VICR - Earnings call 3 2023 | Vicor Corporation

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Operator

Welcome, everyone to today's webinar entitled Vicor earnings results for the third quarter ended September 30, 2023. My name is Jono and I'm your producer for today. [Operator Instructions]I would like to advise all parties this conference is being recorded.And now, I would like to hand it over to Jim Schmidt, Chief Financial Officer. Please go ahead.

James Schmidt

Thank you.Â Good afternoon and welcome to Vicor Corporation's earnings call for the third quarter ended September 30, 2023. Financial Chief Schmidt, Jim Officer. I'm we Andover And XX. for Officer, Marketing.After the Vinciarelli, release today, Executive X and ended Patrizio Phil I'm the our Davies, September results closed and in and Sales Corporate Chief Global press months with Vice financial a issued X markets summarizing President, release press website, on posted www.vicorpower.com. Relations Investor This the been has our page of

while of page growth, Brick sales for for to recorded risk SEC's uncertainties.Â In is should Vicor uncertainties, sequentially million, Form from revenue a profitability to to accurate of quarter mostly conference after press Form various stockingÂ distributors conclusion XXXX. on recent during of XX.X%. sequential the the I filed remarks, second Form today, up contained matters Relations planned announcements, of will this review $XXX.X additional orÂ our up upon the to will provisions is from note potential as any explicitly in the to review call, Exports webcast prove by you also $XXX.X third the to million. of of $XX.X and forward-looking of provided capacity Products update of opportunities, our the X-K XX-Q of our results and which Vicor differ X.X% this is the this are via and of spending, forward-looking with not remarks and my call Actual for historical may Shipments This year-over-year. being this this and quarterly XA million, any our as refer and on products, call decreased total the we the A sequentially of only total no The now XXXX of XX, $XX.X on after information conference October a no Safe balance XX.X% EDGAR this shortly set XX, this quarter's statements be customers, In our for turn statements market under XX.X% statements Patrizio, XX.X% XXXX statements regarding sequentially events uncertainties materially and items forward-looking XX% financial you system available Investor management's on Private implied decreased take we XXXX. are release.I risks also those to I for today. revenue will, XX-K, Advanced expected issuance may these rely and involving purposes will of on document information today undertakes current risks call percentage increased upcoming ProductsÂ revenue February call release, million, XX.X% to prior assurance the revenue stated property from Litigation made the any which, We call, the quarter in remarks the million. offer current sequentially quarter copyrighted increased total X% the total discussed replay from of the focus $XXX.X Securities approximately release or Phil fact, SEC in Item today's the such and developments, in to face recorded press Harbor information.As listenersÂ this website.Please light XXXX any press can forth and of third third today's call. remind Reform obligation our including is quarter QX that Tuesday, for expansion as we Corporation. statement changes and sequentially of discussed during filed expectations during questions. forward-looking statements,Â including statements of available the Act and performance, XXXX. the Phil, be I in will website.I'll correct. related market potential as constitute for and and your sheet call we well Vicor make our P&L you and remind Except and of

We of QX, equity-based quarter.I'll of operating Products from Products primarily $XX.X quarter International gross Total to to XX.X% $X.X completion expense compared the cost R&D in of total revenue consolidated was to expense total of For the sequentially with spending increase sequential infringe at $XXX,XXX, is of the and increase prior for the recorded which increasing the revenue.Turning included Advanced to total a United legal respectively, Brick the from profit XX.X% X.X% the second XX Commission goods, by fees, was quarter The approximately Vicor share basis increased the QX Trade The decreased gross turn XX.X% XX.X%, correspondingly second increase million. will of remain XXXX, expenses. through investigation the QX for R&D patents. that XXXX compensation and share margin amounts systems to now and $XXX,XXX substantial operating to point unlawful SG&A, margin. totaling importation and to a which of million. modules asserted due into in States of an of levels $X,XXX,XXX of QX

of $XX.X were to quarter approximately million, provision with X.X. bookings with count of QX XX based Operating million balance QX. the an the fourth representing at $XX.X DSOs million. backlog. for for decreased progress $XXX.X second share of QX Accounts the margin backlog totaled approximately at sheet. Capital totaled XX.X% receivable diluted X was per X.X%. share income tax in effective $XX million in to the taxes. end, turns XXXX cash $XX.X a inventory of income XXXX. of X.X% for remaining on QX representing diluted XXX%Â from quarter totaled $X.XX equipment per million. with and X% address a in primarily quarter flow $XXX.X Net our ago.Turning fully receivables at for trade million.Turning from manufacturing million. cash earned quarter $XXX.X came of to $X.XX We $XX.X approximately year and share to and below $X Inventories Cash expenditures quarter and cash XX,XXX,XXX a totaled at sequentially QX operating be quarter. operating flow sequentially decreased compared Annualized million for in $X.XX construction increased XX.X%.Turning million, quarter, EPS equivalents quarter decreased of same to diluted shares. now and of an rate recorded for the weÂ recorded Fully $XX.X a GAAP We ended income the $X.X the approximately QX, of days. tax million closing approximately and earnings X-year million balance to spent.I'll totaled prior for reserves of net net reserves book-to-bill For

reduction on backlog, more in dependent are overdue to outlook. orders, visibility less the backlog, including that we and With turns results in our near-term

in yourselves limited to our that ask that then I related and current your expenses so that, expectation operating follow-up Phil, possible flat is While the and gross will and an recent can sequentially.With questions.I Patrizio, approximately case, margin, as and time you question respond as is a take that market Philip we be to revenue, you available. overview limit one of provide developments, the of that many will will

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

Philip Davies

you, Thank Jim.

high-performance on update growth an computing few continue with driver begin business, HPC be in to next Let's or our will our which the major years.

the areas. key next few quarters, focusing will be For we in X

and bus of be ramping Gen production first ChiP converter new our in XX-volt our The factorized X point-of-load products will power fab.

Gen our tools factorized completing The power in of of models second will and be delivering point-of-load XXXX. solutions X development QX and

The continuing market third years. dominated over accounts the revenues past to our the expand the our major HPC will in base be that beyond customer X

in products. in to XXXX.In network introducing Gen to through of companies substantial products revenues lateral reference customer large expect base, vertical powering using customers data next-generation new high-current processes, Regarding solutions X both discussions have Gen challenges before and with power our AI, we midway production expansion delivery their utilizing center, have VPD be through we HPC, to or on X lateral-vertical and in processor the continued XXXX

deploy the to need technical into of insufficient even lower power towards VPD X delivery a customers thick, delivery the power using lateral-vertical gearbox competitors delivery processes one to X carbon-neutral to systems. density as mechanical to solutions their and companies The however, our at is technology performance. capacitors least, route of by inept and effectively to in VPD driving XXXX power in HPC to multiphase power or rack Power and data delivery customers greater everyone's AI will, high down power generative continue current multi-cell packaging that VPD due in heavy, solutions to multiplier full to same on losses power the introduced processors, current the accelerator challenges center X require delivery. layer at density stacked going repeatedly while their data these and scale. power packages. AI density. technology objective. are major AI-enabled not And aware but they can system while challenge in first-generation Gen reduction.Vicor's with challenges processor a scalable try bypass risk, solutions recognize current centers operational foremost Putting they based reduce the an that address access becoming was minds are to to stacked complex thermally incorporate cards, last power heard adept thermal and vertical required megawatts running Future enabling loss All more and

our the that card the years, our bypass am the enabling are density to objective X share pace. thinner, capacitors coming I VPD and the up design steps Customer solution gaps performance AI reduces engagements cost-effective. AI-powered a MCM by at second-generation view Gen within system that in few dominant of evolving requirements and power and Our will system a layer quarters X density technology capacitive VPD of accelerating Xx to power significant will needed, multiplicity is we a thermally the wins.In system solutions more reliable by our of secure over market. And for AI and eliminating XG current happening solutions confident gain demands, Gen of adept, enabled and current an be a stacked

integratedÂ ChiP for major fabÂ with development vertically scalable, One XG and time line design the and short-cycle objectives in time our was have to capacity a of a frame product expansion. short low-cost, of the

meet will based our groups supply different on moment We to capability at chain in X are need priorities. customers distinct of demands the the this who

where group power enabled superior The system AI.Due is on the supply attributes to performance product focused our first where chain scalability group, focused and very priority and the is the solutions is business priority our from the multiphase second XG to developing group multisource, ofÂ ChiPÂ fabs. by competitive advantage enable embrace our the are first belief level innovation progress the I that markets, soon flexibility which market to is own. a competitive flexible pleased multiplicity technology, portfolio key and robust other VR needed of is a am a power on will with forces, system of critical from in

our qualification for second these products important development, platform very power conversion, a power for which XX-volt of to XXXX. reached X achieving have in milestone volts the We of our for in automotive XXX production half PPAP business modules enables

smaller system seen wins in continue Tier our in recent Korean purchased have of advanced modules have we both in And beyond.Towards enable aerospace, and collaborations new remains who of high-density develop who quarters channel and weak design across industries. and will production broad through power brick range where demand both in Demand opportunities defense our X partners. These industrial, our with Advanced for we end QX the China power markets and quarters, previous and collaborations large QX, our XXXX customers solutions. focus broad value been a As legacy and Asia new markets, early OEMs we OEMs we for into Pacific strengthen the to shifting towards Products. and for see lightweight, for suppliers

significant flexibility. to and XXX XXXX QX up access their performance fabÂ have more our and newÂ ChiP with And in as coming progress, performance pace making scalability. will opportunity fab on solutions density and initiatives systems Our years. that multi-source have revenues equipment, with industrial with now pick we new teams in excellence impressed understand add pipelines our track attributes new on in that and with reflected supported automation sales continues excellent understand Japan accounts, of operational current large need been to are the has team They developing up improvements X have and will per goals.Customer our and process, meet to working in visits our marketing its Momentum with that's And to in with with our XXXX, our top XXX for audit with operational our are the you. accounts months. view on ramp our from to of also products launch by ourÂ ChiP capacity be the averaging customers. power This questions. production top with in or and customers. new commitment host OGSM clearly that, track PDN we recent density been cannot week QX we to keep set excellence fab.Thank to take our cannot multiphase fab and Visitors systems new of left ability and power your capacity They specific

James Schmidt

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

Operator

Tanwanteng. the coming from And first question is Jon Instructions] [Operator

Jonathan Tanwanteng

the and the through of from seeing new demand plating one, Can wondering customers? response First start I you're initial just at that you and the was capacity that facility. about the qualifications you'll kind when volume have talk you're shipping vertical gone how seeing

Patrizio Vinciarelli

had hearing of Could I repeat part your please? question. it, trouble we think you

Jonathan Tanwanteng

the process volume new integrated Sure. I for went that plating new start for vertically on initial to was equipment. wondering you how qualification expect shipping customers and the when the capacity

Patrizio Vinciarelli

Okay.

as had at we've frequent visits remarks, So in visits, his pace, visits. prepared accelerating weekly out pointed Phil an

equipment coming the point place other getting generally totally has in visits while visitor he equipment, time is with impressed the very to order That deferring in evident effect, are achieve while say to next scalable the quite we what are, But processes, in over that have installed not are But terms we three-dimensional the team Visitors every fab. fab capabilities not some that this installed. facilitate measures in in in enabling these our gone The cycle is operations essentially The at strategy to is to been capacity the complete. well. would through the shorter As of that's of has vendors. of much challenges the put mentioned, integration the say packaging This automationÂ is some come been capacity. integrated the in some done to by months. to has equipment few to has XG core place of are vertical and has a and systems the its we in all with all that We the delivered make pursued of terms units, that steps in respect initial I been as extent. can, complete outsourced capability, well of point, this at vertical that essential package process steps. the integrating enabling integration products very platform our large have three-dimensional exciting of very processes terms to which some including XG our as new done, get

Jonathan Tanwanteng

To be you and that piece the facilities? so last in finishing already out the you out hard in-source of year to qualifications still or you producing Are the been are shipping clear, stages that of you've or over working are X? maybe

Patrizio Vinciarelli

customers our a service of for cycle time not most are certain who needs, our needs yet. rapid I to mass of it beginning We to are their in-house short say, selectively turnaround but some this and using it for on in-house scale at point. And would use needs, seeking

Jonathan Tanwanteng

think to and to you start follow Just that the do on,Â Patrizio,Â when book-to-bill X again? do creep backlog your see you back increasing is will over

Patrizio Vinciarelli

Well, could happen specific make not take longer. little relatively that could It going soon. prediction. to a We're any

I variables it's number of and is play. a there think at complex landscape, a

that. need think respect I we be with to to non-committal So

Operator

John Dillon. from coming is question next The

John Dillon

I'm more a wondering if the little you can color give on us bookings.

or look increases be bookings the to down? the for we to do or quarters? the going expect do them how bookings example, For you of see couple in next Are sequential flat

Patrizio Vinciarelli

of that specific a Again, include are We range may uncertainties very we But of pretty take climb. while outside a is it want because But again, then scenarios a to control. longer. our increases. of there steep that may don't see substantial be

John Dillon

But just just on give on? helpful. that'd more sounds possibly increase be trust Can understand you nice little us that, do. that? in a on could and little What's a can going But bookings. really you color It I you a bookings, -- us more see color me, give I like

Philip Davies

is So Phil. John, this

host it's out solutions. coming things complex-wise of a newer a of programs programs the of deployment whole in up. asÂ PatrizioÂ said, there ramping landscape There's older So complex next-generation of down, terms

just So given bit looking moment, a we're better at wait-and-see it's complexities at. a that to as that take little the of I said, asÂ PatrizioÂ said, to the approach

John Dillon

better problem you there's the and you understand Maybe bookings I a pretty running about you're that really on short guys guess question are bunch the who just vocal against little betting and out I can they're aren't see stock people that. the GPU is the a and to the of The bit going shorts are saying, you of increase of any and demise around business. Vicor, company. because they're answer

wondering bit is on a little can help concerned. just here, you GPU as land you color give what see little I'm if far a us So out as us

Patrizio Vinciarelli

as long John, based run an type might on don't the investor consideration. a or long I know, what been think We you near-term view. you've for time. do We take the any of a shorts company

we are that are in needs. We position We support committed. unique the believe market a very only very position, critical can

that's believe current density terms AI So flocking of equal delivery vertical us that that we power the their debate that's and such flexibility, in to to needs, not company, the to technology, get to it operate. what into objectively of PDN numbers is obvious going literally us and capabilities regarding our industry. supported in the The and without the by we how are next-generation respect are We're is confirms as run that, with it. customers which for need we tenure quite how any

time us. believe what reliant think obviously, believe respect a to upon. have and should be us that's tell with they We to So believe But not investors will that. I ourselves or choice

John Dillon

understand involved I that with was I the understand I understand. when voltage the And content drop, investors know ] if do, don't too completely was I'm well. programs all in but I completely all and and [ there I technology.

Patrizio Vinciarelli

going if I But them. too don't, to next think for topic. we bad So to the need that's be some move on to

Operator

the And question next from is Quinn Bolton. coming

Quinn Bolton

there for first question, think AMD you pretty NVIDIA, at 'XX expected about that just that is I How AI you with updates you confirm Is X,XXX-watt Have of are this to TDP. excited guess, are X,XXX see you more platforms indeed platform you're guys related level on associated quarter, that seemed one lateral Can that? here? watt guys fourth to a platform throughout question. seems us on vertical. it? any give Can track? in kind both about rated And I of new by and X,XXX-watt XXXX. AI feeling is still now where started one the Last bookings program? the bring on it ramp market, by you power X the this It advantages, you some whether especially real key a like quarter

Philip Davies

Phil. So Quinn, this is

your of my power part XX-volt in first focus in said question, last was factorized to solutions. I QX, that remarks, we converters And first on bus was ramp think, the talked of area the the call. our and So prepared what basically about I

that I question clearly. answers So pretty that hope

The second, out in of terms of combos and CPU, and of and processes all power, we're mixes seeing there. X,XXX watt ASICs network GPUs sorts GPU

very, my well, technology power mentioned offers, engagement solutions critical lateral now about, is those coming our As of technology the have I And high. significant as address as in we Gen Patrizio level vertical in of any with of very talked which that with company. to the center to data X savings along, is prepared really centers, scale data the megawatts remarks mean I

us introduction. we old very it's the up, that going few for of complex you've the future that where conversations there out we're new landscape, programs with a bunch programs doing I confident got last I'm -- having a X guys ending. from And with the said, been as a There's substantial because for and stuff stand. technology with I diversify said, other and bit next big I of customers product As we've years.So in on away as said, will the now business starting

So our market. we're say, confident in as in I position the

Quinn Bolton

customer the of I power. it ITC from some it kind us moved you and of think business, what's of of question, motherboard a guess any in away has looks your stays complaints do your going the that Delta. architecture I give a like some has customers XX I like sense Because highlighted, much that single-stage? big do like Delta how in seems from away the and -- sockets business this won to is of your from has on come goes MBM. looks think the much X-stage you think, -- against How and X-stage can Delta to of with guess big moved in come legal I But to or X-stage? it XX-volt and XX of motherboard architecture proceedings, factorized Vicor transition And away scale it in to one has a module.

Patrizio Vinciarelli

the as know, may So you pioneered MBM bus converter. Vicor

We that patents have substantial IP. different cover we at it from coming patents We've they're not have asserted that X And directions. only technology. the X different

and We they or royalties of those That's have go There certainty MBMs, they that licensed next for been taking OEMs to what's going are ones they year. that have in to other happen. There supply. are and the line it. going continuity have ones those are chances, down the that are are paying

Philip Davies

market have to creeping our -- when have would XXX, some I introduced been amps CPU technology year, is the these XXX the X been motherboards. Gen up, say of now next for that AndÂ Quinn, what requirements

X-stage I that of approach that the get given Gen Gen cause number from to X. our think customers X reevaluate can solutions our will they a performance

think the to X to to go in X X opinion. X, it my I So will from and moved back market -- has

Patrizio Vinciarelli

I Yes. that. second

the AI. it, love VPD X first, be it's amp So me level are out a about next-generation high-density the you the it's societal. amp when to invested, the up brought long-term cost-effective be sustainable millimeter, since from not robust in has to level. multisource to that landscape. hear in much not fundamentally square to, scalable, question, effect, turning handicapped. is performance, as terms it X,XXX to to it's multisource. not you clear, competitive as or not significant answer But It drive in the kilowatt we attempt really an VPD, of right? is trade-offs which capability Truly is It's MBM for get multi-phase we in your It solution not

Operator

And Instructions] the question from [Operator coming next Dillon. is John

John Dillon

call, a you a opportunity for had same to lateral major that And vertical -- was wondering stated lateral you On and a I customer. the was last the if

Patrizio Vinciarelli

sorry you to saying. but you, John, to least hear? you're can interrupt at me what Phil, hard, it's for hear

Philip Davies

Yes.Â It's bit coming across muted and little a mumbled, John.

If you can do something with be your speaker great, there, that yes. would

John Dillon

Yes.

me better? is Let -- just this little a bit

Philip Davies

Yes, Yes. it is.

John Dillon

lateral GPU, last you the stated the a X same for you a call, opportunity or was had GPU major separate a was And On I it and that lateral was for GPUs? vertical with customer. wondering,

Philip Davies

what for one solutions talked there customer. vertical just we and about not lateral we that was have So lateral

We lateral looking than number at forward bit lateral those a number at solutions. are customers but -- solution of have higher both that little both. that And the are bringing of have with we and vertical deployments looking customers the we certainly,

Patrizio Vinciarelli

It's which way PDNs. the systems the year. but also in mistake longer coming have that's evolved, with and the And is next in future lateral make no future no

on falls companies to lateral tried PDN. design In either which what lateral or robust the first-generation PDN. at thatÂ VicorÂ pioneerÂ and point copy. more customer lateral heels more or a VPD, potential call not I'm consider fact, other It's second-generation of important is is have the form on even advanced, VPD call VPD to a an that going we're a scalable, engaged we with activities all entertain tomorrow. We're vertical that beyond this in of more of the

John Dillon

the have with are Do they So in with lateral, X one, to then one to going be customer? working different to Or one, are vertical? lateral lateral you, to used the though, lateral they using have the other do and designs that X different one using that's customer GPUs they it vertical? is going GPU major for is going with going initially used one same -- be be the

Patrizio Vinciarelli

the of us. want we're going involved with sorry get any John, not one That's customer. specificity but with. level about we bear talk not that I'm to to

John Dillon

margins GMs, And last the to you with new question then then. do one expect the When gross the factory? improve

Patrizio Vinciarelli

we to have XX% I And in upward the here us to improvement I partly fab capabilities of investment just in But quarter. cost-effectiveness. the position terms to in line feel, every takes the XG technology much considerably unique but see going a Jim a not higher a and trend. are range. a put that place, of us of not in general That's been considerable we positive that think also think performance Well, we're sight but myself, stronger on numbers, we low to each say to due X have significantly of the terms point-of-load and that

cents time, result And substantially more margins price at higher solutions. a Vicor. of same more in at to for terms per in that customer But passed those is will going customers to to along cost-effective of of the be some amp the form cost-effective solutions a lower point in

Operator

the the is who attendee The coming phone. question over next joined from

yourself you So please question. introduce before take your

Richard Shannon

Craig-Hallum. ShannonÂ with Hi.Â Richard

see, bookings couple of here. topic of on a Maybe questions. the following a Let's up

that fourth either the last quarter in quarter, think backlogs confident I you felt quarter. the or ending third would fairly improve

of to less to certain if I you're the design that. understood Now, of one prior a I active you're seems -- the here. a with answers expecting still still think it that And major question, is customer

your like be reasons. either limited delayed of initially seems share the of size it thought than more there's you is for that or other is opportunity a potentially simple of had what So explanations or design couple that would the

conference your dynamics call? understand us last help you relative can to So those

Patrizio Vinciarelli

do the don't reason the what into little term. very for in clear we of I long interest, curiosity, really really detail. clear, we're the to with that's focused made the I it's on. to I appreciate and go think that level the want And Vicor's And really opportunity got well, medium to be

Richard Shannon

term. jump for Phil, longer another I your prepared Maybe time And I'm I'll here. to remarks to bit to a here frame about little ramping. going back guess question technology looking XG be

ramp-up you would one 'XX, X-nanometer in of intersect this dynamic the Is expectation some commentary caught is there I said with? see correctly. in -- expecting first if caught I think that intersect the my market I you're you to the of if accelerators or your with

Philip Davies

No.

I believe, it's going ubiquitous. the think that what I be market, doing it's capable very to is, XG of looking at to

I technology. cost-effectiveness, design-ins, as the hundreds see amps think of low we'll we've density because and of down level about, the talked in even and of performance the

to going to all increasing design it's different ubiquitous a So 'XX for an be with see what in frame. computing high-performance markets. deployment of the a a production 'XX be ramp will to regards sorts then time us obviously we year of perspective, and big with win from But customers across number

customers other year. midway Some through are in of are 'XX, really sort customers the

and it a mix domestic be So will of actually. both blend international customers, and a

So significant market. going That's share us set what we're to to really AI the right at in now, again, for the ever-expanding scene Richard. that's looking take

Operator

next question the coming is Quinn Bolton. from And

Quinn Bolton

vertical I we revenue a of Richard's for Philip, you just There follow-up the of real there, could Gen in growth go. the XXXX transition market would and levels is you guess revenue. until that about to sort of sort opportunity year X see the solutions you that do some ramp get lateral Gen that and you expect design If ramp technology, Gen year at to is X X X quarterly actually to a see lateral question. to flattish stay of quarterly XXXX Gen come the current or as

the grow. a we quarters? lateral quarterly Gen about Now to sooner us vertical? with before lateral ramp give revenue next quarter significant do to X I'm it happen or over -- when just you revenue see you X get X I'm trying need that Gen in Do or can a may how not we think increase to and X

Philip Davies

Gen that to as we in that. I right goes, that end back lateral going it now. Gen And technology, complex for go megawatts Quinn, We're lateral believe mean that and said, not to your about, talked but again, -- got you I'll confidence So X X see our can't a we've right? seriously deployment, I for as how and vertical save not just it's solutions. customer consider we landscape

quarter. and next great it's that got we're be for towards Gen but products into So us important we've ramping this a going step very quarter to X,

to Gen like, the X. you So we have a bridge, if

Operator

is The question Tanwanteng. Jon from next coming

Jonathan Tanwanteng

break the wondering, in does was of to of the its actual expense the be I what quarters? legal if next kind Jim, as you investigation the and quarter over rate out ITC you run the couple expect could

James Schmidt

the Jon, position. substantial a and it's Incrementally, what very us company. believe number, it's I for our of of an taking But millions on quote dollars, as we it's but smaller won't strength in exact we're of the because

Jonathan Tanwanteng

it expect increase from here? did you quarter past to in the what you Do

Patrizio Vinciarelli

expense relating way to prepared a this, our we're who is that intellectual particularly intellectual The is move becomes evident all more necessary. play property-related to much in income. invest property been to have to our with taking left certain out stolen the that side it by may of of this by how direction, respect they're companies continue be technology. in OEMs wait-and-see have profitable, Again, to in as than covered the looking as to we right a Yes, attitude operating large going theÂ intellectualÂ property expect one to as at business right? that And

Jonathan Tanwanteng

a just development the guess, there out same cycle today Number size wondering the breadth that the AI you -- of and of X there's lot opportunity volume bit of if the maybe expand time out in the was enthusiasm I on all the the Gen of customers processes? more in the Would competitors VPD. because are seeing what's just today amount for you gen say increasing. Where current you're that a two, like of number one. that there, the the out I opportunity you're you So for seeing were there where the could versus little

size help looks can. versus Gen Gen if like that Just opportunity you what X X, me

Philip Davies

AI, got Yes. along the currents you've much first the higher of density for drivers right? of of across processes the all, coming first Well, all the The current networking, CPU, thing. improvement. That's

the also AI add side. But Secondly, expanding add an you more also add CPU, to you is need the incredible more market rate, as you to more particularly AI, at on need networking.

So getting uplift. big the everything is of sort

they're that examples we a has have. the list that X multipliers density that vertical, lateral. they God, we're of small a one Xx of lot got and processes, is are the Now now thermals." vertical. current the into need we is And I of the the in astonished sort little these Everything VPD, capacitive I it's package.And go reaction actually. don't customers current I there, Gen all network -- and our put if factor of mechanical underneath going of but mechanicals, of can current shown to as examples as or When fits. the they're have to to they're the board. over technology then put astounding. where can about all "My we've current X Gen my reaction going you of to processors, we've them X is Gen Gen at They that, packaging disturb you looking my the AI at can not say, layer majors the data center, VPD tiny of X lateral today because to The mean look much shown about down that's about and don't as worry that about that in said, go conversations I Patrizio there. the

down is compared so stacked see similar major is our And Gen we're take our trying terrible. heavy, They're share path the to basically said, see the are in wrong going leading -- here copying which -- and thing customers do I'm a I to companies this really the Chinese when are thing, package, VPD the can and confident, market. copied as trying technology.Â So wrong that very is incredible, customers that terribly with reaction incredible that X companies when the this excitement MBMs they to to really

Patrizio Vinciarelli

from from well. is perspective VPD First-generation as manufacturability IP and an a show perspective horror an

putting and continuous perspective substantial suppliers not the should perspective unscrupulous from IT the to solution or respect OEMs robustness there themselves a with in at supply, So from non-infringement foreign perspective, just both perspective say. but I viability from too risk viability terms of are of of major the an

Jonathan Tanwanteng

Gen Gen in is have you the to X.X on So X, much say there? the it it's that pull that was out fair X than Gen stronger

Patrizio Vinciarelli

Yes.

to I add going think solutions. all that that chain all scalableÂ ChiP customers cost are the going with to flexible fab, that. to get we're on both of performance, on with work right, And and of our power savings. to customers able about be supply And reliability, of advantages we talked

in place, Jon. good very sitting we're a So

Operator

question coming phone. the over Next is joined from who the attendee

yourself introduce please So you before your have question.

Richard Shannon

to Since in different over a fabs. one, mean wanted ask I group of you've your talked can Phil, statement one more groups XG the here. by about X fabs, believe about, only your least frame guys. multiplicity fromÂ Craig-Hallum,Â again, time and you will you what that please? embrace here technology of level we statements innovation prepared the Shannon and and bit what have priorities plan, remarks of from at last with a was ofÂ ChiP XG the see little about for tell multiplicity statement part Richard you that kind The that first of targeting parse could you in are ofÂ ChiP a you us different

Patrizio Vinciarelli

question. Well, lack I'll visibility Again, answer to try with that. of respect to given that the sharp

bear with answer question in So as your me terms. I general

hundreds are of to this from perspective and the perspective, given know, you fabs is is, in took similar with be a closure, that initiative is high of investment a the substantial, processes is it's fab bring involved in much equipment great sourcing flexibility bringing investment news of again, that that degree to most respect case, with from us of to such have OEMs millions.On a propositions fab. value and that perspective the perspective, wishing it small something kinds that relatively and a done shorter the firstÂ ChiP having familiar persistence, can fabs. of As -- And respects, in it the the investment. while complexity, But many complexity from the substantial replicating done the semiconductor predictability. capabilities technical years their on the considerable together some a In cycle first to with, system right to time, And and of as is investment. takes, it in very the time perspective

cannot, do reason, the fab bring first of from where coming rely power than So to will facilities. X fab avail anticipate themselves more OEMs to ecosystem we that Vicor about an the capacity from good on capacity just large market for

Richard Shannon

I gen on answers going or guess interested ask it talking I'll or second you're they're level are term one and a you line, demarcation you're looking vertical-only in I that that me of at future, use that with not that only maybe and you're or to customers we'll follow not to wording think, statement I'm a lateral up guys me that and are sufficient probably here. question here, amps, X,XXX correct get either power in your are that Patrizio. parse talking you different, at solutions, essentially Is but saying just all prior not vertical? engaged your about the here about, anyone are with of -- that with saying not only are seeing -- the it's looking all if first the telling looking of tell at

Patrizio Vinciarelli

with with requirements. the cases, a nearly So And year those the very a applied lateral of different at are of to they centers, fraction current current of that to past current the the a are that technology, relative you with savings. there or programs watts done amps, in kind typically demonstrated set data part scales, order a year And proposition substantial levels months or in savings XG density substantial. of roughly some megawatt both XG. our indirect can a can direct And And result XXX right? though you the there. few power even Phil It be in of through, at the density is with X,XXX better get differentiated lateral, at particular, lateral-vertical. scale we PDN, can is attributes. of can achieve different across engage something and when looking result Those value of are small technology earlier.So referenced of value half on or their time our and focus particularly those is contribute solutions with We XG where lateral-vertical that be unique when can that

vertical. is there little of opportunity X value customers objectives. and bet, we enable much proposition But few can the to the it engage X, lot So bigger a is a There to months or a months. looking their a beyond next there, achieve is

as They're whole production, are into with early year of Phil late the square that amps 'XX MCMs, to world turn next robust are They mechanical new from thermal they got perspective perspective, scalable. that in They've we're going capabilities go around. a enabled are cost-effective. systems from are few per robust or and and said, the right? Our management in attributes, XG millimeter, that more around enable solutions go a all they're a

Philip Davies

had out where Richard, invited they adding massive road data got about add data plus the of And data company's as those to maps to neutral that. this Phil, and challenges strategic going executives weeks on to supplier you I AI the as trying Patrizio a talking mentioned is get centers challenge. A XX-megawatt building into is in day of the their centers So more on ago, while big future just as couple presenting as data a can here, imagine, we're and the to well forward. centers also existing level, getting power center, carbon their of

savings. the going watts side AI amount that's compute processing. When the the be you on to in going plus center, or of or amount the the very at and look you it that's both side, if on to So needed megawatts quickly. XX watts network support X ASIC CPU forward, of per compute CPU, the multiply over gets you a if data save massive a Even GPU

your do not in going watts That's vertically amp the watts So change XX and vertically, do that the motherboard, you even amp can it on to it if a offer to you XXX or CPU save can in or customer market. that's XXX that's XX why base.So --

Patrizio Vinciarelli

that that, way. that couldn't why to not that it's it it Is Phil's, do add a To answer do historical the to you historically, question, way?

to that socket historically bandwidth that that fraction enables technology the the the be have of out caps need high both a swept significant away. the high You got current density, has taken

Philip Davies

to it is you going as stuff deployed power gets So be can't it. because savings power this

same the data EVs with the all grid all of supports out also there, You're plus that the center. competing

important. So hyperscalers. but It's these they're data use impact also megawatt-scale center any reducing significantly really the to value-add trying really of is massive renewables, on for a

James Schmidt

I have takeÂ -- we're think to Okay. Operator, to going

Patrizio Vinciarelli

Maybe more -- one

James Schmidt

then we'll Maybe it moreÂ question, please, have wrap up. one and to

Operator

Jon is question coming Jon Tanwanteng. last the from So --

Jonathan Tanwanteng

I'm sorry. hand wasn't That I raised. didn't have me. my

Operator

we Sorry. have case, In no more questions. this

Patrizio Vinciarelli

Okay. Thank you.

James Schmidt

Thank you, joining for the everyone, call.

Operator

-- everyone Thank you,

James Schmidt

you. Thank

Operator

the everyone. and you, end of your joining, a webinar.Â Thank marks That day. youÂ for Thank nice have

Vicor (VICR) 24 Oct 232023 Q3 Earnings call transcript