicon carbide and doing some sort of a burning of it. There's no way they're shipping those to automotive suppliers without it. And they're either doing it packaged part, k, or they're doing it with our system. In this case, we've already talked about the one customer, or they're evaluating, trying to figure out how to get to wafer level.
We have heard every customer we've talked to is planning to move to wafer level. Now the question is, well, what is the competitive situation? What's the alternative? The most obvious alternative that we know works, right, we know is in production and is And you take a probe card that's 50 or a $100,000, you've got a system. And I'm you know, generically, it's a million dollar test cell.
And you can test it, and in twenty four to forty eight hours, you can do, theoretically, everything we can do. We think we have some competitive advantages with the way we do it. K? But it's a million dollar test cell for twenty four hours. Our system remember I just did the math with you.
It's about $4,000,000 divided by 18. You're, like, at $200,000 or less. Okay. Right? So you're you're you're at a fifth of the cost, and so you could test it five times longer for the same price point from a capital depreciation perspective.
But a wafer prober, if you've seen one, if you stood in front of it, is like a you know, you know, has a footprint of a lot of Prius. Right? And maybe so does our system. It's actually a little smaller than that, so is our system. But it has one wafer, and in that same footprint, we have 18.
So now go test a 180 wafers, and it's 10 of our systems, 10 Priuses next to each other. Actually, Priuses big, but anyhow, I've never used that analogy before, but I'll go with it. And with them, it's a 180 a 180 in a clean room space. So you wanna put in place a thousand wafer starts, you have a thousand probers, okay, or hundreds of them. So, you know, the cost effectiveness is, you know, a fifth from a cost of ownership than a capital depreciation on the capital cost, and it's a twentieth of the footprint.
And we make good margins.
Speaker 8
So somebody if they they'd they're gonna have to design a system to compete with you.
Speaker 2
And they're going to be stopping all over our patents and IP if they try.
Speaker 8
Well, that's good. Yeah. And I guess, is the situation analogous in the silicon photonics? Is it the does the same well, that's silicon carbide.
Speaker 2
Similar. Very simp
Speaker 8
Oh, it is silicon.
Speaker 2
Yeah. Silicon photonics and silicon I I mean, it's a different application. In this case, it's a fiber optic transceiver fully integrated on their piece of silicon. And the huge advantage of it is they can actually manufacture, like, a thousand transceivers at a time on a single p single wafer. The cost effectiveness is so dramatic that folks like Intel to the world have already put out multiple companies have gone under because they simply can't sell them at the cost that the, folks like Luxtera or Intel, you know, Inphi or Sequoia, which are known names, are building them for.
And so the beauty of it is is that with our FOX systems that can either test them in wafer form or singulated die form, we're able to actually do this so cost effectively on the integration that we've heard from our customers that it actually enables them to, in fact, do whole wafer silicon photonics manufacturing. And they then they test them, and they burn them in. In this case, they stabilize them before they're put into the packages where they're extremely expensive to burn in, and there's yield loss associated with Same same kind of value proposition. The only difference is is that on a the the fiber optic transceiver market, is measured in, you know, millions of units a year, like 10,000,000 units a year total. That's it.
K? The Mhmm. I think a Tesla has 48 MOSFETs in each car. And so if you're gonna do 31,000,000 of them, it's literally two orders of you know, an order to two orders of magnitude higher size. Given the same test time, similar die per wafer, the silicon carbide market is absolutely more than 10 times larger than the silicon photonics one.
Yeah. I'm thinking about, you know, to follow all that math, but that's I was trying to do it quickly.
Speaker 8
Oh, sure. Sure. And and then on the the sensors you've talked about, two and three d sensors, I mean, is that
Speaker 2
You know, it historically, and it has proven to be, has not been a very big market. You know, we make good margins. The customer's happy with us. They're very unique. But has traditionally been and we've talked about it before, a sampling market.
What it means is that the devices do not inherently have either a high enough infant mortality or, need the structural stabilization to test every one of them. So the customer has proven to themselves that by sampling some percentage, we don't get into it, but imagine small, they're able to, by buying just a few systems from us, they can actually sample, you know, you know, hundreds of millions of parts a year. K? And we continue to execute for them. We keep our fingers crossed.
We have put in place enough infrastructure that if they wanna do a 100% sampling, we're at. So far, they have not chosen to do that. Now we do have a couple of devices that we have done that are are, we know were, are a 100% sampling. Sounds funny. They're a 100% burnt in, but the volumes are much smaller because of the target device it's going after.
And we don't go into it, but most people have guessed that you know? And when you think about mobile, certain mobile devices are in hundreds of millions, and others are done in millions. And, so if you get a 100% of the millions, it's about the same size as, you know, a few percent of a 100 millions. Mhmm. So as soon as we get a 100% of the hundreds of millions, then, we'll let you know.
But I'm I'm sick and tired of saying how great that one's gonna be because we continue to get forecasts that seem bigger than they actually plays out. But we love them. They love us, and we continue to execute.
Speaker 8
Okay. Good deal. Well, it sounds exciting. You know? So
Speaker 2
Well, I'm so glad 2020 is behind us. And all our employees made it through SAFE. We actually, as we look back at our records, we had only one employee that had mild symptoms in the whole company. One employee that tested positive but was convinced later that that was a false test, and we've gotten through this. So we're, pretty happy about it.
And I can tell you the manufacturing folks are thrilled to death not to have to wear masks anymore out on our floor. So, that is because they've been here through thick and thin the entire time. So And and glad you Oh,
Speaker 8
yeah. Me too. You know, I'm glad you're back. So, you know, and and in a even in Europe, aren't these the people in that work in I mean, aren't most of them essential I mean, I don't know if they have that category in Europe or an essential employee or
Speaker 2
Most of them. Right. Right. Our customers fabs have continued to operate. You know, we've heard this time and time again that what they did is they were not ramping new devices.
They were just building what they had before. I mean, silicon photonics is a perfect example. It turns out there absolutely were less, fiber optic transceivers purchased last year. But the biggest difference is people didn't ship silicon photonics away from the standard fiber optics. So our customers had pretty bad years.
And if they're not growing, they're sure as heck not buying equipment from us. So now we've seen that they're publicly strengthening, projecting things. We watch the testers. They get filled up. And so we can you know, you can kinda see it's like, okay.
They're about full. They're gonna need another system, and that's why we can confidently project, volumes from them this year.
Speaker 8
And then depending on how quickly EV sales grow, they just are gonna need more because once they're installing new systems, they're not gonna go back to this old way. They're gonna buy That's correct.
Speaker 2
You said automotive is even more sticky than that. Once you get qualified, it's actually quite hard to change. So there's a mad land grab right now. But you know what, one of the things that we're actually hoping to see is when our customer qualifies a part, the way it works is they not only qualify us, but their customer qualifies the process. So we know for a fact that there are some of the big suppliers out there, think automotive guys, that have teams or individuals that have to sign off on a FOX XP system for wafer level burn in, and they have done that.
What we're actually hoping is that that rubs off, that that same company can turn to another supplier and say, hey. How come you're not doing this? And so, you know, we think we're, you know, we're just continuing to execute. We have a lot of domain knowledge too. We're not just picking it up from, you know, any one customer.
So we believe ourselves to be expert enough to help people with these challenges with burn in because we've been doing it forever. I mean, I have people here on my staff, and I've only been here ten years. I have people on the staff here that have been doing this for forty years and can really understand the challenges. And we've, I mean, without being offensive, we corrected people. They said we're doing it this way, and we pushed back and say that doesn't make sense.
And they've come back and said you're right. So we hope to be, you know, a partner and help them and hopefully be an advocate and may enable it to a rising tide of silicon carbide. And, you know, we think all the customers that use us are really smart. But I think if everybody used us, the whole industry would be better off because there would be more demand for silicon carbide because it'd be more quality.
Speaker 8
And this the silicon there's plenty of silicon carbide, I guess. I mean, I I saw where some Yeah.
Speaker 2
I think so. It's been debatable how easy it is to get it. I mean, there's been a mad rush for people to get it. I feel like there's still some constraints, But and there's still a lot of people getting into it. I think it will be more available as time goes on than it is now.
How constrained it is now, I'm not sure.
Speaker 8
Well, yeah, that one company in Cree, I think they're building a fab, another fab. I I I don't remember, though, but I'm pretty sure they're building a fab in The US.
Speaker 2
100%. 100%. Yeah. 100%. And they supply substrates under contract to other to their competitors, so that's always interesting.
Speaker 8
Okay. Yeah. And they're also making the MOSFETs. Yep. And Yep.
Okay. Okay. Well, gang, thanks for the information. Appreciate it. It sounds like you Thank should have a really good
Speaker 2
you, Frank. Thank
Speaker 0
you. At this time, we'll turn it back to management for closing remarks.
Speaker 2
Okay. Know, there were a couple things that we had had somebody call in on. I wanted to just make sure they kind of hear this. One was actually, there was some questions related, you know, loading our systems. We sometimes and sometimes on purpose, sometimes on accident, it may confuse people, and I say on purpose because, you know, there's competitors listening and things like that.
But, our FOX XP systems in particular can test up to nine high power wafers or 18 lower power wafers. And sometimes we ship them full, and sometimes we ship them partial. That tends to be at the discretion of the customer and being able and to pay what their capacity is. I wanna make it absolutely clear that these products are fully released, that our lead customers in two d, three d sensors are doing full nine blade systems up to 2,000 watts per blade. Our silicon photonics customers are also 2,000 watt per blade, nine blade systems, and we've shipped multiple of them.
They're fully loaded. They're fully operational. And our silicon photonics cust or silicon carbide customers, because the lower power wafer, is actually 18 wafers. And the systems we're shipping are fully loaded 18 wafer systems. So, software's released.
They're fully functional. They have great MTBF in terms of reliability themselves, and I just wanted to spell any rumors that there's any concerns related to if they work full because sometimes we ship them partially populated because that's what the customer asked for. So it didn't come out. I wanna get that out there somewhere. And then, I'll just take this one.
Ken was gonna do it too. There was some discussion related to quarterly revenues. And, Christian, I think we covered some of that too, but I just wanna get it out there. You know, there have been years, and, last year was one of them where our forecast was heavily weighted in the back end. You know, I hate the term hockey stick, but that comes to mind because it was, well, when things recover, it's gonna get better, and, of course, it didn't.
This year, well, it's not that way. You know, we don't promise everything's smooth, but it does feel more up and to the right as we do that, and there's no hockey stick nor is there any, you know, miracles that need to happen. A customer that isn't forecasting needs to start forecasting, etcetera. So, you know, our confidence level in this is certainly as high as it's been in years. And, you know, while we may start out slower than we ended the fourth quarter, it's not gonna be a hockey stick.
And we just somehow wanna get it out there. We're not giving quarterly guidance, but it's important for people to know that, as they're thinking about what our business is gonna look like over the next four quarters. And stay tuned. This is gonna be a very fun year for us. It's gonna be exciting.
We're gonna be dealing with components and things like that. But you know what? It's a great place to be in, and, we're we're we're excited, and we appreciate everybody joining us on the call. And as always, if you have follow-up questions or want to follow-up, we'll be happy to get on a one on one with you individually. Just reach out to our IR folks or us directly, and we'll set that up.
So thank you very much, and we will look forward to talking to you next time. Bye bye.
Speaker 0
This concludes today's call. Thank you for your
Speaker 2
participation.