VICR - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen. And welcome to the Vicor Earnings Result for the Fourth Quarter and Year Ended December 31, 2017 Conference Call. My name is Lisa, I’ll be the operator. At this time, all participants are on listen-only mode. Later, there will be a question-and-answer session [Operator Instructions]. to James conference Simms, like host to now today, for CFO. would turn over the your I Please proceed.

James Simms

Thank XXst. is and you, the call press financial with CEO, for XXXX. Lisa. results our and Corporation’s Jamie on me the Chief Vicor Good I’m Officer. XX are periods Relations fourth our afternoon, here and Dick our in quarter Patrizio month CFO, Nagel, summarizing and Simms, page full Accounting Andover release Today, Web of release we welcome year and The to Vinciarelli, ended Investor the site, December the available issued three press a of for www.vicorpower.com. earnings

earlier also SEC with the the press We X-K related release. a filed today issuance Form to of this

potential accurate no Securities remind any announcements, in market Actual statements any recorded forward-looking remarks various sales constitute expect on item of call listeners of SEC conference customers, is of forward-looking current XXXX our call during forward-looking forth to which expected offer filed A including that by file update property made copyrighted call, midnight also will, our for I prove this passcode any our and XX-K, events XA Thursday, assurance such in risks face March explicitly of opportunities, not statements we the Please today, rely purposes differ Act and discussed the may and XXXX. and provided involving X, on the with or during discussed Form statements tonight may results today. regarding correct. obligation which can Corporation. at materially the today’s conference XXXX. I products, spending, to remind statements, the is about of is XXXX. conclusion replay implied number fact, be and X, provisions any of with risks be beginning item and in from call. will Except dial-in only uncertainties, or being Safe statements replay Vicor may and planed Vicor of available through February light after X, set make this forth SEC we to as this during of in these forward-looking those or forecast the Harbor will March statements as this are be the you March well of always, of followed potential call XXXX, growth, we profitability, uncertainties. no In this XXXX undertakes historical remarks also including as The Form contained uncertainties XXX-XXX-XXXX, information should is set the we we call, XX-K, call, in you Litigation XA As on XXXX. matters XX, are upon and call this by risks Reform the statements the XXXXXXXX. for The information note, Private under

implementation recent of page webcast tax quarter XXXX. $XX.X fourth compared quarter Relations questions. the available press business a start on and full to for with conditions, afternoon's Dick this of sequential afternoon's consolidated after quarter of and as Web the take XX% I stated Patrizio this on he today's with a a our of quarterly impact will Vicor our recorded representing discussion a follow be of with of addition, Beginning your which, quarterly and results. comments increase fourth will year. performance the of will and replay comment call shortly total In the about fourth the increase ASC million, current release, revenue in financial site. legislation, will for Investor will XXX the our review of X%

revenue advanced was contrast, revenue an with associated rose over total increase sequentially. our XXXX, product total with of portfolio Turns In associated To consolidated million, which XXXX. attribute legacy for or fourth XXXX. matches million roughly of year to essentially products XX% recognized year-over-year. XX% $XXX.X revenue total portfolio Brick year orders rose declined the year, the revenue representing address, revenue, totaled the distribution from XX% $XX.X the quarter, approximately to we Quarterly $XX growth by revenue margins received International the revenue. X% and is was by seasonal of revenue XX% increased while advanced the the quarter, fourth sequentially XX% Gross million, in declined and of ship conclude stocking sequentially. quarter. Comparing XXXX, we revenue XX%, X% the on for volume, unchanged dollars within our for over shipped indentify sequentially representing full of factors. that For legacy revenue, quarter's full approximately which to profit the quarter

as margin, increased For of quarter quarter fourth from year, XX%. revenue, for nearly fourth profit the increased for XX.X% XX.X% a the XX.X% the full third gross XXXX. to of and Gross quarter the percentage profit for dollars

$XXX,XXX were Operating product today's of the the we operating certain expenses Chip higher manufacturing our to a XXXX. for would VI the essentially in continually the evidence have approximately of benefit or prototyping EPS or for by volumes. The of accruals. compared inherent of in of reduce share, diluted sequentially, $X.X This quarter address packaging XXXX a fourth reflects and gross $X.X per $X.XX to alternative minimum absent Dick leverage and, fourth reported for compared effectiveness Net or lines production diluted for well quarter quarter million a profit a us exceeded per and the for account and Chip is third this is share point net technology. loss income product per Brick net in lines. driven I cost, This in our quarter tax administrative as management clarify during our in Chip non-cash milestone the aggregate X.X%, of the for Company $X.XX the benefit $X.XX for commitment percentage fourth ago. press way for in of legacy fourth increased corresponding just cost milestone remarks. fourth margin XXXX, year of quarter. $X.X quarter net for line million, development or the plans will income a for the which change will share to with as scalability breakeven for his remarked Patrizio As our gross income share, margin was release, loss VI higher view, share per should expenses management’s per and largely the diluted of our quarter net percentage million VI income performance to of XXXX been Net that quarter $X.XX the a contributing nil taxes, $X.X $XXX,XXX, moment. million was the the the and out for year the Dick or

inventory at annual Turning rate to under the balance times. loss of sheet, an quarter-to-quarter, four DSOs churns remained days remained at just and XX

and and decline for of increased in Cash line was equivalents Productivity in my Our cash headcount again temporary portfolio at approximately total prior million. because associated part we year receivables This rose $X.X possible reflecting net review modestly growing declined $XX.X decreased Total accounting employee employment, ending increase sequentially and Dick revenue Dick? with in fourth due the in swings visibility once reserves, two quarter, end capital the million increased, the during requirements we with way revenue. loading quarter, quarter, XXX sequentially. scheduled XXXX, X.X% non-cash meet has of the part, conclude Inventories, of are recognize within by been to and level Nagel production the of the when developments quarter's unchanged. the notably our transactions to employees. quarterly can. however, fulltime production recorded the safety student now essentially our working backlog. of certain at income fourth opportunistically of will backlog in important of from to was stocks describe We've materials total made for increasing into co-op accounts. tax. timing building greater To our inventories raw

Dick Nagel

Jamie. you, Thank

working guidance the under for most the we've earnings prior call, adoption January GAAP. quarter's U.S. guidance new XXXX recognition new revenue last codifies recognition. which XXX, replaces XX, during guidance discussed of ASC for deadline been As revenue The of towards

customers adjustment applied deferred XXXX, of financial XXXX, most which going of subject has of modified the Our XXX adopting January to will related to approximately recognition that reflected Vicor's on of of distributors the earnings our guidance, we to sales distributors on net not application. Xst increase in single quarter million our be their This retrospective expect the the of revenue but as to the in XX, resold presented earnings Form year's first is data method. January XXXX. sales such restated, in represents prior $X.X adoption existing is to statements Through with effect new ASC significant as of we and a early application ASC stocking XXX the in contracts cost to the The the customers. distributors. of for In file of forward instead filing impact retained method, made to products until timing stocking shipments been XX-Q of we’ve this retained With May. are December

distributor time we and XXX, With at the revenue estimates will stocking to of the the historically-based the by longer distributor. we're ASC stocking distributor of to reserve, a until revenue Instead, based and the our sale to customer. sales provided no the allowances stocking of deferring adoption end returns on record

associated XX-Q, day will the there reporting in the with first our believe While be far we be considerable end adoption, more notably at the of will straightforward. quarter disclosure

tax the Act, AMT December, refundable AMT changes, Vicor of immediate net how legislation fully can be the The Turning future for and benefit $XXX,XXX became quarter. the Tax the enacted fourth to realized. eliminated minimum these for Because forwards recorded of in Vicor's tax and changed existing the the impact in Jobs credits consequence carry credit was alternative years. Cuts corporate of

deferred impact we tax must consequence the long-term application reflect the the full the the with of Vicor and of Vicor, The the like from GAAP of associated to of of both the value. which be the existing tax of quarter. to for value incurred period to the effect against this assets XX% fourth charge tax the domestic net the legislation, to to of reduction Jamie during tax another of a a contributed is for also corporate allowance creation our XX% income tax rate net Because companies, primary reduced new rate, many those maintain federal tax tax value notable U.S. a the benefit, the requires but generated tax assets, fourth quarter. the rate As receivable recorded enactment, described, of assets as legislation lower lower involves in be loss

an equivalent by offset was reduction in However, the charge this allowance.

transactions these had quarter on such, As fourth results. no effect

up balance, the an and would detailed our Assuming tax the $XX would To deferred summarized now profitability, on in today, back approximately some at I'll this well changes recorded to that, Tax what sustained which its the remaining regarding across the income allowance assets the benefit, point wrap and extent to legislation. as totals the over turn periods. due additional entirety million, brought future be taxes forwards tax Act, carry the used Jamie. I've reduce underlying the on will disclosures call be in XX-K released descriptions the future about as by With have upcoming full of as

James Simms

you. Thank

increase we recent in Turning anticipate where quarter, the given revenue increases and and in backlog to in further sequential growth profitability. the our are we an XX% outlook, within

and and bookings. those Similarly, our expect now must pipeline remarks, of are and forecast. control, his in an of these remind news, made of I will time by also decisions early rewarded given sudden you higher sequential of do cycles consequence with operating I being remind with changes their with many timing quantifiable anticipated efforts in which in adopting outside technologies. innovative listeners factors for brought disruptive as each decisions, difficulty sales, our quarterly the by the I customers changes I the the are manufacturers, to subject expanding accurately you, We and address increase Patrizio of and being opportunities. bookings forecasting of contract a speak about sales the characteristics is good financial The

Patrizio Vinciarelli

$XX announcements steady backlog of products quarter sequential bookings was recent million, Bricks for of at wins, bookings Picor. compared starting end for at stream XXXX, existing first design customers to and the and $XX by for at million quarter. in imminent XX% fourth well Chip and in of customers, new over quarter the $XX of advanced end quarter Total prior bookings high-profile from $XX million bookings Fourth and dwarfed customers, on to sequentially, bookings for higher up the year. the A a A third year-over-year basis. the the XX% million, indications bode sequential end new recovery from a substantial up legacy from the was XX% of VI increase increased of

bus with in, vehicles emerging penetration supercomputer defense market’s infrastructure, design of, Other quarter. received in leading opportunities discussed, for market. during Notably, adoption from in on recently momentum continued continues, This to space solutions. segment aerospace a encouraging orders. continue autonomous production volume our from regarding important solid the communications, Our prospects. its volt to progress, this including in bodes quarter, lighting, state news build, wins to expanding XX also the future network interest of the datacenter engagements the wireless well based electronics, position and pre-production customer we the long-term moving in and fourth applications with have fourth some We’ve and

by players, interested current expand so industry Our engagements will of consisting well of our very intelligence cloud a MCMs, captive called end and a with artificial adoption which modular Power breakout by breadth will solutions encouraging needs, acknowledgement are MCDs. modular be in further XPU serving and of including of with key system as Factorized year in as so and driven Power-on-Package, believe leaders. Power key XXXX Factorized explicit We called across Customers their solutions, applications, our results. Power-on-Package, multipliers, adoption current in rapidly customers drivers, showed vendors market

has technology say, I'm leaders with could of I will solutions. market Factorized listeners that of There soon a many call. performance new sure have drive great will Power open achieve visibility enabled we widespread stage to the XPUs high levels power unprecedented adoption but deal questions, is Our more so their system

Operator

the Please first [Operator Instructions] line McKenna. proceed. comes from question Don of The

Don McKenna

the the increase think wanted for for increase? quarterly you be rest the able bookings ask, might you X% the in quarter, to be year? I that had you a I over sequential you? reason past of Will what see XX% might know within you achieve to Do quarter

Patrizio Vinciarelli

exceed we to should think I able that. be

we're far were thus this last ahead we quarter. where So well quarter, of

Don McKenna

you of that momentum have sequential kind that, at then quarters -- think after do And lower or do rates? been would building level that you same

Patrizio Vinciarelli

the for shows quarters. progression forecast The year through the

QX. results conservative, was is to have quarters in certainly -- thus have forecasts in QX, think case case I been shown recent in it the the that be the and far

Operator

And question of next line Please comes from John Dillon. the the proceed.

John Dillon

comment nice was I ground Congratulations you the spring? also, board. that really, on still really still plant can about. numbers you put if you schedule? at Are that this talked looking up the on that new breaking on you've wonder Is

Patrizio Vinciarelli

change regarding existing square a plans investigating is So, not would of order term facility our we've concluded in needs. of our to neighborhood feet the after had What building the XXX,XXX serve of that we Street options Federal on a certain long XX,XXX that.

help more to larger give some term with to short with able expansion. a room a capacity were partner ground room lot for us breaking breathing to on considerably deal we So for secure requirements

much looking to feet, which So at as terms our as would in of we're options be Street XXX,XXX for building. equivalent capacity Federal square

seek, that So expansion last quarter, we but term, and partnership need particular, would product should in a in the we short have than term to those the expansion. room going And the otherwise to in that gave to for a breathing effort help we're late challenges the somewhat year, procured, line. capacity SM-ChiP in operational term fourth recap, longer other conclusion with us divert bigger, bottlenecks impacted, came to to from our facilities, that, the the short rather we

that is footage larger larger of with my guess half at first square a not the breaking the in likely lot ground new or until point either of year more place this may take XXXX. latter So, of the this part

of allocation with manufacturing reconfirm the to judicious we within revenues capacity have wherewithal the in of choice half we So, and processes. a that yearly Street, billion about space Federal expand to

John Dillon

the this contract to on Is for some just it’s elaborate manufacturing a be deal you partnership? somebody who's licensing doing you? Can going or

Patrizio Vinciarelli

for us. manufacturing It’s contract

a for a about entered us. partnership long So And deal is it’s term great of to into going capacity our we've that bring a granting benefits fraction requirements. significant

John Dillon

who the Can partnership's say you with?

Patrizio Vinciarelli

Not this at time.

John Dillon

it is And or international? domestic

Patrizio Vinciarelli

it's far facilities It's existing and our northern from away not Massachusetts. domestic, in

John Dillon

you that It what clear something wasn't had just the to. does that you pretty that burn And else. with capital have went cash that cash big I'm something to quarter. equipment -- to or do a wondering if really this went

Patrizio Vinciarelli

materials the related, it -- working but capital in quarter, the there past it So, primarily like. capital though primarily some investments, capital and was was wasn't equipment equipment was even,

it a decision sub-contracting that realization rather are off year, new proprietary provisions those critical the a that by There’s Fundamentally, in-house late that not Hence, needed be to in or critical the done. or economies to larger breathing outlined while product this steps of us more expansion. in is done do square more of partnership is incremental terms economical year scale. doing the expansion predicated more subcontracted would key addition ourselves capacity easily to ramps make better existing going for requirements, with Again, or smarter The So this much we'd facility. in to be incurring a facility And the in process reasoning mass that’s costs, of next incremental the first And square foot in we already to relative that much have. process ago. of a the could production given we’ll that time non-negligible while fixed product. year. give be be longer on steps half doubling can be our without gave that be out, extra of short XX, the is the little way room a foot keeping to building, term, we lines, out terms and something capacity capacity an a the those and XXX,XXX end expansion term, of XXX that in to be

John Dillon

you Or quarter Don’s with to When growth total to the had of sequential are last referring in just quarter? you ahead bookings as little that to referring bit amount just you’re of your last the a as expand answer. And on question said bookings, bookings? far you’re you

Patrizio Vinciarelli

So mark already on we’re XXnd. February million passed $XX the

rate. So of the quarter good the looking quite terms in is bookings

John Dillon

are far So $XX the million? so bookings

Patrizio Vinciarelli

Yes, million. north $XX of

Operator

from comes line question next the proceed. from And line Please Jim the Bartlett. comes of the of

Jim Bartlett

advanced Is you including is that question or the just products the One, on products. where VI the margin had the products? Picor with surpassed that legacy Chip on margins said

Patrizio Vinciarelli

Picor mass. The critical quite once margins some have achieve all been along, Picor good least, of level at

So our products. specific remarks VI the Chip were to

Jim Bartlett

I that just sure want to big -- up. very make a step is

Patrizio Vinciarelli

I think this, don’t Well, in magic lot along. we've so, as of all indicated there’s a

significant very There’s scale being effectiveness. an them in these ultimately, scalable tremendous we with have, those volumes lower and costs, fixed cost-effective, cost cost be keep with would have flexibility, to manufacturing fixed compete from product products costs tremendous margins. of bring on able nothing efficiencies and to much packaging believe level with about our inherently very inherent performance. platform. scalability, We conventional We and to need economies Again that technology greater absorbed and, good technology, with

build more the the same a cost volume become even So and while achieve margins. We time this need to just as marketplace, we competitive achieve volume in going those delivering economies, to better is at we’re economies, game. those to

Jim Bartlett

this kind as of you in Would a willing of be percentage breakdown volt? gain of amount. again importance given company gave for what's to what had the as At volt dollar in happened you one the XX do XX well shown here point you

Patrizio Vinciarelli

key otherwise of products competitive to densities, to of power way perspective, is customers the merit one significant unattainable. be are to in think or in the my advantage enabling industry. with of that from performance answer question levels I the figures term are terms way those would their the perhaps own densities But current most So in accomplish characterize of

been of not level performance have our we’ve without the achieved So, enabled datacenters in that technology. could

Jim Bartlett

had business I so example I and that last you? for increased of percentage quarter that was you much, of how importance volt for much that, saying revenues, some base your XX revenue Vicor get what by the was is

Patrizio Vinciarelli

of So over we’ve we within year new last what used exceeding really down about have for this legacy by year-over-year. one some not legacy think revenue, we there grown because that, quite look And to substantially. before products make-up And a they’re slightly And little we up to then is little year, comparable total fraction a call and I long moving has the XX%. the time business way now the the needle, too is be quite that talking at and essentially business. level them that tiny to at been revenue that grew fundamentally, considerably while have of that we’re advanced going flat see products the

line, comes with slower respect to the… back comes line, with to that to top going that respect with So leverage and bottom to with the answer my

Jim Bartlett

almost products XX …advanced all volt?

Patrizio Vinciarelli

only be say from volts, the we’re volt phase because three plug, AC, that But or wall revolves hub. of are to strategy the VI AC the the wouldn’t with Chip single XX address load. speaking, able our the around to I it XX there generally phase point technology, requirements

load,we in essential voltages phase of volt while application our the an differentiates fact very have our busses from we technology conversion from of and to breadth And the high So much phase this taking do the packaging where the three volt. new XX of from XX part companies voltage or to and once in space. capabilities. powered these point unique into take power other that, AC applications have strategy with that's technology to single Again, solution of support many products something this approach customers again,

Jim Bartlett

so business? in reflected called would that the… which the business, getting past at end You where now one had in front front-end mentioned So point you are be

Patrizio Vinciarelli

gotten we’ve business. getting the our and end front -- within last traction more – with getting are more year we Yes,

at business order -- of the couple at You of is where, -- should was our out know, potential possible, of I was and years I has end last still a current the at beginning and week, say, revenues just end this of front that’s business… one front customer customer, customer, potential

Jim Bartlett

that you're if start impacting would within when BBU… the And including that

Patrizio Vinciarelli

it’s That's to AC/DC of not point current Generally TAM of than portion actually portion. the the potential. our highly just indicative It's at not forecast, this It’s speculative larger speaking, is load our volt the time. in plan. XX of

all power than imagine solutions. points we the to power that solution, starting load the in of that is can effect power typically provide of load. the in to the deploying solutions load goes also for in the is of just of that of greater factor at the power complete applications portion end which not the You of of extent value our through the load chains solution, source, the point but just AC, all opportunity is And the necessarily provided by two supplying than terms not systems more a of point of a point front system, solution, where

Jim Bartlett

now right load? point growth volt the datacenter is big of XX and But

Patrizio Vinciarelli

from coming growth of point load the now, solutions. is Right

coming front it's in types applications from systems. of, Chips I include also of VI think end that other particular,

that’s me So substantial. it been growth also to you, I already know is and I have of front it the works -- rate in is but a growing relative general quantify that in quite for don’t in

Operator

question Please next Alan line the of proceed. comes And the from Hicks.

Alan Hicks

of about Is quarter, a have in project still last that you was a supercomputing Japan. that which question one talked going I the had on, delays ahead? you few

Patrizio Vinciarelli

the up of further because involved last is as management, as do on And understand having outlook, CEO legal in projects may in that were good, some the quarter the So to in that the But likely delays. popped we company. put the early management, a hold a the very be will top that, new set it, with quarter. soon that resume of in brought supercomputing there've project as and had been back next and issues Japan

year, be suffered setback But forecast it opportunities. particular far is both -- than clearly So by terms in is the for what very in quarter in minor of may setback. that on bookings engagement glitch quarter of certainly going this well terms that fourth more we from and has a this other a temporary think, and our the of has and the exciting lot made thus been up being

Alan Hicks

quarter ship would the -- soonest, would be So it that may assume? next I

Patrizio Vinciarelli

but and we're Well, have -- see wait what resumption so, the and -- of surmise, activity to their getting to not given likely be can a happens of new there’s But the from plans. details that what leadership we into owners privy change soon. way, we’ll by and without the of

Alan Hicks

orders So area strong very must be then? datacenter in the

Patrizio Vinciarelli

and of and Well, we should more say all I at to in lot is And clear question. earlier exciting not that’s are that diversified. say, Needless to enough point-of-load. wasn't maybe the where the there’s assume very answering action not One soon. making a there we’re the action place to inroads. exciting it’s very it’s going get that’s But lot that only the

and I lot at should Tuesday excitement, potential solutions, a in front our Monday was I the is two last customers end on of the potential. in West We are Coast there's with say, week, particular, making interest inroads there tremendous products. tremendous with And revenue elsewhere. and customers,

Alan Hicks

that in so Yes, area? VIA the product

Patrizio Vinciarelli

to that -- with Japanese that we’re now were world. we ago, customer a these are front-end to and beginning No, rest a moment product market the of the we pioneered discussing it’s the

Alan Hicks

it broader looking opportunity, it a supercomputing? the like and Just seems there's you at build And can to worldwide But seems well-positioned supercomputing it really issue. defense a in race you’re comment opportunities biggest, could the other there. be on supercomputers, national fastest on like going

Patrizio Vinciarelli

entrepreneurs companies startups new we're new extremely So bar we're wherever breaking resetting that And there. will are say in and grounds computing established well-positioned well-positioned I with with capabilities. the very respect to

within levels with seeing amps going to on at call More to else current amps XXXX XX that the XX, operating anybody package X.X and the factor the that is of are enable that multiplier XX our these we're enables with trait up nothing the to load support. who where significance point a volts requirements ASICs transient technology are versed requirements for those or the common And of of of can ranging current amps XXX a to is XXX that amps. of X.X So, XXX amps, well a current required capability levels state-of-the-art or current volts. applications or or down XXX more has that, huge

a to it’s advantage. as more to its we're excited, by otherwise the of that ago, a little be see true of levels them that give evidence the so not superiority by articulating is was in And I get happen. what solutions customers density while in customers enabling performance lot test enabling competitive of that to high some months made come. That’s going itself, And cannot

Alan Hicks

of that that? product, The is PoP part

Patrizio Vinciarelli

Yes, the part product PoP that. much of is very

So more small to and or a very, variety GPU, supercomputers scale, another. we're getting form on a one of wins, design more power of XPU ASICs, but very

Alan Hicks

And memory, time you got delayed… you and chip customers more that then that also couple be effective. other there storages non-Intel last was redesigning with XX a volt was their a And somewhat boards there for were mentioned delays, working

Patrizio Vinciarelli

I in probably up got quarters in is But I tight And that you that undergoing there Many a might issues bottlenecks specific still two the the resolved, popped think think still earlier consideration. and earlier some is strategic ago, in though this of referring those industry call, even period resolved. shortages that’s three was of supply. or a be had So, the got that of issues to XXXX. were referenced those

by sub amperes, seeing one game comes Regarding town we’re in kinds it solutions. of only the a board. Intel I to really say And suggested of and consume those lot would XXXs we're sockets that, across the ASICs traction in volt as more to that traction enable sockets, comments, non-Intel when earlier the

those at of terms and power sockets, in a Intel those within is volt, where because as of higher that the are demanded that’s a of is sub-one used hundred and requirements internal come not regulators Intel close thousand pressing, there that’s more chips, in to lower much not But delivery landscape, done where more ASICs. a way which amperes. several current, competitive voltage, for seeing up For because X.X is volt or we're more opportunities wher

soon get And AI very with current that will it’s where the amps. whether multiplier one do to to is that the I very think is current capabilities of a current lot kinds for solution. away a close on or that is in of there is far chips thousand consumptions. trend the form activity a best have and And ASICs GPUs, that's or those again, another going

Alan Hicks

to quite able with a you're So different few work processors?

Patrizio Vinciarelli

more on Yes, area. volt and particularly in the many with sub-one on GPU, more customers XPU we're engaged a, ASICs, projects,

Operator

The line of next comes from proceed. question Dillon. Please John the

John Dillon

I'm give Nvidia, in us also Patrizio, particular. wondering more you're if you could with on and color doing GPUs how

Patrizio Vinciarelli

are going cannot I respect to wait announcements to customer comment with I we’re think to for be made. engagements, that specific to have

John Dillon

exactly this it's because of high a power, and crazy, perfect they're is and a you're would you're picture type in got guys. those opportunity about. the of it current working lot product, and draw The see and it has whenever up it is converters of that some outside XX reason my And datacenters uses I the chip, me the research is with the see up turned I that I I of PoP drives be bring talking what auto. of It in Nividia see for your in that

use talk with power? about general color you give Can you're doing those? some that how you can us GPUs So on in high

Patrizio Vinciarelli

up limiting I solution specific The But bus. respect current going to for point, with the a power applications, keep from you that, hinted XX general different, requirements factor, I that to cannot volt automotive of involving, achieve supply to limitations engagements. volt. you say XX, also But can of the volt following it, point, very them, challenge the that trains to can separate the and traditional with can phases another you performance is in having with XX going of fact demanding at there’s the these delivery is, challenged, I in them. level is think your customer parallel challenging XX in what to XX deploy XX and that to to is terms, power terms XPUs operating levels comment your to do

bring having a automotive, powering higher be come about higher saying about to industry. And that ran talked infrastructure XX But and that's of long-term of systems the XX brings ago automotive get to there's that even really volt, in is vehicles and current, to can with to going driving that automotive. convergence autonomous demand backbone in drive that lot that XX -- market be it is this certain didn't have fundamentally on volt. electronics gain the to because of at but to to more that brought time vehicles test terms there's volts XX automotive bus -- because anywhere. can Now that volt, for XX than voltages long have by many, a infrastructure been initially going XX have of it volts a place didn’t was the really no cases the be were with to in a volt economies an old some rest many that you in in There very about years about both migrating on And lot requirements, volt, of with XX hybrid where point ASICs, you traction. time, GPUs come question

happening. that So I see

John Dillon

XX think guess working engineers And been don't was up. And I other about enough at can they and be of look I have I've with the whenever I Nvidia with pins. I converters, complaining years, is, point, pins for that that how chip of XX all freed

So that’s it? isn’t got for driving be factor Vicor also, to a

Patrizio Vinciarelli

the I we distinguishing technologies boundaries If hundreds the freeing for takes that to to lot and can XPU of imagine of function devoted of power our delivery. be at reduces the amperes, of in XX value value-added freeing to benefits negligible you constrains fraction, more by do X.X consumed connectivity this a Power-on-Package, an done power was current what is the those a by and XXx, pins our power power be of and delivery one opposed XPU even So, power to low than the a is to only pins, delivery of the which and multiply as of number MCM, and those enabling otherwise one by pins comes volts boundaries the the as traits implicitly those current the by in can information intrusion it to can that Power-on-Package, times, of our effect voltage, up such earlier are need commenting to rendering is when delivering the and volts X.X that terms that that or lot particular, delivery in up alluding at developers. current about delivery. pins in that for multiplier, estate, of real of A

of And so ago, that’s Japan U.S. a that big And general we key is pioneered arising with years within last a value in in and a and the and that a taking off. a proposition, which, with really half we a now customer year future of in the that customers, multiplicity lot see couple one opportunity framework.

John Dillon

Could progress And from made when some auto you the to Does going us this a from industry? Or seen the expect you mean in industry? auto I revenue would and auto. more significant give you’ve mentioned little you're color? revenue you the just mean

Patrizio Vinciarelli

So, we I driving world. names. in is can’t Again, power delivery talking we've system the call. And advanced this kind say. most the name I advanced early been But the autonomous products cannot in conference the power with of

Operator

proceed. of line the from Please comes Bartlett. Jim question next Your

Jim Bartlett

and that depends the -- supply ways this when John's understanding year's you that to automotive follow-up with given revenue sector. question Just sector of a auto seeing issues. is on the chain was another My off, part strategy dealing on from be might

Patrizio Vinciarelli

that, believe to you be to expect direct year revenues we call a see in is can be there begins automotive. may which see, we significant what what from to from So driving. that autonomous going we XXXX And with

expansion opportunity. next I -- But is opportunity XXXX, systems I that, -- perhaps come more into our indirect with we’re going get think imagine opportunity. needs network year, in we’re world year its a going all by with by that to the fact and significant XX there’s about, increase enabled and also come in XG automotive to Whether hardware or that connectivity and, say which level volt autonomous stationary we’re driving XG. in connectivity that real of of for and powered that itself, XPUs XXXX also see way to think revenues, significantly expansion XG and will see is can a is will that with what to that lot systems. you by in involved systems powered not an XXX-fold the is carry application. that sold solution Harder of in to with in forecast automotive there it that bandwidth

think I see automotive in action. we're to So generally going

XXXX. think still see going in we're but I terms evolved significant de contribution XXXX in more minimis, to some of in at some and it’s our we're level, But revenues. significantly

Operator

in additional no are questions queue. There

Patrizio Vinciarelli

to you Talk well. Very soon.

Operator

day. may you gentlemen, a wonderful and and disconnect Ladies now have

Vicor (VICR) 24 Feb 182017 Q4 Earnings call transcript