Q4 2021 Aehr Test Systems Earnings Call
Good day and welcome to the Air Test systems fiscal 'twenty, and 'twenty, 1 and fourth quarter and full year financial results call.
Today's conference is being recorded.
At this time I would like to turn the conference over to Mr. Jim Byers of NK or Investor Relations. Please go ahead.
Thank you operator, and good afternoon, and welcome to <unk> test systems fiscal 2021 fourth quarter and full year financial results Conference call.
With me on today's call are 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.
Good afternoon, right after market close Air Test issued a press release announcing its fiscal 2020, 1 and fourth quarter and full year results that release is available on the company's website and are dot com.
And is being broadcast live over the Internet for all interested parties and the webcast will be archived on the Investor Relations page of Air Test website.
I'd like to remind everyone that on today's call management will be making forward looking statements. Today that are based on current information and estimates and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those and the forward looking statements.
These factors that may cause results to differ materially from those and the forward looking statements are discussed and 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 this date and are 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 CEO.
Thanks, Jim and good afternoon, and welcome to our fiscal 'twenty, 'twenty, 1 and fourth quarter and full year earnings conference call. Thank you for joining us today.
Start with a quick summary of the highlights of the quarter and the improved business momentum were experiencing and then I'll dig deeper into our expectations for increased revenue growth and our new fiscal year, which is already underway.
We saw continued signs of recovery and a strong increase in customer demand during the fourth quarter, which is a positive turnaround from the customer production ramp delays and push outs. We experienced this past year related to COVID-19 and.
I'm pleased to report improved revenue and operating profit for the fourth quarter that reflect a return to above pre pandemic levels.
Fourth quarter revenue was up 45% sequentially quarter on quarter and up over 100% from Q4 last year and were profitable for the quarter on a GAAP basis.
Additionally, we're off to a strong start for fiscal 2020, 2 with $5.4 million and bookings and then effective backlog of $7 million that's up today.
We're seeing improvement and multiple test and burn and segments, including Silicon carbide, Silicon Photonics and mobile sensors, each of which we expect will contribute to our expectations for significant revenue growth year over year, and our new fiscal year.
Now, let me dig a little deeper into each of these opportunities starting with silicon carbide.
This past fiscal year, we made significant inroads into the emerging silicon carbide device market, which continues to be a very promising and key growth driver for air and will be a major focus and the coming fiscal year.
Silicon carbide power semiconductors have emerged as the preferred technology for battery electric vehicle power conversion and on board and awkward electric vehicle battery Chargers and the electric power conversion and control of the electric engines.
Our Fox P family of products, a very cost effective solutions for ensuring the critical quality and reliability of devices and this market where performance and reliability cannot only meet increased battery life, but also whether you have to walk home from a vehicle, whose power semiconductor sales and the powertrain.
I once heard from a very wise general manager of automotive semiconductor components supplier that the quality and reliability of twice as such as these power semi seventy's and the engine drivetrain and vehicles should not be measured by how many failures per million and they have but how many walk homes familiar and they have.
As a failure on this component results and the driver and passengers walking home after it fails and the vehicle.
During this past fiscal year, our elite silicon carbide customer qualified arris box XP system for high volume production burning and infant mortality screening a silicon carbide power devices at wafer level for electric vehicles.
This customer and is a leading fortune 500 supplier of semiconductor devices with a significant customer base and the automotive semiconductor market. They.
They have now qualified several devices for automotive applications on our solution ordered multiple Fox XP systems and have purchased multiple new wafer pack contactor designs that are expected to be qualified and moved to production. During this new fiscal year.
During our fiscal fourth quarter, we received and shipped a follow on order from this customer for an additional Fox XP system for high volume production test and burn and up those devices and.
This past week, we announced another follow on from them for and additional Fox XP system and multiple wafer packs to meet their increased production capacity needs.
These follow on orders for additional Fox XP systems and wafer packs are the result of our working closely with this lead customer to achieve their test requirements and validation, our Fox XP platform and wafer pack full wafer contactor as their production qualified solution.
This customer is forecasting orders for multiple additional Fox XP systems, and wafer packs this year and a significant number of systems and wafer packs over the next several years due to the electric vehicle semiconductor test and burn and demand.
On each of these silicon carbide focused.
XP systems are configured to test 18, and silicon carbide wafers in parallel and the footprint of a typical single wafer test solution.
While contracting and testing and 100% of the devices in parallel on each wafer.
Our solution cannot only test 4 inch and 6 inch and silicon carbide wafers Buck and test the future 200 millimeter 8 inch wafers planned to be introduced over the next several years.
Air provides a unique fully integrated solution that includes the test systems for wafer wafer pack contractors and the wafer pack aligner.
In addition to the very large opportunity for silicon carbide with our lead customer. We're currently engaged in detailed and very promising discussions with several other major suppliers of silicon carbide.
Some of which have also publicly indicated plans for significant capacity increases we expect to move to on wafer evaluations with multiple potential new customers this fiscal year.
As I mentioned on our last call. We're very excited that a potential new customer I'm, sorry that a new potential customer that produces silicon carbide power devices has asked us to demonstrate our full wafer level burn and solution on their silicon carbide wafers, including putting the system on their manufacturing, Florida and demonstrate our capabilities well.
This is a new customer for us for Silicon carbide, and they're actually currently a customer for us and other application and already have several Fox XP systems and production take for testing and burning and mobile sensors.
They are a significant player and silicon carbide right now and we're confident that we can prove to them that our solution will catch their infant mortality failures that otherwise show up and customer devices.
As I've discussed many times and Silicon carbide is an optimal material for high power and particularly of high voltage devices for applications, such as electric and hybrid and electric vehicle powertrains and electric vehicle charging infrastructure.
These devices reduced power loss by as much as greater than 75% of our power silicon alternatives like <unk> devices, 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 to silicon carbide based powertrain and charging systems and the near future.
The challenge with Silicon carbide is that it's known to have high infant mortality rates, however, with the reliability burning and screening that era is able to offer with our Fox product solutions. These defects can be removed to provide extremely reliable devices for these mission critical applications.
Eric Fox XP solution allows for 1 of the key reliability screening test to be completed on an entire wafer full of devices basically testing all of them at 1 time, while also testing and monitoring every device for failures during the burn and process to provide critical information on those devices.
And as an enormously valuable capability as it allows our customers to screen devices that would otherwise fail. After they are packaged into multi day modules, where the yield impact is 10 times or even 100 times costly.
[noise].
Okay, sorry, we had some background noise going on silicon carbide appears to be 1 of the hottest potential application spaces are test had seen and many years and we're extremely excited about our ability to service this emerging market.
We anticipate that wafer level test and burn and will become the industry standard for quality and reliability screening for silicon carbide devices for the automotive market.
And with the most cost effective solution on the market to address this opportunity. We believe that air has the chance to build a dominant market share.
Power semiconductor market for electric vehicles is expected to triple between 'twenty, and 2020 and 'twenty 6 growing at nearly 26% cager to $5.6 billion. According to Youll research and a report with Deloitte forecast total electric vehicle sales will grow at a caterer of 29% from 'twenty to 'twenty to 'twenty 2.
25, before reaching $31.1 million units by 2030, and security and approximately 32% of the total market share for new car sales.
These stats highlight the tremendous opportunity of air test test in front of it with its wafer level test and burn and solution for electric vehicle semiconductors.
Now turning to Silicon Photonics, we're seeing an improvement and the silicon photonics market, which was significantly impacted by the pandemic this past year.
During the fourth quarter of fiscal fourth quarter, we shipped a fox XP system and multiple wafer pack contactor is 2 and existing customer that's transitioning from our Fox N. P system for initial production burn in to our production Fox XP system to begin volume production and other high performance Silicon Photonics devices. This is a mate.
This customer is a major supplier of fiber optic transceivers and the data center interconnect interconnect market today.
Silicon Photonics fiber optic transceivers, which are used and data storage and 5 G infrastructure require a process step and manufacturing called stabilization, where the devices are subjected to high temperatures and power to stabilize their output power.
Our customers are using our Fox wafer level test and burn and solution for production test and burn and other integrated silicon Photonics devices and we currently have 5 silicon photonics customers that are shipping products to their end customers ease and our Fox solutions.
We see a significant opportunity for growth as we expand within these customers and add additional new silicon photonics customers in this fiscal year.
Now, let me touch on the mobile sensor market. This past year, we successfully implemented our Fox systems and die pack carriers for production test and burn and of 2 new applications for 2 day <unk> sensors for mobile devices.
Ara has now successfully executed on a number of programs for highly custom and unique sensors and packaging and configurations. Unlike any other devices on the market.
Average engineering team has been able to design and develop custom guide pack carriers and contractors to address the unique electrical mechanical and optical and thermal needs of these devices with our Fox XP systems and proprietary dye pack carriers.
These solutions are turnkey with development of the proprietary carriers and test schematics accustomed AIPAC simulated diet and module sockets and carriers.
Highly proprietary thermal conductivity and transfer solutions custom application test plans and automated handling systems to load and unload our dye packs with 100 per cent traceability of test results and bidding.
We feel we continue to meet and exceed the customers' expectations and are happy to continue to meet their needs on these extremely challenging test and burn and applications. We expect to see follow on orders for system capacity and die packs. This year and continue to be optimistic about this market space.
So let me talk a little bit about our consumables and contactor business as I've mentioned on past calls our Fox family of test systems and include our customized wafer packs and die packs that are proprietary full wafer cingular and to die and module contact tiers and are needed not only for full for new system orders, but also for each new design.
Win or each new device added to production test.
During the fourth quarter, we launched our newest di Pacs solution, which is capable of handling and extremely small and complex devices and a very high powered defense and at very high power density devices with higher parallelism than ever before.
This new class of died pack and handled devices small enough to rest on the tip of a patent on a pencil.
Devices, this smaller extremely hard to handle and particularly and any kind of parallel zone.
Often a discrete device the smallest handled with special handling equipment and a test that can only test 1 device at a time.
And this new Fox XP system, and <unk> solution is capable of testing very complex die and modules and addition to them being title tiny.
This solution is a great addition to our product family and we believe it further sets us apart from any other company and the industry.
As we increase our installed base of Fox systems, with current and new customers, particularly with our Fox N P and XP multi wafer and simulate die module test and burn and systems.
We expect this consumables business will continue to grow and.
Absolute value and as also as a percentage of our total sales over.
Over the long term, we expect these recurring consumable sales to account for up to a half or even more of our total and no revenues.
And lastly, touching on our packaged part business, we continued to see indications of renewed demand for packaged part burn and applications, particularly from customers and automotive applications and those seeking high voltage capability on.
On new package part burn and product with very high voltage test capabilities continues under development and we expect to generate additional new opportunities with our planned shipments to begin later this fiscal year.
So let me go ahead and touch on supply chain I received many questions from customers and shareholders about our supply chain and ability to meet capacity demands for systems and contactless given all the issues with semiconductor shortages and rising costs and raw materials and lengthening lead times across many industries I quickly.
You have to acknowledge this is a reasonable concern and understand where the questions are coming from.
Air has a very robust supply chain with world class subcontract manufacturers on subsystems of our test systems contractors wafer pack aligner and diapers cameras.
Subcontractors have successfully supply day subsystems for years to air and a very mature.
And all cases, the suppliers have capacity well in excess of air historical shipments and the ability to ramp significantly higher as well.
We're very confident and our ability to meet the customer forecasted demand plus considerable upside.
The 1 area that we do want to highlight is the risk associated with semi.
And we conducted component lead times that had been very rational over the last 6 months, which is causing us to jump through many hoops to ensure we have near and long term volumes to meet both our forecast and considerable upside to this forecast I.
I don't want to overstate the risk because we're confident and meeting our projected revenues that were guiding for this fiscal year and we believe we can meet a considerable upside to this forecast. However, we know there's a risk and the near term and particularly with some semiconductor components.
But also had seen logistics issues with shipping and lead times that continue to make our team keep on their toes and may add to the lumpiness of our quarterly shipments and revenues.
So let me conclude my remarks were now a month and a half into fiscal 2020, 2 and we're confident and our revenue growth projections for this new fiscal year.
And we're seeing a recovery across our customer base, along with significant demand for wafer level test and burn and a cell.
And carbide devices for electric vehicles, Silicon Photonics devices for data center, and fiber infrastructure and 2 D and <unk> sensors for mobile devices.
For the fiscal year ended May 31, 2020.2 air expects full year total revenue to be greater than $28 million, which would represent growth of approximately 70% year over year and to be profitable for the fiscal year.
Now before I turn.
Over the call to Ken to go over our financials I want to note that during the quarter, we announced the appointment of free but the mesh to our board of directors free Brett is a technology industry veteran with special emphasis on semiconductor photonics telecommunications and data storage and she brings incredible knowledge experience and contacts and the compound semiconductor.
And optical and semiconductor spaces.
And certainly I and really excited to have her on our board with that let me turn it over to Ken to review, our financial results and more detailed before we open up the line for questions.
Thank you Jane and good afternoon, everyone. As gain noted we saw continued signs of recovery and a strong increase in customer demand during the fourth quarter, resulting in improved revenue and operating profit for the fourth quarter that reflect a return to above pre pandemic levels.
To add some perspective on this.
And our fourth quarter revenue of $7.6 million is our highest reported quarterly revenue since Q2 of fiscal 2018.
And looking at our financial results in more detail starting with the fourth quarter.
Fourth quarter net sales of $7.6 million or up 45% sequentially from $5.3 million and the third quarter and up 102% year over year from $3.8 million and the fourth quarter last year.
The sequential increase and net sales from the preceding Q3 reflects an increase of $2 million and wafer level burn and revenue and 386000 and customer service revenues, the increase and wafer level burn and revenues is primarily due to an increase and system revenue of $1.4 million and an increase and wafer packed AIPAC revenues of 577000.
The increase from Q4 last year and.
And increase in wafer level burn and revenue of $3.4 million and customer services revenue of 509000, and the increase in wafer level burn and revenue is primarily due to an increase and system revenue of $3.8 million, partially offset by a decrease and wafer pack AIPAC revenue up 487000.
It is important to note that there were no system revenues in Q4 of fiscal 2020.
Non-GAAP net income for the fourth quarter was 870000 or 4 cents per diluted share compared to a non-GAAP net loss of 464000 or <unk> <unk> per diluted share in the preceding third quarter and a non-GAAP net loss of 720000 or <unk> <unk> per diluted share and the fourth quarter of the previous year the non-GAAP.
<unk> exclude the impact of stock based compensation and and the fourth quarter of fiscal 2020 included a $1.6 million excess and obsolescence provision and $220000 and restructuring charges.
On a GAAP basis net income from the fourth quarter was 567000 or 2 cents per diluted share. This compares to GAAP net loss of 735000 or <unk> <unk> per diluted share, which included a 337000 and warranty provision and the preceding third quarter.
And GAAP net loss of $2.9 million or <unk> 13 per diluted share, which included the impact of $1.9 million or <unk> <unk> per share and inventory write down and restructuring charges taken in the fourth quarter of the previous year.
Gross profit and the fourth quarter was $3.5 million or 46% of sales up from gross profit of $1.9 million or 36% of sales and the preceding third quarter and gross loss of 93000 or 2% of sales and the fourth quarter of the previous year.
The increase in gross margin from the preceding Q3.
And it's primarily due to a decrease and unabsorbed overhead cost as a percentage of sales.
Due to higher revenue levels in Q4, 'twenty, 1 accounting for a 5.5 percentage point improvement and gross margin and a decrease and other cost of goods sold as Q3 'twenty..1 included a warranty provision accounting for 4.8 percentage point improvement and gross margin.
Because of our manufacturing overhead costs are relatively fixed we scarab scaled very well.
As our revenues grow the increases flow to the bottom line and our margin percentage were favorably impacted which is reflected in our Q4 'twenty 1 results.
Product mix also impacts our gross margin percentage.
The increase in gross margin from the fourth quarter last year was primarily due to a decrease in inventory reserves as Q4 last year included and $1.6 million charge related to the write down of excess and obsolete inventory.
Accounting for a 43.2 percentage point improvement and gross margin and.
Unabsorbed overhead cost decreased as a percentage of sales, resulting in a 7.2 percentage point improvement and gross margin due to higher revenue levels and Q4, 'twenty, 1 compared to Q4 'twenty.
Operating expenses and the fourth quarter were $2.9 million up 387000, or 15% from Q2 dollars 5 million and and the preceding third quarter and up 185000, or 7% from $2.7 million and in the fourth quarter of last year.
Sequential and year over year increase and operating expenses is primarily due to an increase and employment related expenses for bonuses and Q4 'twenty 1 and.
And annual pay increases to employees affected Q4 'twenty 1.
And an increase in R&D project materials. This was partially offset by a reduction and restructuring charges as Q4, 'twenty included $220000 and costs related to the closure of our subsidiary in Japan and reduction of head count and our Germany subsidiary.
With customer activity and business, improving we eliminated the 30% pay reductions for our executive staff at the start of June 2021.
The beginning of our current fiscal year.
SG&A was $1.9 million for the fourth quarter.
261000, and from the preceding third quarter and up 230000 and from the prior year fourth quarter.
R&D expenses were 1 million for the fourth quarter up 126000, and from the preceding third quarter and up 175000 and from the prior year fourth quarter.
Now turning to the results for the full fiscal year net.
Net sales for fiscal 'twenty 'twenty, 1 were $16.6 million down 26% from net sales and $22.3 million and fiscal 2020.
The decrease includes a decrease and wafer level burn and system revenues of $5.8 million customer service revenues were relatively flat.
Well well year over year net sales decreased second half fiscal 'twenty 'twenty, 1 revenues were $12.9 million compared to $9.9 million and the second half of fiscal 'twenty, and 'twenty and increase of 31% over prior year.
Fiscal 2021, net sales were comprised of $13.1 million and wafer level burn and revenues and $3.5 million and customer service revenue for the full year 2021 system revenues accounted for 44% of revenues compared to 36% and the part and part of 2020.
Wafer pack and die pack consumable revenues accounted for 35% of total revenue in 2021 compared to 48% of revenues in fiscal 2020.
Customer service revenues accounted for 21% of revenues in fiscal 'twenty 'twenty, 1 compared to 15% of revenues in fiscal 2020 non.
Non-GAAP net loss for fiscal 'twenty 'twenty, 1 was $3.3 million or <unk> 14 per diluted share, which exclude the impact of stock based compensation and a noncash net gain of $2.2 million and a tax benefit of 215000 related to the closure of errors, Japan subsidiary and the first quarter.
This compares to a non-GAAP net loss of 27000 or zero cents per diluted share, which excludes the impact of stock based compensation expense inventory reserves of $1.6 million and restructuring charges of 220000 in fiscal 2020.
On a GAAP basis net loss for the fiscal year was $2 million or <unk> <unk> per diluted share.
This compares to a GAAP net loss of $2.8 million or 12 cents per diluted share, which included the impact of approximately $1.9 million or <unk> <unk> per share and inventory write down and restructuring charges taken in fiscal 2020.
Gross profit for fiscal 'twenty, and 'twenty, 1 was $6 million or 36% net sales compared to a gross profit of $8.4 million or 38% of net sales in fiscal 2020.
The decrease in gross margin percentage and FY 2021.
Compared to the prior year is primarily due to a decrease and unabsorbed overhead cost.
The cost of goods sold related to higher revenue levels and the prior year, a change and product mix and an increase and warranty cost as a percentage of sales.
This was partially offset by a reduction of inventory reserves as FY 'twenty and included the $1.6 million provision for excess and obsolete inventory.
Operating expenses for fiscal 2020, 1 were $10.2 million a decrease of 922004, 8% from $11.1 million and fiscal 2020.
The decrease was primarily due to.
A decrease in SG&A of 960000, and restructuring charges of 220000, and partially offset by an increase in R&D and 266000.
SG&A was 6 points excuse me.
SG&A was $6.6 million and fiscal 'twenty with 21 down from $7.5 million and fiscal 2020.
The decrease includes a decrease and labor related costs, resulting from cost reduction initiatives implemented in fiscal 2020, 1 lower commissions related to a decrease and bookings and revenues and lower travel and sales and expenses.
Due to restrictions in place from the pandemic.
R&D expenses were $3.7 million and fiscal 2021 up from $3.4 million and fiscal 2020 due to higher R&D project materials and employment costs due to head count increases.
Turning to the balance sheet for the fourth quarter, our cash and cash equivalents were $4.6 million at May 31st 2021 down 156000, and from $4.7 million at the end of the preceding quarter included and the cash balance at Q4, 'twenty, 1 and Q3, 'twenty, 1 quarter and $1.4 million and borrowings under our line of credit.
Accounts receivable at quarter end was $5.2 million and increase of $2.5 million compared to $2.7 million and the preceding quarter and.
Related to the increase in revenue in Q4 compared to Q3, and an increase of $1.5 million from Q4 last year inventories.
Inventories at May 31 were $8.8 million and increase of 510000 and from $8.3 million at the preceding quarter and.
The increase in inventories at May 31 is to support forecasted revenues obtained and long lead time materials and to ensure an adequate supply of critical components.
Property and equipment was 677000 compared to 617000 and preceding quarter and.
Customer deposits and deferred revenue short and long term were $288000 a decrease of 379000 and at the preceding quarter and related primarily to the decrease and 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 and the last fiscal year under the Paycheck protection program through the small business administration.
Last month, we received notice from Silicon Valley Bank that the small business administration has forgiven and alone and accrued interest we will be posting a benefit of $1.7 million and our first quarter fiscal 2020.2 results related to the loan forgiveness booking.
Booking in the fourth quarter totaled $5.5 million.
Backlog at May 31 was $1.6 million compared to $3.7 million at the preceding quarter and.
Effective backlog, which includes backlog at the end of the fiscal fourth quarter plus orders since the end of the fourth quarter is $7 million.
Now turning to our outlook for the coming fiscal year as gene noted, we're a month and a half into our fiscal 2022 and off to a strong start with $5.4 million and bookings and effective backlog of 7 million as of today.
We are seeing a recovery across our customer base, along with significant demand for wafer level test and burn in and across our markets.
Which is giving us confidence and our revenue growth projections for this new fiscal year.
For our fiscal 2020.2 year ended May 31.2022.
We expect full year total revenue to be greater than $28 million, which would represent growth of approximately 70% year over year and to be profitable for the fiscal year. This.
This concludes our prepared remarks, we're now ready to take your questions. Operator. Please go ahead.
Thank you if you would like to ask a question. Please signal by pressing star 1 on your telephone keypad. If you were using a speaker phone. Please make sure your mute function and has turned off to allow your signal to reach our equipment.
Again press Star 1 to ask a question, we'll pause for just a moment, killing on everyone and opportunity signal for questions.
Our first question comes from Christian Schwab of Craig Hallum Capital Group.
Hey, congratulations guys on a on a great quarter, and a solid outlook gain and you're a greater than 28 million outlook and can you tell us your expectations for how many 10% customers you'll have on that.
Oh and you May think.
And my guess is we'll have.
2 or 3.3 I'm getting the signal 3 from Ken on the left.
We'll have 3 in on.
Our current estimates.
Okay Fantastic and then and then by application can you can you walk us through you know between silicon carbide, and silicon Photonics, and and and just maybe recovery orders from existing customers that were kind of pushed out you know last year can you give us an idea of.
On the application at all.
Yeah, you know I think I want to be a little careful not not for any proprietary reasons, but just you know it always difficulty and understand how it looks like but let me just give you a little bit of windage and elevation with them I think we're quite confident that silicon carbide will be our largest segment this year.
And I think as it plays out then it would be followed by Silicon Photonics, and then that 2 D..3 D sensor market.
On each of those being substantial 15, and 20% or more so you kind of view your old and out there I think we do plan to get some see some packaged part burn and business, but it'll still be relatively small I think we'd probably do about 10% to service and support.
But you know.
Clearly, we do see strength and silicon carbide, and and I think pretty confidently it will be the largest segment this year.
Fantastic and then my last question has to you know we talked a lot about you know electric vehicles and you know have you guys done the math as penetration rates, you know looked to improve meaningfully over.
The next 5 to 10 years for sure and do you have any idea of the potential market Tam that your products could address.
Over kind of a mid to long term basis.
We do and I think what I'd do is they may differ and take that too as we go forward with a little bit more clarity, but.
As we are engaging with multiple customers and we start to understand there.
But their capacity and their anticipated.
You know test and burn and times and the level of quality.
Expectations versus those times it continues to reinforce our model that I think I shared in our last call on.
Which is if you just start to take a look at the number of systems that are required.
For every call it million cars that are out there on it.
It is substantial I think we estimated about 8 systems are so for every million incremental cars that are shipped per year and.
And so you start looking out at.
30 million cars, and 2030, which fair enough. That's 8.9 years away the world needs to purchase a lot of our full.
You know full complement Fox XP class systems, and currently we have not only had been enormous cost advantage and but footprint advantage.
You know a a large silicon carbide customer is likely to have you.
You know.
Tens of systems for certain on their floor keeping in mind that each system has a you know 18 wafers in it.
And another way of thinking about it for every 10 systems. They can basically process 180 wafers per day at 1 day test times for example.
And you start looking at capacity and forecasts that are out there.
And that are well in excess of that in order to meet the silicon carbide requirements on the battery electric vehicle market and the on and off Board Chargers and you can see that it's a it's a very significant number.
So I, maybe I'll give you a little bit more clarity I'd like to make sure I have all my math done and.
And as we as we capture and understand you know a kind of consistently evaluate where we're doing a lot of our old and research and.
And test stability and quality reliability, and so we're able to actually offer to customers unique proprietary test solutions. We are we're not say you know, we're not going into a customer and they tell us exactly how to test it and then more wording around the world and and telling them, we actually got proprietary test get Maddox.
We don't keep and share with our customers on how we're doing this are having to do with the to be able to take advantage of the Fox XP system and full wafer contactor and on wafers that range from 4.6 and going to 8 inch and have device counts from 500 to 3000 devices on a wafer.
And all be tested on a 1 of our Fox XP blades.
As we do that and we understand how quality and reliability correlate to the test times I think we'll be able to speak more confidently as a generic stance and the market on what it looks like but you know data continues to suggest that.
And you need to do 24 hour plus burn and times on every wafer to try and remove the input mortality issues before they sneak into eve and discrete and certainly modules.
So.
Again, it's it is certainly the biggest market we're addressing right now.
And there is dollars.
Some estimates that suggest it's as large as the memory burn and market.
Great Alright, Fabulous. Thank you no other questions.
Okay.
As a reminder, if he would like to ask a question. Please signal by pressing star 1 on your telephone keypad.
Our next question comes from Jon Gruber of Gruber Mcbain.
Hey, John I have a.
I guess, it's a nitpick here.
You said your effective backlog is the backlog plus the orders but.
And it should be minus the shipments on the quarters, 60% over.
And I take it you did not take the shipments out of it.
Is that a price, it's really correct backlog correct.
That is correct, yes, that's accurate and it's not backlogged and okay. So don't call. It backlog. Okay second of all are you know.
In excess of 28 million and excess of 28 million.
And if things go well, we talk and 28 to 30 or are we talking.
28 to 36, I mean give us sort of some range here that cause 28, you know you were looking for 28.3 years ago and you know it's a 28.
Good year.
Is sort of a on a so how.
And how do you if it's if things go well, what what's the upper end and here on the shipment side.
Yeah, I I I appreciate the question and I fully understand that in fact last year, we were talking about 2 and $28 million and we clearly were much less from that.
And you know I do.
And I sit here with certainly more confidence because they would at least certainly and the U S and U S based customers and the customers that are talking about ramping they seem to have gotten through the COVID-19 aspects and are letting us get on their floor and do the installations and all and at well on eye. We chose the words pretty specifically not to be coy on.
I actually don't want to put a high and on it.
And there is.
They're there they're there is significant upside to the 28 million and as we.
Get the bookings and print them and give us confidence we'll go from there but cash.
Candidly, Josh we've been we've been talking about how great. It's gonna be for a while and a wheel.
We continue to believe we're taking a conservative stance and and the forecast. We gave you I believe stronger this year than ever before.
But I will.
And I take it gave me on Saturday.
You talked on 28.
36, more likely than 28 to 30.
Correct.
If you had to pick a number and I'm not gonna have you do another 1 yes.
Okay. Thank you guys.
Thanks, John.
Thank you once again Thats star 1 to ask a question, we'll take our next question from Larry Chip Leno with troubling and capital.
Okay Alright.
Hi.
Hey, congratulations on the highest EPS quarter, I think and 6 years.
Is that correct.
It sounds about right.
<unk>.
And on.
On the next silicon carbide hopeful for customer that you discussed that's occurred and customer on your 3 D sensing.
Or have you started the testing of those wafers.
Sure.
And would it be.
Yeah, not quite yet so.
And that should start at any time now.
Yeah.
And it like within days.
Yeah, I'd tell you, what Larry and I'm not trying to be coy to you folks on it you know.
Competitive knowledge is there's lots of years out there.
And let's concerned about being clear with my shareholders than I am with being you know letting everybody know, what we're up to exactly but yeah.
We will we will be on wait for.
And with test results this quarter.
And where are we halfway through it.
The.
The $4.3 million system that you.
And the May quarter.
And.
And obviously something slipped on it and application.
Yes.
Is that.
Is that the application.
Is there a problem with it where it may may actually not show up and the mix of product release or is it just kind of delayed.
And let's say a month or 2.
Actually I'm, sorry, I am not really fund me, the $4.3 million and what segment.
For the.
On the pick and place our application on move.
The sensor.
Okay. Okay. Okay. Okay, Yeah, that's I mean actually the the.
Net.
The revenue for that we think it was in Q3 or something Okay fair enough what was the question again.
There are apparently was a problem and that.
That product launch and the ultimate product launch familiar and flip.
But is it just a slippage of the of the launch of that product.
And why you are and I had a follow on.
Yeah, let me on order.
What do you guys keep these are really good questions again.
That particular customer in particular is you.
And the legal believes secure and understanding what I will share is the following we continue to believe that that program is going well.
We continue to believe we are.
And part of record and.
We do have a forecast for incremental.
Systems, and dye packs and our fiscal year and.
And I think that's the most I can say right now.
But generally speaking at least I personally believe that that what's going to happen a little sooner and I'll leave it at that rather than talking about whether there was actually a product slip or not.
And I think that's the best.
But they're very happy with us.
Alright, and then.
Lastly.
Any opportunity on the big old set or that you are currently engaged with.
For other.
You know what.
The OS at and their kind of front end customer.
Each of which have have systems now there is active engagements with customers beyond the first lead customer for those guys.
And burdens.
And it's been giving updates on where they are it's still thank you know at some point we wanted to work this year and I still think there's still some front and you know new customer engagements impacts related to COVID-19.
And I I planned to fly to Europe next Sunday, and our reps there said get on teams.
Customers aren't going to see you on.
Debt, we're still doing everything face over the phone et cetera, so while the U S to me at least and California here for the most part it's just wide open and Ken and I are and the office you know now and.
And we actually are not masked in the facility for everybody and it's been vaccinated, so, but I'll tell you what customers still there's still a little bit of slowing on that but.
That's okay, I don't really need that to hit my plan or the upside.
But I you know I'm still hopeful we know that they're engaged they're serious about it but we've heard some things too from the big old sad, but they're pretty booked out.
You know a lot of the interesting things with the whole semiconductor supply chain as they talk about you know all we are booked all the way you know for the next 6 or 9 months.
So you know I.
I'm not currently all that I'll call it hopeful and I'm, certainly not forecasting a lot of volume and and sort of new customers on that that Oh.
Through them this year, but maybe late in the year and definitely into the following year.
And if that helps it.
And and you said Youre traveling to Europe next week did you say.
He didn't say, where I don't think I did debt.
Hum.
And I'll do it.
It was Europe and thought it was worth.
Headed and I was probably to go Sunday and I'm not so oh.
Yeah.
Oh, you're not going away from <unk>.
I can't sit here and do some more teams meetings and things like that for right now.
So you know even though on the CEO I think they day.
Thinly disguise sales guy to sometimes so I think right now and they'll let applications engineers and and.
Support people to go in and install things, but there are a lot of the restrictions and Europe up and down are still with salespeople. So.
And that's true also in Asia.
1 last question and on the CP.
Opportunity for the data center is that still ongoing and they used to do you expect that to get kicked off anytime soon.
Is still ongoing they use it every day in fact, I think last quarter or the quarter before they were buying some parts and spares and on that system continues to have incredible uptime and I was curious why they were buying and some parts since it hadn't gone down or anything but and.
And my understanding is they're using it like 24.7 right now.
It's my understanding and since we've been so elusive about who it is like I'll be a little bit more forward because actually no one's guests yet who it is.
My understanding is that program has been pushed.
And time again, and I think we have very little too if any forecasted in this fiscal year again, but there are they're continuing to operate with full intent to go down that path, but it's that project is a kind of continued to push out I'd say the total is what 2 years different.
And what we were originally hurt so far right.
Is that a silicon photonics application.
I haven't said, what it is I called it a data storage application and I've been wonderfully elusive debt Nobody's guest who it is because once you find out you'll know why.
I'm sorry.
Alright, that's all I have thanks for your time.
Thanks, Larry.
Thank you we'll take our next question from Matt Winthrop Ages capital.
Hey, how are you Sir.
We're good translation it sounds like things are doing much better and I'm not going to beat you up like these other guys and I am excited story Youre just going to ask me, if it's greater than 36 and waiting for each 1 and that's just 1 question I know all right go ahead, Matt no problem.
I have 2 quick.
Can you sort of in layman's terms, because I talk to clients all the time on retail guy and I'm not and analyst.
On the electric vehicle, how can I explain it and elementary level, what your product addresses and Thompson, Okay average.
Is that okay to ask.
Yeah, Yeah, Yeah, I'll try and I'll try to alright, so on on you'll walk up to a Tesla right.
And.
The Tesla basically has and onboard charger internally and what it means is if you buy electric power to it.
And your graduate and your garage it actually converts that AC electricity to D C and charges that onboard batteries that AC to DC charger has.
These power semiconductor that's inside that are made out of silicon carbide, which are way better than <unk>.
And in fact.
Tesla and Elon Musk are credited with the people that basically.
And I guess had the nerve to try and silicon carbide without going through the tens of years of other things and have identified it as a superior product put it in their model 3 and immediately had like 10, and 20% extended battery rage sense and they have put it in all of their cars and.
And we understand all suppliers are following suit.
And I think that's well publicized by multiple people out there so in that charge or it converts AC to DC and it's extremely efficient and what that means is you can do it faster and you can do it with more efficiency than when the battery is charged the funny thing is the battery, which you can only charge battery.
And with D. C. Direct current just like a regular battery and your and your flashlight right.
But then the motor and the Tesla and everyone else is actually an AC motors [laughter]. So the.
And the D. C motors. So now you have to convert it back to AC and order to work and that's called an inverter.
And it uses the same aspects.
Alright.
So its pretty interesting and so their market share there to efficiently charge your car.
And they're there to efficiently power of the car and they are directly in line with the power to the electric engine and so if they fail yeah your car's debt.
Alright, Okay. So there's 1 other place and not as they you know.
More and more we're seeing them, where like the electric gas stations, where you'd go and Theres a electric charge pump yeah.
Those are big converters, as well and they also have silicon carbide electric MOSFET and.
And you know some of these modules if you look at them I've got 1 and my hand, but it doesn't do any good but when you look at this module and it's you know some of our you know about the size of your hand or a small hand.
And in there are 8 or 10 different.
Semiconductors, and this case, there that silicon carbide fats switches and the reason they have 8 or 10 of them and there is because they are all in parallel so they can have 400 amps of current.
So maybe each 1 of them can only do 50 amps, but if you put 8 of them and parallel you can do 400 amps.
So.
What was the first thing when the first customer that was using US was realizing that they put 8 of the silicon carbide devices into this module.
Okay, and then they had to burn it in but every 1 of the devices had some you know material failure rate, let's say, 1%.
They had and you know on 8 devices, you have and 8% failure rate and 24 hours of that device and you'll have to throw away the module.
Those modules if you go right now and click on Digi key or Mouser on E Bay, they're $600 okay.
Alright, and Theyre coming down quickly, but imagine debt you have 1 of the devices fail.
And you have to throw away, a 300 dollar module or something.
So our value proposition and wise, we test the devices before they're put into the module.
And not only is it cheaper per device, but now all of that all those failures are removed. So you don't throw away the 100 dollar package.
On a constant.
Is it fair price and this technology also would be applicable to a ford or GM on Audi, It's not just a Tesla thing this is 100% of them.
Every day.
And electric vehicles, it's gonna have silicon carbide.
Every 1 of them on the sales side because.
Last couple of quarters, you were a little better last time, a couple of quarters ago, you were pretty upset about how things are progressing but it sounds like youre more excited you had built this room in your facility where people without them and that.
And that's starting to open up are you doing actual displays and this room now yeah.
Displays and we're testing wafers how's that customers still on can come in and but that's okay. It actually works out pretty nicely kind of marketed that is hey look it's a touch free environment, but.
And now we're kind of lonely it'd be nice day at the people come here, but we're getting really good and it teams and zoom and and Webex, but for.
For example that customer wafers that are going to be tested with silicon carbide will be in that room.
You can do it and just virtually show it to them. They don't have to physically be there. They give you the product and advanced the test or something like absolutely. So you know.
I thought you know and Silicon wafer has say a thousand die on it just to make it easy right. Those devices already have some level of actual failure to them. So they don't get 100% yield so let's say whatever it doesn't matter how many 10.20, 30% of the day are our failed.
It'll give us the wafer map.
Or not when we test it I can tell you immediately which devices of sales.
And over a 24 or 48 and 96 hour period I can tell you exactly when it failed.
On every single device with a 100% traceability. So you know if they're wondering if we're serious and they could give us the wafer without the way from map I'll tell us, which way switched out of your failed and it always correlate alright. This weekend with this on.
That's great I appreciate it I'll leave you this on and upside Battle lets say it scored up on your new sales manager screwed up a bunch of really nice contract what kind of run rate can you guys. What is your capacity if like everything hit and the next 3 or 4 years.
I'm, not saying, you're saying that sales, but what could you do out of California without yeah.
And on your factory lets say.
So there's there's a few ways to look at it and we had some contractors debt.
Yeah, It's a fair question I mean.
The simple answer is on.
There is nothing and our supply chain that couldn't within 6 to 9 months get us to you know even.
Sure.
10 systems a month.
Okay.
You just some of it some of it would include some of the people growing and adding some people.
But.
Even what's 10 systems retail out to your wholesale out to your cause a if you could and S.
S P a.
Silicon carbide configuration, and I'd say, 2 and a half million dollars or so.
And the complement of wafer pack set what and a half million that's $4 million a piece.
And.
And I.
That's correct.
And that seems I'm sure people are like okay, okay, but that's that's real.
Even I mean that seems like big numbers to us here, but that is not big.
Yep 10 systems, a month as you know, although they have 18 wafers of capacity and each 1 of them. So you know if you were comparing it to say a J 750 from teradyne and our.
Each of our blades has more pins and then a J 750 and more.
Electrical channels, so it's not like on them.
And she'll be excited listened and so I would suggest because you guys are on a roll.
And off this Q&A and you can't get on a fallen and close a couple more because it sounds like Youre really yeah.
Yes definitely.
And and stuff.
Yeah. So forgive me if I'm doing that right.
Some of these guys I'm tired of these guys whining and crying. We're finally here, let's go out and closing and I think you've got the opportunity.
And thank you Matt.
Yes.
Thank you we'll take our next question from Frank Barresi with Ameriprise.
Okay.
Hi, good morning.
Hey, and <unk>.
People with all this COVID-19 and interfering with new installations and sales.
A lot of these electric vehicles that are being sold now arent using it I mean theyre not using your system and production correct as of yet right.
Okay, and so Tesla of course is using it for everything.
There are many other of the other.
Hmm.
Let me let me clarify this okay. There's a couple of ways to look at it so.
Of the electric vehicles, Okay. All of them have this and Burger and battery charger et cetera, Okay until 2000.
A third.
18 to 2018.
None of them use silicon carbide and keep in mind, that's like Toyota Prius says all the hybrid and electric vehicles et cetera, and then Tessa zero market share of self from carve out right.
And then the model III did it and 2019 Tesla did it I believe theres, an Audi out there right now I believe that my understanding is that Toyota type can it still IGT and T. So even some of the new models that are coming out and do not use silicon carbide yet.
Mhm, but projections from folks like a.
<unk>, which is a big 1 extra what which is another big forecaster, they're projecting pretty dominant share to almost 100% share of all of those power modules will all of a sudden.
Power fats in these devices will go to silicon carbide over the next like.
3 to 8 years or something.
And so that's the devices.
Ross today, we currently have 1 lead customer who is.
Currently.
Moving everything to wafer level on our system.
So you'd have to say well how many of their customers. How many you know how many design wins, how many cars have they gotten into you know who do they have and we no more debt.
And I admit to.
But they obviously don't have 100% market share yet.
So we're also capturing other customers you know on at some point, there's an opportunity for us to compete with every single customer and potentially.
1 could use our tools.
And then it doesn't matter who wins.
But for now we you know this is a pretty hot wave for us and.
And our systems work, it's right and the sweet spot of the capability of this machine.
Fully loaded 18 wafers you know.
This is <unk>.
There's a great opportunity for this platform.
And that's just and the.
Well.
Its charging the battery and discharging the battery needed on both sides and on the charge or any of that.
Okay, Okay and so.
Basically like and a lot of the test, let's say than they they don't have 100 I don't know if it's a test was necessarily but the companies that are using silicon carbide.
A lot of them they are not able to do.
You know theyre not able to use your system. So.
They must have a lot of these failures you were talking about.
No no. That's that's not fair so what they'll do is just like our lead customer they actually test them and the package form after they've already been packaged up in many cases with multiple devices per package.
So it's the day you know they basically can do it we sell packaged part burn and systems to we currently are forecasting zero for Silicon carbide, because you know why would you do that when you could do it at wafer level.
Right.
Yeah, so so everyone.
Everyone is test gains and silicon carbide and doing some sort of a burn and of it there's no way, they're shipping those to automotive suppliers without it.
And they're either doing it packaged part okay.
Or they're doing it with our system and this case, we've already talked about the 1 customer.
Or they're evaluating and trying to figure out how to get to wafer level. We have heard every customer and we've talked to is planning to move to wafer level. Now. The question is well what is the competitive situation. What's the alternative the most obvious alternative debt. We know works and we know is in production and as capable as you've taken a T. He says.
And automatic test equipment system from multiple suppliers that are out there.
And you design it and you put lots of power supplies on it and you put it on a program.
And if you take that and a T system that ranges from a few hundred thousand to a million Bucks and you put it on a program that's $350000 right and.
And you take a probe card, that's 50 or $100000 you've got a system.
And I'm you know generically, it's a million dollar test cell.
And you can test and and then 24 to 48 hours you can do theoretically everything we can do when you think we have some competitive advantages with the way we do it okay.
But its a million test itself for 24 hours.
Our system and remember I just did the math with you its about $4 million.
Divided by 18, and you're like at $200000 or less.
Okay, right, so you're you're you're at a fifth of the cost.
And so you could test at 5 times longer for the same price point from a capital depreciation perspective.
And.
A wafer probe or if you've seen 1 of your stood in front of it just like a you know yes.
It has a footprint of a lot of prius right and.
But it has 1 wafer and and that same footprint. We have 18. So now go test 180 wafers.
And it's 10 of our systems 10 press is next to each other.
This is big but anyhow I never use that analogy before but I'll go with it and with that 200, and 180 and the clean room space.
So you want to put in place a thousand wafer starts.
Do you have a thousand probes.
Okay.
Or hundreds up and so the cost effectiveness is a free.
Yes from a cost of ownership and a capital depreciation on the capital cost and its a 20th of the footprint.
And we make good margins.
So somebody if they've had they're gonna have to design a system to compete with you.
And they're gonna be stopped and all over our patents and IP if they try.
Well that's good.
Yeah, and and and I guess is the situation and analogous and the.
Silicon Photonics is it does the same well that silicon carbide.
I'm kind of on a very simple it is.
Photonics and Silicon I mean, it's a different application in this case a day.
On fiber optic transceiver fully integrated on debt piece of silicon and the huge advantage of it if they can actually manufactured like a thousand transceivers at a time on a single single wafer.
Cost effectiveness is so dramatic that folks like Intel's of the world have already put out multiple companies have gone under because they simply can't sell them.
At the cost that the.
And folks like lots terra or Intel.
In Pi or Sequoia, which had no names are building them for and.
And so the beauty of it is debt with our Fox systems that can either test and in wafer form or simulated die form we're able to actually do this so cost effectively on the integration that we've heard from our customers that it actually enables them to and factors whole wafer silicon photonics manufacturing.
And they did and they test them and they burden them and in this case, they stabilize them before they're put into the packages.
Where they're extremely expensive to burn in and Theres yield loss associated with it.
Same thing kind of value proposition and the only difference is is that on a day for the the fiber optic transceiver market.
Is measured in millions of units a year like 10 million units a year total that's it okay and.
I think a Tesla has 48 MOSFET and each car.
And so if you're going to do 31 million of them, it's literally 2 orders and order to 2 orders of magnitude higher size.
Given the same test time, similar die per wafer the silicon carbide market, it's absolutely more than 10 times larger than the silicon photonics.
Yes.
I follow all that math, but that's I was trying to do it quickly.
Sure sure.
And and then on the the sensor if you've talked about 2 and 3 D sensors.
Mean is that.
That's it.
Historically on.
And it has proven to be has not been a very big market.
We make good margin and the customers happy with us, they're very unique but has traditionally been and we've talked about it before and sampling market. What it means is that the devices do not inherently have either a high enough infant mortality or.
And need the structural stabilization to test every 1 of them. So the customer has proven to themselves that by sampling some percentage, we don't get into it but imagine small.
They're able to buy buying just a few systems from us they can actually sample you know.
Hundreds of millions of parts of Europe.
Okay.
And we continue to execute for them.
We keep our fingers crossed we have put in place and us infrastructure that if they wanted to do 100 per cent sampling where it <unk>.
So far they have not chosen to do that now we do have a couple of devices that we have done that are are we know where on a 100% sampling and tons of money and to 100% burnt and but the volumes are much smaller because of the target device that's going after it and we don't go into it but most people have guessed that.
And when you think about mobile certain mobile devices are and hundreds of millions and others are done and millions and.
And so if you get 100% of the millions its about the same size as you know a few percentage of 100 and things.
So as soon as we get a 100% of the hundreds of millions and then we'll let you know, but I don't know.
Tired and state and how great that one's going to be because we continue to get forecast that seem bigger than they actually plays out.
And we love them and they love Us and we continue to execute.
Okay, good deal well it sounds exciting.
And you know so well I'm, so glad 2020 is behind us and.
And all our employees made it through say, we actually as we look back on our records we had.
It only.
Only 1 employee that had mild symptoms and the whole company 1 employee debt tested positive but was convinced later that that was a false test.
And we've gotten through this so we're pretty happy about it and I can tell you. The manufacturing folks are thrilled to death and not to have to mirror masks and anymore out on our Florida. So.
Debt.
Because they've been here.
And they can Ted and the entire time, so and and that's quite a bit.
Oh, Yeah me too you know I'm glad you're back so you know and and any even in Europe aren't these are the people and.
That work and I mean on most of them are essential.
And I don't know if they have that category in Europe were and and central employee or most of them.
Right right.
Fabs have continued to operate.
We've heard this time and time again debt what they did is they were not ramping new devices. They were just building on what they had before I mean silicon Photonics is a perfect example.
It turns out they're absolutely we're less fiber optic transceivers purchased last year.
But the biggest differences people didn't ship silicon photonics away from the standard and fiber optics, so our customers had pretty bad years.
And if they're not growing they're sure as heck not buying equipment from us. So now we've ruined that theyre publically strengthening projecting things we watch the testers they get filled up and so we can you can kind of see it's like okay. There about full they're going to need another system and that's why we can confidently project volume from them this year.
And then depending on how quickly E V sales grow.
And just still going to need more because once they're installing new systems are not going to go back to this old way theyre going to correct. It wouldn't be on automotive and it's even more sticky than that once you get qualified it's actually quite hard to change.
So there's a mad land grab right now.
But you know what 1 of the things that we're actually hoping to see is.
When our customer qualifies apart the way it works is they not only qualify us but their customer qualifies the process.
So we know for a fact that there are some of the big suppliers out there think automotive guys that have teams or individuals that have to sign off on a fox XP system for wafer level burn and.
And they have done that.
We're actually hoping is that that rubs off that that same company can turn to another supplier can say hey, how come youre not doing this.
And so.
We think were you know, we're just continuing to execute we have a lot of domain knowledge too we're not just picking it up from any 1 customer. So we believe ourselves to be expert enough to help people with these challenges with burn and because we've been doing it forever.
I mean I wrote here on my staff and I've only been here 10 years and people on and staff here they've been doing this for 40 years and can really understand the challenges and we have been without being offensive. We've corrected people. They said we're doing it this way and we push back and say that doesn't make sense.
And they've come back and said you're right.
We hope to be a partner and help them and.
And hopefully be and advocate and they enable her to a rising tide on silicon and.
And carbide and.
And you know we think all the customers that use us are really smart.
But I think and everybody used to test the whole industry would be better off because there would be more demand for silicon carbide, because it would be more quality.
And this the silicon there's plenty of silicon carbide, and I guess, I mean, I I saw where some guidance.
I think so it's been debatable, how easy it is to get it I mean theres been a mad rush for people to get it I feel like there's still some constraints.
But and there's still a lot of people getting into it I think it will be more available as time goes on and then it is know how constrained it is now I'm not sure.
Well, yeah that 1 company and Cree.
I think they are building a fab another I don't remember, though but I'm pretty sure they're building a fab and the U S. On a per se 100 per cent yeah 1.
<unk> hundred per cent and they supply substrates under contract to either to their competitors. So that's always interesting.
Okay, Yeah, and they're also making the.
Mass I guess or MOSFET.
And GAAP okay.
Okay, well again, thanks for the information I appreciate it and it sounds like you should have a really good year.
Thank you Frank.
Uh huh.
Thank you at this time I will turn it back to management for closing remarks.
Okay.
And there were a couple of things that we had had somebody call in on and I wanted to just make sure. They they kind of here. This.
And 1 was actually there was some questions related loading or assistance and.
And we sometimes and sometimes on purpose, sometimes on accident and we confused people and I said on purpose because you know there's competitors listening and things like that but.
On our Fox XP systems in particular Kid and test up to 9 high power wafers or 18, lower power wafers, and sometimes we ship them full and sometimes we ship and partial.
And that tends to be at the discretion of the customer and being able and you pay what their capacity is on.
And I want to make it absolutely clear that these products are fully released that our lead customers and <unk> sensors are doing full 9 blade systems up to 2000 and watts per blade.
Our silicon Photonics customers are also 2000 and want to put blade 9 blade systems, and we have shipped multiple of them theyre fully loaded they're fully operational and our silicon photonics customers and silicon carbide customers because of the lower power wafer is actually 18 wafers and the systems, we're shaping our fully loaded 18 wafer assist.
And so software.
Software is released they are fully functional that's great MTB asset in terms of reliability themselves and they just want to dispel any rumors that theres and concerns related to if they work full because sometimes we ship them partially populated because that's what the customer asks for and so it didnt come out I wanted to get that out there somewhere and then I'll just take this wasn't Ken was.
Gotta do it too there was some discussion related to quarterly revenues and Christian I think we covered some of that too, but I just wanted to get it out there you know there have been years and last year was 1 of them, where our forecast was heavily weighted in the backend.
And I hate the term hockey stick, but that comes to mind, because it was well when things recover it's going to get better and of course. It didn't this year Wow is not that way you know we.
We don't promise everything smooth, but it does feel more up and to the right as we do that and there's no hockey stick nor is there any you know miracles.
Miracles that need to happen.
A customer that isn't forecasting needs to start forecasting etcetera. So you know our confidence level and this is certainly as high as it's been in years and.
And you know, while we may start out slower than we ended the fourth quarter, it's not going to be a hockey stick and we just somehow on it get it out there, we're not giving quarterly guidance, but it's important for people to know that.
And as they're thinking about what our business is going to look like over the next 4 quarters and stay tuned and this is gonna be a very fine year for us, it's gonna be exciting and we're gonna be dealing with components and things like that but you know what.
It's a great place to be and and.
And where we're excited and we appreciate everybody joining us on the call and as always if you have follow on questions or want to follow up we'll be happy to get on and 1 on 1 with you individually just reach out to our IR folks or us directly and we'll set that up.
Well. Thank you very much and we will look forward to talking to you next time bye bye.
This concludes today's call and thank you for your participation you may now disconnect.
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