Earnings call transcript Q4 2022

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Operator

Good day, everyone and welcome to the Vicor Earnings Results for the Fourth Quarter and Year Ended December 31, 2022 Conference Call hosted by Jim Schmidt, Chief Financial Officer. My name is Esther and I am your operator today. [Operator Instructions] I would like to advise all parties that this call is being recorded.

And with that, I would like to hand over to Jim. Please go ahead.

Jim Schmidt

you. Thank welcome year earnings ended and fourth for Vicor and quarter December to afternoon call Corporation’s the Good XX, XXXX. Schmidt, Jim am Chief Officer. I Financial Executive Vice And and Marketing. am in with Vinciarelli, I Andover Phil Global President, Chief Davies, Sales and Patrizio Officer

today, press markets a issued posted Relations the release results has closed our year ending page press months Investor website, the been X After and summarizing www.vicorpower.com. of December financial we the release for XX. our This on

today relating release. X-K the We issuance press also Form filed this to of a

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

conclusion today, the during XX, A any be provided will This Vicor call passcode XXXXXXXX. rely no conference March tonight the of you undertakes this Thursday, available February today’s XXXX. during of after at passcode and made dial-in XXX-XXX-XXXX forth replay press the only as forward-looking of The this statements update release. and are call. such call note Please call followed not also in XXXX. should statements to today’s through information upon this beginning replay statements set including number is XX, by dial-in is midnight accurate obligation

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

In our the questions. now quarterly XX-K as year-on-year and full and turn on our remarks, to your financial mostly Phil and refer Form P&L and additional of changes items upcoming sequential performance, review I press change recent Phil for a full to for focus will after will our take balance sheet market release I will as developments QX which Patrizio, information. for well and review year I will my you

$XXX.X while to Revenues release, prior increased increased up million total to Advanced Advanced press XXXX the fourth from recorded year Products XX.X% revenue year. Revenues X.X% $XXX.X revenue for Products third quarter. third ended XX.X% today’s $XXX.X of declined XXXX X.X% from XX.X% the for of Brick X.X% ending $XXX.X million total $XXX.X from in XXXX year sequentially, from Product million rose the for total up $XX.X As and Vicor XX, the the the before. million for the million revenue fourth quarter stated of quarter $XXX.X quarter December year million. million, the from for

from the the of XX.X% to percentage year’s to the Exports of fourth from basis, as percentage decreased XX.X%. approximately quarter revenue a a quarter’s for total a year-over-year. and X.X% approximately prior sequentially XX.X% On total prior stocking as increased distributors Shipments exports XX%. revenue XX.X% year-over-year sequentially increased to

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

consolidated QX the margin gross we quarter. to of point basis a is Turning margin, approximately recorded which increase gross a profit XXX from XX.X%, prior

the equip and startup costs margin increasing tariff cost manufacturing in-house higher For A associated factors in lower in from and manufacturing margin higher percentage, with gross the utilization we costs. year prior freight full including integrated decline vertically our XX.X% to incurred XXXX, Brick outsourced volume, declined less year. year-on-year gross the contributed of as XX.X% during facility, year, the factory to number

now turn the operating Total expense quarter. operating will to from expenses. third QX X.X% I decreased

XXXX, year respectively, of included totaling million. the in expense $X.X cost revenue total full of approximately $XXX,XXX XX.X% $X,XXX,XXX in from increased The percent QX amounts a compensation to operating total of SG&A based the For $XXX,XXX, year. prior as expense equity was and and R&D XX.X% for goods,

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

the million in XX.X% full revenue million the year operating For income $XX.X of X.X% to year. revenue prior of totaled $XX.X or compared XXXX, or

for Turning year provision year of to per XX.X%. a QX for fully on diluted effective tax the was for for quarter million, income was an an effective XX.X%. the taxes, share provision the rate tax $X.X we share Net approximately XXXX The earnings $XX,XXX,XXX. $X.X representing of full QX tax recorded totaled of for based $X.XX a million. tax GAAP representing million, approximately income diluted $X.X of rate count

the share to $X.XX XXXX, earnings year from $XX.X declined to fully full the million from For million $XX.X year. $X.XX. prior decreasing from income decreased year the diluted in XXXX, prior net per In

in DSOs progress QX inventories Annualized manufacturing sheet, equipment equivalents $XXX.X totaled were $XX.X million. million balance for million spent. be cash in expenditures X.XXx. for $XX.X increased net Operating approximately receivable, million to $XX.X with and in flat quarter for sequentially approximately our the QX. Accounts reserves, flow $XX.X of approximately With X.X% Capital XX reserves receivables totaled the We cash primarily $XXX,XXX totaled at cash inventory and balance net totaled to turns of and with sequentially days, ended of a construction remaining quarter to flow million. trade quarter. $XXX.X at end. Turning cash million for

net program our backlog contributed backlog. reduction cancellations, next included new to I’ll cancellation address the of came decreasing far was prior in with and business. million now year in the QX closing the same in and and bookings decline X backlog million at quarter as end. last total $XX effect for bookings from XX.X% QX XX.X% at million, orders of sequential below performance $XX.X orders as well in X from $XXX high The book-to-bill backlog. period compute year, year generation which

our to bring diligently advanced fully factory team integrated working expansion, manufacturing Turning products factory is to vertically our our online. in-house

due steps operation. certain startup of products, While to benefit we plating Installation our we have to yet this constraints self is been not quarter. delayed key to advanced in the of and has fabrication the be of the from the equipment year and a the resource begun process from to of now of equipment what manufacturer sufficient are process quarter second expected use process material in this first

shorter improve we to completion we of times our facility the integrated our substantial the for reduction and cycle manufacturing full anxious As provide And this more time, lead factory U.S. our to efficiency, products, will to that advanced of fab completion control consistent looking to and manufacturing are the allow. based imminent are vertically forward customers. we in near leverage

we first to approximately to Turning QX. the quarter expect to results of flat XXXX, be

and take provide Phil modestly expect in will We sequentially rate XXXX. decline questions. the tax I respond and limited can to limit that, Phil will XX% many a time operating XX% to to question so related the one you With recent as a as of yourself developments we available. of can on an in follow-up, that expenses and your market order Patrizio, I of then and you ask we that overview to

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

Phil Davies

Jim. Thank you,

the half at order continue low are the that generation built we prior XXXX quarters platforms the occurring to specifically reflect to of and processor for in transitions hyperscaler that and and customers. in XPU have QX Our next backlog second rate

bus and chip This to internal X-nanometer requirements co-voltages current amps will to even node chip down generation hyperscalers closer R&D volts. reduce ASIC higher to of time are processor and X.XX technology. next is number developments products process on from Their XXXX a based While solutions drive same converters focused with launch with X-nanometer FPA and companies the about Vicor. at

generation performance voltage to processes with best enabled on products averaging, with to current next requirements. major intersect our X-nanometer their In we chips Our multiplication Technologies. soon of both performance arrays prediction and future Vicor High in power power about the delivery playing real-time. is proprietary Vicor solutions. processor meet how processes clustered VPD OEMs discussions delivery, uniquely vertical XG initiated of several Instead their require QX, out and will

power Our X noise said performance density, a with calls in in of system our cloud efficiency in FPA game have Xx density. current learning technology be Generation and a I current machine terms highest overall step changer provide solutions low will and previous the computing in up as and

Vicor’s ever performance to The support technology. smaller expanding geometries processor aligns fully to AI proprietary journey requirements to

And in have position that competitive growing confidence increasing. recent years stronger. customers position Our the is in in a HPC as HPC worked is to we and hard market our in develop result, my

expect to globally The our two aerospace wins billion Our as that target to new QX identification addition and electrified our franchised broad SAM global design XXXX industrial driven the of advanced by set automation and These across stable businesses systems and electrification, orders being a with autonomy. defense will applications. market broad in Vicor. represent emerging and these Avnet strong. efforts high with $X for grow add support POS from business developing remained distributor customers over markets result remained a revenues growth new strength and units in as markets and distributors of in engagement a are in the I and of

recycling. entire that using in testing One exciting applications electrified cells, testing battery the opportunity spans includes packs battery and packs, forming and the new ecosystem

for voltage design have of markets We important XXXX. modules high in our revenues high in with all these early with growth leading wins customers

audits Vicor three remains past the an as X Our automotive approval automotive progress in months, in supplier. market successful positive the of very in resulting with OEM

with QX further in We IATF in QX QX. and XXXX. certified in follow we and expect NRE strong to advanced top engagements expect and OEM will in collaborations products XXXX we products X and to additional be our Tier funded three QX are flagship PPAP

As in their bring the automotive advantage competitive powertrain and valuing Vicor that HPC for enable designs we modularity the our that system are density and vehicles. market, power their modules to customers

margins. design this to factory us achieve billion focused XXX we new customers XX% on wins our top production our $X release team year, put our production our track XG new in securing on As front-end into of modules and Northstar comes gross that our revenues online and is and laser will goal

will I and Jim now take Patrizio, you. your Thank questions.

Jim Schmidt

are So ready now. we operator, for questions

Operator

Thank go [Operator is And coming from Instructions] the Tanwanteng. you Jon first one everyone. Please ahead.

Your line is open.

Jon Tanwanteng

to number ramp are supply there is able on long good color and two, you with give they new cancellations, first have time you could and number what’s Patrizio, just simply if bit anymore you cancellations First, to that maybe afternoon the it low rate being and get on – had orders for get thank will the going more order my both? on that be to digesting one? in a already the the product clients the placed taking My the great? the they And ramps a concern anymore on on time support Phil new Hi, and quarter or just us one your just orders color questions. of lead on factory up and is

Patrizio Vinciarelli

being industrial variety think year Phil respect ahead that exclusion with the a pace products with Chinese to and of with and I enough being concerned times to setbacks pointed respect events some suffered ago market are seeing the we long level the of to general from of to get the the to involving ensuing activity. lead large out, customers a from growth as of product factors the ordering contraction certain in the is key able effects

the being products our coupled phased with respect that that transitions place up being in all backlog So respect right the have products to out changes and in sequence our to last quarter. has led the brought with your with taken the to

Jon Tanwanteng

compute. language the some – customers? some Okay, in there. interesting and great. you to are something as just give models current the that around the you us We if at I the level you having indication such on wondering has could this able X-nanometers and there your you going for been things perhaps models Are to frenzy to then is that it was requirements Thank gave you are of market having participate to to that’s the you or discussion have or large today share GPU have X-nanometer on that are train and lot And you. of and is at participation stats then But wait AI that And BT relative know general similar to things. year that next the attached changed with requirements AI generation? all similar a

Phil Davies

No, the is have we past nodes I that X-nanometer spoken think higher what significantly that about the that in have current. the

factorized Our benefits. has significant power architecture

have We companies X nodes XXXX. got X-nanometer about X in with or ramping

We that have to architectures multi-phase. also XX them PDN giving boards their their have then to, voltage got also a and and and can are something amount That get XX at actually from factorized with power that’s down of seeing will and not of – solution. IBA they other that losses the processes customers drops that re-spins out are started volts volts architectures these looking lower performance to those even that maximum possibly

also are Jon, of if customers with that you of two their processor upgrades nodes. out three best or we X-nanometer get on engaged other performance, the like So to sort would

on. those going we both see So of

our Vicor. to is and to low when vertical happen. that high power very delivery for that market different and voltages we when extremely I XG vertical a you from high well going is get very delivery completely X-nanometers area to think the interest feel and currents technology that’s starts in And the in power do the strongly

talking about remarks sheet. the So prepared that’s what were we in

Patrizio Vinciarelli

difficulty state there the current proposition about at is loss down for to within the requirements. current case high of the the application on field That in PDN type depending the with to network voltage within due from amp of are case these the kind up power total as watts. reductions of the a within currents, Phil’s whether place X-nanometer quantify this this major in at looking by of in And of that the higher test in gets to factorized it distribution power in of in voltages reduction lateral itself of fundamentally close the is earlier account The doesn’t copper is value duration a multiplicity challenge and target elevated pin domains process, steady differentials so multi-source to lower the vertical point XXX is of take net or reduction requirement loss, to proposition range value or the to look in against XXXX in where even now, powered level a with already you power is silicon the a servicing current our solution reduction transient new Just multi-phase, rails. XX X-nanometer to solution each pretty a the going needs. down just other to solutions, is watts solution terms a terms

Jon Tanwanteng

you. in Got lot it. will Thank jump but I back have I a more, queue.

Operator

coming is Quinn question the Bolton. And next you. from Thank

Your line is open.

Quinn Bolton

follow-up perhaps the a to Phil’s bit but more try last question wanted Hey, to direct. be response to guys. and that, I little on

announced its GPU next Your largest from customer for its in shipment. quarter last of the the GPU older generation second night exceeded X-nanometer the GPU just revenue generation revenue

So it’s X-nanometer fast the ramp very of new a obviously GPU. generation

when You this would changed see have new not, X-nanometer on program if X-nanometer this to expects anything meaningful opportunity you content recently Vicor’s to GPU? revenue previously And Vicor platform. have on with expect for this stated Has ramping?

Patrizio Vinciarelli

competitive as to may I general are your our general and matter – said, we our of demand going what I and XG, customer-specific position we make policy, just question is With as rising. getting Quinn, will solutions of answer in not with you our terms supplement that don’t is architectures have that. believe So, respect get our particularly PDN Phil we into comments what to we with know, particularly this unique stronger, to statement sorry, say. for the a

a time, Phil? matter Now, point to again, I in policy. specific as respect can’t comment applications one at any of general with

Phil Davies

this terms we this the confidence go lead with reducing. are mentioned and No, growing, is market I year like position to the the I our in my new customers. you changed? we in remarks, are and anything some not Yes. confident And as future in mean, my in going through ramps customers has said of in

Quinn Bolton

Okay.

because to get spot? good next like architectures sounds current to speaking generation just it you have you X-nanometer even it that you with more in the move as will customers, ramps without multiple I specific but your customers, So think we requirements positioned you feel mentioned, participate sweet sounds like as better X-nanometer into just feel

Phil Davies

nodes also, not think architectures lateral X-nanometer intersect to XG of and by solutions performance that be are the mean, The the there places so They to is on the are and answer more yes. the significant Xx I in out getting the processor tends PDNs. I that and us, getting performance architecture there PDNs too. are IBA number they gained from now. reducing And solutions will upgrades is IBA the the of then levels sometimes drawback performance, can vertical we and improve be a

expect play I out of that as so year to well. this Quinn? some So,

Quinn Bolton

programs? guess, comment sounds issues Understood, any some through capacity? Phil. the obviously ramping the that these manufacturing And can listen process have generation or to confirm largely quarter, excursions facility, just just started next current will like of how that? the designs the had ramp or delay are you wanted you be I you it end could of Have of to have this outsourced as yields internal that your I Andover processor ramps you you And you of manufacturing progressed yield meaningful comments going question to have second provider think by then independent I the I if of understand the second

Phil Davies

Yields are better. getting

nowadays a of typical So far XX%. high volume around products is chip yield

raising taken And the bar the we targeting spite reflect outsourcing the pursuing accomplish of to benefits of these steps in the vertical And where chips the challenges are integration. upper to we have have of We that. a are in place XXs. advances yet don’t methodology

Quinn Bolton

the largely partner third-party electroplating year middle the free is now? just ‘XX timing the lead And old of sort of X on dependency sorry of that of

Patrizio Vinciarelli

think and the due shortly be the based I current schedule in of last piece QX, it’s month installed of after that. within April No, up equipment major on coming specifically, the to

Quinn Bolton

you Thank will in queue. Excellent. the for I back detail. jump

Operator

John Gruber. is Thank from you. The ahead. next question Please go coming

open. is Your line

John Gruber

have Good analyst afternoon. in you quarter? under In And also, that. I impression being about the when resume we last company owners? you analysts are analyst like going are when and you was and communication talking the meeting with the call, I asked And an haven’t seen the was public about it anything a that this about them real the visits communicate with will and and –

Phil Davies

We had.

participated January XX. the Conference, we in So Needham

So one about that did. haven’t that an this Analyst Day, was point, we At John. decided we

is are talk perspective going to in of our I another months. think we again couple

about handle short-term in in And meeting fairly it’s June. that So frequent and shareholder are here. how we then the the to also talking

upcoming. are those So

John Gruber

about to And investor visits, only company, to people? which companies that the talk you want the to what analyst are visits

Phil Davies

the and I think want Yes, we to very of seriously. everybody to is objective. fairly. a time information sure time take That’s It’s same process kind do the same We focus everyone that we time. treated at our the have we provide from is to make that

John Gruber

you. Thank

Operator

from coming next is Dillon. Thank John you. The question

Your open. is line

John Dillon

are How doing? you everyone. Hi,

Phil Davies

John. Good,

John Dillon

bookings far this far question, pretty Phil, are quarter? are just wondering so a had just So am quarter. the how into we I

Phil Davies

I we right. get can think about specific don’t that,

Yes, talking the about the are… are certainly through quarter. rates We halfway but

Patrizio Vinciarelli

into. that I winning terms we that not general in the believe into both and I strongest have get emphasized specifics, we get we Phil let’s policy So have technology. Again, don’t think the the

And It some of we something competition Our technology Phil shrinking. heard industrial not and widening, HPC. as applies to automotive is that’s the applies also that to earlier from it gap markets applies to the other markets. to

come. we in that strongly years very anticipated, second investment to taking but are use And on to than little going up that returns see longer the we that So place, major putting feel place we in are we it’s undertaking. the a capacity

specifics. is to is this going that beyond into as what we happen get Jim bookings, with I happening provided general respect the think to month what don’t any to quarter this So earlier, to are guidance going

John Dillon

It and I backlog, the quarter, you can again, appear, the a from it inside, going would Okay. to are if than still bookings. And don’t Thanks help appear you am would outside helps. during but ship it something quarter, because can that and even explanation. have little with have you for I math if me me be understand bit able you in actually from my $XXX you here, wondering more to book additional ship a the would million $XXX million

that’s going super being conservative going near-term? revenue is flat revenue, that with you to saying for are be be So the to

Patrizio Vinciarelli

now I else conservative, wouldn’t and I of think is best it’s says the guy it optimistic anything guidance our as characterize that being that now. or over as

John Dillon

for okay. Jim, then Okay, And coming had mentioned that you starts one improvements as online. question last GM incremental factory the you expect

So some to expect see quarter? can GM we this improvements

Jim Schmidt

but we I the on approximately slightly could is less side would real things It outsourced spending guidance There incremental way is by improvements manufacturing time. better, see. say, of will of be the flat.

production So bring up will increase. as line, we that the

the opportunity for is there improvement there. some So

factory. of that, significant out I looking are think for beyond our we efficiency own

Patrizio Vinciarelli

shorter better times, efficiencies. have cycle We much much

John Dillon

Thank into will I much. very guys you Thank queue. try back and you. get Great.

Operator

you. Thank The is next Tanwanteng. questioner Jon

open. is line Your

Jon Tanwanteng

returned to for margin able product guys or Hi, around you Were happened follow-up. if And is a that that you last was the a to was inventory the you one? you place hasn’t satisfactory My close was are pretty it doing it to so? at Thanks and took back yet quarter? price guys. at question number or or that

Patrizio Vinciarelli

been some has shipped out. into put It’s and back of it been inventory

Jon Tanwanteng

can then have And just exactly are hear. me the we a what that we you us Okay, layman’s where second, expect you just decisions on seen, that have and efforts, tell great. can legal That’s current we recent commentary give good next? to the

Phil Davies

about are legal You activity? talking

Jon Tanwanteng

correct. Yes,

Phil Davies

update? or Sync

Patrizio Vinciarelli

there. update no is There

are of post-trial through significance. going the nothing We briefing

Jon Tanwanteng

using new the quite the bit. of getting a or we think Jim, close in just that I are in a projects expect little quarter. up bit you am indicative Is jumped what And sales wins exactly are R&D forward? that you not any be And that magnitude? and the run-rate expense pipeline? great. then is should I a that that going Okay, sure finally, said

Jim Schmidt

litigation So, accrual quarter. looking X.X it third you the in might related be at without including

did So of of quarter third expense up and in exclude with that increase fourth the spend. from was associated legal sequentially increase X% in piece in and come was when you the OpEx mostly that caused the trial because quarter. a the it activity actually quarter fourth R&D expense did

I Vicor to R&D factory important aimed note think and new that aimed is increasing it’s getting rate and on of at spend it’s at products it’s line. the the

Jon Tanwanteng

coming Thank you you. revenue development? fund how terms just it. in expect just to much you Is this Got how much cost mentioned our – NRE of that there of in do year,

Jim Schmidt

development product Well, that’s development of new automotive. the of factor customers collaborative or new again, on a efforts systems with with strategically types to for the engage it’s and we in engage want

that. we’ve So got lot to do of a opportunities

to So we of dollars, range in difficult really from on with leaders look engagements job. to millions a hundreds sometimes And thousands dollars of put it’s these engage a to of number the marketplace.

Jon Tanwanteng

versus split on how catch-on you and Last your and great. give remarks. one, to train advanced on legacy? a legacy don’t year? thoughts this I the Brick And those did think, just businesses it’ll you prepared Okay, expect any

Patrizio Vinciarelli

sales the – of forward on basis? Yes, go a

Jim Schmidt

did you Not something… on forward the quarter, But last basis.

Patrizio Vinciarelli

at percentages. gave the breakdown I Yes, the

over we’ve to becoming for guess irrelevant. discussing It’s a I time time, away, but been quite some isn’t business that So greater going as degree

long terms it that last XX it the that So going of away it of years. timescale isn’t it minority. year. next suits is next reducing XX it It’s for leave or And to revenues. ago, of artistic some the was wasn’t or test XX majority years, as but business longevity, And month the that that in a go

Jon Tanwanteng

Okay, thank you.

Operator

you. Thank

Richard Richard now. next from are Shannon. you live question Our is

Richard Shannon

Thanks, question. for Great. taking guys my

flatness quarter, seem here the the the long to suggest June beyond release to that language in refers that, when you maybe the that’ll can or take? and press quarterly also give would that in I into revenues but flat essentially expect March long going think near-term, about to longer, back to or supporting maybe how only visibility statement to you near-term how occur some obviously in

Patrizio Vinciarelli

Here to neck in again, is reflected think level out our the want stick beyond press don’t I that the release. we

I be this play, quarter. out. the could be visibility rationale a to get guidance think it’s further as obviously, of also of And factors near-term we that’s It diminishes given variety that with quarter, caveat. part could provide next of the

all we So should understand.

Richard Shannon

Is you’re this on or you scheduled? get to new better sometime by to applications win the you’re on potentially up manufacturing this timeframe just get is hope when Or which quarter? standing to you the done your hoping they in hoping think facility, contingent I said visibility second contingent which get

Patrizio Vinciarelli

with particular what losses getting PDN way with of with out the lot the a the to way can level anticipated of and you that customers respect they we silicon. don’t of integration, as uncertainty even I degree there, understand availability so X high of a being of results the the challenges nanometer themselves, the the ramps. and able to described in allow There’s technical respect have that them in a not earlier we a vertical of they visibility made Phil new tool given former get. specific got, with have I from the Frankly, frankly, that extract think The the programs high of less respect programs, these imagine, with up visibility completion understand what it degree they capacity, to to and in to in performance timing might that comments the

that’s of programs So part the and source revenues. of respect with timing to uncertainty

Richard Shannon

who solutions a notes past? yet adopted good haven’t in the Vicor one, here issues, is PDN that customers about here uncertainty who done That also have is it reflecting are ones

Patrizio Vinciarelli

vertigo Well, all of of with respect of level these level has an a above solutions capability and gotten to to and invention vertigo. deeper the of with Vicor

Red silicon it’s is copper say greater not within running let’s place being was much live and module had the It’s of greater. percentage it’s deliver they becoming the these current density, copper, efficiency visual XG, which of a domains that an many pack, advance So about or to play. greater the voltages a customers They a terms issue our distribution play. part a fully variety that and that, the current not the with the see particular, the the is related the on anticipated do the from silicon certain within of of with frankly, modules, with which that the molecules, to to that of itself. itself, advances able network, also don’t silicon power take within of that for But see price of is by the our bring the the it power of system, density both power deliver ahead the just the of that a on terms high of density power or this that do networks, in the appreciate is there the part the yet with respect because bar, what performance architecture layers, Xx constraints is in the greater that, of to in density Hat. within reasons in that density, one drops aside our enabling opportunities can themselves to, again, do and have advantages and the power much distribution of they and in ways to And power, density alternatives competitive handicap being of power control of distribution, [indiscernible]

to And a silicon. on So the what because, customers deliver carving process our full it associated in isn’t of to sanding of their there with the particular, challenges fruition it’s unleash frankly, indication, this be. process this with us, work potential incumbent on could to are

Richard Shannon

to a lot stuff of out for related there, question will thanks I’ll that a line opportunity. Okay, that. thanks And left last that to automotive detail. unpack the jump for review here I of

think to detailed When more year, I stated of the you maybe early for around this year? delay forecasts could to bit that orders next the prior and expect you next like ramping of kind middle look what that from do of help a and get you expectations a understand year. at

Jim Schmidt

I Tier ‘XX. that R&D to this that X the early That’s of some end towards the there’s sort this the towards of hit and stuff ramp Really teams of more delays mentioned been us. probably the for would is think ‘XX different end for the because lot Richard. of I is issues so COVID And of of OEMs. the a ‘XX, year, middle ramps

Richard Shannon

all That’s Thank you. for perfect. Alright, me.

Operator

you. Thank

Our [indiscernible]. is next questioner

Your open. line is

Unidentified Analyst

Hi, Yes. guys.

delays my at talked continually December you year, about mean, could clarify fully It’s if new manufacturing at back warehouse, if vertically of last And with get the year, about integrated some can seems plant last looking kind that. you to speculation to you last plans specific I I’ll some pushed contamination Just had up? out. there that the could the thoughts. you the guys XX% a integrated, clear then new more by we up. follow-up just my end it notes just, XX% chip the have end going and QX fab, of in week, issues, was the that of And little of be fab probably

Patrizio Vinciarelli

are pure contamination or suggestions by bullshit. competitors So

Unidentified Analyst

But still to I wanted hear.

Patrizio Vinciarelli

major a bringing of that to the X X also, in by in delayed it news think, X – away, novelties in only the time, And what has The guess, the you hands some cycle months been delays but time fact there really good not question, that is. Okay, what looking timing equipment to in vertically of not been bringing with overstate some we developing being apprised at It we’re February, I facility States, is complex of of with a that an the looking to now kept complexity and the which… got is months delivery that’s In respect of last United this, its last happening or be for vendor of converters to Apple, we’re the of technology first one got so and a fab fruition, integrated kinds to first I way Vicor piece in earlier the this date that’s of first The earlier equipment all again, the from vertically Europe answer that we’re for of respect endeavor, well, is to the protected. these kind. the heavily the given and four is integrated the for the a we’re unique surprising. fab, products as with equipment state together federal these chips make as manufacturing. of commute number complexities processes in what together may bringing package,

Unidentified Analyst

wise to that’s heard that before. of guy. a going be kind we’ve And But

up but a getting it’s video So little delay, about weeks, are couple a to the won’t a with in through AI. word be in unnerving investor, as buzz inventory, and you last you Wednesday, and talk seems to areas. that has be over a their there seems all an know in a I delay, like video, been delay, involved ramping real AI of working guys

good I’m started executing. of investor, are the technology monolithic keep race no that execution but an machine. getting I matter is talking and a guys little trash falling your mean, the you sorts is. how And all an behind, they is they’re As board, across nervous

So little are I’m you that behind? nervous guys just a getting falling

Patrizio Vinciarelli

taken nervous. your blame respect with guess I’m you to have And getting chips. mean been delays. I make for don’t Europe U.S. some to of we for from piece to delays not, the have look, can’t might. equipment I the shoes, Japan vendors is a I But wearing of I for months had and if first There I fab the across beyond involved number some the number globe excuses of expectation. to equipment

delivered think equipment an either, to be So The guy you’ve a I we… of but in that wise don’t last only we’re in say is be heard before, to February. [indiscernible] due me piece

Unidentified Analyst

hope process outsourcing delivery on because thought that the brought that’s at the through; talking the Well, that could purely you you so that through. because remember process you the guys I mastering it’s I you hope about planned delayed, outsourcers I process been plating comes back equipment process, improve your I that that bringing were house. when also and you comes go the to upon efficiencies basically in it

strictly like not there. It’s it’s a training equipment’s So not issue.

Patrizio Vinciarelli

Yes, are pointed greater And Jim time running. is beginning as being qualified up delivered and right. to capacity it’s with respect and equipment greater and using in itself cycle reflect as the There with to but it to still delivered, degree being delivered, we gets and that that used are to a of to that then we pieces be is lead be – visibility of greater. it’s That’s times. being close to of equipment Lot as equipment. out very little earlier, left, say, time already stability we’re few

be the So delays. very surprised if work be I to would further

line are we to vertically being of think I integrated. sight

Unidentified Analyst

you I finish what last it’s of attended Needham continues in about I’ll story. to Conference, the And with appreciate queue. back and talked get We it’s be year year. contact that the think And great want we want sort that to hope I hear greatly story. in you because a positive I’ll a guys. guys this We with We the

Patrizio Vinciarelli

you. Thank

Operator

you. Thank

next Hicks. Our Alan is questioner

open. is Your line

Alan Hicks

Thanks. Good than XG getting afternoon. coming than little has factor technology from can products. the XG I step and expect is a question. your the expect going own done, and revenues been approach that? the the way, the out of Can way and that want gauging in expect plating the those what last we then Seems again is revenues? different to we to trading like once By we can up much one

Patrizio Vinciarelli

limited we job further respect and way out been to I have coming in need real-world great missed traction tell a we controlled years what in what XG, customers instances, over is in expose And very and are XG going to began you to advances for way test already of So, with a trends, needs applications our being Very get have and market and we’re has case need can providing few with done, with what that very, with aligned getting lithography. come. validation to to capabilities effect our to very expect – we customers. market

has we’ve what happened anticipate So what order market had critical in applications. I’m is to very, needed to vision very the performance and careful the enable with is respect before, going to fact that – of

is have so month. XX expect some with start modules They capabilities customers of of operating a to availability QX something year. the place XG We we the bench second complement silicon. in the to on full of able sound together be coming this the And control

that the unique we have to along a effect developed, tools solutions further validation, customers and requirements. to going enable with get PDN with respect the capabilities we we’re growing methodologies their As in expose being degree that their driver’s list controlling customers, meet to with already destiny are of the behind and developed system been seat to to get real some to

products. of of technology respect playing respect setback performance first think to can be of together in resetting the in terms to coming good the very critical And what’s in current level major power ‘XX about terms well So development architectures, unique we I together. of a to generations to density, Vicor achieve time able expectations all distribution applications, for and was I this. beyond computing with automotive step lot is together this the the And and in in packaging the is in power that with technology, feel that performance. of deliver up we’re of other prior is the technologies, both This a particularly with components, that the major think XG to bar density the setting needs noteworthy

So excited very we’re about that.

Alan Hicks

delaying think their you get hands perhaps Do are customers until Great. they on XG?

Patrizio Vinciarelli

the way not it works. that’s No,

say, on trends targets XG there to in be target [indiscernible] needless product waiting final really place. preliminary because So kinds comprehensive this XG to specs can while for instances we customers the can very trains few of achieved stage a with we’re which if best the do ones is fall They elements, starting that to to there’s in design in are capability, still yet, a the at still process for that we enabling in leave some the are not earlier elements portfolio, engaged paths is while are the intersect follow an last that capabilities this of leave we’re all if have be place. perspective have the but and with session the from the not so opportunity year session engaged of

Jim Schmidt

for is factorize spoke and ramping X nodes, architectures earlier, power we So, nanometer right technology now with bus as converters. more

be those And opportunities X-nanometer, there’ll will calling technology. So as XG nanometer I’ve the out stuff. through got we’ve on the nodes, to the XG peaks it hit year, services lateral ramping XG good performance up next pick year, mentioned, on some other will move our vertical get of designs then we’re to this X is using with but we

in So XG. transition that that all we happens happened before

Alan Hicks

XG expand think will market? your you significantly do Okay,

Patrizio Vinciarelli

But a to I am Absolutely, going terms costs, get because finer. both cost, even in and lot yes. of higher again, lower

amp, to So XXXX amp. the going XXXX we’re to going only but the amp XXX take take not we’re also

Alan Hicks

up more Okay. once on Did we get back revenue logjam and using unleash the shipments for you finally, better And Do trading? in that you expect step that plating. completed? house

Patrizio Vinciarelli

constraint the and to so revenue, of as as we it’s, in for bookings suggested near-term. this capacity not Yes, release, suggested moment, by backlog limited of now history of respect press I the have with earlier, I

Alan Hicks

flat Thank quarter, basically next so possibly Okay, you. saying quarter? second

Patrizio Vinciarelli

with or we interpretation either, your clear to want mean wise fact expectation? are and to don’t It’s near-term. just be we not guy what this sure encourage respect very I but to be any misleading that potentially a

Alan Hicks

very you much. thank Okay,

Patrizio Vinciarelli

you. Thank

Jim Schmidt

one more I – we you, Thank have everyone. operator, I for think think, we could And maybe time question.

Operator

is The Quinn last coming Bolton. from you. question Thank

Your line is open.

Quinn Bolton

of on year squeezing of based current expectations? for sort this XXXX that XG latter event is Thanks the Does start that your vertical a ramping The this your question. with more technology. or filling last it’s

Patrizio Vinciarelli

goal to year. ramping is have that this Our

Quinn Bolton

Perfect.

you. thank Okay,

Jim Schmidt

Okay, thank I everyone. to the now. call close Operator, ready we’re think you,

Operator

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

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

Vicor (VICR) 23 Feb 232022 Q4 Earnings call transcript