PXLW - Earnings call transcript Q4 2021

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Operator

Good day, ladies and gentlemen, and welcome to Pixelworks Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. I will be your operator for today. My name is Carmen. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. call recorded conference replay This Instructions] is for being purposes. [Operator the now to like would call to Relations. I Investor turn over with Brett Perry yours. is floor The

Brett Perry

announcing Thank issued Aman. President supplement of in and Company’s joining for Todd you is the DeBonis; me you, to Financial and the earlier of CEO, the conference Pixelworks’ the Officer, today’s Chief Haley call on Pixelworks' call. provided With purpose results press Carmen. for quarter is call today and afternoon The release Good information financial today’s fourth thank conference XXXX.

statements like Before statements. we our materially begin, today. the based reflect undertakes Company refer remind market Thursday, today, XX, February risks update are as occurring trends, various and I of differ Company’s that this results statements The statements and this those facts obligation materially. circumstances economic all on All would after or such to historical statements remarks XXXX. to events on any we not to actual forward-looking call no uncertainties ended about belief of Please on report actual XX-K subject on differ call, press filings today’s our annual results, results. release, XXXX, including are and to for December make the and a of from to Form number forward-looking competitive factors to cause forward-looking that constitute financial statements forward-looking year description XX, to are for SEC subsequent future other made may cause a that projected you position These that could

internally cash information expense, call and restructuring consolidated substitute on gross measures will per share. measures in to for, these We measures provide perspective performance. management non-GAAP results we these throughout compensation a Company’s non-GAAP of a of Also extinguishment. The assets, Non-GAAP and attributable intangible to gain investors and release certain caution meaningful Company during expenses, to net in include financial assess We loss management expense the addition believe underlying margin, this release press to with consider accordance measures not during net our non-GAAP our operating note net loan to operating in GAAP. exclude GAAP amortization of to, as discussions statements as stock-based acquired operating including refer simply and loss uses and nor measures loss. and superior results flow Company’s as press the conference this terms, and Company’s dynamics. the Additionally, Pixelworks, financial and statements presented core conference loss net these Inc.

For additional release details to and to to the reconciliations that, EBITDA, it we earlier would you today. press go non-GAAP his Todd over to remarks. opening GAAP call net my for and adjusted -- Please issued turn With refer of is ahead. now GAAP loss please to the

Todd DeBonis

Thank and and the on to you, Brett, good phone everyone webcast. afternoon morning or

was another As fourth we revenue XX% out growth and over up the mobile momentum, quarter XXX% year-ago record, reported of with and quarter Total growing in was XX% year revenue today’s release, XXXX. entering another consecutive increasing in closed the and year-over-year, the sequentially quarter. press

full the growing with For increased revenue total XX% year, XXX%. mobile revenue

local are Earlier to appointment announced out solution material highly was several majority absorption for Gross throughout Soft topline costs particularly organization. our and leadership to China-based to customer the two the as as a expanded licensed result we margin strong in build continuing addition Pixelworks margin improved this phone the subsidiary of executives team. regards revenue as our to models. Iris strong from strong due mix experienced of mobile that progress the higher our With a we of to on a recognition covers year with gross fourth pass our Shanghai, customers. week, Shanghai quarter a to In growth, to ability of overhead product our well semiconductor

VP of TSMC at our and Frank roles Skyworks new Solutions. Liu, who MStar, similar is first Operations, The brings Mr. Senior from Semiconductor, extensive Dialog experience prior

Pixelworks as subsidiary. are restructuring financing on-track and be appointed We remain Together of recent also most and important the part of Shanghai NTT of Chemical independence submit Finance General Liu appointments President Senior CFO prior with Linna this for the our early and to application and Vice CFO our Linna an to recently as subsidiary, Pixelworks to latter the these year. Most Manager interim Systems positioned of our Data the CFO We Shanghai establishing Global element as the as of Chemtex for served Shanghai Engineering. was subsidiary.

markets. Turning activity end across of review to primary our a

our business new customers our OPPO had introduced color mobile revenue XX N, ambient OPPO brightness OnePlus Two high-efficiency XXX% models, OPPO prior launched XX% of revenue and calibration, professional our wins Pro and using Software smartphone sequentially and brand's year-over-year. our Iris solution, first absolute as color sequential correction. consecutive the over accuracy, leveraging record patented announced since phone, with Find foldable visual calibration such another represented launched brightness multi-year our incorporating the color the QX and and including call. the Briefly highlighting increasing features with strong Soft contribution several latest solutions. both, processors OnePlus, conference Our solution. Then, Pro ever Xth quarter quarter, both from software-only growth technology.

vivo also The visual its an visual it processor gaming. overall with enabling X the X is of performance high XXX platform, flexible launched visual variable of Pro has hertz King the maximum for of frame distinguishing early designated premium the Potentially the flagship of a Specific its adjustment, smartphone smartphone, game high-performance I of rate launched series equivalent. the users. uniquely In Pro, capable model, pixels. X.XX-inch Honor resolution is NeoX, the over for On display incorporates the XXXXxXXXX most XXX experience for League, series Snapdragon curved Premier features the dedicated XXX been January, In of the with processor vivo our to controller iQOO Acknowledging processor. iQOO as a as launched first official U.S. screen ultra of incorporating KPL, in X hertz iQOO iQOO was Pro's even X XX more iQOO and to which and single our of competition refresh X and a coupled a to XXX Honor partner there’s here terms mean believe LTPO Pro AMOLED in this The of each million Kings. which Qualcomm of win NextGen NeoXS popular December, of XX us, active hardware those visual three China, the vivo ever vivo been have smartphones. doesn't ever NeoXS in in iQOO XXXX. have our the side, lot game daily Kings estimated an with don't

As nearly discussed which on to all attempting calls, and trend, previous on are has keenly mobile capitalize. focused gaming a dominant OEMs become market

However, do excessive adoption frame when and consumption ongoing not challenges. challenges, premium introduces mobile industry's display a combined series HDR, of newest with most gaming and power Even of the resolution level display overcome and system advanced more in higher processors resulting rapid heat. of panels applications these undesirable the rates, higher capable notably optimization

utilizing dedicated the APU mentioned. upscaling just I architecture, intensive that The frame GPU. that offload processing rate processing, processors solution and distributed visual from smartphones iQOO the high consider Pixelworks’ is visual a Just and

wins XX to solution high-quality our processor, constantly are perceived on proven digital benefits While process through for of the of the raise growing high-efficient a convincingly visual number processing. limitations display we the challenge leading and edge we've and of bar design driving innovation

our and processor effort visual ambition. team's algorithm advanced Our reflect roadmap this

redefine will mobile As XX we such, for immersive device. mobile on performance we introduced formally processor, believe gaming the our which visual visual a

quality. This before Then can quality advanced a that processor Our new picture HFR generations low game-changing technology XX and the simultaneously device a also compensation we've algorithms estimation/motion XX are and advancement provides features and we've introduced our resolution modes while MEMC, capabilities. enhanced enhancement recharging. increasing latest several motion the Ultra-low MotionEngine consumption feature ultra-low and completely resolution or gaming latency chip industry-leading significantly fundamental which mobile innovative significant Pixelworks’ incorporates visual visual the in provides time MotionEngine the Low is extends most to the feature users yet on boost visual upgrades Power specifically resolution the resolution, processor in a adds of frame Ultra-low leverages power new MotionEngine to our remain Latency content. Latency played while game is proprietary of offered previous to-date. what additional optimized resolution technology, our for improving allowing and games for in frequently The to Super-Resolution Based power to low rate low in the state. be requiring low from with length content high and designed overall

reduce to high unique engine low superior motion, on Unity's during processing can next their power platform with the provide frequently mobile producing a the a GPU gaming, sustained while with can latency PQ. Notably, Unlike the XX the length device. a to influences integrated frame of an addition gaming rapidly In the critical rate conversion, processing to user high stream streaming video, with HFR is latency for competitive lower coordinated offloading frames user solution time where from enjoy, on dramatically content. of we've dramatically overall gaming frame improving ability interaction the XX's of and consumption, experience rate also extending

with image both, a dramatically LCD Our refresh rates quality to OLED frames of XX improved visual supportive XXX and per enables and screens, up video processor second. on

in track production We be the the launched first and in models current the processor for are quarter commercial release XX timeframe. QX incorporating on the to our to expect

is key over the Our evolved years now mobile and three has growth focused strategy around objectives.

expanding continue with and enables expansion in these customers differentiation platform solution; We integration Pixelworks third, default and collaborate the gaming and that the strategic unique customers. of recent our of customers each of technology an all our engine ecosystems, SDK of our MotionEngine. on gaming to ecosystem three and areas quarter. in consistent providing cultivating we and game actively capabilities the utilization and testing positions programs, it's First, of made to target the to progress the applications; as that to second, XX Related Unity

pace. agreement an the of ISV has visual MediaTek. in the support element outreach, our and with mobile of technology studios to with opportunity built of mobile our environment. an to with team's announced This cooperation to in processing joint our devices experience as of it a initial on Separately, will availability products far, based at of bring Another our into platform. MediaTek MediaTek leading cooperation XG advanced shared and Open fast been the and processing, creators well, had is gaming a Resource milestone. Pixelworks' collaboration meaningful immersive Qualcomm The been visual Unity display we progressing game been represents efforts and for upon significant mobile Dimensity engagement which new extend December, goal, expansion Thus a incorporated Historically SAM, Architecture. mobile exclusively relatively is our mobile have cooperation

announced several of multiple expansion been. expect programs our to customers broadly We it current from engagements mobile models as as respect be ever this with More and strong year. to pipeline customers, of new has mobile active

win X with a had slated that mentioned the for previously initial Tier launch quarter. Our third currently is OEM mobile current we in

expand in engagements we we formally personal platform. secure development four X TrueCut know, In and launched the years. this by several you unique into we adjacent markets mid-December, can of as display has Additionally, Tier most to been TrueCut, with Motion end of year. Shifting which believe for mobile the customers

have innovated includes of grading end for end upon ready of providing and TrueCut implementing While our and a innovated format certification. both, existed capable fundamental upon and content commercially new delivery marks structure been underlying This device-based for the launch to solution. motion the -- availability algorithms technology for years, platform, a true years, for announced a have

Electronics early ecosystem. publicly TCL Motion all we announced to to you a would those would published better visit. conjunction with I Show milestone collaboration to of Consumer who and is TrueCut announcing TrueCut recently Motion the section endorse website another what For is manufacturer in in with In our the new TCL. join about, January, TrueCut the and we our like understand significant device first encourage

first the has world's growing largest any technology brand to track a demonstrated backlight addition to introduce be including TCL are co-marketing the the TrueCut dot quantum Motion one to and and introduce promoting while of TV LED the In TCL first, ecosystem, Today, first the TV manufacturers North actively technology displays, of fastest to to to America. bring the TVs intent we first plans to the TV. supporting incorporate TV simultaneously and brand with expand in TrueCut platform Roku both, record

device to able his of of technology, size while content consistently on is our creators on high-resolution are manufacturers, primary production TrueCut consumer, video named enhanced post from distributors many platform all out with focused endXto-end relies an realizing throughout As or XXXX, to firm her with content potential TrueCut’s incredible simply type ecosystem. manually artistic Today of of on screen, the the on to and publicly. settings intent an acceptance is but partners, preserving needs and from TCL ecosystem motivated ecosystem the immersive be having the The take to by deliver belief. be and rate consistent partnership to the filmmaker, without of display building HDR to of exists content first that agreed of is that advantage in be or device. in motion, high technology the different order supportive collaboration currently adjust regardless the to the created display will This frame objectives, with devices. one which focus

be several TrueCut to continue the out of part motion as we leaders, of of stages evaluations various discussions ecosystem. market and the with in building However,

progress, make further we announced. recovery both ecosystem be In business, new customer demand. to the will in of market extension continue As we the partners and projector end see

Although quarter business projector revenue a was snap up in sequentially, strong down back following year-over-year. XX% our QX was XQ, and fourth over single-digit

to quarter in year, broader successful to adequate and demand XX%, to projector required For in relate ability The components. reflects customers' but our impacts primarily other a prevalent, largely be major continued entering understates the customers. any revenue of chain Pixelworks' supplies the which real-time XXXX and has more projector our mitigating limitations. constraints ability function tight, fourth of a we've supply full SoCs grew to and to source remained supply supply

Given this projector QX with the consistent demand, backdrop, QX be expect we seasonality the traditional to of bucking business.

including and that strong Looking visibility extend beyond from existing indications good customers, QX, we the have throughout XXXX. end bookings of

number healthy certain SoCs working newer have design products. to pipeline to of also legacy activity, migrate of smaller and away while We from a customers simultaneously a

growth business will summary, to a did during continue In also recover in Although was projector and pace, with job a supply Shanghai chain a growth listing in dynamics our Pixelworks exceptionally with The continued dictate in we believe our strong team and preparation our mobile the year significant realignment subsidiary for Pixelworks business recovery outstanding a year-over-year local of the business. in progress will the projector XXXX. challenging an accomplishment.

executive a other new of our great Our execute at team organization has bring executed on expand in in exceptional is well, Pixelworks and to as position Pixelworks Shanghai we our opportunities. support initiatives our talent to and this adjacent continue mobile growth year.

I introduce Before her subsidiary. accounting leader as with turn CFO. Haley over She to will handing our transitions has have a appointed as the realigning spearheading executive Haley. team. that, call several been over, to leadership I also of and want roles organizational of welcome call with team. integral tenure. undertaken, to than the the and finance has have been Pixelworks Most member financial we and part our Shanghai is to in various of her And Pixelworks more is of the during great It briefly Aman the decade recently the served Haley recently for as a our

Haley Aman

CFO. you as Thank here you to you, looking the many great Revenue to the really over Todd. and It's joining I’m be coming speaking today months be for quarters. with and forward of of increase of of in $XX.X and quarter increase XXXX. the from fourth quarter an of in the third was XX% an of XXXX fourth million X% $X.X million XXXX million, $XX.X quarter Pixelworks’ from

of for XXX% to reflected in growth quarter year-over-year in growth of million. and sequential XX% record increase previously an was $X.X increased mobile mobile a Todd Year-over-year, ongoing our represented the mobile the recovery was revenue As by breakdown XX% driven highlighted, revenue revenue This increase The business. continued and strong follows: fourth combination as the total approximately sequentially from projector the revenue. market. of and

mobile delivery approximately Fourth end the of gross provide customer we at in revenue was projector Non-GAAP digital XX% with but from quarter, Although and to up million our digits the the recovery was consistent historical XXXX continue from and margin sales from single XX.X% million year the the reached we licensed in our in display market demand. the XXXX of of in solution. the Revenue and software to down XX% don't in a gross end ago processors quarter. the quarter records, fourth between of expanded mobile revenue and to third XX.X% our quarter. hardware related quarterly year-over-year, benefited detailed and third high both range, in was to our $X.X represent majority approximately see Video software $X.X visual from solution, revenue the margin fourth with quarter quarter. profit quarter breakout of continuing

As to of To-date, customers. observed across costs largely industry. to initiatives most on that to mitigate passing successful execute have at increases we communicated through continue the our material cost in higher these recent quarters, been the been we've

to $XX.X of We increases million $X.X annual as the fourth quarter part quarter fourth year. comparison $X.X non-GAAP Non-GAAP fourth the by net increased of The loss gross per increase of million XXXX the were driven consistent a the net quarter are XXXX XXXX. the negative the quarter margins basis, headcount. fourth expenses or expenses to XXXX. operating and negative loss $X.X of a as pricing the $XX XXXX in share $X.X over million, million was a quarter range quarter, or and loss a low-XXs. million $X.X a with to was and was EBITDA continue per that share quarter, to loss $X.XX well in operating million closely costs in negative On periods quarter quarter a $X.X to fourth million net merit compared fourth or our in primarily a our last manage loss these historical in million, last maintain target as our of and the compared of per for $X.XX loss of of $X.XX of prior the in million of compared in Adjusted share $X.X of in third

balance cash total and our the prior quarter. largely equivalents and assets the to from sheet. million with Turning quarter We liabilities cash ended $XX.X of the remained and unchanged

$XX.X with expect be guidance better anticipated to in XXXX. total of between approximately to the first profit equate expectations be expected with and first flat growth being gross a to quarter release, XX%. XX% the quarter to the range the revenue range shifting year-over-year. seasonality million. and results $XX.X more made quarter sequentially Non-GAAP million current we represent anticipated and typical Consistent at would comments our our the to than in first midpoint preliminary This of Now, margin than is be revenue XX% for between and of in

expected margin to reflect of as larger quarter First revenue significantly most revenue compared mix gross versus the quarter. licensing to is recent chip a

million Additionally, hiring first non-GAAP costs. to on the sequential $XX.X we and The as plans operating quarter reflects ongoing expect primarily in operating as increase $XX.X well range million incremental in anticipated expenses for first expenses between a quarter development our basis. the

expect a in few with share. your completes to And remarks. Q&A Operator, to questions. range loss of our we That taking be proceed please $X.XX the forward of and between look you. a of Lastly, session. first a loss we per non-GAAP EPS quarter share a Thank $X.XX per prepared of

Operator

Roth Instructions] Capital. Desilva have We line question Suji the with of [Operator a from

Suji Desilva

the call and luck of Welcome role. and the new best to Todd Hi, in Haley.

fourth And coming the in So, mobile? these already and describe the customers you those expecting. the versus of customers I'm you had? be are if would opportunity the third what timing the you those incrementally could X customers, perhaps wondering Todd, if online Tier you've perhaps ones talk at about

Todd DeBonis

timing, the that I rather was think Well, specific.

marketing. don't particular to the context differentiating and substance don't that with OEM that the I it we I to front may -- are I be that features engaged, because we much we going is. on major but size -- cases, that customer, going Third is, indication can run their weeks What who many want won't that to features announce collaborate land of we're model. a give In an we're -- it

times. many this mentioned I've think I So,

to So, with consistent just want that. be

it, we'll that that engaged communicating and talk launch out So, announced, once I to it. too Tier who But I can is that about and more going is to are much we're third what is what give customer is, expect then the Tier from said expect until the quarter. fourth I comfortable it, about to model said put what year about PR, can to with too X talk much feel have we expected officially models we a I have it's color, leave this the X. And released,

Suji Desilva

you helpful. there display wasn't there as market? what mentioned were opposed personal would the sure I clarity you then, the market. referring smartphone be to And Any to

Todd DeBonis

experiences There I content, on was people new on I No, form gaming or out much entertainment consume it long be say. content, vague for was will live purpose. video that -- whether there traditional content, is hype so visual let's the

And I'm clearly, with discussions have in engagements so, -- and customers. we some very specific

that And about display to device know what just that. I I is. don't personal more talk any so, exactly want detail

Suji Desilva

one forward about look platform We’ll about that you opportunities enough. that's not Perhaps the to I unlock Todd. because launched Can maybe that, have customer TrueCut. were then been perhaps you've switching over And hadn't here? new what of available, think that might and platform available? that go-forward now to previously talk the Fair this to opportunity

Todd DeBonis

of think, Alibaba, technology. you down almost one with awards evangelizing these listen, Hollywood with three of we go back we’ve the have ago, some subsequently things done awards. deal this did -- won we I technical from Youku We Group the TrueCut, -- and are been then Well, years that interesting mainly in an

evangelize then job ecosystem. So, production available that and from the groups broader evaluate their to to making these technology new the process, to movie is it try make it and are to and bring

been devices, three making now and last tools We've able to devices. there, introducing the technology the okay, rate years to we’ve or it acceptance theatrical and being create that been is combination people three the that for the periodically. rendering where talk make technology houses creator movie a post-production of aware is to about for content and home it intended the sort What And of effectively process. entertainment years and technology, to we part as so, creator that produce on the use, deliver frame doing we’ve getting this been done multiple to that for high and making into formalized content, of evangelism that motion content we’ve

one that's So, element.

element is, content to creating these technology Another display consumer mentioned. without that new we the it worked distributors themselves. a streaming we've was content by collaborate and deliver appropriate as the I creative on And created consumer, finally, way to with to that then, their that for just the devices from seamlessly and on device interaction no certify intended, adjustments

this technology we're doing a is, service But are for in the trying to really order content go to can't that it's and product create in creator business. enable to it, one just work, evangelist okay, So, from tools create can't the, product are I'll we we to this service We just manufacturer. not to, go be We ended. the sell content. what call it device going

a go of simultaneously. We to to multiple to have form ecosystem the maturity pieces bring the and ecosystem deliver

Operator

from & Our next with comes question Raji Needham Company. Gill

Raji Gill

congrats is it flat. -- question of down? that thinking about I you're normal mobile for great to other you, And, down, Yes. basically will any bucking QX, wondering, Thanks. one A Hale. kind overall, be much pretty And will revenue the segments Haley. momentum. When and -- is be will stands there know Is segments and flat QX welcome be seasonality there and going or the bucking be the is to of I'm maybe going seasonality in just into it's the on being then going out? all grow

Haley Aman

Yes.

would will it in because basically for hardware be the our be across specifically, be should mobile, be but up will software lines in So, flat mobile. QX, the down, all and hardware up

Raji Gill

video Okay. be And and other I businesses, flat? for essentially the then Got guess, delivery would it. projector

Haley Aman

Yes.

Raji Gill

QX. looking I margin, And sense happening and as is your think to Got at margins progress how opposite obviously, Okay. software pipeline, of you're and gross in When you're about of year? mix in hardware it. know the then the low-XXs. throughout then, And software benefited the more any split the from on you of the QX, making

and to some so best we as margin, to details model correctly more can? that want then how have about Just we get think the

Haley Aman

Yes.

that increase So, the shift change as think of to software we throughout We're year, maybe trying in little move some ways could a bit. to areas.

trying say that to kind don't some are right there get So, we and get yes, too ideas much work to of I now. But that. -- want out on

Todd DeBonis

a me there, said. little to a Let add color Haley what little bit

in increases most our space, passed again, costs. in -- chain So, customer have of 'XX think think on. us, is on fact, passed price QX I all absorbed think, Then, industry 'XX, to in half were those were what majority, of increases increases our the started 'XX. Back most not you're those on I those passed just of supply this base. rest but something of as had increases. has I increased the increasing And of we, Most seeing

people when Some keep on. on margin have and they their those pass increases them

decrease cost means on, just which the Some may the maybe a people pass bit. margins effective

of are business they're is Where our I talking we who you're where their in to mobile an aggressive build-up business cycle think, in this it and depends, cycle. in ecosystem.

We're unique software this of to build helps that two customers trying support And so, experience. models enable but a we're and more and trying that broader get gaming us content on to things. also gaming side, the engine expansion

what margin we that. to with want your cost if double to if And saying? prices so, many the Okay? get margins, dilutive gross increases. you $X.XX, with you and In your your to So, not Did yes, compound I'm XXs, offload But would we didn't let's customers, I raises for transferred, cost we to increases say, margins you just forwarding but margin our got these we your cost, 'XX, adder. -- in didn't somebody that increases. are of have say don't the many increase cases,

means had that margins. on So a we've headwind

So, we XX% thing, this business, quarter. year-over-year, think, just chose we on growing because in right, that's and -- this mobile we're said, one a I do to we are

phase of growth -- the So, in we're a you in business. clearly growth, we’re

And so, is, margin we're to From from I perspective, that offset bringing both. higher you'll aggressive a margin what posture. by licensing think business see in trying

in saw You make gone and Soft it it Part licensing And point, based Soft break switched licensing. could do they models we to way of model. with reason the upfront a model that see a one an our upfront on licensing an we them. device, TrueCut models, you ship after went of was at Iris QX part gears mobile, instead get Iris from increase customers out, paid royalty-based with some we which with royalty we'll business. coming model. won’t of of We've you was licensing with still big those because changed bunch We've the a of the the up licensing we new a doing

that ability lumpy, good quarter-by-quarter and extrapolation going to transition, allowed it's to for less us it's Frankly, models, of more if increase to little else through to hope color right will that hope want do for slow We way I as aggressively I bit that be do to range, there. to all-in-all, it's At on continue different be the ecosystem to with just I expect a for the it's down. methods predict this and is mobile point, little going will call. margin for high that use business. of don't it's they say side various there. to then effectively going you out demand we can. helped. our both, But business, let's a hard our to we But and the go long-term. and lot everybody when we model And some in it's predictable us low-XX a margins us think gave goal a you customers for better our get the we So, now, building And them. to -- customer. just, I the that have growth be maintaining, be as

Raji Gill

appreciate that I of logical sense. think No, a makes lot I that.

on The tight. he follow-up. no the where restrictions. process capacity capacity ultra-low noted been my has in at XX-nanometer the past Iris built TSMC Just And had you extremely a is been leakage mentioned

be bring timing I'm amount Could of start you the that will you the ULLL. give XX. that to in of sorry, sorry, on have into significant in a more units think half you committed XXXX shipped us fact And line? the your ship kind terms you as unveiled to should would probably past, when as you've move update lot the of hopefully TSMC is or right an second could that go coming lot are iX You a -- models, as -- year year. I'm on well and your the nanometer last these capacity a mentioned, capacity kind this of production I and right, XX more of forward

Thank So update that appreciate you. on out and I insight. just me that

Todd DeBonis

decide. of Based Yes. we the wait our constrained. still Well, But seeing it that are long back we OpEx, we're to to the for additional 'XX, of going are 'XX, half front to way, half the revenues support to spend because I more I how say comfortable like would that constrained. still are grow like in growth. put okay, can't feeling through like, come, for I going am sure we this would we upon

And so, be going organization, and and what exactly us to new our is that board. knows going available to on that capacity the Operations he VP, drive is doing to like Frank, I'm I'm

to is There do. risks we that, risk. what but is are there look to trying at Now,

We have choice. no

are to We going grow.

Raji Gill

Thank you.

Operator

you. Thank

Derek question Colliers next Securities. Our from with comes Soderberg

Your question, please?

Derek Soderberg

and Haley. Yes. welcome, Hey, Todd,

and where engagements. congrats very could but would Iris? mobile share on towards our the at Soft think question there engagements, heavily quarters, the the constraints now and where the there. you Todd, progress I I you've prior in over past, year mobile, you couple exit think performance I weighted and of guess nice just wondering and on on in I'm related the number next you the like level a put was if are with sort to So, of

Todd DeBonis

is the the will our Pixelworks that to will capacity, No, the quantity want than going no. quite -- engagements think been. we first there the a builds -- So, phone? content we to say and isn't a it. talking where important And our value gave to anymore, me Actually, of is, is enabled customer that our important would for flywheel higher to I careful long-term not it that quality now because in did our growing product team stickiness utilize truly ever the And twofold early production it how say not customer? of articulating is -- we all, I although right? not right? enable, stronger so their of issue was of of, to does the designed I that models Which what to we careful meet when It resources, it's content what's quality engagements. return and can we into but process, What's think the those capacity, more say, for utilize target on so, this today, creators have very have the was reality revenue demonstrate is not pipeline Which gaming being the then still quantity. be to quality. and a which our investors now say that more happen. they objectives it's engagements, production to objectives And it it patient is the I our The how of are volume? me, only experience constraint And does are resources. to is, more I we use bigger really immersive that quantity, approach, I was comfort it production want is we be probably early about the meet what's also quantity capacity, with? it's starting would is on

dedicated out We resources are our content to to platform. building targeted

the Soft programs new customers, existing XX We are both, programs. dedicated Iris across and XX have resources multiple and -- programs to

for so, still that's but would And we're us. growing, larger say the constraint I

engagements to resource those choose, when -- don't we pick high we and both, we intent. to get In that and on get market, choose, and achieve doesn't for strategic cases, we But our we customer the engage. target some return some So engagement. we which highest the our demand we engage. quality cases, In

Derek Soderberg

sounds on the in OpEx it on just and year, mobile for Haley, TrueCut. And like going a lot of activities

You've as well. an program got R&D

should how move curious on we as think would any help we of levels throughout year, great. sort OpEx OpEx Just be the about

Haley Aman

Yes.

think this see well. trying to we're this that the expect for -- of And as an next as year grow. year you Company, to in I XXXX you OpEx should investment think should

Todd DeBonis

be but it It'll growing. will controlled, be

Operator

from Richard Shannon with Craig-Hallum. question Our next comes

Richard Shannon

Todd, a see you just phone X December MediaTek, backwards on as it? the then, on of will from in that looking use announcement can there? your MediaTek competitor view we you any when still way? explain a processor do relationship And the And them

Todd DeBonis

my their our sure one, the I'm more bringing see the of prepared see benefits than should one color products mentioned XG we would in should the last see you all that Dimensity The customers collaborated that just But multiple going remarks you I competitor a Soft -- announced right, Qualcomm that. software say nature the is formal -- there's is one. those that okay software guess, announced relationship your of deal relationship were they before to our announced, the Dimensity there's then the make aspects an that or relationship our we you my there on in for informal, and first year available -- Iris are at environment, formal to And how we we to always independent so is with your vendor mid I almost platforms. should always probably platforms them the before It's that several you probably year. line not for with piece. are The relationship that and competitive least our asked, you environment, you this formal the In software partner. every to solutions there's not. products any partners. products, XG give a

MediaTek our So and time market able calibration software they're with now, gets benefits same customers, both to and has and secured color leading at MediaTek out their it world go companies, but offer We're equal out absolutely their right? Qualcomm. go the best that to on footing to to programs competitor

cases, is -- relationship I where you would we hardware and And say, and I then, in remember, is almost formal many times a But that's customers, all that sometimes software. software working So, our product. gets make product, it's I've sure and have see before, want said well. not, but hardware does a customers relationship, what it it the we the visual informal our this use also have announced the processor to lost,

part it's of the So, solution.

paves next software working sure AP the making for So, your also that AP. embedded to and is your path to flawlessly be processor the on that visual

the will with relationship the with just but Where productive says in working have said, positive go, So, Qualcomm, it had relationship who where with very that sort of at we're knows, we past. we've as a now. MediaTek,

Richard Shannon

kind devices? stickiness. are what going ultimate Unity My typed here, this? expand mobile -- mobile strategy your prepared here? the can of remarks, and of to them creating few in your past I about you the Helpful is, stickiness Pixelworks' perspective, to progress usage to degree outcome ability default hopefully, there? an How Todd. your in is Can Okay. Pixelworks' you of response with to And questions of one When second question with we talking efforts here, and then, just see growth that's on involved talk about here, To as the talked down happening, is ecosystem wording of default. one that the to

Todd DeBonis

one -- never is okay, of for. about so that those it's reach you obtain talking consciously I'm Well, what you goals what those one of

never is But Okay? strive I an Will us not cetera? else, reach or just we don't for. ever point the using either think know. using we somebody about where alternative, people not what et it

that I'm is what And Okay? articulating.

particular mean -- spend in, you around, when And starting refreshed I mean, what they are all do? less all all, than agree, made look they there creating, doing three should they and we're went to what that decisions and the giving and have forefront doing we why would some years. that not a are So, call Well, doesn't of this. is, him there's could smartphone at sitting Does that model call smartphone And is guess that awareness my next we're a that this was to smartphones, have go we're hasn't -- the money. particular trying this else today. in on people sure given we -- to on of I first think buy person refreshed anybody the I'm there's on Nobody right probably that other not now. it, we that

broader mobile decisions OEMs Asian broader higher only this, has priority mobile they that a say are are market see our markets, what U.S. home And a we display capabilities. -- market are For much today some or see awareness on so. making the this, we talking people that call display creators And those are but on the then markets. list. target today content this, people somebody Asian the But now most from probably migrated are ecosystem I'm people in one markets the China camera one based, AP because eight call, this very the to in specific would when you the camera, the vendors in months, see I I'm OEMs very probably that become and has into time, the refresh decision still U.S., on top important, to decision is China. in was on, years, can last customer last European over but the creating three this. five was number starting one sees home strong of not But and the now, change strong or here this. number base vendors game there capabilities. have their is phone this in the the Asia away and in how The Chinese customer their see decision probably decision target their may the display and the now when Number XX Our you China experience in was two base making goes over the of right? the

providers, gaming seen you've acquisitions content expand mobile recent from gaming. here this. reach into And the to U.S. so, see their They trying in

and the a have goal the is of So, go be we create, literally tip at spear announced I just our mean, and roadmap, XX. to out

solve XX on the solve a We that out, at some point the mean, you -- of how immersive an and out problem, then Have of are when experience of and go problem and pushing device, on part and isolated times the products to that the forefront a resolution you in are working fashion. mobile XX. can roadmap go of try I you

problem, Some the the more the is it distribute ecosystem an make to solve and immersive. the best you cases, them across problem solve solution help have to way

sooner, We with have -- AP of than immersive engine the our seen all on we more it it make and our XX with roadmap can versus game content and that we experience reality more collaborate providers see and a that, if go this own. trying started on you'll and out providers, to we do

talking aspiration and there I'm question? what that that about intent. the hope is So, I that answers

Richard Shannon

did, And detail. appreciate always the I It Todd.

had center that's the inclusion the of I that gaming center try therefore summarize would this, Pixelworks So, that to kind is if or -- that fair? strategy. of make probably trying seem Is of to the that it experience default, is is to the sticky,

Todd DeBonis

we experience forego color about, have should foremost, that, will all very calibrated, we mean, different ambient rich you display a deliver I color is. in accurate, high quality immersive first display. talk this It never and environment, to

away never really go what from go the promise delivering And look so, at off, promise. that will you if was we that to which customers, we started

you're the the part thing gaming, content deliver do with best-in-class. playing So, this first all make content making it's -- add you're is game display sure not the capabilities content or when the creating we that is best, these other to delivering Then, -- now we game. you're really when

of that display. trying class we're top world now to on experience this improve So,

Richard Shannon

go base characterize breadth of here? as the Okay. one would guess prior to following you of about customer over rate we’re guess, the Where's tax thinking of in terms next quantify throughout that How your think think hour getting about on last -- of base, that? that? of the the close couple you or and X increasing it we help Tier as about fast end Fair questions or here, think years? how we of to how enough. do unit year the and here. about the think Kind their do I you do How going question I

Todd DeBonis

be alienated with and wanted So, I even that the that in portfolio The customer price to had we to was, dramatically of Pixelworks it diversify do would lines us, enabled would features have have The not growing gone we probably ability multiple though product our to down path, the points. capacity. available problem that phones. on capacity we unlimited their expand one across have have customers. would If

categories It the we capacity, Since going we gaming points to This types have to unlimited engage, expand to want So, customers correctly, capacity, across we happy. okay, question choose no They on This demand of gaming longer put makes be how phone. do the have all phone. frustrates is your do and on a manufacturing like and improve not to and just on experience to answer to resources have say would price phones. where it. of and careful other unlimited be I customers. go, some you very

Richard Shannon

you Last to not quick When limited supply business? expect follow-up Todd. to mobile that, be in your

Todd DeBonis

show to we're because growth be I think, But we're going this constrained showing be dramatic we growth. dramatic to the year, will throughout able year. entire

thirst for for be think, -- I'll I is growth our throughout voracious. our fighting growth capacity XXXX. But,

Operator

will back this Thank turn our you. I final for Q&A session. remarks. it the And concludes

Todd DeBonis

to prepared the Well, long welcoming and Thank for attending. like much team you remarks conference extensive questions. lot Haley the I'd interesting and some call. -- very you. again on for Thank of finish today. thank to call you A the once

Haley Aman

Thank you.

Operator

conclude today's we gentlemen, and ladies program. that, with And

now may You disconnect.

Pixelworks (PXLW) 11 Feb 222021 Q4 Earnings call transcript