VICR - Earnings call transcript Q1 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone, and welcome to the Vicor Earnings Results for the First Quarter Conference Call. My name is Linda, and I will be your event manager today.

During the presentation, your lines will remain on listen-only. [Operator Instructions] I would like to advise all parties that this conference is being recorded. And with that, I would like to hand over to Dick Nagel. proceed. Please

Richard Nagel

in afternoon, quarter Vicor I'm release Davies, ended Chief Officer. Good for earnings Dick Vice welcome Vinciarelli, Accounting first Patrizio Sales the March And for and we press release President press summarizing and Kemble Morrison, Controller. of you. been Officer; and Corporation's Corporate to XX. call a and Nagel, has months Chief After the March Global financial the issued page Thank results Executive are the Marketing; Phil on Vice President Andover markets three XX, ending XXXX. closed www.vicorpower.com. Investor today, our of posted our This Relations website,

any obligation X, or with no potential during be XX-K, this This uncertainties. face our that risks any uncertainties Please we via and as differ current statements filed today, Item the to and implied planned by offer March remarks results listeners light a may We of remind any statement XXXX. call, being In during provided forward-looking those and the system fact, and various the SEC's today on to release. may is spending assurance our of such discussed management's copyrighted accurate including beginning on forward-looking expectations expected of risks today. this in information contained This Reform through X, available XXXX. as involving also XXXX. The these recorded uncertainties, of statements replay on Form at the and on conference announcements, well April in be are and Thursday, document during and purposes are today’s statements forward-looking should to is Litigation for no Actual after Securities only remind midnight dial-in can which passcode historical of followed of of Act of set profitability and XXXX A forth we related will, available this The also for tonight provisions any Private is made not the XXXXXXXX. materially opportunities, of call undertakes regarding conference EDGAR we this the SEC X-K and press make potential you correct. Form call, the I also Vicor information we risks today's dial-in website. this this remarks Corporation. by growth, in replay in statements number explicitly update current Except the call prove statements, forward-looking the statements the set call, in discussed call this from the XXXX. filed of issuance May matters will are XX, property XA is and including conclusion and note, passcode call our harbor expansion customers, market constitute Vicor events products, you capacity I XXX-XXX-XXXX, as safe press this release. forth under call. rely sales for

of our of today's the website. available a Investor call, addition, replay with shortly Relations on In will webcast the page transcript be along

Jim June Board announced the serve release, of the Jim Chief X, in will as XXXX, effective and noted As join April our Treasurer dated Secretary. Directors X, Financial succeeding Vicor as also XXXX, press Company’s we Officer Schmidt the appointment Simms. and of Jamie

upcoming sequential will you P&L review Phil our and turn We year-over-year will market Form to items QX our to release performance, I forward company. after on developments, the refer mostly Phil of a focus I'll comparisons. quarterly and and remarks, looking now press to for join which having recent the are my will take or sheet our change financial Jim and XX-Q In review questions. for your balance Patrizio

$XX.X modest shipments quarter revenue today's first as Turns rose press This global distributors X.X% Vicor growth the for sequentially, a for Exports Brick while was XX% Shipments mentioned Asian X.X% million, sequentially. in component of XX% constrained Brick rose the to supply sequentially. to revenue the allocation resumption a fourth XXXX. America. limited sequentially, quarter. just from of Products in an availability stated total shipments. semiconductor the reflecting sequentially trough increases factors recorded by release, customers As due XX% from in rose from regarding Europe North These the issues to increase revenue during of up Products grew of QX primarily pandemic-related sequential million. increased stocking offset of Advanced after total decline to total shipments. Asian first increased to XX%, percentage prior quarter also customers X.X% a revenue and volume the XXXX, $XX.X experienced consolidated shipments revenue, approximately of European Quarterly due our quarter reflecting Products the quarter

we Advanced Products increasing Products with compared We correspondingly of the in once Products believe of fourth XX-volt growth will of a technology, with sales of expand the Brick revenue XX% total for Brick center share percentage declined quarter, data serve to contrast QX, AI, Products. we slightly revenues, XX% comes segments automotive, For online, the Advanced XX% to have to significantly share revenue. maturity and manufacturing given penetrated total as with especially to total the capacity including segments new high-growth our

tariff cost sequentially. of We a mix margin. margin recorded variances Gross did gross XX.X%. as to QX contributed volumes to margin consolidated Higher and rose reduction higher profitability improved and XX% profit charges. gross Turning dollars a in

declined of approximately XX% under pressure charge million. $X.X tariff charges, of high from QX margins approximately QX’s remain the charge While

$XXX,XXX, XXXX were part X% in through million. see $X.X QX, consistent SG&A of OpEx component with for R&D I'll rose operating longer-term reduce just trend, expect spending. QX our equity-based expenses. ongoing We periodic respectively, from to but The and under goods, further discretionary totaling in included to to turn now reflecting improvement efforts reflecting costs swings sequentially, and total China. imports compensation $XXX,XXX $XXX,XXX, in of expense amounts approximately Total

operating representing of leverage sequential income our income an For increase $XX.X we in operational The of operating margin QX, the model. in reflects reported million, XX.X%. operating XX%

Turning a $XXX,XXX, rate $X.XX diluted QX benefit of representing net the effective diluted attributable was of XX,XXX,XXX. fully count to million. X%. earnings of quarter for we tax income for Net a totaled minus to for GAAP share per recorded an share $XX.X taxes, based on Vicor QX

just about Before a to position, our our I turn COVID-XX workforce. update and brief financial

discussed, we three manufacturing operated have essential As and the practicing designated pandemic, onset using shifts masks of previously distancing continuously our Andover the facility. the manufacturer from social at

increase pandemic or influence with estimate cases, again, cases occur. December control, the has Nevertheless, are small risks COVID-XX January the absenteeism operational a the seen when the influence levels experienced might below recently, declined. such through the influence of much or have potential in we of While and in timeframe associated outside our of we such financial of extent performance on is cannot because our

ended totaled reserves totaled with receivables balance to balances million an with equivalents net increase $XX.X QX Capital million days. totaled leaving quarter-end, construction $XX.X a quarter We at X%. expenditures Turning of be of short-term sheet. to through positive the at capital cash declined X.X% our spent Inventories $XX.X investments over DSOs cash increase All year. Cash, for turns million $XXX to balance totaled in sequential scheduled X.XX. results, for improved flow QX, Annualized million of budget approximately XX Reflecting the million. steady $X.X the the QX progress are $XX million. cash current. $XX quarter. sequentially million, a operating for our to operating net and XX.X% receivable trade and reserves of at of flow of Accounts

Our we the saw of X.X% backlog. with QX and sequential sequentially. was At bookings factory I’ll bookings now in in shipments, approximately increase. budget. $XX year-end, increase totaled modest with Products million, X.X at an proceeding is backlog on with expansion and Europe reflected $XXX.X a and The Products on overall Asia project bookings million, largely America. totaled X.X Advanced X.X% growth address and Brick X.X. North circumstances decline one-year at QX schedule book-to-bill same

quarter XXXX. outlook the our to second for Turning of

expect revenue growth. We

continue sources operating expenses. not gross meaningful profitability. increase any we and to and anticipate product margin forecasting level of We pressure in improvement address the Further, our do

follow-up, recent we have margins While can factory, limit await, and will of of that in earnings vertically an our model. operating revenue substantial market Phil that, take we as one improvements to a we developments, provide in overview the that production then can question to limited so and integrated your and respond expect ask drive time from will Patrizio With our will new incremental as further related yourself available. Phil per scalability you gross I share many questions. of given to you to

back in get to you more than topic queue. have one address, please If Phil? the

Philip Davies

increasing Thank XXXX to a you, great are and Well, we start bookings range markets to of globally. regions in Dick. off with

was Our we recently our weeks center, AI the is chain Products supercomputer legacy legacy XX industry increased demand. customer facing, supply that product With times for and respect Advanced data lead challenges as XX have to bookings was weeks to for strong products. and

QX for beyond. into is times QX are booked QX essentially capacity subject and being and orders new and manufacturing Our to lead built standard

data for We and and will solutions next-generation of driven performance GPU point existing high with XX-volt rapidly that enhancements. AI escalating HPC power new occurrence engage for load demand center, our continued by and delivery to enable customers ASIC

OEMs to systems to taking States. from OEM also alternate into our OEM the stage United the infringing enable develop are importation sources without modules initiative using of to licensing power We being excluded risk next

with power and only XXX and not opening automotive Our electrified also but who OEMs. partners robust automotive margin effective pipeline on development. shifts Vicor deliver continues innovative more look stack. without power to towards for XXX, new major traditional shift with up solutions can of solutions system, XX-volt volts as These market OEMs new and X with our suppliers market are looking Tier solutions to they the new The automotive opportunities is for higher undergoing electrification modular cost are vehicles, for business value grow

delivery modules eagerly from radiation QX, North our awaiting America Evaluation So on and updates of satellite their Board delivery. to in power customers of very started have initial family opportunity. market Europe the the In been who quick we tolerant

will important exciting the to on creating. are we am out. quarters The new Overall, made initiative We in systems progress of new pleased in the QX to of as this and say engagements have level power future with we opportunities I our that number our at begin effectively we plan on pioneering will this with initiatives market modular customer intellectual a build has more we place and innovations. that now that power property rapidly are of while components the substantial high-density us opportunities ahead in us, the holistic the take We is Operator, strategy progressed monetizing questions. you. right the time. maximize right changing and Thank also asserting business to

Operator

All right.

[Operator Instructions] questions. have begin. now your will everyone, We some So question-and-answer session upcoming

one first ahead. Khorsand. from go The is Please coming Hamed

Hamed Khorsand

Hi.

the So those you're you you as timing talk just North in Advanced the first that experienced getting could American the customers off, QX? far Products from as about decline shipments that experienced feedback and you in in

Patrizio Vinciarelli

prepared our due to existing respect Products we the They've commented state the are been of been As the remarks, that factory and semiconductor those vertically partners] have constrained also within some industry. by for to component integrated process in Advanced capacity not [XL yet. limitations with the we've with availability

Our the capacity understand customers constraints.

to working are They closely. very them appreciate address We their efforts the needs. with

year, we of the facility enabled the as and to time capacity Advanced in manufacturing to requirements a QX we steps up at step-up expanded QX and that vertically towards in deliveries catching are QX with an are We and with And integrated. into will our this cycle that going the process expanded trend packaging by to deploy are progress continue significant reduce begin expect end we accelerating the have all pace. Products

Hamed Khorsand

Advanced is And these testing level? out Okay. Or this are purely you then still customers? the at your deployments Products with

Patrizio Vinciarelli

on Well, we it talking Advanced which depends about. are Product

shipped Advanced Other Products these the quantities. at and of millions. being of made prototype initial sampled the Products end Advanced Some the by are are other still the spectrum pilot being or

about, with talking a packaging very but volumes particular when with differently, particular in component somehow Advanced and with engagement markets we power of with depending these unique that on capabilities related a the wide [indiscernible]. apply So at very the range that began range are our technology a what very so of Products are cast broad our unique way type are also of across for

whole involved are volumes that application happened to depending the introduced. the when and range So product be particular customer, on these of

Hamed Khorsand

you. Thank Okay.

Patrizio Vinciarelli

You're welcome.

Operator

ahead. go The coming Bolton. next is question from Please Quinn

Quinn Bolton

to X% I'm the wanted component Hi, highlighting limited press Patrizio and and Phil. Congratulations results follow-up just on question. outlook. and be well as in Obviously, that QX comment constraints, that to you that nice on up growth would comment will the about should had reconcile some then to the I capacity on the on way that constraints release? press sequentially. growth, also that the X% just trying last revenue for that Products availability manufacturing as release are a QX? you're the at Advanced Patrizio, revenue we constrained you on Brick looking Are overall Products? in – mostly comment constrained Is And is QX, be and you quarterly interpret are within or you

Patrizio Vinciarelli

Advanced cycle So primary shorter of capacity us faster rate the and past capacity, limited it Products of timeframe the limiting the Advanced to for to growth expanded constraints this being at the capacity of that the overall press away. and of X% go needs absent after revenues release. rate quarter factor we this deploy factory, additional will we to the the capacity short-term, step-up quarter-to-quarter. and statements are get Those the and in have to constraints demand constraints year. fourth on that's vertically quarter and in begin quantities scale book-to-bill projected the say the time about given revenue was are once Products on the the And we quarter what's and based this a of processes. But Again, constraints the the see near-term up that would integrated the the bookings ability

Quinn Bolton

grow growth result QX? next X% And overall Advanced revenue and higher net follow-up Brick to Advanced faster is, from flattish X%, over with growing of Products will sequentially, will on the such Advanced is topline three than come perhaps Products quarters but that the I with constrained guess in X% that Products my about overall so Products the most QX, more is QX, in growth

Patrizio Vinciarelli

Yes.

correct. is interpretation Your

they’re And mature markets remarks, As are in revenues tens not years, prepared and suggested of Advanced there's in they're growth relatively no a applications they to as are the you are component serving old, mature our stable Products dollar. – right. classic They products. timing, know, with the decades in essentially of

standard fade of So long and before Products, being right. which the by the the are going bricks is sunset, to the revenue products classic all unit growth the too for make purposes growth into generated Advanced and [indiscernible]

faster So the quarter than is Products, after growth which this set by quarter, next revenue rate essentially X% the will Advanced and driven combined other one that. up considerably

Quinn Bolton

queue. will I get Patrizio. you, Thank back in the

Richard Nagel

we do question? Operator, another have

Operator

Okay.

the can As is queue, see there Alan to is question and able Hicks. speak in I a

So go your line is open. Please ahead.

Alan Hicks

afternoon. Good Yes.

Patrizio Vinciarelli

afternoon. Good

Alan Hicks

around were I had question was about X.X%, put the brick revenues, if they high. were the think, up about which X%, up them overall like last think I be X.X. which book-to-bill million, XX-year And I quarter they $XX.X would would a

strength the that so, Advanced would strength Brick – explains the that that year, what the around I it and at strong to so what's Products BBU? such only we going were stay implies through in So X% or know level? in expect up what's the Products –

Patrizio Vinciarelli

brick that year to is of of for a earlier. do but QX from dollars that there revenues, Products. not component capacity should to units that component anywhere not particular QX going big fact may and in The like revenues fluctuations, our with factors substantial to quarterly is last demand. suggested it as essentially have really That It's constant. or be in of it Brick growth of interpreted the variety suggest again, rose, So a this year,

and constraints, that grow QX the suggested because in capacity semiconductor allowed, is fast of as the Products is constraints have could which would certain with components Advanced as not demand earlier. So the something

fact the QX. on QX we QX, in focused addressing are are that We and

will quarters the that growth to revenue expect entirely Advanced this quarter, should other year, you come following this in Products. So

Alan Hicks

Okay.

of level $XX.X this around rest at year the remain Products Brick million? will So

Patrizio Vinciarelli

it to three right. I try wouldn't down Well, to regions, significant pin

So going same stay to the at they're essentially level.

Alan Hicks

Okay.

So customers positive they're that's pretty that for the ordering. brick

for Okay, brick was about a it say XX-year think I high, revenues.

Patrizio Vinciarelli

Products long but Products. continuing But and have not to into anywhere, read The way. be any Brick again, wouldn’t Products. up. Advanced they're action going with lasting, not Brick to that that growth remarkably The they're all going the Yes. do They're in is been I sustained in

Alan Hicks

fall to you don't off. But expect Okay. them

Patrizio Vinciarelli

or that Products. to to expect don't forward, fall almost this either going up. about we entirely Vicor Again, No, be Advanced is off go going

our So of to the the brick relevance will fade away financial terms in performance.

Alan Hicks

over or? in relatively $XX range do stay to But them say the Okay. time, expect million you

Patrizio Vinciarelli

Yes.

We of dollars, be a expect percentage to our tiny in but essentially revenues. constant total

Alan Hicks

Yes.

I those out, think it's pretty that positive continuing sell products to are so.

Okay. Thank you. back I'll queue. get And the in

Patrizio Vinciarelli

Thank you.

Operator

John Please And Dillon. the coming next of line from ahead. question the is go

John Dillon

really great good. congratulations on some Really guys. numbers, Hi

Patrizio Vinciarelli

Thank you.

John Dillon

in You're sources. gist prepared you’re on your saying welcome. little the what catch that. of a expand talked bit? licensing for your didn't Can remarks, – in about I that you Phil, quite you what OEM alternative

Philip Davies

Patrizio one. that let take I’ll to Yes.

Patrizio Vinciarelli

Yes.

we for discussions multiplicity accommodates that subject of addressing this respect OEM OEMs have sources OEMs. respects the to obviously scalable our of negotiations a and alternative So of niche capacity and And requirements strategy most growing but a the and with with number the for conversations the property, intellectual a sources. being

from are to pressure in products. to privilege demands of variety satisfies market We an a growth on And be royalties these income OEMs investment with with the needs, certain Advanced return intelligent scaling for marketplace pay given quantities providing a for that and based with density alternative addressed in guiding that's us the pressure sources strategy Products mind, of will on to of market high-power being both with for markets. our revenue access opportunity licensing current be get in able derived in the of its a seeing end needs it that that while applications to

John Dillon

mean, I you're Can licensing someone? with we a this close deal – to that mean does

Patrizio Vinciarelli

deal. I'm not timing going to to the respect speculate any of with

discussions. having are We

an OEM that and and to adopters progression a apply respect generally at And adopters stage. establish be respect commercially consistently to speaking, methodology fairly of with be certain [indiscernible] to respect to and agreements with standards there we're license early to their late going our each stage to can able a engagement, looking rates. are We to rewards, puts with royalty

that is time this very the necessary strategy So well take implement. to are is structured, to which a we going and fully

John Dillon

you a for sounds target some deal closing internal year good. have like Do Or kind It there then? of hopefully that? calendar of target is a this within

Patrizio Vinciarelli

comes believe going We in is these those the is that like applications rates pressured. passage of not the there feel it value Fundamentally, time, with don't down. of licenses can requires. We of competitive we with technology terms to royalty when of going solutions it's the the no up, level performance, pressures address believe don't that AI, authentic there's way any market that that in

we to don't prepared So see the see most to up, value going technology the take going necessary it of of we the it. time we're and down, make out

John Dillon

Great. Congrats queue. in I'll the get back guys.

Patrizio Vinciarelli

Thank you.

Operator

The is go [John Gruber]. Please coming question from ahead. next

Unidentified Analyst

addition we facility, when The and Andover kick in much there? revenue machines to how soon will will – What's status in the all be, Yes. new does addition when Andover? the have the how that to of in moved the that and facility

Patrizio Vinciarelli

is it's will until year. We're beginning get some to begin and month moving up. together equipment of of the the but to next the quite in enclosed, of to not going next – It's parts is So deployment come there's about fully not the progression as parts through towards be capacity the some initial we the The the be get latter of year. building year. a to entire going initial

million of building, yearly total in this we revenues the terms integrated deals, the care at will capacity that expanded believe product capabilities in certain early to capacity licensing regarding of look we the of next while. capacity. of beginning a upwards that for expand take the out Referring to to facility OEMs. working back of also the increment with In ship the some joint of vertically us and $XXX can with discussions we're entertaining cost venture possibility of and OEMs We're

Unidentified Analyst

in $XXX in the Is seeing in not this million, does QX, – the more that addition So not X% XXXX. you're QX, extra that's X% increase in in addition, QX include correct? revenue

Patrizio Vinciarelli

take quarter and facility. installed next the out So we coming equipment that, the advantage into the to that of being yes, more X% the quarter, getting new this is get capacity of quarter, after before that's

some May equipment, in, of second qualified. mentioned some equipment progress the will half months the in equipment installed But I as year. being to more obviously, power So earlier, going in is this in be of the do needs addition the grounds. in and to We to go need as

So that year. additional turning we're fact very not year, earnest beginning capacity next the to end until in of be going of in on the

quarter, So the next those in about think the as should being increasing for capacity brought most quarter accessible on us you recession that, the to are of equipment part, that based are them being from you brought this today. and capacity – after quarter improvements about is

Unidentified Analyst

you. Thank

Operator

question is Shannon. proceed. next coming The Please Richard from

Richard Shannon

up guys. the on Thanks a on quick questions Well, side. about good of capacity you've talked constraints well. afternoon, for as the on my here, taking topic Maybe following question

in I think had also you've constraints inputs here. some

Are Products? I commodity think semiconductors. these Advanced or or custom products? you've Bricks described both the just in the the affect they and Advanced And do

Patrizio Vinciarelli

but They of part own the plan vertically working [Indiscernible] other incremental the semiconductor backend, And and looking integrated is partners partners, backend also affect components more dependencies. to to mindful in next vertically away. making, sometime integrated to industry But is happen particular we're still primarily in a fab happen. in become to those as more not the forward you challenge our provide going will with is going know more capacity. is for respect campus but of and and going and demand of semiconductor that’s respect capacity to that to become we're Advanced to with that's with terms Products are they say becoming in needless that effect

Richard Shannon

Okay.

that your what on ease these on commodity saying? the is vertical So you're is semiconductor? to integration me, or Excuse eliminate constraints going parts,

Patrizio Vinciarelli

near-term, right vertically much we processes, very which plan now. bottleneck with backend have of the are in do a to respect the but Not integrating

over – primary the So primary been the that's constraint constraint the has several last it months.

Richard Shannon

Okay.

those then is relieved, you answered… online just capacity highly by And is that that so and your the getting for and is additions correlated timeframe with which what coincidence

Patrizio Vinciarelli

opportunity vertical in vertical referencing is in vertically semiconductor expanded the the packaging integrating for we're packaging the backend processes, of next What That's integrating beyond facility. No. processes. which integration terms I'm [indiscernible]

in So technology, in been as for integration, a day that's do for to which processes of least the heavily the year the is we the implemented. we use packaging is unique, relying realized with currently converter golden we've that. with applied vertical this And package variety the you've away. the inside by year, works end to is opportunity, products a applications, the has which that's XL be the which next that frankly, is partner AI And on being which backend technology, semiconductor with and Vicor quite And speak, in components package significant respect of that seen which that the that's will of constraints. so-called at our opportunity. still, heart housing next The

Richard Shannon

Got it.

for Thanks that detail, Okay. Patrizio.

and in Just Does data your segments and see segments, follow-on automotive center this this on too? or both supercomputing one you licensing. question do related or with the also to other just

Patrizio Vinciarelli

end We in see markets. of those it both

Richard Shannon

Thank for the you Okay. me. for detail. Perfect. much That's all

Patrizio Vinciarelli

you. Thank

Operator

question next [indiscernible]. coming The Please from ahead. go is

Unidentified Analyst

you if Yes. question. to about first qualitatively new color just taking in affected? a how that be would margin there will it'll Will at any or Thank expand? depreciation as And very quantitatively could profile, be the get on very helpful. color then hit the what there and your talk facility. wanted least much you little you I see at bring for a I Can be

Patrizio Vinciarelli

and this XX% internal goal getting So facility margin they margin play year. that get as a beyond facility, at goal expanded vertical that on next respect our XX%. integration, even this gross end the us – rate expanded is role with our will bring vertical the run integration a with of to year of gross before to The approximately the beyond we to

are that's to the semiconductor which performing amount in Now total steps wafers the respect type And bring the we're were our industry your as depreciating implicit as past, new the to we're the a on facility, through fab. equipment to are equivalent of significant a all I process are think obviously start the going opportunity. in commented to a of that panels, with point, XL costs be the But margin that of factor overall fundamentally packaging of partners going heart we the technology of we our deploying.

get [indiscernible] hundreds to facility of panels time facility, someplace that Our place Massachusetts. collapsed in from are of to all have panels time, the much to travel have to equivalent weeks the travel require a to which another into miles already going of cycle from to shorter They and going New on cycle within is in are maybe Hampshire floor another. put to waivers one they

scale, margin opportunity. So reduction with with the heavily the the are weigh economies time, of playing start efficiency, to cycle to going in And respect going out the to in the yields improvement respect that's to of XXXX.

Unidentified Analyst

the Advanced? factors, and is Or even gross you within and about bit of little factors, gross it Advanced gross Brick Got – there margin Or was talk Products between QX, And a it. utilization the and higher a they Products? similar? mix could puts does That's margin on strengthened of the the vary think, of there couple I margin very takes helpful. a then and just Brick delta and in in are terms is

Patrizio Vinciarelli

respect point, contributes capacity leverage the your the revenue to makes revenues recession itself by So of model. particular to more of the because with up which mix that

the how the in cycles to learning and with that We in – respect through say that's Advanced improvement. another margin process factor with to Getting learning And Products, at respect to overhead not costs parameters have there's factor. a significant to the expanding overhead. improve refine and as with of rate revenues, of nearly is associated the particular the is costs dollars yields

Getting that. better accommodate achieve will it, area the bottom XXs of the some the cost all growth lift to say progress margin gross with had of that With yields demand significant for larger near-term even margin late. products the margin the to those into particularly getting overall, and being That’s been though line with help the go to capacity and impeded that better components, also into we're the are quantities, needless and current to the So from semiconductor where margins. points those reduced go we the XXs of factors costs improvement But revenue these in by challenges. a contribute for we've can driver.

Unidentified Analyst

you it. much. Thank Got so

Patrizio Vinciarelli

Thank you.

Operator

next the from Please have go Bolton. question We Quinn ahead.

Quinn Bolton

wanted next-gen I and on you I've comment I affected next-generation automotive. And you new the existing then could those call, ask, some and guys. wondering track on talked constraints their got on last Hey, with shortages or if have a customers was next-generation about I'm think those follow-up engagements component the designs the it capacity your whether are architectures. manufacturing on products. still timelines of of some to of

Philip Davies

This Hi. is Phil.

no, engaged with high-performance a on not ASIC So and just manufacturers North chip next-gen GPU, are the very and in globally, number America. we actually projects still hyperscalers of the actively CPU

So Vicor. coming I'm see right a in got conversations converting now. into – if XX-volt just data we've bear been couple of it's I in finally the marketplace. of prediction that, well. product uptick of turn offer. an that like And next-generation that's that to They're centers got technology of behind, is that we've but interest we've been going for this say confident seen companies going current no continuing And they really the to because from to you to density that hyperscalers in the we guess And are a will early, opportunities XX-volts, really the really on up. XX-volt some great I'd lagging in quarter, really nice that currents the interested actually go have that And

quarter. exciting an been it's So

Quinn Bolton

terms continued it before Great. follow-up, revenue know on initial expand Should and calendar ramp there the calendar like you're shipping And some wanted I today. some is see a some sample seems engagement. you to when you charging could made that say, might the that's stations had XXXX program, then? about ramp? I be to still Phil, probably start comments design your things meaningful ramp we thinking the revenue you’ve opportunities even But pipeline, in still automotive to of or be of like XXXX

Philip Davies

focused us mean, really The on charging the what for or opportunity charging Yes. vehicle. we're really station that's is on. I

supply have, developing middle up I early And end opportunities with of say very mentioned in of in to It's the customers remarks, and exciting. changing too. some of has really right XXXX the and is been right. but up, changing very next-generation team technology And companies looking I the terms some the and the challenge the are hard to you're XXXX OEMs supply then that's mean, the chains that yes, XXXX. is company but we my the too. there that always would bring I really electrification of them, the the So market for at and to that at through early can the chain the towards, and looking picking picking are ramps value it's the

be with we'll So this we think I bring announcing engagements supplying than help year, from probably some opportunity automotive the that us even I bigger go as one think just through partners will modules. the

Quinn Bolton

Great. Thank you.

Operator

The next go Tanwanteng. one from Please is Jon ahead. coming

Jonathan Tanwanteng

breakthrough been new limited and guys. facility get some is deal you you Nice that past that facility to you in that year be my QX? we how other address for be you've there to new X% not limitation this the just go limited the maybe quarter, that? that and if immediately Or should or constraint you online to Do thinking you're as will thank Hi taking sequentially. about wanted going I question.

Patrizio Vinciarelli

No.

within obviously which the maybe dollars. the it the units, depends it to revenue best after a right? is panel. in in is relate Again, the from or capacity on our from – on completion installed, major to in devices step-up. talking a to we equipment panels We're scale – measure us going after about the financial trend the whether is the it perspective the With way of on new step-up number capacity aggregate be gets of facility validation major, It's

beyond booking the So that that to into get we vertical with little with to have with million. be could $XXX say respect will number going the wing million $XXX There integration. I all the the And opportunity equipment to be that capacity conservative. could capacity maybe [indiscernible] a that’s new

So year. a of what represents to lot end that obviously to headroom going be at this we're of the relative

Jonathan Tanwanteng

are great. Just get overall going? the are color licensing an Or received well? want are more Or constructive? just Thank sense Have little trying discussions you're a of they Okay, And those direction think to having. discussion they they you. been combative? the on you that

Patrizio Vinciarelli

that to a sure But critical that return time, our want have to think that a they would that and OEMs the think under we are to discussions understand cooperative they very architecture. have in that have the at across have of – R&D basket, their measurable have recognized the number to to I intelligence with they investment And get up investment to have that their a we are to the appreciate they facets a needs. there's the take over logically on have we way that I incremental that same taken step engines, can the care in considered control circumstances, that in these I $X.X of requirements. way systems, OEMs system, that a huge to I distribution Well, advanced they our that It’s be covers use technology, allow win-win the That's the need both legitimate we want are that they going relationships we they averaging turf. in should we one that of satisfy Those OEMs that would a see place. many competitors not intellectual and well growth into capacity be logically, property objectives. all think say all of power way eggs technology. unique terms that packaging par very power creativity. old comprehensive decade billion investment. the And fact understand portfolio we would in They

Jonathan Tanwanteng

that Thank you color. Okay, for great.

because maybe to one there their related bottleneck of factories at shipments not up take more, of any want there to could. customers a be end, that and get on Just all? supply into might yours can more might I product delaying won't constraints if risk they they your their pop until Is your

Patrizio Vinciarelli

see But out variety ways. impose a impacting sold of the aren’t customers semiconductor in the don't out nearly are available. respect that QX. with We've sold say to are we prepared we QX, to for capacity had remarks, for that. allocation some is capacity We constrains to hard that It's as suggested the in

that application there few becomes pick is up constrained, behind So some gladly capacity otherwise customer, will even customer that is if any lower. that some spare

Jonathan Tanwanteng

very it. good much. Got you hear. Thank That's to

Patrizio Vinciarelli

You’re welcome.

Operator

another have Hicks. question We Please from go ahead. Alan

Alan Hicks

give working update you us Could products you've on an on? Yes. the new front been end

Patrizio Vinciarelli

for opportunity that's promise, of later have this for deal revenue two scale. year. applications adds on massive million a good LED to And lighting so A $XX that. it leading starting above the One, we

is that the say most in that front-end, new environment. supercomputer and application, would is Scale one in liquid advance which major advanced Wafer other capability front-end a supercomputer it machine perspective, – The and for enabled from my the I customer cool. We a AI is application in our –

we're excited about So this. very

And from extremely of interest state-of-the-art very most have of the with revenue front-end of us to of to to become advanced at front-end hyperscalers improvements of we’re cost those technology will kinds early Those for not to capabilities. effective. The necessarily not that in but kinds deliver near-term. result cost liquid cool kinds there looking effective, is follow-on implementations and these some are enable to going the We the engagements achieve density. unprecedented respect these levels are

see with kinds stationary manufactured opportunities are as methodology, of that still into opportunity. going the capabilities, of in the expanded way view making have longer-term we facility. which not same technology, also the also applications, converter vehicle the just packaging So in We same panel essentially front-end revenue is the modules, see these the same which up by equipment housing but them application. front-end half We these

because times that ultimately power utility for Another being can all every this AC ampere additional of with comes very what while is or the action state-of-the-art. point-of-load capture that unique stage from the we there's truly an at that’s saying the maybe way some of point-of-load, the as the capabilities, that processing thought

Alan Hicks

Okay.

some begin opportunities fourth broadly. year would by So the revenue initial you quarter, then more say ramp and next have to

Patrizio Vinciarelli

Yes.

Alan Hicks

very Okay. you Thank much.

Patrizio Vinciarelli

wrap And or with more will one take question, we that, if we is brief it Operator? there up.

Operator

sir. sorry, I'm

take more can one question. You

Patrizio Vinciarelli

brief Yes. If Yes. it is a one.

Operator

And right. John from Please it's All then go Dillon. ahead. coming Okay.

John Dillon

Hi guys. this last question. Thanks for taking

their funding Vicor. NRE and it about from customers commitment talked how You've shows really to

any there And customers So progressing? the it that? I'm just is is wondering is from progressing. pushback How that on

Patrizio Vinciarelli

No, there's no pushback.

resources our at think It justify provide in call love might up. takes dedicating we have technology do we requirements have more requirement. selective of capability unique that the And that support. as them, unique it us to get effect to right. respect our having to projects which be some pursue system something of I projects general it with for flexibility respect filter scans to customers again these that have is lot need within demonstrate of general, wanting customers we addressing scalability to bandwidth you to development otherwise progressing. look high we respect But those we is with what respect with Packaging technologies. particular to proof in NRE to is worth with effective because to customer an taking degree a

John Dillon

that And still. seeing increasing you're

Patrizio Vinciarelli

then products those the more Yes. customer of more NRE standard in final scalability address with to obviously and products requirements, this, a with on there's standard come developments. deal, because more because addressed it’s be is can the With opportunities. of multiplicity more when customers, that with emphasis those appropriate. good with fact can products, standard those work more respect opportunities comment And And one

the respect those what we're have by requirements year, both a front-end more So with we year. products, to fifth building next-generation in to in call leverage point-of-load blocks this generation, at way. next is we late going With more coming our and we're early which past comprehensive other with looking to standard deployments the than capturing developers, on might

John Dillon

gives with opportunities that less work. you because more great That's

Patrizio Vinciarelli

That's right.

John Dillon

much. All Thank Great. guys. right, so you

Patrizio Vinciarelli

appreciate we And it. you. Thank

Patrizio Vinciarelli

We’ll few that, talk we’ll wrap you it a up. months. in And Thank you. to with

Operator

much, conference concludes today. for Thank That you your everyone. very call

You of disconnect. may for day. your enjoy Thank now and you the joining rest

Vicor (VICR) 23 Apr 212021 Q1 Earnings call transcript