VICR - Earnings call transcript Q4 2021

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Operator

Good day and welcome everyone to the Vicor Earnings Results for the Fourth Quarter and year ended December 31, 2021. My name is Robin and Apigee operates yesterday.

During the presentation, your lines will remain on listen only.

Just anytime stars or when you found and the cards answer will be happy to assist you. I would like to advise all parties that this conference is being recorded. like Financial the Officer. would Jim over I Chief Schmidt, now to call hand to And Please sir. proceed,

Jim Schmidt

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

and implied a regarding Vicor to on this related remind Reform under in filed this I discussed as expectations and uncertainties. also events with information the capacity Act which forward-looking are our that statements As from we being to historical fact including our Actual the prove listeners may conference uncertainties of today. be for current statements will set today or we available update Please expansion, can filed profitability Xa this spending, by potential is materially In call. light This system of in Safe planned of forward-looking X-K, XXXX, during to forward-looking and any for risks February contained Securities purposes Form of release. these of in no well you remarks call, offer management's market press remarks XXXX. the any statements, matters XXXX document the of Item is opportunities, expected products, during SEC's call, call and make provisions Except statement call we and involving one, Form any the of sales The only explicitly accurate website. this statements risks and statements our in property Corporation. are current Thursday, call potential for customers, announcements, March XX-K, and differ today, growth, Litigation and forward-looking note provided of recorded copyrighted EDGAR XXXX. this undertakes the risks the no Vicor the during via constitute is remind Harbor this face I we results to forth XX obligation may correct. discussed including also information SEC made as Private assurance various those on uncertainties, the on issuance is conference any and this We

XXth, not You the today's conclusion of and XXX-XXX-XXXX, The March number upon at rely set is should midnight will beginning XXXX. statements tonight replay this passcode through available dial-in passcode, call. also be today's release. replay by press followed call dial-in the after This forth of in such A XXXXXXXX. are

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

up Brick while prior to $XX.X third $XXX.X XX.X% XXXX As year. the of XX.X% XX.X% year December for quarter. the stated quarter to sequentially, from XX, XX.X%. X.X% the before. release, increased and for today's the both revenue revenue distributors quarter to XX.X% in On of for basis, of X.X% increased total increases fourth million of due ended increased prior to $XXX.X to year-over-year the the Shipments million Vicor from recorded Revenues the for XXXX Brick fourth increases Revenues approximately sequentially, Advanced the for for approximately from press percentage total quarter primarily million. million increased revenue sequentially XX.X% with year $XX.X $XXX.X the Products declined $XXX.X ending X.X% Advanced quarters as XX% year Products Products. year-over-year stocking rose for a Products Advanced million Exports revenue total Advanced Products. third in revenue increased total a from exports percentage million year-over-year to as from XX.X%, the a prior-year's and from

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

margin, a to Turning recorded QX of gross gross profit margin XX.X%. we consolidated

from For XX.X% in to the full-year XXXX, improved gross year. XX.X% margin the prior

by While high to approximately X.X% QX compared charge decrease margins million. pressure $X.X approximately QX remain the under the to did tariff of charges,

to amounts $X in declined component cost The driven continue We total included prior expense approximately part compensation the the percent XX.X% reduce Total now total to third XX.X% compensation, SG&A development increased XXXX year. by totaling was in X.XXX $XXX,XXX operating our legal, and from I'll ongoing based million. as QX to from sold, for to see efforts expense revenue operating goods operating full-year to overtime, of reflecting respectively, turn expenses. million increased expense quarter a expect the and and R&D China. QX equity from improvement business expense, imports XXX,XXX of for of X.X% in

prior operating income For $XX.X revenue, compared $X.X XX.X% For X.X% of or million X.X% the million XXXX, totaled to or an QX, million $XX.X year. revenue of of in margin operating operating recorded the full-year of we income representing

was for the Turning to income was tax totaled This X.X%. $X.X an provision earnings representing income rate of $XXX,XXX QX million the the for shares. diluted Net year a GAAP based tax an $XXX,XXX a on share taxes, primarily those of X.X%. we $X.XX effective diluted share full-year was QX of tax $XX count million. provision result fully quarter stock for for required representing for recorded of periods. to tax exercise per rate due for income tax a during of accounting effective $XXX,XXX The XXXX the options

For in prior XXXX increased increasing year, million a from income full-year per million year. XXXX, the $X.XX than in net $XX.X the year. the diluted fully earnings prior In from prior the from $XX.X up more tripled share to $X.XX

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

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

year. above budget, and prior I'll and Our XX% one-year factory expansion same on backlog well project bookings the now on QX period and of and came schedule with increasing received book-to-bill from January is certificate and in we the from XXth, than proceeding up twofold on backlog. more immediately quarter, address one occupancy. last

continues to to the be our not first XXXX, quarter Turning practice quarterly targets. specific of provide to

directed focus the driving can so coming support we bringing the products. production customer for Our in that our our that is months base demand fully is at in-house online

any to new we integrated on operating increases further in production do work not will our to anticipate await substantial continue level product vertically while profitability. improvements improvements factory. margin gross in in have Further, from meaningful We expenses,

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

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

Phil Davies

legacy customers, lower products with and remained characterized QX you, strong legacy strong. by bookings. again regions Orders product for was performance Jim. than bookings high other Thank anticipated with computing China for Advanced in Products once

growth both Established a increased with solutions. existing low OEM new business approaching vertical relatively lateral current planning products AI performance start-up new trajectory with bookings having our now at initial for demand major customers. continuing s well-known customers, activity currents is front, platforms, On several lateral and well-funded and Vicor's and introduced and amps the and designing power AI for both advanced the high companies, and and AI-AX, continue, are turn X,XXX expected opportunities strong to computing to

efficiency, to high advances customer silicon high response, transient and in critical to in -- density, performance ready performance which our applications. critical control, all grow. current new in we're Generation AI power continues to And which density, Our computing technologies portfolio in components X is and continue are

major introduced high power unabated Due engineers to equipment, this With have of the existing in UAVs. off. to as the for early both next toughest of segments products the our load markets. such pay systems GenX three Our in target all with and point marketplace power new incorporating to -- both across their of to beginning power the challenges, market rapid within be applications work delivery modular solve year design emerging in past battery market light will in Vicor's industrial turning years The and identified advances solutions QX lead broad billion we continues trends an demand five-years, our solutions markets, customers. robotics, available vehicles, industrial to across autonomy density to performance and find is $X.X electric growth additional electrification test several

currently these Our applications. for million $XXX stands for high-growth opportunity new pipeline

opportunity place development truck for a and to Our power growth presents the automotive the a Vicor modules modules, XXXX success of industry. supplier our power market confirmed that major automobile as significant business future confidence our automotive and in

three supplier OEM now technology based power ten with and module very major with strategy system evaluations. has design wins been products on leading s OEMs and directed Our successful with production collaboration

beginning is defense advances made outside with communications, have grow. growth undergoing new one these of our on we and lead customer, business of and refocusing Boeing, opportunity satellite aerospace In a strategy customers four to pipeline markets. key is Our our markets,

ahead solutions, the pillars We are across launched our entire clearly lies modular from major and occurring acquisition. and XXXX assistant will of autonomy power from voltages Key in and maximizing retention dislocations focusing with solutions teams improvement, last well now increase, opportunity electrification the system networks. customers target power numerous power of maintaining excited cross-functional from be ranging on density to for for achieving custom company. beyond growth what and our markets, centricity multiple higher given significant talent us Initiatives of seven Vicor. QX demand moving drive towards higher delivery excellence power of and our markets and in performance levels to and the year benefits high end in continuous are underway to discrete-based customer operational see Major away across large

of Our is factor American key to our achieving vertical to also a our operational commitment manufacturing expanding success excellence. and operations processes, integration of base

remarks, cutting this our Patrizio, facility and Jim your I That concludes new prepared and QX will take a will in opening of remarks As ceremony April completion now with the and be approaching my in ribbon noted questions. on is operational earlier his XXth. Jim year,

Okay. Operator, questions now. for ready we're

Operator

wish Steve Alright. Thank answered of Instructions]. you. All Dan. if the a [Operation Everyone, ask questions to in order you be question, will

ask to You will your went advised be question.

proceed. line queue of one few a the Dillon. have coming Please first questions in John the is the We and from

Your is open line now.

John Dillon

more of really see the on new you have give would that Hi, that quarter. queue, bookings. on question you little production on Can guys. They this did factory new look is this us kind with a of starting factory. the kind good thought what's happening be -- Congratulations the color I I

Patrizio Vinciarelli

Yes.

technology that production to other regarding minute. is next the modules on one actually to that the in new do with portions which the of production integration. the new wing, per shorter we're line to start-up of panel, start the expecting with then more That's a So capacity with portion week expansion package a cycle vertical larger is multiple key the the time fruition, to

So on three place, Tuesday additional us cranes And of or feel, is there [Indiscernible] week. of of [Indiscernible] that two -- Tuesday, bottling this lifting equipment the getting be equipment installed. on actually, is equipment then it will

it's at have steps runs, tens in, in of of July. the process are so to and full millions next start integration, and later Jim by suggested this of some going of as quarter the but qualification We be a to In to clear month operational is be going going dollars, through vertical going we're looking the second into quarter, equipment earlier, quarter.

John Dillon

next quarters, would Got for you, then So see some we'll couple of the increased still in production I imagine?

Patrizio Vinciarelli

or of ship the access again, packaging, significant convert in start in process house of be at steps in the production it in next going areas, a to complete in With [Indiscernible] in some technology, respect package week. to involved starting that's but again are July. Well, the to we're process QX, some have to will we increases for certain looking

John Dillon

Got revenue you. mean, total But -- Go I ahead. with

for see -- the I say? new revenues with starting increase, some For to the Vicor total additional increase really I we constraints what is start though, to provide imagine should total revenue for increasing, after will or can revenue along quarter guess to revenue quarter? I'm expect would continue the we factory, I see the asking supply chain --

Patrizio Vinciarelli

So with QX. to let's talk

for mentioned particularly earlier, in So sequential Advanced XX% with QX increasing quarter. That trading as the I from stress we Products, third about significant think while will did was still to respect process that throughput, of achieve steps challenges on well some outsource. a as fell of the short availability expectations component the challenges up significant combination some our respect of reasons, lingering side, steel as to package with

last at up relief Now, the But capacity in the this as as stone another to least month. partner in the really stepping provided counting -- the [Indiscernible] prepared days some parts other short at we quarter there QX that the brought we're the suggested for predictability within of point control further for in have order in beginning our we we to of that and the low the wasn't second Unfortunately, stability integration. QX. have expect. off full of that The be to need to in destiny remarks,

be this to level Just that in isn't predictability going to be clear, quarter. of there

But our very Again, their getting some operations more of respect think the respect to both because steps I the respect it's with the our flexibility supply been access challenging them. bait process of of with capacity to team to gives SaaS chain, for job with processes. done. tight the challenges

bit respect little on increase In a what on the it impact how get confronted with terms some been QX not were to glue has of throughput, process the but also Just steps. that, of to of with in margins. price XX this just

destiny and of all top once eager a difficult completion been progressing And to fabrication. our is again, the it's which the get of we're is ready having well the So of for selection environment. through equipment a then control of equipment, the benefit getting the

John Dillon

Got you.

I feel and second first in -- XX we'll you quarter get did $XX million fourth you a revenue all delivered from see -- that, this, can mean, quarter, step-up for quarter. So we and about

Patrizio Vinciarelli

So QX to destiny a up a respect [Indiscernible] I provide the of even going the revenues or though that fell control we one we Advanced of in in surprises, the until to to in given were turn improvement sequentially level our other. step guidance in Products are our believe make We quarter we result that way we revenues. with for short earlier higher thought target,

say, location we're so key on We We looking keeping lot it of products. we of just a a more backlog. customers going to to got for lot stick [Indiscernible]. got And to used

it we You is sure that operations that have. working even about we to investments our team into control extremely bring hard can all lower be before get the to need

John Dillon

completely I you. Got that. understand

we're already. So QX far into pretty

Jim Schmidt

As it's right, I just here, said in specific offer the to Jim guidance. call, up earlier going we're not

need from to control. it of could we've in and that away call what own having call and visibility included control having could we our that it months, you you over sense -- were think really I destiny, have weeks

Patrizio Vinciarelli

short. the going we to full not semiconductor issues, that still We progress. may allocation, is And to just in control component the availability back landscape destiny. but of bigger front, This got gaining in going on of our greater Yes. fall We're is minds. particular

got late of example, vendor certain we time an on the last on our then an year, XX As of end life components didn't and fall last buy.

the chain we're there, with and vertical that hard predictability lot make integration aside So of of a the complexities processes. from by manufacturing dealing lack your

John Dillon

will queue. so Got the you, it. in Thank you back that. I Thank I and much. understand get

Operator

Please the coming line Bolton. proceed. is question from Quinn of Next

line is Your open.

Quinn Bolton

of Hey And key guys of I is. guess John's follow sort to questioning. up on question line wanted my

then manufacturing on mentioned miss still entirety outsourced plating or it some you'll there much challenges You a making obviously online shared beginning component it step the step But get sense on your some to July. sounds integrated manufacturing sounds trying is really It component outsourced like I'm component like constraints still the or was and because issues? step availability risk bring of progress. to due how the limitations you're electro is vertically with that

bottleneck. that wasn't a maybe So

Patrizio Vinciarelli

two, in respect Rhode with vertical for we've real additional as increasing. wafer tape by Island was taken discussed assembly. ready past, in of we outs And have way, between in there wafer in the of the I So, integration think provide the to investing is the and Quinn, there to are components there progress latency initiative been in the outs But back-end. facility

or fracture by compounded if component by packaging due it's still in going you issues -- those any process significant, to once is a around you not a of the is constraints. that which the about the started We [Indiscernible], we're in at packaging have to that substantial not me and The get capacity process up, impaired as can't they, our predictability, the So to latency quarter. as but were cars, to we're outs we packaging one opportunity up under get And to level in if the present. -- we the heard got on as with effect some work this still get inadequate belt. get constraints step component slow do good taking least being combination of be the to the to off-source place associated particular in the interdependencies steps wafer of jobs factors. process available periods, that's because say expect in we There's make time say

Quinn Bolton

mentioned you are pressure, that increase Patrizio, primarily steps. in sounds the that QX Understood. supplier? in to steps some will process more importantly a those with bring bring Am But of for the you outsourced had beginning process think it where integration? that vertical that gross a margin process second are reason I to right the XX those was the steps like on perhaps you sort in-house July

Patrizio Vinciarelli

and the issue, in for customers. the mirror. the short-term to With that The we our to priority get forced in take cost can our have. regard Fundamentally, get as the capacity was what going essential margin. The were to to that's us was care as long on to to we correct. knowing do impact rearview we of not that had capacity worry too much to Yeah, about behind to short-term -- our before priorities order do, be

Quinn Bolton

question. my is Understood, and last this

customers you I it's -- to like a a think asking you've where will to to left you short for Sorry to satisfying their for higher you're think they paying find Obviously have supply some you your the Andover, Do look them ramp try you any the steps taken to demand. process Or of able been you've such important. but critical of be sources point alternative may third, feel of Vicor? do the more demands? their as that steps prices

Phil Davies

this is Quinn, So Phil.

them So to in shipments on almost with are with the [Indiscernible] with it manufacturers and set that think that major planning the contract them, obviously were. customers communication their as have, task, I daily of close very integrate to we we very

is very not embed hyperscalers shift we're that their profiles, terms buying we're with There's AI what the of are is But a three are within year they that they we're what in them in centers, which they So of increasing higher in and have doing Future, data supporting and surprises much in a have for their big them. that performance their fixed. steps involved that power at that we're much very next we're the very the the demand pretty compute What over to significantly market, computing, seeing taking surprising particularly would in profile all. years. to pilot the high aware planning the is then no market and solutions the we're already actually racks seeing they that density having intricately

we can we're demand in a So think that be year delivery second the partnerships performance. solutions, lot we you sources, I'm significantly ramp mentioned big I'm still. going I our companies that for close and our confident number these Vicor, and with on customers of demand track mentioned, half need be play got of but do confident end our in to will is second assure year, need. role as with I that, a as in is over our customers for of the We've with able to going demand with this I that stay service that meet many that Patrizio remarks. commitments Then my They to going up to prepared Yes, next beyond. years. servicing very the meet in stay up are planning developed step-up looking they with them, in to them make. need that these

Quinn Bolton

Thank detail, the you for additional Phil.

Operator

question is Please James from line The the of Liberman. next coming proceed.

James Liberman

you. Thank

to area? making. market color some to opportunities are licensing up could also What developments on -- and the regarding you and you open comments the converter in give how progress of that kind the participation into Could listening pleasure a it's So you you. make in us AC-DC your

Patrizio Vinciarelli

have these we as -- [Indiscernible], to in licensees opportunity the we're are we longest say past with that developments having of discussions So And the with markets anything licensing are and potential five don't will when end public for are technology or But, our very so licensees. variety substantial. in and it. portfolio go of today with the discussed [Indiscernible] a

think a bottom a I [Indiscernible] line to going to the it's degree discussed a to as that the respect margin, I significant in key we to think need to on be passionate significant the making and these and right contribution the most they're the the revenue picking opportunity also the to past, of whole. right with to But the to partners make making in engagements respect with your fronts as the end-markets. niche of

James Liberman

sense on Now, you, you can opportunities comment that makes absolutely. And AC-DC road. the the down for

Patrizio Vinciarelli

-- We I that, we opportunities, think referenced past, installations in the are kit customers as that beginning. significant have the speak beyond that we that very

and opportunity broader products And racks them makes [Indiscernible] are more more at fact, systems the density for while enable strong pursuing. liquid this a solutions opportunity. that margin that generally have high-density to cool, with which cost require in is other liquid us we Now, very, attractive AC-to-DC in and a very market we point with high providing

lead customers. of products are completed. that power efforts level the They effect our in blocks already that thermal a the that's proven have to that's same of follow-on [Indiscernible] development -- and perform management advance are ease VIP probably density those efficiency, to the use So represent demonstrated low-hanging to with that as been we've been in building that

James Liberman

Appreciate much. it. very you Thank

Patrizio Vinciarelli

you. Thank

Operator

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

open. is line Your

John Dillon

comprehensive just Or patent your wondering how that that's is patent protection you Is Vicor? from vertical anyone is? solution your someone I our good it system, was do, And product enough licensing underneath, underneath? delivers I'm protect delivery your from whole power doing your just either sale can that from power is protection wondering like you specifically, if On patented?

Patrizio Vinciarelli

about So It's a is brought give that reasons, to for detailed protected innovation answer you going to question. okay very our with your the of effectively initiative I'm that multiplicity balance. say not by [Indiscernible] obvious to we

you yet. know, good that take have intellectual other ensuring public Some protected. we as not innovation, care become effectively ones property domain, are our But

anybody fair I think it's that chances. assume to taking is

to minefield respect this past, you tracks might in with say a have and on me So following [Indiscernible] advisable being course action. said heard on the technology, an our as not of is you've

John Dillon

the I center. Phil, I saw market products read point-of-load And that and in in of LED computing, to how data and of Vegas front-end them? lighting. performance if just you compared how the and of of center Can wondering a these big signs me to then I I'm maybe and they of is High other, LED data was like size thought relate could Vicor then then And and each the give sense you a each

Phil Davies

mean, Yeah on I to broad point front? DPTC I industrial market LED a think LED of good market, datacenter the displays the and for opportunity market, the us for is massive which whole to ACDC it's safe high-performance market. say the is display that load very compared particularly other big

Jim Schmidt

We're entertainment follow, involved others for of to big there types on about London and domes. may you Vegas. And talking those in be know, there Yeah. other are installation places they

maybe participating in estimate the around part be about be that, available there. to portfolio, maybe the million, there of a -- So I think we will will the our of but industrial $XXX market broad somewhere range that be

John Dillon

Gotcha. I thank limited, be figured very I interesting. it guys. it'd but was you much,

Looking forward to the quarter. progress next

Patrizio Vinciarelli

Yes.

make center. regarding into the relatively the AI opportunity throughput that. though So It's centers. relative we same leverages AI blocks that there, is developed into to opportunity short for small let that building the The me incrementally, even a comment an

that the AI the called functionality the hand. And on liquid a So center key into the space solution. unicar we remarkably, same one the PSU, with big provide have within modules that

module exactly same [Indiscernible] megawatts. is the the XX Our the in in deploy lighting,

of of of incrementally our we terms reusing all and different modular market system and is unique a to opportunity, same IP that's these in building can blocks, diverse [Indiscernible] it's scale environment. So But synergy our requirement, kind that if the power very methodology power pursue methodology. the different

John Dillon

center. Yes, there, people engineering, sounds the and lot very it Great. benefit that's with different like you data for scale real very markets to people out a a of easily can little outside

That's Thank sounds Okay. that's great, you. good. really

Patrizio Vinciarelli

you. Thank

Operator

next line question from please coming Tanwanteng, the The proceed. Jon of is

Jonathan Tanwanteng

vertical taking wondering at my been for regarding there the quarters. -- now we happening the bit little could throughput improve thanks I before give Is I us up bottlenecks It prior ramp on guess through you what's going what you questions. plating the was -- color quarters COVID is had go and something that's your new as partner. if next your a couple there Hi, of to more duration? in

Patrizio Vinciarelli

able color many been can frustrating to destiny. that of being in on control necessary not today would from sure would in scale a get it that We've respects. to quarter-after-quarter, necessary give more month counting fully that Products, very incremental literally than customers. say a after demand lot to you expand slap they're our Again, capacity it's volume said, I I'm to not as the other -- been support order be Advanced to the been month, in but as have to

that our and months fully not of integrated with few can left own. team are the So, phenomenal the made to we any to be terms capacity hopeful up outsourcing dramatic of in incremental in improvements

more team down essentially mentioned QX. rely the equipment makes degree that process been Even outsources, to both there We which to of done. earlier, some a which its relying in second of on as have complicated their week-to-week, this down, we've QX between down very our and limitations got their respect and we this brought do though the timeframe of predictably with on getting will gives going and be number partner, frankly, I output. they of really more job and can respect middle the gets these for remaining steps flexibility as can It latitude, on end and the ups what with the life with partners but it operation our turns of from

Jonathan Tanwanteng

I'm prices. in I to Got pass you it. surprise wondering you this tailwind any able other But everyone's said in able places all, are for you second, increase if are Thank of But And in get those surprise you touch and on want then other form through First that. shape, way, to just know inflationary pricing? you one terms pricing? terms mentioned big -- your outsourced you're that to behind partners. in of of seeing raising you other a didn't pressures? the same on. you price or general on

Patrizio Vinciarelli

answer Phil part take of and part food our I'll the first regarding upstream of So question second your customers. chain us the will the regarding

a to the many respect we That's blue. -- we've steps, been ways. the challenge it example year. impact of seeing by a big with the So that in kind extreme very of of over we'll last drill had process XX If there out a was

when particularly online. as end, routine are In mundane of I future, foreseeable are to heard more that to semiconductor begin referencing to things pressures the events could there This around, the the get early happen in got Area of by think could this of then all to fall become barely year. end [Indiscernible] more going a earlier. as come stay fee XX%, is with industry But to turn of I we XX%. as have order again, the that. that for TBD. XX%, that the [Indiscernible] I as way the already was down in with could [Indiscernible] increases facing the not case an earth it of the I the examples same basis we forecast know us comes has [Indiscernible] level to

-- So Phil on

Phil Davies

certainly that, will -- one and every important that. channels our take understand obviously, our to they a that and just of want and helping challenges We've families completed us XX% some with us was the look across any done ranging customers range. Yeah, are ranging is we right via they legacy actually help big some much that with year price wide from that very in things increases through of legacy increase, strategically, That increases products, at our in to on components the X% We years we cost understand even supply with our them and couple to from They and like advanced understand they side. for different recently price as the in certain and good our haul. somewhere well. John, last still advanced, the pretty products, long of pricing front, profitability

well, So been with they've as yes, that. partners collaborative us doing very we've so been

Jonathan Tanwanteng

you. Thank helpful. very That's

Operator

the Shannon. Richard is coming from proceed. Please The next line of question

Richard Shannon

you you. before. them you for you times guys Well, questions. Do XX% was the parter compare quarter least, two had what my - can lead customers quarter exiting Jim, have that maybe a taking quote for thanks, or, quick the And XXXX? fourth any at for to

Jim Schmidt

The lead time that we're said had previously. we quoting is still consistent with what

Patrizio Vinciarelli

XX weeks, XX weeks [Indiscernible]

Jim Schmidt

Advanced Products in XX when they [Indiscernible].

is in bit turns with Brick that we Products a still turns business. it it's more business, have to deal lengthy, ability capture with but the case generally So the

Patrizio Vinciarelli

to component availability. Subject

Jim Schmidt

I know we've And component constraint it's to without outsource that to but generally about. think I routinely a case we XX% the that -- probably that Subject it's don't have that availability the that customer question. talked

revenue talking terms or? in of You're about

Richard Shannon

Yes.

Jim Schmidt

large a customers distributors -- OEMS. XX% we have and of We -- have couple that

Richard Shannon

Okay. you you wins. think the follow-up me Then had a space. ask three enough. automotive design you you Phil, question here mentioned Fair on I let said

that quarter ten remember I more us focused here the can't along within before architectures were how can you're give I had of success? a Maybe on, collaborations, one one. think there. dynamics many last you applications automotive with that's you on you if on than that can sense having Maybe touch you

Jim Schmidt

Yes.

the So -- five pipeline. to was terms four the outstanding now. in building in dollars have a increased XXXX of quarter billion It's by four QX. collaborations over the

quarters. about those really couple converting wins next start-up we're opportunities over production and So, significant opportunity, do it's dates, to design that now of the working into hard

XXX, the we In terms charging XXX systems. playing, onboard play in where of volt charging we're

you solutions, We know, competing, XXX, box almost pilot discrete-based density significant silver have smaller, of much efficiency. sort much, a over higher solutions,

several and some the on XX XX in So down either XX-volt evaluation. increases lead to then XX-volt and interest collaborative interest we're working a we're XX, the delete XXX-volt saves playing Then for lot to battery prototype to even weight, developing which the with range. early in and rid systems or battery down projects, of and cost XX classic it, there XXX-volt of to OEMs getting getting battery,

across several call in -- it would that right I charging would and I down-conversion, it's yes, So world. large OEMs the around

Richard Shannon

Appreciate Great. from detail, me. all that Okay. that's

Operator

is of Hicks. the line Please question Alan from Next proceed. coming

Alan Hicks

reason High In deliver on Super and risen Or some Is Good this and able those, orders, dramatically? I backlog very Performance large those the is up afternoon. know XX been Computing, your big upwards. to orders? have of so can that -- million be like areas you is the that

Jim Schmidt

quarters So we've year. through ramp different had a last of steady the

next Patrizio we As what increased. to mentioned, power of talked online about, we've of to factory go modules, to volt to increased to steadily But delivery XX as applications. NBMs to as we've Those call XX our ramp are XX, going treats. we on bridging our need certainly XX come level the to we're some larger new for

need what the us that's You are help talked of terms do that's about to getting equipment that. but early really of ramp year, half the second up in we production fully But in going some some we of integrated, of increasing. to this

We customers our have been quarter-on-quarter. increasing to lead shipments there

Patrizio Vinciarelli

the relative sequential That was that a before was increase product double-digits in So the as It right? disappointment. quarter, was comment unfortunately short also that. target and felt prior ahead the to too XX% as same to an mass to quarter. quarter products, applied take But was it advance of the shipments when of our to example, expectation. Even prior QX, it still comes

it was wasn't compounding get marketing. So support -- which our general per capacity, to really it relying to has rates. partners be is specific from can't support at needs. XX% unpredictable on the designed to to XX% higher It quarter sequentially, with support, We architect been [Indiscernible],

needs. not technology every it's for really unique respect our in right package the So infrastructure

Alan Hicks

So of that across-the-board? with orders board? is say and Center Computing during that the -- it Super Computing some across it area Super is from backlog you Or Or is? more the the large -- very is these can Data is

Jim Schmidt

systems new of new to XX-volt to AI system. purchase from, pods and to they server-based CPU accelerated products, as ranges it Yeah, to XX blade with cards, server I in that XX AI mentioned, integration hyperscaler AI

it of So, supercomputers the It customers there the across even We've we're of where now into government is across very more types footprint industry. good right applications. high-performance as many the board many a business well. computer got different is in and type ramping and military our

Alan Hicks

-- what Then, you is could technology that mentioned is that that comment just you provide to now? beyond you third Okay. quarter, you coming -- opportunity on the in have what out going generation for

Patrizio Vinciarelli

condensity, threefold up as about because it's and significant the scalability, density very relative our is step-up effective in and performance. power that time as AI one switching frequency and it the It's [Indiscernible] measure the transfer a a which of figures made to In response significantly We're excited terms step I of for [Indiscernible]. cost-effectiveness. solution key existing will that, in bar well raise

Chrome. system development has control for Our fifth-generation under been

other in be these And them. applications. three some a platforms component platforms way can a where great, ones of in level, looked type out wafer two in raised some of this few we different two little weeks, these probably product, Would within Sometime, behind we're cost have play key the action solutions ten we recently that's in devices. next characterizing XG a got weeks. a next that them special on accept days. or some complement of weeks starting it XG waiting about And being the at complementary solution, controllers, of do getting the the we really this rational that taping of are real to a

example directional them our automotive system. by with an support pulled power of of we the control is Some technology, for get solutions XG

count. in accomplished Let of or a silicone me good for earlier, area. was know, automotive component tell this the you costs, incremental that feature And is some fraction year that's no key incremental solutions a referencing that

cost XG industry sure density we're the improvement happening So price the the respect reduction to we're on paving which in is comes is first to the that, significant system, all essentially systems control the within higher. And to it's within. trends. When Subject I'm pressures to that, ceiling sorry, the area, have with on But current negating is get of what's current cost Xx industry shortages as and a environment, a owing and within that Xx reduction, it cost. built achieving to impact increase major in our the the wafers, going dependent not control reduction. with of density. to if even innovation cost under of we

Alan Hicks

to handle new able technology. we'd this factory, new be So the

Jim Schmidt

The factory new [Indiscernible]. can

Patrizio Vinciarelli

Yes.

life is this So test.

technology the actual AI, packaging be opportunity The an was that progresses. year technology and some net is and same characterized next-generation that bar in play, these center terms silicon. developed solutions, some in new that CAISO, platforms. is with performance about reduction on relates type other we with the characterized packaging the as raise plug controllers to automotive deploy to available our That's is for any applications. that separate and from the This innovation apart has as level wafer And right? of earlier, of again, referencing becoming of component to the cost-effectiveness. we've without So which novelty the sort of XG been

Alan Hicks

you that's gross part the you get improve factory clean? of expect margins the substantially after and to reason So up

Patrizio Vinciarelli

the there. improvement and get quarter and you've QX. we trend after a fully the again, certainly the all Yeah. line, Again, of increase working I to But, are unleashed. to do significant control bottom our order respect and was total expect with to business the It with [Indiscernible] and kinds to disappointed be realize very going Intel in billion-yearly-revenue capability. frustrated that improving what in to think quarter once a quarter. new of we expected destiny matched what the without Advanced this we Products we in volumes them. that facility scale comes of would economies with margins margins improving of they're There fourth way in when I the the had a with positive. it should we not and in leverage be that to The And to had with we model see get whole we that these a remains

Alan Hicks

you very Okay. Thank much.

Patrizio Vinciarelli

Thank you.

Phil Davies

one Operator. I think more maybe with take question, we that, just And should please,

Operator

next Jon is Please coming question from Tanwanteng. line of The the right. proceed. All

Jonathan Tanwanteng

because on the I backlog the you can can that the was think I my how follow-up. Hi, of on of quarters does going up for the supply online, catch quickly it up maybe something a up time to it new matter on taking just from just to facility chain when will factory, to some wondering that guys. leaving capacity Thanks you revenue that. quickly it catch Is be did, or issues,. where table the takes the and come ramp capacity can

Patrizio Vinciarelli

when real comes the capabilities. to in happen don't functions world step so Well, it these

yet per to going billion the be as Advanced we the revenues, worth me has capacity essentially $X past all capacity obviously we you But point rate are of catch say to [Indiscernible] progress. I the of before where the backlog think not to in the of be of that as year we're heard new level run. over We Products. factory, for And walking the relatively at make up would but statement with quickly, can a

I team half Advanced Again, earlier, spite think they've growth. of to unit say course to full. had suggested sequential our operations of look all run right has to in that obstacle the the to quarters, glass as XX% the last several XX% at extent it's Products through to been over that we challenges, the deliver able if

begin to the number, should think I quarter a third significant take step that comes up.

Jonathan Tanwanteng

it. you. Got Thank

Jim Schmidt

you. Thank

Phil Davies

Thanks very much.

conclude Operator, So, ready call. we're to the think I

Operator

you. everyone nice that very conference have much in you for this thank and right. joining day. a call, All In case, us Thank

Phil Davies

Thank you.

Jim Schmidt

Bye.

Patrizio Vinciarelli	President & Chief Executive Officer
Jim Schmidt	Chief Financial Officer
Phil Davies	Vice President of Global Sales and Marketing
John Dillon	D&B Capital
Quinn Bolton	Needham & Company
James Lieberman	Revere Securities
Jonathan Tanwanteng	CJS Securities
Richard Shannon	Craig-Hallum Capital Group
Alan Hicks	Ainsley Capital Management

Vicor (VICR) 25 Feb 222021 Q4 Earnings call transcript