Q1 2021 Pixelworks Inc Earnings Call
Good day, ladies and gentlemen, and welcome to pick total words incorporated first quarter, Jonathan Eckard on earnings Conference call I will be your operator for today's call. At this time all participants are in a listen only mode. Following management's prepared remarks instructions will be even further up.
And answer session.
This conference call is being recorded.
Replay purposes, I would now like to turn the call over to pick celebrates CFO Mr. Idiots, Eli as theater. Thank you Sir Please go ahead.
Thank you.
Good afternoon, everyone and thank you for tuning in.
Today's call with me on the call the start up on US pixel works President and CEO debt.
Purpose of this conference call is to supplement the information provided in pixel works. Its press release issued earlier today announcing the company's financial results from the first quarter of 2021.
Before we begin I would like to remind you that various remarks, we make on this call, including those about our projected future financial results.
Economic on market trends on our competitive position constitute forward looking statements.
These forward looking statements and all other statements made on this call that are not historical facts are subject to a number of risks and uncertainties that may cause actual results to differ materially.
All forward looking statements on based on the company's beliefs as of today Tuesday may 4th 2021.
The company undertakes no obligation to update any such statements to reflect events or circumstances occurring after today.
Please refer to today's press release.
Our annual report on form 10-K for the year ended December 31 2020.
On subsequent SEC filings for a description of factors that could cause forward looking statements to differ materially from actual results.
Additionally, the company's press release on management's statements. During this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms.
Including gross margin operating expenses net loss and net loss per share.
Non-GAAP measures exclude amortization of acquired intangible assets stock based compensation expense and restructuring expenses.
The company uses these non-GAAP measures internally to assess our operating performance.
We believe these non-GAAP measures provide a meaningful perspective on our core operating results on underlying cash flow dynamics.
We caution investors to consider these measures in addition to.
As a substitute for no full force not superior to the company's consolidated financial results as presented in accordance with GAAP.
Also included in the company's press release are definitions and reconciliations on GAAP to non-GAAP net loss.
On GAAP net loss to adjusted EBITDA.
To provide additional details.
With that said I will now turn the call over to Todd for his opening remarks. Thank you.
Thank you Elias and good afternoon to those joining us on today's call and webcast.
As outlined in today's press release, our first quarter financial results were in line with our expectations and with all metrics coming in at or above the midpoint of guidance.
While anticipated Q1 seasonality on the projector market resulted in lower consolidated revenues sequentially.
With weakness largely offset by record revenue from mobile, which expanded to 44% of total revenue.
Consistent with our guidance gross margin in Q1 was lower than historical average due to a combination of higher supply chain costs product mix and a new mobile OEM that ramped during the quarter.
This anomaly is now behind us and we are positioned for gross margin to return to our historical range in the second quarter.
Starting in Q2, we have passed on higher material costs to customers. While also benefiting from increased unit volumes and improved product mix.
Coming off a challenging global demand environment in 2020 due to the pandemic, we saw improving order patterns. During the first quarter that will have a positive impact on our guidance for Q2.
Additionally, we have seen a positive response to our increased lead times across all product lines and now have better visibility on product demand through 2021.
Most importantly, we sustained all fundamental R&D efforts over the past year, which was critical to securing the new wins, we've announced year to date and the expanded opportunity pipeline we have today.
Specific to the mobile business in the first quarter.
Revenue grew 91% sequentially and was up 58% year over year to a quarterly record.
This marked the third consecutive quarter of 50% plus sequential growth in mobile.
We believe the mobile market is primed for growth in 2020, one as the industry and end market demand recovers.
Third party research firms are forecasting global smartphone units to grow 7% to 8% this year with Oems returning to their more traditional seasonal launch cycles for next generation phones.
A significant portion of the expected growth this year will come from China, where consumer demand has fully recovered.
According to research from Cowen total units shipped shipments of smartphones in China were up on an estimated 100% year over year in Q1 over the first quarter of Q of 2020.
Additionally, they projected the penetration of five G enabled smartphones shipped in China was a record 76% of units in the month of March on.
All of these data points and current market dynamics bode well for pixel works in the mobile segment, where we have focused a large majority of the company's resources.
More broadly the ongoing global adoption of <unk> technology will continue to be an important trend this year.
Is it enables the efficient delivery of higher quality video and gaming content to mobile devices.
Research firms, including Gartner and counterpoint projected global mix of <unk> enabled devices to more than double year over year and represent at least one third of total smartphone unit shipments in 2021.
S. Five G expands it becomes mainstream the high associated value proposition of our leading visual processing technology becomes applicable to an increasing share of total smartphone units.
Another prominent and favorable trend is the growing shift by Oems to more advanced OMA led displays that support higher refresh rates of 90 to 144 Hertz.
The primary benefit of these higher refresh rates are smoother scrolling and animation.
With the early adoption largely concentrated in flagship and gaming centric phones.
Today adoption of higher frame rates by mobile Oems is still on the early end of smartphones supporting 90, plus hurts likely accounted for less than 10% of the market in 2020.
While the penetration will be much higher in 2021, there are two existing drawbacks for consumers.
The first is limited available content that supports being displayed at higher frame rates and the second is the increased power consumption associated with refreshing the screen at higher and higher rates.
Our visual processes processors address both challenges providing.
The ability to upscale low framerate content higher rates, while reducing the load on the apps processor.
Resulting in significant improvements in visual quality and power efficiency.
Also specific to OLED displays they create the need for additional color management in order to display colors accurately and area that pixel works excels and we have been actively promoting for many years.
While some degree of color management is frequently offered in the applications processor, our solutions take color accuracy to another level, providing both meaningful differentiation as well as high efficient color calibration.
Third party tests have consistently proven pixel works delivered the best color accuracy in the industry.
With the availability of AUM led displays expanding beyond tier one flagships and the cost coming down more Oems are adopting these displays and thus paying more attention to delivering accurate color.
The increased focus on color accuracy, only makes sense when implemented together with together with color calibration due to the frequent manufacturing variances inherent in OLED displays.
Pixel works patented color calibration, which can be integrated using our soft iris solution or with our visual processors.
He is extremely efficient.
And reduces the time required to calibrate on mobile device across all standard colored damage during the manufacturing process to under 30 seconds.
I also want to emphasize a few important elements of our soft iris solution or software only solutions to address certain common misconceptions first our soft iris solution could only be applied on platforms with relatively high end application processor that has certain video display pipeline capabilities.
Although simpler and less expensive to incorporate into our smart phone and then a chip the requirement for soft iris to run on a reasonably robust video display pipeline prevents it from being a solution for most lower on smartphones.
Perhaps most important our soft iris solution is not feature static and in this is that in fact is currently in its third generation. We continue to upgrade the solution with new and optimized capabilities to deliver incremental value to Oems as.
As we add functionality, we're also able to gradually increase the price of soft iris when used as a standalone solution.
At a more macro level one of the fastest growing use cases is mobile gaming.
The combination of a more of more powerful gpus.
Ultra low latency five G and Wi Fi six is enabling multiple very popular interactive games that price previously could only realistically be played on a console or a P. C.
Two.
That will be played on a mobile device.
In addition to the gaming phones announced in recent months that incorporate pixel works technology.
We have strong indications from multiple mobile Oems the gaming will be a lasting and growing trend there.
They are focused on optimizing the gaming use case in both their premium and flagship phones.
Higher frame rates are fundamental to providing the most immersive and realistic gaming experience yet also create several pain points in a mobile environment.
Our family of visual processors provide a distributed visual architecture that solves multiple challenges such as motion clarity color depth, and contrast, and I comfort.
However, the single largest pinpoint for mobile gaming is battery life and heat dissipation.
Rendering and displaying dynamic content, whether gaming or video consumes battery life faster than all other use cases combined.
Distributing or offloading, the visual processing to our processor and upscaling the frame rate of the displayed content with pixel work smart motion processing algorithms decreases the workload of the AP, reducing overall system power consumption.
We've demonstrated that this distributed visual architecture with pixel works coprocessor results and up to a 30% less battery drain and up to 10 degrees Celsius lower phone temperature during sustained high frame rate gaming.
The on solving key pain points, we provide a path to higher frame rate modes that fully utilize the capabilities of the display.
This includes providing advanced features such as AI optimized picture quality.
Real time, SDR to HDR conversion dark noise suppression and smooth auto adaptive brightness control.
As highlighted in our on our previous call. We introduced our most recent sixth generation I six visual processor on Q4.
Which is the first to incorporate AI adaptive picture quality.
The dedicated AI engine and our ice six processor utilizes power efficient inferencing that augments pixel works extensive knowledge base and industry, leading display processing algorithms with numerous real time inputs from content sensors display user preferences and the environment.
This enables increased adaptability of the overall picture quality in real time, including colored color depth contrast, and sharpness, while adaptively preserving viewing clarity in any lighting environment.
Yes.
Yeah.
Looking at mobile wins, we've announced year to date pixel works visual processors and software solutions have been incorporated into a total of 11 models launched by six different mobile Oems, including our second tier one vivo as well as another first time customer Lenovo.
Brief highlights from the recent wins include.
Our longtime customer and consistent early adopter Aces became the first OEM to incorporate pixel works sixth generation I six visual processor with its launch of the <unk> phone five seat.
Featuring a $6 seven eight inch OLED capacitive touch screen display and supporting up to 144 Hertz refresh rate. This ultra high performance gaming phone Leverages. The full suite of advanced features in our <unk> chip, including AI based adaptive picture quality as well as.
AI enhanced real time SDR to HDR conversion.
Also during the quarter.
<unk> extended the use of our proprietary and industry, leading color calibration and flesh tone management in the launch of the Opel find X three and find X three pro series, while also retroactively incorporating pixel works software solution via a firm where upgrade into the Reno five pro plus.
In mid March we were pleased to have announced the second tier one mobile OEM vivo.
In conjunction the launch of the IQ Neo five smartphone.
Designed to deliver an unmatched five G gaming experience.
The IQ Neo five incorporates our X five pro processing solution to enable a unique gaming experiencing mode.
While also leveraging pixel works patented motion estimation on motion compensation technology that optimizes content for power efficient HDR gaming it refresh rates up to 120 Hertz.
Also you need to the Iqos <unk> five is a dedicated optimization in close collaboration with pixel works that boosts the device's display performance, while playing a select group of popular mobile games, including game for peace, Hong Chi impact three and perfect World.
Subsequent to the launch of the new five IQ released a derivative and renamed version of the smartphone in India. The IQ seven five G, which also incorporates the X five visual processor.
Additionally, one plus incorporated pixel works technology across its flagship Oneplus nine series of phones. Following the success of the highly acclaimed display performance of its H series in 2020.
The one plus nine pro features a 6.7 inch fluid on the led display with W. P. H D plus resolutions supporting 120, Hertz, coupled with our X five pro.
Leveraging pixel works patented dual motion engine technology optimized for variable high refresh rates. The one plus nine pro can deliver superior visual quality across a wide range of content video formats frame rates and apps, while simultaneously optimizing power consumption.
As previously mentioned Lenovo became a new mobile customer in early April with the launch of the Lenovo Legion phone dual too.
Utilizing Qualcomm Snapdragon 8885, G mobile platform and featuring a 6.9 inch on the led display that supports 144 Hertz refresh rate. The Legion phone do two incorporates our <unk> processor to provide an immersive <unk> experience with more multiple levels of content optimized color depth.
Contrast, and screen adapting this.
Most recently announced was the T. C. L 20 profile G, which also incorporates our <unk> processor with AI enhanced picture quality.
Featuring Tcl's, New next vision, two data on display and positioned as a more affordable flagship. The Tcl 20 profile G is targeted at disrupting the premium tier of the smartphone market.
Also notable our recent third party report published by Dx Omar ranked the Tcl 'twenty Pro five G. As having one of the highest ever overall display scores across top performing smartphones.
Collectively these announced wins demonstrate expanding adoption across a series of new and existing customers that are turning to pixel works on mobile display solutions and expertise to differentiate their next generation devices with industry, leading display performance.
We continue to have a robust pipeline of design ins on smartphones with planned launches in the coming months and quarters.
Looking at our current pipeline, we are on track with our goal for 2021 to double the number of devices launched by customers in 2020.
This includes a healthy mix of phones, incorporating our eye six X five and soft iris.
We expect the growth trajectory in 2021 to be strong for both our hardware and software solutions.
Shifting to the projector business as anticipated we saw a decline in orders for Q1, which is consistent with the seasonally weak first quarter as Japanese Oems manage down inventory prior to the fiscal year end.
However, during the quarter, we started to receive upside orders from projector customers for Q2 and extending into the second half of the year.
Improving the order patterns have been driven in part by stronger demand in China will recover where the recovery continued a solid and steady recovery of demand from education and consumer segments in the U S.
Another contributing factor to the increased orders we are seeing is that the projected customers recognize the broadly reported supply constraints across the semiconductor industry.
Lead times on orders have extended 20 weeks with some customers now willing to place orders as far out as Q4 of this year.
As a result, we have bookings in support of a meaningful uptick in projector revenue in Q2.
We've also put in place dedicated and aggressive initiatives focused on securing supply from our foundry in assembly and test partners to close the gap between supply and demand.
That said the magnitude and pace of the continued recovering projector beyond Q2 is war likely to be partly contingent on successfully mitigating the ongoing supply constraints in the second half of the year.
More specifically to comment on supply constraints, we're seeing gaps to meeting 100% of our demand across all our product lines, but have made significant progress with the help of our supply chain partners and closing those gaps to meet approximately 90% of our Q2 demand.
Similar to other semiconductor companies. We expect these constraints remained a headwind throughout 2021.
Yeah.
Turning to a brief update on throughput.
As discussed on previous conference calls the growth and sustained trend of direct consumer video significantly increases the value proposition for a true cut solution.
As part of our ongoing effort to breakthrough and secure first true put customer in North America. We are continuing to work closely with high profile creative and leveraging key influencers in Hollywood.
We've also continued to narrow our focus on advanced advancing existing engagements and evaluations that are ongoing with a select group of leading U S Studios and streaming service providers.
Each of these prospective engagements recognize the challenges associated with streaming UHD content to high frame rate capable smart Tvs.
And true pets unique ability to mitigate those challenges.
The remaining gating question is how high of a priority do they put on addressing the problem.
While it is still too premature to model or forecast the exact timing we remain optimistic about securing the first commitment for true cut in the U S in the coming quarters.
In summary, coming off a challenging year in 2020, I'm very pleased with the progress we have made across our business and expect strong growth from both mobile and projector in the second quarter.
While the supply constraints I just discussed could moderate the trajectory of projectors continued recovery as well as limit the full potential of our rapid growth in mobile we are confident that we've reached an inflection point from the impacts of the pandemic.
As a result, we expect to achieve strong topline growth expanded gross margins and improved operating results over the coming quarters.
The value proposition of pixel works visual processing solutions and display expertise in mobile is poised for continued growth commensurate with the mainstream adoption of advanced OLED displays higher refresh rates and five G enabled mobile gaming.
Today, we have a solid.
And growing pipeline of new mobile customer design ins for the remainder of 2021 and we remain on track with our goal to double the number of new smartphone models launched.
With that I'll hand, the call over to Elias to review first quarter financials and provide guidance for the second quarter.
Elias Thank you Todd.
Revenue from the first quarter of 2020, one was $9 3 million.
Compared to $9 6 million in the fourth quarter of 2020.
On compared to revenue of $13 8 million in the first quarter of 2020.
The decline in revenue from fourth quarter reflected a combination of seasonality and weaker end market demand and the projected on video delivery markets.
Which was partially offset by strong sequential on year over year growth and on mobile business.
The breakdown of revenue in the first quarter was as follows.
Revenue from mobile increased to approximately $4 1 million or 44% of total revenue.
Driven by strong growth in sales of both visual display processors on software solutions.
Revenue from digital projector decreased to approximately $4 1 million.
Video delivery revenue was approximately $1 1 million.
Non-GAAP gross profit margin was 43, 7% from the first quarter of 2021 compared to 49, 6% for the fourth quarter of 2020 on 52, 1% for the first quarter of 2020.
As previously indicated on our guidance for the first quarter the lower than our historical gross margins. In Q1 was due to was a result of product mix on aggressive pricing that was temporarily extended to a new mobile customer.
Having completed the initial ramp up this unique customer program during the first quarter, we anticipate gross margins will be total historical range in the second quarter and then expand as mobile continues to grow on the projected market recovers.
Non-GAAP operating expenses were $10 2 million in the first quarter of 2021.
Compared to a $9 5 million last quarter on $9 7 million share period last year.
The higher Opex in the first quarter.
<unk> social benefits in China on returning to pre COVID-19 levels.
As well as administrative costs that are typically higher on the first quarter.
On a non-GAAP basis first quarter 2021 net loss was $6 4 million on.
On loss of 12 cents per share.
Compared to a net loss of $4 9 million on loss of 11 cents per share in the prior quarter.
On a net loss of $2 6 million on loss.
Seven cents per share in the first quarter of 2020.
Adjusted EBITDA for the first quarter of 2021 was a negative $5 2 million compared to a negative $3 2 million in the fourth quarter of 2020 on a negative $1 five bringing on in the first quarter of 2020.
Moving to the balance sheet. We ended the first quarter of 2021 with cash on cash equivalents up from approximately $25 4 million.
At quarter end the company had no long term debt on zero outstanding balance on our line of credit.
In terms of other balance sheet metrics for the first quarter day sales outstanding were 54 days at quarter end.
Which compared to 44 days at the end of the fourth quarter.
Inventory turns were $10 one times in the first quarter up from six times in the prior quarter.
Now turning to our guidance for the second quarter of 2021.
Based on recent order trends on our current backlog, we anticipate strong sequential and year over year revenue growth in the second quarter, driven by a combination of another record quarter for mobile and a significant recovery in projector specifically, we expect total revenue in the second quarter to range.
Between $13 million.
On $15 million.
Consistent with my previous comments.
We anticipate gross margin to return to our historical range in the second quarter as.
As the mix of price and within mobile normalizes and projected gross margin expands.
We will also benefit from improved overhead absorption associated with higher consolidated revenue.
More specifically, we expect on non-GAAP gross profit margin in second quarter of between 51% on 55%.
We anticipate operating expenses in the second quarter to range between 10 5 million on 11 5 million on a non-GAAP basis.
That's the anticipated risk on the anticipated increase in Opex is mainly due to planned hiring in both engineering on marketing to support our expanding mobile projects in China.
As well as development costs associated with our next generation mobile visual processor.
Finally, we expect second quarter non-GAAP EPS to be in the range of between unlocked a fortune.
On a non-GAAP loss of nine cents per share.
That concludes our prepared remarks, and we will now open the call for questions.
Operator. Please proceed with from Allergan in the Q&A session. Thank you very much.
Ladies and gents on them to ask a question.
Oh on.
On your telephone keypad.
To ask a question you will need to pass a star one on.
On your phone.
Yes.
Please standby, while we compile the Q&A Boston.
Sure.
Your first question comes from the line of <unk>.
From Roth Capital. Your line is now open hi.
Hi, Todd Idolize, the congratulations on the very strong guidance here a.
Total business is looking very good so great execution, Yeah. Just a quick question first on on the segment guidance for <unk> can you just give us some sense of how the different segments track I know protectors going back mobile coming back any color there would be a good helpful start.
But your life you want to give it to him you know I mean trajectories coming back strong right I mean, I think sequentially, it's going to be up over 100% correct.
You know.
The year over year.
It's still going to be up quite a bit.
And then mobile.
Will it be up sequentially and up year over year feel free.
Correct.
Year over year, Okay. Good.
And then you know Todd.
Kind of make me to help you hate to make you do this but can you kind of walk us through a bridge from <unk> 19 from mobile where it was $3 7 million to 4 million you broke now and then obviously going higher from here you know what the difference is obviously you have more customers more wins, all that but just to give us a sense of you know how the businesses evolved because it's helping understand for the go forward look.
Well, okay. So if you go back to Q4 2019 that was a.
We're multiple programs with our first large customer Oh Paul.
And they they were slating more than we ended up being in because it was they were trying to do quite a bit in a short period of time from an R&D from an R&D perspective, So I think if you recall.
We had to burn off some of that inventory on the front half of 2020.
And and then of course you know.
The pandemic hit on them in the middle of that so it took us a little while to burn off that inventory, we did not have as many programs.
And I would suggest even in their case their programs weren't as successful as we anticipated the ones we werent.
So the biggest single difference is.
We don't see that right now okay. We see because if you go to Q4 revenue from mobile Q1 mobile revenue and now Q2 guidance mobile revenue it has been sustained and growing.
And frankly.
If you listen to all of the notes you can tell we're not even with that guidance, we are not feeling all demand.
We will leave the quarter delinquent to orders for both mobile and projector.
<unk> was higher than what we could sustain and where we're doing a very good job with our supply chain.
Okay.
But not enough to clear out all delinquencies.
And and so on.
Theres no inventory that needs to be burned that I can tell by any means so that's probably the biggest single difference you know a little bit it helps that theres breadth across customers. Some are seeing strength. One in particular has seen great strength okay.
And.
You know I'll call them out that the IQ product line of vivo.
The way they launched this gaming experience.
With dramatic power reduction and and heat dissipation savings allows them to two.
Deliver what they call I think they call it marathon high frame rate gaming or something and it effectively a low allows you to put a white list of games into like most of these games. If you don't use us the GPU.
You may be able to do 60 frame per second gaming in some cases 90, but not sustained because the GPU starts heating up and then it starts throttling back and drops frames and May go down to like a $40 45 frame per second type mode.
By using us it allows them in some cases to go 90 frames per second sustained with no frame rate loss and at higher resolution, because we do SDR to HDR and scaling.
Or even up to 120 and their particular demographic that the entire IQ product line I mean today. It's in these debt neo five and in the target model for the four.
India, we expect more models to use the same.
Type of setup to be launched throughout the year Theyre seeing incredible demand for this capability and so.
It's nice to have a success.
And most of the success you read about it a lot, but it's all in Chinese so I don't think most of the investors that are on this call are probably attuned to what we're seeing in China.
Okay.
Number so again, great job on execution, thanks, guys I'll jump back in the queue. Thank you Susie.
Yeah.
Your next question comes from the line of Wechat Channel from Craig Hallum. Your line is now open.
Hi, guys. Thanks for taking my questions I'll offer congratulations on a really nice guidance.
Thank you.
Todd Let me Peel back the onion on Suzhou question here in two ways here.
First of all on the guidance on it.
Is and I haven't been able to run these numbers I think you said projectors growing a 100% I'm, assuming that you're expecting that to grow on a percentage basis meaningfully higher or is it mostly going to be in that range and then kind of secondarily here as we think about the the capacity and supply constraints out there.
Which business is being affected more there.
Yeah.
So I'll answer the latter first so our projector business is.
He is predominantly 40 and 55 nanometer we have some trailing edge 90 nanometer stuff still in production, but bulk of the businesses and 40 and 55 and if you look around at where.
Probably the most acute shortage globally is for process technology. It is in the 40 and 55 domain most of the automotive parts that we read about every day in the newspaper.
Our in these process node.
<unk> and these process node.
Yeah.
So that's the challenge we've done okay, so far but that's a challenge because.
It's a land grab for 40 and 55 nanometer process technology.
On the mobile the mobile today everything is in 22 nanometer ultra low power.
And and that is also constrained, but not to the same severity.
And then your question I didn't completely get your question on the growth for projector.
Just a relative growth here for the segments here in the second quarter, especially with the mobile its power to guests who are not having run the number it seems like mobile sequential growth to be low less than 100% you are calling out for projected but just want to make sure.
Yeah, Oh, yeah, yeah, Yeah, I mean, because we've had strength in mobile I mean, it's sequentially continuing to grow, but it's not going to grow on 100% projectors coming back from.
It's coming back and so it's coming back strong I mean I think.
That particular industry, which is you know not all of our customers in Japan, but they are predominantly in Japan.
I would suggest woke up late.
To the situation.
For supply constraints for general semiconductor process technology to be in a constraint mode and they had bled off inventories in Q1 so.
They're getting they're gonna be scrambling to build up their inventories for a while.
We're seeing at least 100% growth projected.
And we expect probably that kind of year over year growth to continue for a little while.
Okay and then that's a good segue to my next question, Todd, which is to what degree is oftentimes when you see bookings go this far out in the industries, where they don't typically happen there some double booking and so did you start beating our supply equals demand to start to see those disappear or these or do you feel like these are not double bookings and theyre going to sustain or do you have.
On methods to.
Make sure that those order sustained they don't just get they don't just disappear I mean are we going to see a fourth quarter drop off much more than normal as things catch up here, how do you foresee this happening.
Well I mean, I think it's going to happen within the industry and a general nature I think at some point you will see that drop off I don't know when it's going to be for us, though I think we have two different anomalies going on I mean, where first of all we're small.
But with that backdrop.
Projector remember this this industry.
Was severely impacted I mean this is not this is not a segment of the market that had.
The stay at home effect, you know the zoom effect. Okay. This is a market that was severely impacted and so even though we're seeing these these pretty large jumps we arent we expected this to happen, they're coming back to what we expected them to be prepay.
Pre pandemic.
So I you know.
I don't think there's going to be a giant hangover.
For the projector market plus I think it's going to take a while for them to build up a buffer inventories. So I don't on right now I'm not anticipating a big you know.
Net inventory bubble dropped in the projector segment as far as is mobile.
Mobile.
I really don't expect it either I mean.
I can tell you that.
Even though we are on track to do quite a to announced quite a few more programs and continuing to grow the business.
We have had to pass on some significant programs with customers I mean, the growth rate would have been in minutes and that's just because customers today.
They want to secure capacity before they even let their engineers work on the program.
Hmm.
So if theyre in that environment, I would say that I mean for us I don't see us I don't see a big buffer of inventory being built out there.
Okay, Alright fair enough, maybe one or two quick questions defaults and here are tied to in mobile as you go through the year here do you see.
You see kind of sustained growth throughout the year and then also what's the kind of the construct of the customer profile here or is this more you know, adding new customers that are significant or more you know new models with your existing customers. How would you kind of help us think about that as we go through the year.
Well first of all I don't want to really give too much color on the rest of the year guidance and the reason is is that you know I certainly know where the demand profile is I could give that but I don't know where the supply profile is.
And so.
No we have to work through both we have to work through the demand related issues and supply related issues I'm feeling confident will show continued growth in mobile.
We will be able to support our projector customers through this bounce back how much we can grow I just don't know yet.
And then.
As far as customers go.
But you know.
I would say in general we're looking for quality programs versus quantity of programs.
I have two supply constraints going on.
One is getting access to R. R.
<unk> and assembly and test and substrates, but the other is R&D.
R&D resources.
You know when we engage with the customer they don't just design and our chip I. You know we have a team of application and software engineers that debt become an extension.
Of of the display engineering team of the OEM and.
If we use debt valuable knowhow and critical resource on programs.
That just don't ship a lot.
Or we don't anticipate to ship a lot.
And we may have to do that from time to time, depending on customer relationships, but we don't really want to do that.
And so what we're looking for is quality of programs and not just from a volume perspective, where we're trying to build a business here.
And.
What we want is to build the feature the capability to where the consumer.
Really wants to go out and buy phones that have pixel work technology and they give that input to the OEM because if we can create that environment.
We don't have a demand issue.
We have different issues and so we're focused on the programs that we think are aligned with the OEM, they're going to go out and really.
Embrace this high frame rate gaming or or video experience that we're trying to bring to the marketplace.
And so with all that said well what does it mean, you know, it's not going to be about quantity.
Of design is going to be that quality of design.
Okay.
Good color there last quick question from me Elias.
10% customers that you haven't where any of our mobile and <unk>.
First quarter.
How many 10% customers I don't know.
I can get yes, you have the numbers no.
My guess is we had.
Probably 210% mobile customers and then we had another.
At least 110% projector customer my guess.
Okay about the sales all from me.
Total debt.
Yes, yes, okay, alright, guys. Thank you very much.
Again to ask a question you will need to press star one on your telephone keypad again, that's star one on your telephone keypad.
Yeah.
Okay.
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Again to ask a question. Please press star one on your from Keybanc.
Yes.
Yeah.
Well I think that's it today.
Oh no.
No further questions at this time I'll turn back the call to EBITDA.
Elias.
Thank you very much for showing up guys. We appreciate it and see you next quarter. Thanks.
Thanks, everyone.
This concludes today's conference call you may now disconnect.
Okay.
[music].
Okay.
[music].