Q3 2021 Aehr Test Systems Earnings Call
Yes.
[music].
Good day and welcome to the Air Test systems third quarter fiscal 2021 financial results Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Mr. Jim Byers of M. K R. Investor Relations. Please go ahead Sir.
Thank you operator, good afternoon, and welcome to Air Test systems third quarter of fiscal 2021 financial results Conference call.
With me on today's call are Air Test Systems', President and Chief Executive Officer gain Ericsson and Chief Financial Officer, Ken Spink.
Before I turn the call over to gain and Ken I'd like to cover a few quick items.
This afternoon at four o'clock P M. Eastern Air Test issued a press release announcing its third quarter fiscal 2021 result that release is available on the company's website at <unk> Dot com.
This call is being broadcast live over the Internet for all interested parties on the webcast will be archived on the Investor Relations page of the company's website.
I'd like to remind everyone that on today's call management will be making forward looking statements that are based on current information the estimates and are subject to a number of risks and uncertainties.
That could cause actual results to differ materially from those in the forward looking statements.
These factors that may cause results to differ materially from those in the forward looking statements are discussed in the company's most recent periodic and current reports filed with the SEC.
These forward looking statements, including guidance provided during today's call are only valid as of the state.
And Air Test systems undertakes no obligation to update the forward looking statements.
Now with that said I'd like to turn the conference call over to gain Erickson, President and Chief Executive Officer Kim.
Thanks, Jim and good afternoon to those joining us on today's conference call them also lessen the online.
Ken will go over our third quarter financial results later in the call, but first I'll spend a few minutes, providing some details on the quarter and the improved business momentum that we've started to see that.
I'll discuss what we see in the near term and talk a little bit to next fiscal year.
Following our remarks, we'll open up the lines for your questions.
During the third quarter, we began to see signs of recovery from several customer production ramp delays and push outs of forecasted orders that we experienced related to COVID-19.
We saw a significant increase in activity with both current and new customer engagements as business conditions begin to improve resulting in improved bookings and revenue for the quarter.
Our $8 million in bookings generated in the third quarter is our highest bookings quarter in the word here and we're glad to have 2020 behind us.
These bookings include two significant customer orders flow of Fox XP test sales during the quarter. One of these orders came from existing customer flow, partially populated Fox XP multi wafer test and burn in system and multiple wafer part of contractors to begin volume production of the high performance Silicon Photonics devices.
This customer is of major supplier of fiber optic transceivers from the data center interconnect markets and is our fifth customer in Silicon Photonics space, that's using our Fox P platform for production.
They are moving to silicon photonics integration to address higher performance in the lower cost needs of the market and are transitioning from our Fox NP system that they used for initial production burn in of stabilization to our production ex peace system to meet the high volume production forecast.
This Fox XP system is only partially loaded with blades and allows the customer to fill on the system by simply adding an additional blades of wafers of capacity as needed.
Chose this option to align with their planned wafer capacity expansion.
The other Fox XP test cell order was from the new customers are who is the supplier of sensors to a major mobile device manufacturer who is currently a current customer of air test. This.
The initial order totaled $4 $3 million and include the single Fox XP test system of set the Fox <unk> carriers and a fully automated day Pac load of on motor.
This test cell is for the test and burn in applications like critical new mobile device that includes a new class of Fox type of carriers and automated that Pac load of on mother.
I'll talk about the sneak die package of units.
During the quarter, we began shipping against this order and expect to complete shipments in this fiscal quarter were right on.
We continue to expect follow on orders from this customer flow additional dye taxing system capacity to address the production needs for this device.
The increased business activity, we saw at the start of the third quarter includes existing customers as they focus on their increasing their production capacity and particularly as the data center and fiber infrastructure related silicon photonics optical transceiver market is starting to recover.
Multiple customers have completed upgrades of their facilities to accommodate expected deliveries of on Fox systems in the near future.
In addition, we're seeing new customer investigations and evaluations for wafer level burn in with multiple silicon carbide customers and over a dozen silicon photonics transceiver labor lasers stabilization of applications.
We're also seeing the valuations for both wafer level burn in and package part burn in for automotive devices.
These discussions have significantly increased as potential customers believe COVID-19 related travel restrictions are expected to lessen substantially over the next several months.
While the customer delays, we've experienced have been frustrating to say the least it's important to note that we've not lost a single deal we've not seen new competitive solutions and reduce nor have any of our customers, indicating any change to their plans to ramp their production using air systems and consumables.
This has really been about timing and when customers resume their plans that were clearly interrupted by the COVID-19 pandemic impacts.
Our strong bookings this quarter is evidence of increased momentum, we're starting to see with our existing as well as new customers.
Let me touch on a few of the markets. We're seeing this traction starting to take place.
Let me start with the Silicon Photonics. So we continue to hear from our customers as well as analysts and shareholders that followed the fiber optic infrastructure markets for data centers. It by Chi that business is starting to return after a significant hit during COVID-19.
We heard from our customers that companies like Facebook, Amazon and Google were simply not doing their planned expansions and upgrades during the COVID-19, even with all of the pressure for more data and more bandwidth.
As business conditions improve we believe we will see a strong increase in investment in the space due to pent up demand.
Air solution is unique in its ability to test and stabilize of burn in the entire of whole silicon or other compound semiconductor wafers below devices before theyre, singulair and packaged individually or integrated into of fiber optic transceiver.
These transceivers are used in data centers and as data center interconnections as well as five G infrastructure connection.
Our solution has been proven to be an enabler for whole wafer processing that significantly lowers the cost of manufacturing.
In the case of Silicon Photonics, the laser devices are bonded directly two of silicon based device that has all of the logic multiplexing and day multiplex gene and other high speed communication sub systems, all integrated into a cell of a single silicon based integrated circuit.
Our solution actually makes it feasible to burn and integrated silicon photonics devices, while still in wafer form without adding the cost of the transceiver printed circuit board and the other mechanical infrastructure of the final transceiver module.
And that is both yield and significant cost savings.
This becomes critical in particular of communications speeds of greater than the 100 gigabyte transceiver bandwidth.
Several large players in the market are working on direct optical to optical switches, which will further simplify the deployment of greater than 100 gigabit transceivers at the data center and data center interconnect levels.
Silicon Photonics transceivers are much less expensive to build and much more scalable for quantity and capacity due to wafer level processing.
Analysts see silicon Photonics is the catalyst to higher growth in deployment of fiber optic communication across all data center layers as it becomes significantly more cost effective and there's enough capacity to displace copper based coaxial cables from data centers.
For the old researched the silicon photonics market is expected to grow at a compound annual growth rate of 42% between 2019, and 2025 to the $3 $6 billion on your market and we believe that the industry will transition to wafer level of simulated die for this critical manufacturing step, which is where our Fox P products.
Stand alone is the most cost effective solution of the market.
Some of them, we talked about silicon carbide.
Our lead customer for Silicon carbide continues to forecast significant additional capacity needs and as such we expect them to add a significant number of our Fox XP systems over the next few years.
They are a leading supplier of semiconductor devices with the significant customer base in the automotive semiconductor market and are using our Fox XP system part of high volume production burn in an infant mortality screening of silicon carbide devices at wafer level for electric vehicle power modules.
This customer has told us they plan to significantly increase the capital investment in the Silicon carbide business. This year, which most certainly would include burn on equipment that would drive Fox wafer level systems and wafer pack sales to them.
Excuse me.
Silicon carbide continues to be promising as a key growth driver for are for those who are not familiar with the nature of silicon carbide at the very impressive material for high power in particular of high voltage devices per applications, such as electric and hybrid electric vehicle powertrains and electric vehicle charging infrastructure.
These devices reduced power loss by as much of 78 per cent, which is essentially changed the entire market dynamic.
With this development, we see most if not every automotive company that's working on electric vehicles, moving the silicon carbide based powertrain and charging systems in the near future.
The challenge with Silicon carbide is that it's known to have high infant mortality rates. However, after of reliability.
Burnt in screening like that offer by airs Fox product solutions. These defects can be completely removed to provide me extremely reliable devices for these mission critical applications.
Era is able to provide a complete solution for one of the key reliability screening test on an entire wafer of devices basically all of them at one time.
While testing and monitoring every device for failures during the burn in process to provide critical information on those devices.
This is an enormously valuable capability as it allows our customers to screen devices that would otherwise fail. After the packaged into multi die modules, where the yield impact is 10 times or even 100 times of costly.
A critical capability that only our solution can provide in the market today is the ability of test of 100% of up to 2000 of more die on the wafer in a single insertion, while providing a 100 per cent traceability of pass fail results of each device, including exactly what time, the test and burn in cycle the device itself.
Yes.
Our systems are not only able to test the 100 per cent of their devices on 468, and 12 inch wafers, but we can test and burn in 18 wafers at the time in a single Fox XP system, thus significantly reducing the cost of test and burn in.
We are engaged with multiple new potential customers in silicon carbide.
In addition to the very large opportunity for silicon carbide with our lead customer. We're very excited to report that of new potential customer that produced the silicon carbide power devices has asked us to demonstrate our full wafer level burn in solution on their silicon carbide wafers, including putting the system on the manufacturing floor to demonstrate our capabilities.
This customer is currently a large player in silicon carbide right now and we're confident that we can prove to them that our solution will catch 100 per cent of their infant mortality failures that otherwise would show up at their customer.
Additionally, we expect to move to wafer level of evaluations with other potential customers in the next few quarters. As we're currently engaged in detailed and very promising discussions with several other major suppliers of silicon carbide.
We've invested in the special clean room at our facility that houses each of our tools, including our Fox XP wafer and multi wafer system, our Fox N P dual wafer system on our Fox CP single wafer system.
It allows us to run many customer wafers at the same time, making it easy to do multiple valuations in parallel, particularly in a COVID-19 social distancing world.
We anticipate the silicon carbide wafer level burn in will become the industry standard for low cost of 100 per cent traceability for burn in of reliability screening.
Airs Fox XP system hasn't has very unique capabilities that are a great fit for silicon carbide reliability and burn in test backed by significant IP excuse me patents and experience with the unique challenges of wafer level burn in test systems and contractors.
This creates a barrier to entry that we believe will enable us to capture multiple key companies and significant market share in the silicon carbide space in the next year or two of them.
Purchase of second.
Yeah.
Part of my headset was giving and I'm not going to let it go out let me continue on the Silicon carbide semiconductor device market is growing at a tremendous rate with unit growth of high power devices expected to grow at over 50% CAGR from 2019 to twenty-five again per Youll research.
When we look at the total available market opportunity for silicon carbide, and silicon photonics wafer level and simulate the dye test, we see of approximately $250 million of needed capacity, including consumables based on total wafer starts yields and test times.
Now I've mentioned wafer pack several times on these or are these in our di packs are are proprietary full wafer and simulated die and module contractors that are consumables. If you will and that worked with our Fox family of test systems.
We're also seeing increased orders for our wafer packs from existing customers in the silicon carbide and silicon photonics segments for the installed base of Fox multi wafer test systems.
Towards the end of our fiscal third quarter, and then for fourth quarter. So far we have received multiple orders for new designs and added capacity for volume production test of Silicon carbide semiconductors for electric vehicles, and electric vehicle Chargers as well as silicon Photonics devices for data center, and patchy infrastructure of fiber optic transceivers, where.
[noise] forecasting additional orders for our wafer pack and dark pack consumables during the remainder of the current fiscal year and from our installed base of customers.
As we've noted before Erez proprietary test and burn in solutions include these customized wafer packs of dye packs that are needed not only for new system orders, but also for each new design win of each new device added to production test as we increase our installed base of Fox systems, with current and new customers, particularly with the N P and ex.
The multi wafer and simulated I module test and burn in systems, we expect our consumables business will continue to grow in absolute value and.
As a percentage of our total sales.
Over the long term, we expect these recurring consumable sales to account for up to half or even more of our total overall revenue.
During the quarter, we successfully demonstrated and began shipments of the new solution using our standard ex P high volume production system, and Fox N P systems, but with a new class of dicot, that's going to be of Great addition to our product family.
This new dye pack is capable of handling extremely small devices and also very high power density devices with higher parallelism, the parallelism than ever thought possible before.
The new solution also includes a fully automated pick and place handling system that automatically load and unload sees the di packs and transfers from two and from cards.
This new class of dye pack can handle devices down below less than two millimeter by less than two millimeter by less than one millimeter, which is incredible the.
Size of such a device of small enough to rest on the depth of of pen or a pencil.
We will send out to investors of total a photo of a device of the size sitting on the tip of the person's finger to show how small of it.
I do want to note for any of that thesis the photos, absolutely not our customers' device and I want to make sure. That's perfectly clear on it is of similar size of the type of device that on new dye packs can handle.
Devices, the small are extremely hard to handle and particularly in any kind of parallelism.
Often the discrete device the smallest handled with special handling equipment in the tester that can only test of one device at the time.
This new Fox XP system in direct solution is capable of testing very complex die on modules. In addition to them being tiny.
For example, the capabilities and features that are being used today in production on these micro scale type modules include the ability the individually read every device I D.
We digital or analog temperature sensors.
Of device power supplies on every single day, that's continuously logging.
On the individual per Gram of current drivers, which is critical for optical transmitters and receivers as well as program of voltage and current limits of read back of independent photo diodes, or internal or external which are part of our integrated into our dye pack photodiode and program of current and voltage drive the levels of per device as well as per.
I will pulse width. These are features never thought in a burn in the test system that we have and massive parallelism on our systems. This new Fox XP system and <unk> solution is configured with up to nine high power blades that can each test and burn in up to 10 24.
1024 of devices at a time.
Each devices thermally controlled via conduction, but the devices, making direct contact with of thermally control of surface that provides a superior or in the case of these tiny devices, possibly the only way to effectively cool these devices compared to an air controlled chamber.
Our new dye pack of auto loader can automatically pick and place tiny or large devices from industry standard genetic trace to our dye packs.
We inspect every single device read device barcode information, if it's available and track every single device from data from our Fox production systems to place the devices into different physical output pins.
Watching the loader handled these tiny devices is really incredible and they can load and unload devices of thousands of devices per hour.
We believe the solution further sets us apart from any other company in the industry.
So let me talk about packaged parts for just a minute of as well.
Recently, we've been receiving and responding to requests for information about the planned introduction of our new package part burn in system, which is under development and has very high voltage test capabilities.
We continue to see indications of renewed demand for packaged part burn in applications, particularly from customers seeking high voltage capability and expect to generate additional new opportunities with this new product introduction, that's we head into our fiscal year calendar 2022.
With our increasing customer visibility, including facility improvements that customers have made to install our tools on their test force. We continue to expect orders from the customers that told us they would ramp in the first half of our fiscal year.
We expect.
You know what I apologize.
The people that had told us they would ramp actually in the second half of our fiscal year that we're in right now when you reach to the weakness that we expect to end our fiscal year with a strong year over year of growth in our bookings on.
Unfortunately, the timing of some orders were delayed causing us to come in short of our revenue expectations for this fiscal year.
Importantly, we expect this positive bookings the bookings momentum will continue which will drive revenue growth in the next fiscal year.
Looking forward this quarter and into our fiscal 'twenty two 'twenty 'twenty two that begins June 1st we feel our outlook is very promising with forecasts from current customers to ramp and silicon carbide for electric vehicles and electric vehicle Chargers.
Silicon Photonics for data center, and <unk> infrastructure to the three D and other mobile sensors and flash memory devices.
We also expect to announce new customer bookings and shipments, particularly in silicon carbide and other automotive devices. During this calendar year.
For the fiscal fourth quarter, ending may 31st 2021, Eric expects revenue to be at least $7 million of 33% sequential increase from the third quarter and to be profitable for the fiscal fourth quarter.
With that let me turn it over to Ken to review our financial results in more detail provide an update on our guidance and then we'll open up the line for questions.
Go ahead Ken.
Thank you again and good afternoon, everyone is.
This gain noted during our fiscal third quarter, we began to see signs of recovery from the several customer production ramp delays and push outs of forecasted orders that we experienced related to COVID-19, we saw a significant increased activity with both current and new customer engagements as business conditions began to improve.
The resulting in improved revenue and strong bookings of $8 million for the third quarter.
Our highest booking quarter in over a year the.
The improved result, along with the growing demand for silicon carbide and Silicon Photonics gives us increased optimism that our products are poised to serve larger and growing market opportunities and that we will continue to see improving financial results as we move through the remainder of this calendar year.
Turning to a review of our financials net sales in the third quarter were $5 3 million.
Up 213% from $1 $7 million in the preceding second quarter and down 14% from $6 1 million in the third quarter of the previous year.
Which as you recall was our last reported full quarter before COVID-19.
The sequential increase of net sales from the preceding Q2 reflects an increase of $3 4 million in wafer level burn in revenues and 163000 and customer service revenues.
The increase in wafer level burn in revenues is primarily due to an increase in system revenues of $2 3 million and an increase on wafer pack the AIPAC revenues of $1 1 million.
The decrease from Q3 last year includes the decrease in wafer level burn in revenues of 867000.
With customer service revenues remaining flat the year over year decrease on wafer level burn in revenues was primarily due to a decrease in wafer pack. The AIPAC revenues of $1 2 million, partially offset by an increase in system revenues of 297000.
There were no packaged parts system revenues in Q3, 'twenty, one Q2, 'twenty one or.
Our Q3 'twenty.
Non-GAAP net loss for the third quarter was 464000 or two cents per diluted share and includes the warranty charge of 299000 related to a voluntary replacement of a component to improve long term reliability of our systems.
This compares to non-GAAP net loss of $1 7 million or <unk> <unk> per diluted share.
In the preceding quarter and non-GAAP net income of 452000 or two cents per diluted share in the third quarter of the previous year the.
The non-GAAP results exclude the impact of stock based compensation.
On a GAAP basis net loss for the third quarter was 735000 or <unk> <unk> per diluted share.
And includes the warranty charge.
This compared to GAAP net loss of 2 million or eight cents per diluted share in the preceding quarter and GAAP net income of 245000 or one cent per diluted share in the third quarter of the previous year.
Gross profit in the third quarter was $1 9 million or 36% of sales up $1 5 million compared to gross profit of 377000 or 22% of sales in the preceding second quarter and down from gross profit of $3 million or 49% of sales in the third quarter of the previous year.
The increase on gross margin from the preceding Q2 is primarily due to a decrease of the unabsorbed overhead costs to cost of goods sold due to higher revenue levels in Q3, 21, and favorable direct material margins related to nonrecurring engineering revenue recognized in Q3 21.
The decrease in gross margin from Q3 last year is primarily due to an increase in warranty costs as a percentage of sales in Q3, 21, and an increase on the Mezz unabsorbed overhead costs the cost of goods sold due to lower revenue levels in Q3 21.
The increase in warranty costs resulted in a six point percentage point decrease in gross margin from prior year.
The impact of Unabsorbed overhead resulted in a three percentage point decrease in gross margin from prior year.
Because of the manufacturing overhead costs are relatively fixed we scaled very well as our revenues grow the increase the flow to the bottom line and our margin percentages are favorably impacted our product mix also impacts our gross margin percentage.
Looking at our results from Q3 last year about half of our revenue came from higher margin wafer pack the ipass and we recognized gross margins of 49% and we're profitable on just $6 1 million in revenues.
As noted earlier during the quarter of the company recognized the charge to warranty of $299000 related to a voluntary replacement of a component to improve long term reliability of our systems. This had a significant impact on our gross margins in the third quarter without this warranty impact gross margins from Q3 21.
Would of been above 42% of sales much improved from the 36% we reported.
With improved revenue levels, and a relatively fixed labor and overhead we expect gross margins above 45% of sales with a good mix of product and consumable sales.
Operating expenses in the third quarter were $2 5 million up 225000, or 10% from $2 3 million in the preceding second quarter.
Expenses were down 190000, or 7% from $2 7 million in the third quarter of the last year.
As I've noted on past calls we have taken significant actions over the past year to control spending reduce costs and lower our breakeven.
Starting in Q1, we implemented temporary cost reduction initiatives across the company due to the customer order push outs on delays and production ramps we experience. These.
These cost reductions have resulted in total cost savings of over $1 million in the first nine months of fiscal 2021.
With customer service activity of business, improving we eliminated the pay reductions for non officers at the end at the start of Q3.
The 30% pay reductions for our executive staff remain in place.
The sequential increase in operating expenses from the second quarter is primarily due to an increase in employment related expenses as a result of eliminating pay reductions for non officers.
The decrease in expenses from Q3 last year.
It was primarily due to a decrease in SG&A of 248000, which includes the decrease in the U S of 155000, and a decrease of 109000 at our Germany and Japan subsidiaries.
The decrease in the U S reflects the decrease in employment travel and trade show expenses, resulting from cost reduction measures taken in response to the Covid pandemic.
The decrease in SG&A at our Japan, and German subsidiaries is due to restructuring of Atkins actions taken to move to a sales rep distributorship model in these regions.
SG&A was $1 6 million for the third quarter up 142000 from the preceding second quarter and down 248000 from the prior year third quarter.
R&D expenses were 903000 for the third quarter up 83000 from the preceding quarter and up 58000 from the prior year third quarter.
Turning to the balance sheet for the third quarter, our cash and cash equivalents were $4 7 million at February 28, 2021 up from $1 3 million.
Up from $3 4 million at the end of the preceding quarter and included borrowings of $1 4 million under our line of credit.
Accounts receivable at quarter end was $2 7 million.
An increase of $1 3 million from the preceding quarter and related to the increase in revenue Q3, compared to Q2 and a decrease of 996000 from the fourth quarter of fiscal 2020.
Excuse me.
Inventories at February 28 were $8 3 million down 718000 from $9 1 million at the preceding quarter and property and equipment was 617000 compared to 683000 at the preceding quarter end.
Customer deposits and deferred revenue short term and long term were 667000 up from 75000 of the preceding quarter and related primarily to the increase in backlog from the prior quarter.
Our current and long term debt of $1 7 million is related to funds. We received during the fourth quarter of the last fiscal year under the Paycheck protection program of P. P. P.
The company apply for forgiveness of the PPP loan on November six 2020.
While the SBA has 90 days to review and approve the application. It is our understanding that the SBA has experienced delays in their review.
And this delay is not an indication of issues with the application or likelihood that the loan forgiveness would be benign.
Bookings in the third quarter totaled $8 million and included orders for two Fox XP test cell.
Over $4 5 million in revenues were recognized in Q3, 'twenty one related to the $8 million in bookings showing how quickly we can turn orders to revenue.
Backlog at February 28 was $3 7 million up $2 7 million from the end of the preceding second quarter effective backlog, which includes backlog at the end of the fiscal third quarter plus orders since the end of the third quarter is $5 3 million.
Now turning to our outlook for fiscal 2021.
Excuse me as Gaye mentioned with our increasing customer visibility.
We continue to expect orders from the customers the projected a ramp in the in the latter half of our current fiscal year. Unfortunately, the timing of these orders has been delayed.
And we believe this has caused us to come shortly on our original expectations for the fiscal year.
However, we expect to enter fiscal year of strong year over year growth on bookings and for our fiscal fourth quarter ending may 31, [laughter] excuse me.
Aerospace revenue to be at least $7 million, a 33% sequential increase from the third quarter and be profitable for the fourth fiscal quarter.
Again, the growing demand for silicon carbide, and Silicon Photonics gives us increased optimism that our products are poised to serve the.
The larger and growing market opportunities, which gives us confidence that we will continue to see improving financial results as we move through the remainder of the calendar year.
Lastly, looking at the Investor Relations calendar Air test will be participating of two investor relations conferences in June we will be meeting with investors virtually at the Craig Hallum Institutional Investor Conference on June 2nd and also that the 13th annual CEO Summit, taking place on June 15, we hope to see some of you virtually of.
These conferences.
This concludes our prepared remarks, we're now ready to take your questions. Operator. Please go ahead.
Okay.
If you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you were using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment.
The press Star one to ask the question, we'll pause for just a moment to allow everyone an opportunity to signal for questions.
We'll take our first question from Christian Schwab of Craig Hallum Capital Group.
Hey, Thanks, guys.
You know you talked about the huge opportunities in silicon Photonics and Silicon carbide can you tell us how much revenue you would anticipate doing in those markets and in fiscal year 'twenty, one and can you give us any you know projections are.
Other or ranges of potential outcomes of what that business could grow to you know in two to three years.
Okay. So we we historically had been not been breaking down by segment and I think maybe that's something we look at for year end.
And part of that's just sort of Triangulating all of the different events, although honestly if we go back and look at each of the press releases, we probably could create added up.
And you know we're also.
Obviously, one of the challenges we've had has been able to provide an appropriate guidance on.
Given all the other uncertainties in our plans are not to give a guidance for next year until the following our earnings release and that would still be my assumption that we will tell our investors as best we can what we understand about the market, having said that I do think that.
While we are we do expect to have a good year in silicon photonics.
I think absolute revenue growth year over year from this year to next and I think the silicon carbide is likely to be higher I mean, our growth in silicon carbide will be higher than our growth in our silicon photonics and I think it's very likely that the silicon carbide revenues will be.
Higher if not substantially higher than the silicon carbide revenues. So you add up all of those things and we are definitely feeling optimistic about you know year over year of growth, but let's also be fair. The last the first few months, where you know the first few quarters were lousy.
And you know we're not excited about what they were we were excited about the continued.
Communication with the customers the.
The what they are telling us in terms of the value of our products. The what they are telling us about their ramps and how we fit into that and how we are basically unique in how we fit into that but you know we're on the edge of our seats like all other shareholders waiting for those orders to turn into first bookings in the.
Into revenue and we have the capability and capacity to to address those needs.
So I mean I.
Hope I gave it a little bit of color, but I do think we'll see euro per your growth at both and I think that the silicon carbide will see stronger growth and be higher as a percentage.
Of our total revenue then the silicon photonics will be.
There's a lot going on in silicon carbide and the quantities of of units unit growth the test times and kind of the uniqueness of what we have I think it's going to parlay into you know on Cigna.
Significant market share in that space.
Okay.
Thank you.
Your original guidance of this year was 25, the $28 million you know and and then we saw you know obviously challenges of COVID-19 related push outs of you know from customers you know that that kind of started last quarter and we were still quite a quite optimistic.
For the back half of the year and it until now.
So when we look at next fiscal year.
And your commentary gained of you know that there are no lost opportunities they've just been pushed out or delayed.
You know if if we kind of have you know quote unquote, you know normal conditions are normalizing conditions, if you will.
Is there any reason why you can't be doing $25 million to $28 million I know youre not giving guidance for the very you know one of the obstacles for you to recover that revenue plus the growth that we just talked about in photonics and silicon carbide.
It seems to me you should be able to you know do 2500 28 million next year. It just got pushed out of the year is that fair or am I thinking about that wrong. Yeah. So maybe let me see if I can do this in a couple of few ways. So in general there's no reason from a infrastructure capacity supply chain.
At this point that we believe we wouldn't be able to do those revenues and more just you know from our ability to supply, let's do that on.
Related to the markets themselves.
I actually feel we have more market opportunities going into next year.
The only reason is we've now seen you know.
Albeit only a couple of more of the silicon photonics customers transition to production, but I feel like we we have now what five folks that are in production to address the market. The part that I and I've tried to communicate you know subjectively and objectively as best I can but if you follow my transcripts.
Over the last two or three quarters and stitch. It together you know last summer when we saw some of the the softening of the Silicon Photonics forecast, where like it made no sense to us.
Wait a minute how is it the data centers are slowed down I mean, everybody's on zoom and the whole deal and it wasn't until really the fall I think when I and one of my conference calls that we started to see that the silicon. The transceiver companies my customers were all reporting lousy quarters at all of their sales dropped.
In last quarter or the summer because of the datacenter folks weren't actually buying and doing those upgrades.
So it's like Okay, well you know if the if the Amazons of the world arent buying and therefore, my customers aren't getting the orders big Shocker, they're not buying more equipment.
Just didn't seem intuitive.
Then it hasn't changed and so it's only now that we're hearing from folks that those ramps are coming back this summer or something along those lines now do I think the double count like Wow, they're a year behind I don't know that I'm not sure that's as obvious as they'll just resume where they left off and will continue to grow from there.
On the Silicon carbide.
If you just look at where it was I don't even know a year ago, let's say last summer.
This idea of the <unk>.
Electric vehicles electric Chargers, and if you understand how the silicon price.
So I like the critical subsystem on again those.
In burgers and things that change AC electricity in the D. C that allow you to charge of D. C battery system.
That's that component and then you you.
Would we have been even the even anticipate.
Sort of this shift where everyone was talking about on electric vehicles.
I mean, the general motor's announcements et cetera, or now with the U S government and the new plan. What is it 500 billion I should be careful but I think towards electric vehicle charging systems.
So you know that that transition has got everybody scrambling and my understanding is and we actually know of both publicly and not publicly companies that are making some massive investments to redirect capacity fab capacity infrastructure of people towards silicon carbide to.
So after that.
So in that sense as we head into next year and I know I always from a very optimistic guy, but we werent looking at that level of strength.
Last summer in Silicon carbide, I mean, we've just gotten our customer first customer of the production people were talking about it but we didn't have the visibility that we had and now we're actually talking to multiple major players and hearing about it and so I think that the.
We will head into next year.
You know stronger in terms of more customers in production.
More products actually some more product offerings, even just the configuration, we do for the subject of car, but didn't really we had before and so I feel very good about it.
Just you know I'm sure I'll, maybe I'll do it with someone else I'll talk at some point about what we're feeling in terms of is it still of Covid restrictions, but it's still there.
You know it clearly has slowed down customer orders and I can't I I know, it's extremely frustrating for our shareholders.
I'm a big shareholder it is unbelievably frustrating to hear time and time again about.
Or is eminent here. It is it's right here on adult.
Here's where the system is going to go look at the picture of where your system is going to set and then don't get the order.
So.
This is during the break.
We're gonna make it through and I think we're gonna be in better shape on the yard.
Great. Thanks, the other question. Thank you.
Okay. Thank you.
Thank you we'll take our next question from John Fitch torn with the dialectic capital.
Hey, John.
Yeah.
Hey, Thanks for taking my call.
No.
You know I guess my first question is really I'd love some clarity on the ramp because you've talked a lot about silicon carbide, and silicon photonics, and and and you might of.
The reverse that and in one of your answers you said I think silicon.
<unk> would be higher in revenue next year than silicon carbide.
I apologize I believe it's silicon carbide, yes will be higher in revenues not just growth yes.
Okay. Just wanted some clarity on that so if you could give us some clarity on the growth rate, though of your kind of two to three D. Sensor order that you got the kind of kicked off the quarter that everybody is excited about is that is that part of your backlog is the continued growth in that.
Order book or was that kind of of one and done.
Well.
Okay. So we what I think I was pretty clear on and I apologize because you know you get a little of lucid were trying to be at least big enough to protect the nondisclosure. So the stuff that we have but you know we started shipping that in Q3, we got the order in Q3, we started shipping it and then we believe we'll complete the shipment of it I'm quite confident.
We'll complete the shipment of that initial order this quarter.
And then what I, specifically stated in there and I'll just stick to that.
We do believe that there will be additional capacity of dye packs and a system level of capacity for that move.
Moving forward and the timing of that and the quantity you said that we're being a little allusive of but I do believe there'll be more.
I think I have shared with people in on these calls before that you know I'm always a little on extra cautious are nervous about.
This particular application because of this.
Kind of market segment, because there's all there's been so many.
Variations in rat, Roadmaps and ramps and things like that that have you know.
The das or surprised us in the past so I tried to be as cautious out of the Ken about that but based on what I've been told from the etcetera, there will be more.
Great.
And thank you.
We've had conversations before and maybe or maybe it was on your conference call, where you basically said, it's almost impossible for you guys to stick around in the $20 million to $30 million revenue run rate like if we take the number of customers you have in production, which I'd love to hear a little clarity on how many guys are actually in production that are tier one customers how many tier two.
Customers are in production like if you just take those numbers and you say gosh of tier one customers kind of five to 10 million of whatever the range is in the tier two is this it's on.
So it's hard for us to do $20 million to $30 million and yet kind of here I come I've got another year of 20 to 30 million and I'm looking at another year of 20% to $30 million.
Is there a breakout or was your original read wrong like give me some kind of thoughts on on how you think your real market opportunity is in the near term medium yeah, I mean, I definitely I, you know what I and.
I am trying to take it on the Chin.
Not predicting very well on this this environment, but you know this feels like we just lost of year.
But you know this is there a breakout I think there is you know.
Who's our VP of sales and I spent a lot of time talking and talking about the number of customers that are in production and how this works eni between the two of us of over 60 years in the space.
And you know kind of focus on our experiences with how you get customers.
To some extent you focus on the basics. We have these great products that we've identified some really key markets, where we're not only differentiated but they need capacity.
You typically start by focusing on one or two of the big players Hope you get one of the market leaders.
And then once you've proven that out you know the word spreads are you spread it and you move on to additional customers and you gain market share of there's lots of books on that.
We've all read on how the kind of do market penetration and that's how we focused on.
And we've been fortunate enough to the lead customers we've had across mobile.
Our silicon photonics and non silicon carbide.
Our key leaders I mean, we're not talking about third tier. These are the best of the best and they have helped us to.
Validate our products they themselves are buying and we'll continue to buy.
And that her news has gotten out and it's not just that it's the marketing sizzle of the products really do what they say, they're going to do and it's applicable to other customers.
So you know the game is now get as many of those customers that you can gain the market share and then enjoy the market growth with respect along with the and so.
Now the reality is that's where we thought we were at a year ago with.
The number of customer engagement.
Have a funnel like every other business. The talks to you know the customers you've just talk to and people that are asking for quotes and people. You know you kind of go through the whole process and.
And Vernon.
Walking through that a year ago.
And started the real.
So you're giving them a little bit before then and.
How in the world are we going to be.
Managed through all of these different customers because it's not like these arent important customers I mean, there's a lot of them on their debt or big tier one potential customers. So at that time, we came up with the idea of give it to Vernon for it we came up with this application center, where we said, let's take all of our tools with <unk>.
Rest of the money, let's buy one production tool of everything we have put it into a clean room setting. So that we can actually do multiple customers demos at the same time that room is has locks on it has limited access it has cameras in there and then we can basically have a completely secure environment.
To protect the IP of customers et cetera, and do these benchmarks by the way.
And then Covid came and so then we kind of twisted that into this COVID-19 non touch application, but quite frankly, that's not why we did it. We originally did it to try and figure out how we can get to all of these customers.
But when Covid happened one year ago.
But we felt was all of a sudden activity picked up.
Oh Wow. This is you know everybody's busy honestly when I look back I think it was everybody trying to keep busy on zone.
On about summer there like the activity has dropped but I can't invest in the new tool right now because they can't bring it into the facility because I can't even get in myself.
So it's like everything just got put on hold the the whole funnel you can just look at it so we focused on it.
That time, we were already saying, let's just focus on energy on our current customers.
The bulk of the forecast that we communicated at the time was with current customers that knew us and already had tools. So they knew how to buy more.
And we said and what we're communicating what they're telling us well, obviously, what they told us didn't happen what the.
<unk> said, they would buy and what they said they would ramp and they pushed them out but each of those customers is still planning day by.
The differences is the probably the last two three months.
The funnel of customers just start to kick back in again same people kind of right where they left off.
And it's getting busy I was at the six am this morning on the conference call for an hour with another customer.
We're kind of on weeklies with them right now.
And it's that kind of activity that makes it encouraging and so I do think of as you kind of set of the inflection or has your pop or whatever.
You kind of get out of this you know the way we're going to grow is by growing customers who themselves are growing.
And that's kind of on a plan with some key hot markets that I think are going to allow us to get past this 20 $30 million range and continuing to grow.
You've given kind of a customer accounts.
Some idea of funnel pipeline.
On the past can you give us how many tier one customers do you have how many customers are in production and how.
How many conversations however, you want of grant if you could give us some clarity that'd be great and then I'll tell you what I don't have the numbers in front of me and if the more clarity of how the left side, probably one of give them to you because I don't want to be too specific and things, but to give you a feel that I think it's fair.
We have.
Several of our current customers that I'd call out of the tier 1234 of them that they themselves could be buying in that I think we said you know four of five six to even $10 million of year. Okay. Then we have maybe a half of dozen other customers that are of that or tier two or smaller right now.
In terms of actually in production on our Fox tools kind of the new Fox P X P systems.
We now have five silicon photonics customers that are actually.
Shipping products to their customers off of our tools. So that's the in production.
We currently as we said have one lead customer in silicon carbide, that's doing that.
And then within the mobile sensor we have several companies that are suppliers to a big mobile supplier. So each of those are different companies, but arguably there's a collective of of an awareness of our solutions by the end customer, but we have several different application.
And they're all in either of production, where it's 100% or theyre doing the sampling.
Alright.
So I hope that kind of gives you a feel and that's in addition to our historical installed base, where we had a handful of customers that were in Fox products, including flash memory and all that are still using their products in production.
Great and I'll make this my closing remark, which is.
You are at that inflection and you're seeing this activity at all of it sounds great, but we want to see activity from.
From insiders and this board has been granted shares you've been granted shares you said, you're a big share holder your big share Getter, we're big shareholders and we've been picture of buyers and I you know, it's hard you of theirs.
12 months of of lack of credibility here may be yours.
Board and this management team and if we don't see you guys on the tape buying stock I, just don't know how else to measure.
Your conviction, so I would encourage everybody to once again reach into their pockets like the rest of the shareholders on this call and buy some stock and otherwise I really I wish you. The best of luck and I Hope. This is the year of the breakout. So thank you. Thank you. Thank you John.
Yeah.
Yeah.
Thank you we'll take our next question from Larry <unk> with tripling of capital.
Hey, Larry follow up question on the $4 3 million order from the three D sensor.
But that's being done on an old set for the end customer is that correct.
I think the way we describe it as a the supplier of that sensor to that two of the end customer.
No we got it exactly how I know you on that.
I know you were working with an O said as well on your thoughts.
That would eventually regenerate.
Okay. So that actually that specifically is a different deal because of that.
That particular, one so the for clarity, what we announced on.
On last year and at the end of May.
As a new silicon photonics customer.
Who bought a system and actually was working with Oh sought.
To build them their silicon photonics devices okay.
And that customer has now moved from an N P. Two an XP. So when we described that we were pretty clear about that being the no sad but related to the three D.
I called it mobile sensor customers. We're also we're always extra vague.
Because of the non disclosures.
So the sort of getting one step further on the mobile sensor application.
Going to fill that order out of this quarter.
Is that of new applications for the customer of a totally new product or.
And the existing product, but a new application or is it something that's out of the.
So maybe of process they had.
Yeah that works on it.
The you know what I'm Guy Yeah, I I don't want to comment about that just because of the specific nature of in particular this customer. So in fact I would I would correct. You you said three D sensor I never said that okay. Okay all of them.
I've ever said is it's a sensor related to mobile that's it.
Sorry, that's correct.
What I didn't didn't so I guess my that's big enough I can get away with that my my on.
My other question is this.
And product.
Commercialized already in the marketplace or is it going in the marketplace or is it hope to go on the marketplace and that's why you're not sure what the coupon.
No what I'm I'm going to take the fifth on that one I know the answer I think it's best for me not to talk about that okay. I can tell you. It's a really it's a really cool device. If that's of subjective as I can get away with.
And very interesting and.
Unbuildable small how is that okay.
So is it does that have anything to do with this.
This new dye pack design, what what well call. The time to go down that path to started developing a new dye pack them.
Yeah. So we had identified this we had actually identified this concept, there's I think three or four different concepts of dye packs a day.
Maybe at some point would make more sense technically we do these other non disclosures with customers of how we've implemented the dye packs and I am going to spend more time talking about <unk>. This year, because I think most people on.
Understand of wafer pack you put away for in this thing and then it goes into our system. The dye packs are a little bit more elusive and die packs really the kind of thinking since the we've taken the technology for the really small micro probing test capabilities of our wafer packs to make contact with small devices.
So we can actually contact and individually single aided silicon or other compound semiconductor die in other dotcom, okay. So instead of it being a whole wafer of them, they're already cut simulated and then we can test them and we do that today.
But it also is quite applicable go ahead I'm sorry go ahead.
As you develop the system.
I'm wondering is there an order behind it or a customer behind it.
Yes, yes.
The Saturn I pack was part of that actually die pack was part of that first big order.
The four O $4 three of them.
Yeah, that's the and that's what the motivation behind the driver for the other ones Okay.
And these and the ability to actually handle all of these tiny little devices and contact them, there's a whole family or there's a whole style of components.
That of come out and there's lots of different names in packaged styles, but sort of of generic thing is called the QF earn.
It's a lead list component the part has no physical pins to it.
So making contact to it electrically.
As well as thermally right on it in a test environment requires you to have pins in your test or.
Parts used to most parts have pins on them and then you pressed the park against the printed Circuit Board.
And but as the devices have gotten smaller and smaller they're so small they don't even have pins on them.
A tiny little pods and they use surface Mount technology from Mt.
Contacting them electrically and handling them is really hard.
So our dye packs have evolved for the same technical reasons, we can contact of tiny little die with electrical pads on it with no pens. We can do the same thing with individual devices or modules.
And have all of the same thermal control and everything else and that is completely unique.
And as you understand.
I mean, we're doing.
I've personally you know.
Inspected I have access to the the non disclosures on all to get access to these devices.
You're under a microscope doing all of this is it's amazing and I alluded to this and the IR folks will get you a photo.
But we've taken a photo is an example of of kind of device that the sky pack can handle it is not the customer device that would be really clear the.
It is tiny you're dropping on the table you can't find it.
Yep.
I got a sense of now switching of the Silicon carbide you have.
The potential new customer that you've been working on and now it's the ball.
Who on actual trial you said the on there.
On their facility is that what you said, yes, yes.
So you you've taken wafers from this customer in your facility on your lab, because you set up to do this work.
Our plan to be more specific our plan is that we will be taking wafers into the facility and then it will move to their facility.
And then when it moves the other facilities are you going to take on the N P. Over there the do it or how does that work you know what I think that would be the easiest thing I think we'll see how that goes on if they immediately want to go into production the Republican on on X P.
I'm not the kind of low on the next I'd say, what Larry I'm not going to loan them on an XP.
Yeah, right if they found on N P. The cheesy because we can practically ship it overnight because it's small enough, but it's the real trial, we'll be I'll be happy to quote them.
The real trial will be on your lab.
On their way for the.
And then the that's the proof that hopefully will progress through an order of Australia with some sort of okay. So this this potential customer with COVID-19.
The get into their their facilities.
Sumit from Europe.
Is.
Does the the first state of being.
Being vaccinated and I would assume maybe that sort of Trump card that you might be able to pull on the get into it where we're all back slightly the zone is that kind of a requirement. The the break into the day, let me talk to you about.
So the folks that follow the market the.
The major suppliers.
Silicon carbide today exist in the U S and.
In Europe, and Japan, and there are some players coming up in other parts of Asia. So.
These guests of the paint in Europe as you know if the one in four chance I'm not going to comment on that yet okay, but all.
All of those places have similar COVID-19 restrictions.
So one thing I do believe is going on is that customers are assuming that they will subside.
But you know right now so.
Like a lot of us I'm tired of talking about Covid.
Personally I buy the I'm full of energy I got sick of work I bite, but just the whole COVID-19 thing and has the CEO just sit here and talk about Covid once again as like an excuse its super frustrating okay.
But the reality is it's real so I'll give you an example of right now.
We want to install the system in Taiwan, Okay. We are installing the system in Taiwan to go out of Taiwan first of all of it depends on what country you're coming from.
Okay more restrictions on U S and Japanese people.
Right.
We had to get approval like weeks or days of days or weeks ahead of time.
My engineer of flu in sat in a company like a government sponsored Covid hotel.
He is not allowed to step out of his from end of the hallway for 14 days.
Or he'll be arrested and that they have the rest of the two people. So far not my guys to make a point out of it.
Then he is only allowed to stay in country for so many days and then you've kind of leave by the way you go back to his own country 14 day quarantine.
Yep.
So it's 12 months away from overhead.
Availability of vaccines and.
Is that gonna be alleviated you know what I I I really don't from personally know anything more than anyone else I know that the Vern and I are getting a second chance next week.
The staff is at different stages, depending on what city in countries and stuff you live in or <unk>.
Most if not all of our support staff is doing it I have not personally heard one customers say Oh, if you got the vaccine now I'll, let you in differently, but that's why I was wondering okay that yet, but I believe I personally believe is debt that will help and will subside, but I think that most customers are thinking summer.
Not 30 days.
So you know until we actually see I mean, I think today restrictions on the U S citizen I can't fight of Germany.
Because it doesn't matter.
You get the sort of micro restriction things that kick in and you know in that environment, new customers, new evaluations are being held up it's weird.
Oh I see.
The one comment or question the C. P a customer whereas that standard is that still on the pipeline as it is it's in the pipeline.
This two months ago, they were buying spares for it it's been use round the clock and we're like tapping our fingers on the table windows on around my my understanding both publicly and what I can share. They just simply put that project they stay.
Held off from here.
Because of Covid. They just you know just one year's gone, but they've been they're sampling to their customers and doing things et cetera, I don't have the latest update of when they're supposed to ramp.
We did at the beginning of the year have a C P.
The forecast for them at the May.
And I think we pushed that out a couple of few of you know several months ago.
But the tool is being used around the clock is happens to be at a facility that they it's an act of Congress to get in.
And thank heavens systems never broke.
I mean, it's it's been fine everything's, great. It's all good but it hasn't been the issues.
You know things happen, but luckily, we haven't had the issues and so.
We're just waiting for them to buy more.
Last question. The I was just looking at the spot memory prices today and I was just shocked at how strongly we're especially DRAM kind of going back up significantly.
Is there of you know does that.
Maybe what the appetite for somebody to expand and maybe open the opportunity for your memory of project is that the.
Are you getting any fees.
We've seen some healthy signaling.
In the flash space I'll be specific.
And you know until my conversations with the other flash and DRAM guys.
I continue here the new program spend on hold like they haven't really.
Not theres still you know well.
People understand or fall of the space you know how is it debt you know air test I, just make sure people draw the attention to it a lot of a lot of companies in our space have absolutely had incredibly great years okay.
The test is that would not be how I would describe it with us.
But I have a lot of friends in this market as well none of them had been selling new tools ever.
Everybody's new product investigations were put on hold by the way having been in this industry for 30 years the.
That's one of the nice things about from some of these weird cycles.
The customers are always trying to figure out how to buy the new tool to get the test tightens down or get the cost down or whatever if they simply continue on with the current tool and buy more on more of it they have no of leverage or any way to get their costs down.
So you make a lot of money and that's the time so what's happened is.
The bond test in Teradyne, and the co Hughes of the world, They're just selling a lot of the same testers to the same customers and theyre getting installed and they ship them on the customers, it's all of them themselves or the outside people install it but nobody is buying new stuff well if you happen to be air test, who just introduced a bunch of new products to go into these new exciting the spa.
Lots of year ago guess, what do you get hit we didn't have that many customers that we were able to ramp that's reflected in the revenue that we have and a lot of new business just got pushed out.
Got it okay.
Some of I don't know if anybody is left but okay. Good luck. Thanks Larry.
Yeah.
Thank you and we'll take our last question from Rick Greene with Green capital.
Oh hi.
Thank you very much.
I have a general question.
I understand new business difficult to get approved the new tools.
Stan.
The industry and the whole is scrambling to increase capacity one of the.
The weighted.
The producing at the Max I used to get back to the T that was everyone.
And you have legacy business yourself, because you are not the new player.
And you are only talking of word of cod by the end the port on ex U.
This is new stuff you know.
The legacy business.
Got it.
You've you see your presentation. He was sort of in the what do you put the new other website see how many customers do you have those that are on legacy customers theyre not photonics that they're not everybody.
Some of them on.
You have so many customers in your presentations here of all the weight of ours that they're doing it isn't that the auditing anything of everybody's increasing capacity if something is not right. You know what you are getting drawn from.
This is nobody lost one of it because everybody is booming.
You one of the you thinking unfortunately.
So there is something here.
I wanted to you guys to have internally from critical assessment of what's going on.
And the because it's been going on like this a few quarters at least.
You have stopped from expectation on what have you does every day everywhere, it's not only for you don't any one country.
Is that also playing lepton and nobody has the capacity even the pool of days they have no capacity for the.
You know much of lead time each one.
For tools.
So I wanted you to tell anything you have because you didn't give the best operators I said this is the last question.
So badly.
Sadly the really what's going on in your day last May we let me let me let me try to describe it as I understand it so.
Fire to Covid stuff you were it said you know where is your business. What's it look like and lets say you know the fourth calendar quarter of 2019, clearly before COVID-19.
What we had been communicating to.
Our shareholders.
Is we had been had made the transition.
Fairly substantially from packaged part burn in which had been the historical business that was running.
The $2 million to $3 million of quarter, or so to our new wafer level products and what I mean by out of is that our new Fox family called the Fox P family is quite new.
Initial revenue shipments in the last 18 months for example of the Fox P and the NP systems and the XP itself is only a few years old with the first customers going into production within the last 18 months.
Including Covid, Okay sort of like 18 months from now, but looking backwards. We had just seen in fact I think it was in Q4 calendar that we were just finally banging the drum that our lead customer for the Fox XP and Silicon Photonics had finally gone to production.
I'm in fact, maybe can look back maybe it was the January conference call of 2020, because that's what they had they just finally gone into production and so what really is what when you talk about you know legacy products or whatever we had made the transition as a company over to these new.
Ex with these new customers and market at that time, our legacy business was actually quite small it was sort of persistent support and a little bit of packaged part burn in business that we have seen substantially go away.
The one thing I am curious on is that we I mean, we went for during the Covid in particular.
Very little of spending was being done and certainly no new product or new investigations were being done in the packaged part space.
So it's just recently that we've had customers turn back on and what would be traditionally your.
Our legacy packaged part business and start to put our Qs in the information out request for capacity and proposals on all so.
Our legacy business, we really did see go to almost nothing and it was only the new products that we were getting revenue on in these newer spaces.
So that's a little different I mean again I you know.
The background as I came from bear achieved that was acquired by the test.
<unk> had products that you know our products had you know 50 or 100 customers in production done.
During this COVID-19 those customers continued to buy those products and have had the company on chest you bought those products has done very well.
My understanding is the new products that we're coming out of those were all pretty much slowed down.
And customers were not buying the new things.
During the last nine months.
So I think that's the best I can try and explain what's different about us and say like on the applied materials or of teradyne are in advance test, we really kind of on the scenario, where we were making this transition to these new products.
And we got hit.
So.
We're just not riding the wave of the broad.
The rising tide because of the segments of it.
I hope that helps.
Yeah. The operator, yes. Thank you okay.
Youre welcome.
Okay, and I think operator, you of that you'd suggest the do it there and I think just time wise, we're a little over the kind of a typical one hour of allotment debt. We do so let me just.
So thank you for everybody for attending the call as always we can't we will make ourselves available for calls with you.
I used to always invite people if you're in town swing by but we're still kind of limiting that a little bit ourselves but.
If you're a customer you're welcome to come by we'll figure it out but.
But other than that I. Appreciate your time, and we will talk to you at the next call as well.
Bye now.
This concludes today's call. Thank you for your participation you may now disconnect.
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Moving forward.
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