VICR - Earnings call transcript Q3 2021

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Operator

Good day everyone, and welcome everyone to the Vicor Earnings Results for the Third Quarter Ended September 30, 2021. My name is Linda, and I am your event manager. [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 Jim Schmidt, Chief Financial Officer. Please proceed.

Jim Schmidt

afternoon, third to XXXX. quarter good call Corporation’s and the for ended you, and Vicor welcome earnings Thank September XX, Jim Executive Officer, with Financial Sales and Vice Schmidt, am Global I’m Andover in President and of Patrizio and Officer; I Chief Marketing. Phil Davies, Vinciarelli, Chief release months the XX. ending After press closed results financial we today, our markets September for a issued summarizing the three Relations release press has This of website, www.vicorpower.com. on Investor been our page the posted

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

developments, In I’ll the call, for will refer will after a our review mostly review Relations our press to to recent change I addition, my you items balance take and Phil your Phil or financial In a webcast performance I website. Form will turn page our along QX market now and focus comparisons. Patrizio, sheet sequential and on questions. upcoming release remarks, and XX-Q P&L for quarterly of our which transcript, Investor a with on shortly be of replay the of will today’s available year-over-year

long wafer decline due XX.X%, distributors primarily because quarters primarily processes. percentage below backend the from down of shortages to of came of the in Products. million cycle sequentially, shortages packaging constraints. in a $XX.X quarter, today’s total and allocation revenue for revenue $XX.X X% due XX% time in quarter due XX.X% component as our Advanced a quarter substantially Vicor while Brick semiconductor Brick release, sequentially semiconductor approximately revenue expectations second Products. from in compounded Component million total Products to Brick capacity total the component second to for stated by the of As revenues second press recorded Products were to limited revenue decreased Exports a stocking quarter. prior the sequentially decreases declined revenue XX.X% rose XX.X% Shipments from consolidated decline second of own

QX XX.X% For Brick decreasing compared for Advanced of to quarter increased of total correspondingly XX% second with total revenue. Products to share share XX.X% revenue Products to the

gross a consolidated dollars remain period tariff as same the was approximately Turning to the to by QX from of the declined though Margins margin million. sequentially, the under – in recorded margin, pressure XX% Gross decline we volume, approximately due QX year gross XX% profit increased ago. high XX.X%. charges QX’s the charge XX% same $X.X a of but of charge

We equity expenses. compensation, fees, amounts in operating QX expect component part reflecting increased ongoing R&D $X,XXX,XXX $XXX,XXX compensation driven reduce expense X.X% QX total to I’ll OpEx consulting of to million. totaling, and our $XXX,XXX, and Total cost now SG&A respectively improvement recruitment efforts $X.X based overtime approximately China. in sold, quarter from expense. from the imports The second by turn to see approximately goods and of legal included and were increased for

$XX QX, representing XX.X%. operating recorded of we an operating For margin income million of

tax period. of tax recorded The $XX.X was $X.XX income based for required count million. effective primarily year-to-date stock for this we earnings exercise the a share of quarter was net tax an Net net to on rate per accounting Turning benefit QX XX,XXX,XXX fully to share during of result benefit shares. the totaled and income for representing diluted diluted GAAP QX of tax options QX income $XXX,XXX taxes, for due X%. minus a for a

estimate COVID-XX such influence a pandemic and the three manufacturing is position, associated such manufacturer the workforce, the as occur. negligible. cannot essential of are just of have and financial social discussed, to now absenteeism or we our due a of as of to our outside I when distancing designated Before update our or influence our because the previously with our mask extent practicing facility. much brief onset Cases at COVID-XX about pandemic, financial and continuously the shifts operational might turn on using performance risk operated Andover of COVID-XX control, we influence Nevertheless, potential from

Turning to construction QX of and expenditures be of cash receivable $XX with budget million, totaled totaled to to equivalents for receivables, trade steady scheduled net balance flow totaled flow reserves million. to XX Operating $XX.X sequentially balance totaled Annualized $XX.X $XX.X from the end quarter for Accounts investments our the decreased balances at to approximately reserves All net million. Cash, and current. of DSOs progress short-term QX. million are increased $XXX.X turns cash XX% million for $XX.X our leaving sheet. slightly of Capital and with through for at the We year. QX. Inventories X.XX million quarter a end at X.XX basically quarter. the $XX cash spent million capital ended days.

budget. backlog, same expansion and schedule now more and on from QX proceeding than is doubled bookings Our on backlog. period at last factory year. the one came I’ll book-to-bill address and year X.X

to continues not fourth of outlook the provide do our for targets. practice Turning quarter quarterly XXXX, to specific our be,

significant components in planning our semiconductor substantial components QX. and should assessment revenue. on of step has QX Advanced our processes in However, cycle Products backend up semiconductor in in improved enable XX% in allocation. reduced a capacity, are we wafer and increases chain supply manufacturing of of Easing Advanced revenue available our since bottlenecks capacity recent Products because of given a increase times and Availability increase and our

We in operating increases meaningful continue expenses. to improve not in we on focus do profitability, further level product anticipate any

to will await margin While have improvements factory. vertically integrated production in substantial, gross further our new from

limit and the of provide will per expect questions. time incremental We follow-up, we Phil so you our of can the an to and scalability ask you that developments available. Phil revenue we that as then to many given yourselves With and one drive question to that, recent a Patrizio, in I limited model. operating share, earnings market as take overview can I of will respond your related

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

Phil Davies

backlog. Jim. than data and Good longer converters Bookings projects. previous you robust. a and visibility you, thank us. customers we record we into is QX, and seen XX-volt record AI bridging for production And achieved our have everyone, power record center, solutions factorized XX-volt bus on for afternoon, book-to-bill, bookings, to programs joining for Thank and were In

also Some with next in center will our of some existing for generation strategy new of programs parallel data run a programs, the which customers. is

generation center of and AI to and development CPU per stages Next data processor server in of $XX programs pre-production Vicor board. content provide early $XXX will

both vertical an higher much target within our across us New our our high content clustered protection proprietary have the started for solutions market delivery development IP always AC and with applications dollar challenges single evaluation three is of products will set offer AC and lead and our the solutions, phase computing, our teams for SAM derivative aerospace center competitors. Expanding phase technical objective that DC from to further whose power in to DC apart defense and data AI and large markets. for industrial processor advanced at customers performance applications

above engaging optical rail delivery XXXX increases networking have core customers ASICs speed We power units, currents in amps. are with high major also deploying are who which challenges for to due

new major market QX first in XXXX. production in this will customer Our be in

low density a industry data of upcoming density approaches. discreet feature delivery, solutions more distribution and to will power compute rather rack XX-volt center XX-volt power power As modular ecosystem shifts than for the need open high forum based the the robust

of ago. to to which emerged commit we made years All market this it validates decisions XX before

opportunities. delivery, an out performance our ahead power needs and playing of data This automotive of additional power Anticipating for practice and in deliver the track is OEM challenges is center to Vicor’s of solutions for ecosystem facilitate will innovating growth industry. and trends Our record. QX AI high pipeline solutions licensing with system market

electrification vehicle OEMs solidify. introduction new dates then As electrified additional within for commitments models grow and

seeing and business based customers markets. five applications. markets, as increasing customer aligns truck pure level a platforms, our diversifying We automotive, with This decided be units plug-in more higher our focus and hybrid opportunities our and as restructure mild market but business business With the market end on target in this our growth The well of structure units. broadening and are and and into opportunities, backdrop of in to scale broad industry of and to performance brings base. will layers growth not computing, four also high EV, have only aerospace global a strategy front we defense, the of

well conversion, high of increased As of will applicability Patrizio, questions. product level team reuse Jim margin will now improvement. the across technology innovations and revenue and responsibility you. and as our of Thank remain I funnel gross centralized. streams your engineering for and take Because markets the development in

Jim Schmidt

for to we’re us. for Operator, you Okay. coordinate ready questions

Operator

[Operator already. right. upcoming All questions have Absolutely. two Instructions] And we

from proceed. Tanwanteng Securities]. coming Jonathan is one [CJS first Please The

Jonathan Tanwanteng

the sequential the Hi, in That’s a of increase on taking how questions. nice that QX. that, good I afternoon, guess over back to what how the demand. wondering, thinking and from my was been you is had guys. in Thank is said quarters number guess had much – organic and of you increases that that maybe several you catch sequential for much QX upside of when X% next QX. I up really I way you the QX it’s have just

Patrizio Vinciarelli

about it’s So, demand. all

we amount. quarter Our backlog, us approximately have would on top fourth business would you the and entered business, up any without expect a that XX% incremental turns of as substantial that by turns would allowance layer for

demand is the So, there.

with particular still We’re are components. respect and there challenges semiconductor capacity-constrained to, in still

had of with wafer those completion in wafer articulated processing allocation. do prepared fab Jim to do back-end have challenges to As both his they after remarks, and the with

has part COVID largely what those parts considerably related have the of been which relieved. in the since QX in other bottlenecks, were So, to some is and factors, back-end world that improved

bottlenecks for up to to back-end QX both commitments So, that with we have have of the in some foundries in within components more time our not been show builds QX. shown more up And able or considerably that XXXX. recently in time up and result in in did because significantly allocation about QX greater furthermore, receive show into

launch gates terms the either within compounding third we constraints. a believe terms that of in component quarter effect that So, in capacity the of in

respect We’ve there. this to able builds being of progress. already to constraints not there, a will to availability As but The deal much as we of are having be substantial still all quarter. components increase capacity schedule dates we’re facilitate great made with know, capacity hand-to-mouth a and on start

Jonathan Tanwanteng

of there infringing that expect the this? bit benefits – your for products. sharing color. that talk Can and what Does release in a And that out do least little mentioned second, more one the signed saw who that. with are buying customers, the press see you that customers this a your kind it. about kind Thank you customers license was you was you of doing tone that some at other I set then to these Got from with of for of

Patrizio Vinciarelli

or So, we’re the key to the executed of not we the the of anything regarding in quarter. at licensee deal identity say of any the liberty licensing that parameters third

like constraints to their we various only enabling requirements in that that’s would be Vicor part to, be the think there and that ways, on in points and I been is needs technology tell and the particularly available a to capacity said from terms as new interest The the customers able of on licensing is know, beginning general time front. as it say relationships I able something very secure legitimate are technology to all overcome. of the compelling, customers our of that at it kinds that to has can of needs growth has industry, to you we

license respect to modules, into concerns the systems with both orders modules incorporate customers patents. OEM otherwise infringe So, those modules the the ability the with exclusion though Vicor importation OEM our those would U.S. with into offset to provides to, products procure even

view ecosystem margins profitability, seek complementary So, to the business there’s have. licenses we providing key believe the component to as model this be contribute customers our while of to industry a and to more we going that many with

Jonathan Tanwanteng

I’ll you. in jump thank Okay, queue. back

Jim Schmidt

Jon. Thanks,

Operator

from Bolton & Quinn question The is go next Company]. Please coming [Needham ahead.

Quinn Bolton

congratulations guys, nice Hey, the bookings activity. on

I’m to component and do significant quarter-on-quarter? you to XX% just to manufacturing just your outlook my back And you have confident get capacity for come I curious, in where question, today, grow availability Before guys bookings are fourth sit wanted capacity quarter. constraints. to manufacturing that feel the Obviously, component enough availability you your the business internal

Patrizio Vinciarelli

It’s the be In I that has it dunk we is clear of we’re but order lot for a of two-thirds today slam to quarter have the of figuratively. first make to and beginning at that that They and underway to do, semiconductor quarter. revenue not not their on components happen. to the We this the as of want all a plan need the quarter. way we be will are in the they the through put

out ability made early gated which of to improvements off in by whole. of of components the but the with outcome constrained to couldn’t but it third So, well that back-end been being be faster to to that a respect start greater we the the to are of there risks components bodes as inability I quarter, still were not effect to capacity feel us destined utilization have respect processed as coupled achieve because the by quarter start made time, the quarter in the that and particular there, lack earlier, in a it us that available the in sets with, with mentioned much

Quinn Bolton

the among Advanced based $XX you’ve just Thank that’s I to very how front-end activity $XXX highly is? that quarters? to bookings the that or of question acceleration is a in was starting in you, by see Thank think on question line give Product Can orders. Products million ASIC, $XXX including the you. the been you some NBM as broad number, bookings as are color of bookings it on booking I probably DC, or Is is, very Advanced Patrizio. AC us quarter My bookings just impressed the based second million, on booked customers, couple GPU, you quarter Obviously, of of driven are million concentrated just the think, company last have most diversification including us were is modules? good following broad with most Advanced I that over looks CPU, Product past over over My activity Product much like being this think maybe it how Advanced couple accelerator bookings. and

Phil Davies

Phil. is Quinn, this Hi,

as are from to So, now couple quite that been think the a data for customer last customers, XX Advanced in bookings the the bit two broadening of over, major XX a XX, adding talking type Products of ago over we’ve has which number. been companies, the well our quantity or years months, companies, on base AI center to backlog one I

are our business, terms XX to strong. bridging of it’s of we’ve we AI the based, our growth to and now the with also in in hyperscalers seeing growth in the XX existing – coming phase continued And boards – growth as some accelerated XX-volt strength with entering the we’re and converter in base, accelerated use but because In XX there latest we XX-volt CPU very XX are with AI AMD XX have there. cluster also our data their at well and infrastructure, activity cards to customer on have with to server seen gone hyperscalers CPU which to new XX growth, AI the of centers XX cards. bridging coupled still of some significant as XX-volts XX-volts accelerator multiple and XX the that And to Intel greatest the platforms the need on XX the

broad So it’s spread. very

Quinn Bolton

a So MCM sort to heavily the just MCD products point quick types is well it balanced components today of MCD of it components between still? of versus load pretty more the MCM, or NBM the or follow-up, skew does bridging

Phil Davies

the it, – eight applications, NBMs those typically the reasons think XX of is largest being of per XX to doing XX to one to the to XX in got piece that but NBMs well Because I board. load space. power you’ve XX is the the in six really

and add the quickly. the pretty communities quickly that up pretty up So, bookings add

Quinn Bolton

the Thank you Got color. for it.

Patrizio Vinciarelli

The more market next substantial. Just quite is bit that. on opportunity year a NBM

it but So, promises all hasn’t timing it the be. from significant, to at it looking been that perspective

of half the order for of NBMs, of quite year. recent the and orders, the has within middle In we significant next enter last fact, days been first million year as in couple just $X it next with

Quinn Bolton

you. Thank

Jim Schmidt

Quinn. Thanks,

Operator

The Shannon next coming from ahead. Please question [Craig-Hallum is Capital Group]. Richard go

Richard Shannon

talk taking guys. about whether Patrizio, nature here. you’re understand questions. ongoing licensee of this, any particular questions maybe the topic hi, there of allowed there Well, you understanding licensing. kind And great, can that you terms or upfront is see Fed of also, then applications if for the push I the Can not to royalties upfront the the I nature just in? in Thanks I’ll on follow-up envelope of a of of couple any please? much and about ask agreement, working in be would my is might say

Patrizio Vinciarelli

placement the like need keep at on go of general based any for would very particular a licensee and may that I on again, to the systems the and license a in get on for it product otherwise constraints the product license. pay the involves you mechanism the The the as confidentiality to infringe license to it’s a and – deals the have be choice licensees. particular So, to infringe get level licensee is a incumbent in future fundamentally to patent license factor way used licensees’ not with we which products decide

as quarter. quarter. And will though flow the in we starting only release, that From even do have deals license and this those license not the we have POs executed first result in within cash in fact so, mentioned revenue get received press licensee we

example of to I such So, guess think an licensing come. I opportunities

royalty order motivate potential their license a license. out can now later what that and could of a with affect well not, a terms wait the time. the escalate should have expect risks and or have and methodology licensees also have thought whether exclusion see systems, that and to serious valuable seek I would They are for earlier there with side like to we quite because them this potential to outline which We that attitude have

about from Phase comes X of you said if transition an that there call to in passage rate. X royalty brings is what to that X with in time we Phase that Phase So, escalation

believe believe need more. that kinds number that to they their having the of need if will to first we of accomplished OEMs want license a be for the aware a they there’s products So, systems. of access we’re to continue we licensee, going And

Richard Shannon

for second question guess the all heard in Okay. in Jim, detail. looking and you the up margins. seem fourth next in wouldn’t but the I your as here for few well. here at kind is prepared Patrizio, gross in you that wouldn’t quarter, My of correctly, on Not quarter until facility, thanks new I I quarters only think fourth suggesting go be to throughput gross sales remarks, margins until it we the in some then. – flattening from see of products it

I’m in sure that you margins understanding next few gross So, how quarters? suggesting at here I want we in to comments the dynamics should were your make look and the

Jim Schmidt

Sure.

imply factories gross to all, it’s gross that on of first until online have I mean quarters. per margin to statement guidance improvement, we about out our practice any waiting do not didn’t to se. wait I provide So, the say to that margin for in that specific new by have

is We It’s gross get we But want not more something made volume to of we’re get have the well. anybody. greater industry. that factory. that all own comment of And we it’s not quarter kinds inside very the the volume – comes drive comment didn’t the leverage, as to is standard Vicor, in just that’s that’s process margin – all no just some fact a online true leverage comment for efficiencies. up, increases I – fact There so get outsourcing the a our I that efficiency goes and as anxious of actually We not It’s highlights online. for steps. that’s factory that we’re true last make actually –

for really be milestone So, going to that’s us. a significant

Patrizio Vinciarelli

that. add I’ll to

leverage margins new of That’s get facility. within rising shortfall several Jim’s unfortunate the the and in point margins us for Looking a right. the not fact. I’m margin if the I QX, that substantially about To saying, fact before the past, of higher, the cost have better wasn’t had even mirror, profit the the bring fact, we’re full margins, we that QX think That revenues been anything saying gross the at not immediately it of in points in terms we expected, revenue. but would will rearview the margins

Richard Shannon

all for Okay, you guys. detail, great. That’s from all Thank me. the Thanks.

Jim Schmidt

Richard. Thanks,

Operator

question Dillon go Please ahead. next from coming John The [D&B Capital]. is

John Dillon

Hey, guys customers Phil, was bookings the priming congratulations great to the place really due or are securing numbers numbers. in if I’m number. bookings the just on the in in those the do question a a customer pump have or wondering bookings I backlog, increase sustainable? on line bookings

Phil Davies

the those So, cards significantly now, increasing seeing involved visibility programs centers. we’re the that a cards in the of we’re demand increased global the have, accelerator hyperscalers we is The on John, for AI deployment across and data with all the level.

strong So, are business. I that’s systems And a mentioned, lot a based. of very rack increase, XX-volt with as along robust the that still

we’re So, need cards whammy and double those by best having sort available a to of today. they XX the in to the if industry density the getting high converter XX power like bus you so

on So, both AI AI with the the and winning we’re hyperscalers with guys as deploying were, the also both it the ends, cards. the, actually with

right now. it’s strong So,

John Dillon

do bookings growing, and the see what is you sustainable even are hearing the So, that I I’m think in future?

Phil Davies

absolutely. yes, Yes. Products, Advanced With

John Dillon

with I pricing would And that you raising power. guys pretty good then imagine prices? along then, Are you have

Phil Davies

we again really do adjust a or on legacy basis or we regularly even on on to Brick and We That’s do with case on and the case value price we just do look to portfolio. customer, we’re but Advanced we market try It our we We or always by do. to on price what looking business. but end customers whole Well, product at that value. or bring that Products the isn’t that prices our value. family

John Dillon

Patrizio, XX be, it. down that the why see you mentioned in XX head. you would customers up Why from thing, last so and conversion you a yes, Got going to aren’t racks XX-volt want going do back XX? mentioned voltage do all I’m call, coming? And to to huge or would the but that? then Why mean, my XX-volt, they’re of can see customers scratching high-voltage this follow-up you I kind One a to to

Patrizio Vinciarelli

I don’t think happen well, overnight. doesn’t it coming, So, but

bring all X.X-volt requires implemented point, is then down to the provide case down be, the XX in about for the plenty to to the hyperscalers for of adoption industry convert XX-volt and motivation voltages rack. too up it up turning absurdity are low should the that that to your go of motivation, conversion just key sub-X-volt So, to time the efficient to of from are will but but back to to XX the fundamentally the voltages get done even way within order developments power as of not absurdity to to adoption, unnecessary greater of, or balance to distribution, be achieve go necessary to what points going racks may to there’s coming they and back say stages downstream in

Phil Davies

John, Phil. this to centers data major seven to are next I the through going go mean, three over years. is changes

out the at If that’s look want. of speeds they’re just they to you amount added, AI data that and in with equipped the being just not get the

to going another gigabytes out of moving terms are from of support autonomous to come that data learning in changes networking moving machine huge applications. to there’s in and and So, terabytes driving

talking to for the the all have these tens renewables you’re that So, footprints things. power of data center them, of because megawatts

data You different move a a can’t location. to center

refurbish to got it. You’ve

next the capability. to it and capacity take level to got You’ve of

to this through networking. is optical to XX-volts years. It’s change, AI, going going all over stuff amazing really to including the in watch. going three quite a So, of higher to the years rack, next be seven performance, significant to It’s more go change

Patrizio Vinciarelli

with XX-volt the By racks management. switching to do distribution the to from is part with another of the over to beyond electric element reengineering way, of XX-volt do it has that thermal distribution the of

that more feel rack delivered within XX third most That be cooled XX-volts, out management to these thermal have is this will levels there. the of liquid out they is solution, safe. of capability in motivation we In by that we liquid for high-density So, cooled have that the first to three-phasing else before front should anything liquid within motivate magnitude and which opposed as XX-volts reality customer challenges quarter air. cooled of cooling brings XX-volt number justify power efficient than transition to that units or the out that to about too particular a racks very point should long also voltage again, the a power regard, recently, end a lead distribution order

John Dillon

exciting. This so I’ll back Thank Guys. much. queue. you. you. get the Thank is quarter. in Great you really visibility. Great Thank

Jim Schmidt

Thanks, John.

Operator

Gus [Northland is question ahead. next go The Please Richard coming Securities]. from

Gus Richard

Yes, circle just need to still plating your come back I up and wanted capacity facility thanks question. constraints. the for to constraint, taking you new to Is my relieve the do that? on

Patrizio Vinciarelli

bottleneck. that’s point your capacity the To key

ways. We’re working it of in a number

partner within complementing by are we – a human the our plating our their own resources of facility the to capacity. So, available capability deploying degree, enhance to high

have that for the feet, here, is this And own $XX capability What to equipment to to second class thing facilities. far partner case step very will think of We which expect facility. of manufacturing our within actually is on Vicor are surprising to up a about stones XX,XXX for the taken referring partner high capacity. million one way, about products. volume that’s relatively further some other also steps weeks, couple being these something worth square of to be low matter deployment recently in the is I’m state-of-the-art tempting of of stepping right. by we on to turn in And bring a that In of plating tech, from main closer state-of-the-art

Gus Richard

And you. any or from and like sounds Got was input it. but wondering if gross higher it primarily the costs margin then I Thank influence very there mix. helpful. was That’s on or, absorption, pressure, it’s

Patrizio Vinciarelli

from fairly Business margin. decent pressure our It gross real out Brick no is mix. actually turns is that There

I materials done cost, and at to it’s costs generally higher inflation our not even facility. we’ve before without our those input Vicor, costs on So, raw there, in were many in what accepting passing we arrived – cases speaking,

that hope that, absorbing but answers So, your I questions. we’re

Gus Richard

does. just constraints last supply at the quarters? aging in It you. scheduled And the Is it backlog it backlog you looking the backlog? the one for normal some Are the is some given few then and me has last of further same moving the distribution Thank remained is or the seeing in that to out world. that of any over

Phil Davies

So, time. we longer lead obviously implemented have

we have more lot visibility. So, a

double people demand. I the all It’s to is XX ranges weeks So, and XX and real asked types families. ordering from we But for of it different that. see out product don’t backlog that weeks get

a a have market very for It’s stuff. unique compatible the not pin-for-pin a It’s We commodity type product. of product. our not

very customers side. They for done on many legacy dedicated our that have stuff. we buy unique have the So, years

we’ve we’re new product center there building and AI. side, got whole On data – the a in advanced business

we good the the have visibility and there. and into demand that So, end market growth

in I’m of So, and have of the the it. of in it backlog we terms reality very that the confident validity

Patrizio Vinciarelli

be months. To it’s within XX clear,

Phil Davies

Yes.

Patrizio Vinciarelli

scheduled Everything XX within is months.

we what be define that’s backlog. So, to the

Gus Richard

so it. Perfect. me. Thank you much. Got it it. for Got That’s

Jim Schmidt

Thanks, Gus.

Operator

[CJS Securities]. Tanwanteng We question another proceed. from Please have Jonathan

Jonathan Tanwanteng

thanks follow-up. Hi the guys, for

that not facility Just capacity and and how wondering wafer component new getting the a that are your plate increasing that you’re the next another and places the the half because next in the worse many quarter allocations and QX. we are I I of question this you confident other constraints just was have. as the putting on year, of these first and quarter you things I plating need you guess especially in in know good get capacity in better. the other lot chain into in

your the you that as wondering control next can’t things visibility So, into you year. I’m head in just what’s the

Patrizio Vinciarelli

even so we we’ve the we November in up outs but So, that we not get and in wafer significant visibility have need. numbers year that more concrete going to numbers informed step for The we’re are casting been next have in and yet, December. been allocated

are respect AI As able operate. and the this access obviously make to that to necessary data a and quite for play of you to be getting we to programs a respect systems us leverage center chips the can products do with that make of capacity imagine, what’s factor bit because to wafer getting have of support with critical

Jonathan Tanwanteng

as just helpful. Are That’s if you become a I And there an wondering give pipeline? Just of us on, update coming into an update do could How I the it. source platforms was you the significant and business. do profit will this give point? revenue? us on you have at for you Got when that auto more guess, think many

Patrizio Vinciarelli

we early Those we take collaborations. have QX. more with remarks. the collaborations We’ve collaborations we XXXX what occurred six production then customers are start-up there, now work is stage, terms nine in in we’re customer the through a testing for and where about date. at to again, to that where talking conversion to more we really but moving of which building them and call prototype months a systems in got typically end stage So a mid-XXXX move or some That’s the I commitment to starting of my was production

always a with SOP nine that host and time, what in have we OEMs we collaborations this of next At large to months. start have we’re are dates the dates production of months point whole moving towards six that’s So in shooting two for.

exciting So, funnel automotive. have very in it’s a we

Jonathan Tanwanteng

And it. backlog. Thanks. again the Got big a such on congrats

Jim Schmidt

Thanks, Jon.

Operator

And we from Capital question [Ainsley Hicks have proceed. a Management]. Alan Please

Alan Hicks

Yes, good afternoon.

be you’re billion expect when a back tax profitable and on it at normal expect products now you you far do rate? like and over invested to in as these $X.X see. loss can solidly Where You’ve of going do to I terms are as get to new you you for how – carry-forwards, looks tax

Jim Schmidt

Hi Alan, here. Schmidt Jim

I point So, comment the on we’re status will tell you at to year. year is going this next quo. current not that

I we or X% the toggling rate, it’s tax So, X%. between expect know minus

have benefit on. tax because that’s option exercising of going We a stock times often

I to but The to not year, that next that’s next think on comment time what We’re prepared tuned. going about stay talk but we’ll going forward, position a more this we’re call in be now. to say at

Alan Hicks

at Okay. of your What tax are in carry-forwards. you terms loss

million $XX the in was range? think I

Jim Schmidt

books. still Yes. on the think right. And that’s I that’s

complicated We’re not – it’s a fairly topic.

with balance ready on working the that the of in status our we’re January. talk for and to again year. say that, product After lenders We’re we’ll quo

Alan Hicks

that you’re $XX I that probably up year. think would to I year. going next would if anticipate make used But million at next least Okay. profits you

Jim Schmidt

that. putting mean, than and complicated their benefit cut numbers and that more to people there. option tax It’s in are of are exercises routinely the puzzle stock I other the pieces

Alan Hicks

there and they it’s were they about remember, that Okay. talk million some then if ago a $X them getting few I six of applying the was been since. months were quarters I growing and think were, ago tariffs back And paid also range, I think,

Jim Schmidt

which said we was cost it yes, my sales this and is P&L – approximately the the prepared what in million, what as in in quarter. Well, last $X.X tariff remarks, expense was of said we

tariff making now incremental. spending are on total, To and significant we actually progress. and did we license time – right have it’s expense. amount people It’s are activity progress of on did make We that

Sometimes it’s slow bit [ph]. from incoming, a because we’re product talking about SAM

in it’s – on So work it. but progress

Alan Hicks

Okay.

still money you get So back that to by this question? expect

Jim Schmidt

Yes.

Patrizio Vinciarelli

It’s of matter of not a a when. if, matter it’s

Jim Schmidt

matter Yes. of It’s a when.

Alan Hicks

Yes.

good. Okay,

very you Thank Okay. much.

Operator

from proceed. Capital]. we [D&B Dillon John question have Please And another

John Dillon

said that. front-end got delivered wondering the little for give Are that? actively on could this going? you I orders color that into I’m So, us some products, they it Hey, you guys. you Are more you the booking maybe on are Patrizio, can doing? you same markets? all you’ve think How’s guys going if you color but actually quarter, products. give some front-end How

Patrizio Vinciarelli

cases, So, with liquid is to programs liquid solutions. that customers two us opportunity fan as cooling, high-density to, kilowatts solution iPad. In input a lead as is have share an require a are an and footprint in XX-volt programs other we at do extreme. was which of the to cooled common of delivering one as high a an now, was is doesn’t deliver solution, XX earlier, XX-volt, denominator into power about in XX-volt, cooled major extremely In provided either I up are it’s we or suggested that of the size state-of-the-art needs necessary system, market case, that getting These one plugs outputs. that effect The the three-phase is what earlier, which representative convection natural it’s suggesting address. rack general

very footprint XX-volts. to in XX heavy kilowatts the from So, three-phase just But imagine a sectionwide going thick very iPad. AC and XX,

years facilities. need get as to the XXs of much order need of that in low the from within In to levels get adverse kilowatts footprint Phil come. case the to solutions So, suggested kind to racks to their higher by of they’re to that’s their earlier, power [ph] the are greater existing much that, in order going bandwidth going

Phil Davies

Hey, John, this is Phil.

gas stepped the We that on haven’t yet really product. with

on early But put think we’re our the foot some and obviously on QX probably as will and it are that got We mentioned, I really derivatives, year moving I working start three-phase. some single-phase stuff. next with gas we customers, before be

John Dillon

start bookings So of… the aspect QX you’ll really start

Phil Davies

you’ll the from of Really, lot base us, of see a a customer worldwide. activity marketing in lot

gas to special. in really because our foot going We’re this with put it’s very stuff, the

John Dillon

It’s Yes. exciting. very

going the see be must so you right, they’re filling until be up at you about you lines, I and to factory talked those along my increasing, the quickly, very if new So, numbers bookings, are a do guys new the math looking factory. you

plans just that for new new timing I’m wondering what’s are of and your factory So, what factory? the a

Patrizio Vinciarelli

candidate foundation the factory quite the feel third So, capacity of in quarter I the should been for got days. with laying the such earlier, the to the that but be the fact, expanded last mentioned within the within tours were Operations of third believe factory. equipment together XX I of impressed is two that of we visiting last in take very relocated team existing the within XX and the Head one lot of wasn’t done step. the I that with within and I’ve that factory, mentioned, week still But I of have Jim of a Mike, bit the had first just a have our premature frankly, it within it terms days. within the expansion. what has walls quarter. And way by expanded

a actually delivery. no down factory have make we power for throughput facilities the We because electric whole took to new

So, there I the exceed that of work goals the has well going a think set the of may has the we’ve is that for lot level on a team been set stage and factory within reported. to capacity

to for take a got we think of I bit time little that, the the step with capacity. next incremental right So,

over six in in capacity QX. online, first major to capacity come starting months critically about quarter our I the capacity expansion that is to is to the contribution and think focus bigger contribution then on a be next important the strictly with a realizing

we I then once take can that next has step. think the happened

John Dillon

Great.

number. goal of it So wing beat looks and to it $XXX sounds like going you beat million with you’re you’re like sounds can a that new – your then like,

Patrizio Vinciarelli

I think we can.

have we potential And that very to this targeted, of got the that will of do efficient. a mix that some it’s the think capacity factory with products. more as I be

than predicated some and are more that So and be thick to panels. in in was of terms relatively wins of on of design thinner to thinner chips, for the take lot going our chips early are that forward chips, point they a case time a thinner those if pro going budget capacity the

of in them can think You faster. process as some layer can fewer wafers with that respects

up point think I being efficiency, increment brick than mortar. have to capacity, we that time the and So, of play in this next freedom focused of improve at is degrees on of variety a important improve and more securing

John Dillon

to Thank I’m looking Great Very good. really guys. times. it. much. so you forward love job exciting It’s it. good. I Very

Jim Schmidt

I And now. to think we’re John. out have to close Thanks, going

the So we’re going operator, to and have to call for close everyone thanks participating.

Operator

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

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

Vicor (VICR) 22 Oct 212021 Q3 Earnings call transcript