Q4 2023 Navitas Semiconductor Corporation Earnings Call
Unknown Executive: Good afternoon. Thank you for standing by, and welcome to Navitas Semiconductor's fourth quarter and 2023 financial results conference call. Please be advised that today's conference is being recorded, and a replay will be available on Navitas' Investor Relations website. I would now like to hand the conference over to Stephen Oliver, Vice President of Corporate Marketing and Investor Relations. Stephen, over to you.
Good afternoon, Thank you for standing by and welcome to Nevertheless, semiconductor fourth quarter and 2020 financial results Conference call. Please be advised today's conference is being recorded and a replay will be available whenever it does investor Relations website I would now like to hand, the conference over to Steven Oliver.
Vice President of corporate marketing and Investor relations, even upper teeth.
Good afternoon, everyone.
Stephen Oliver: I'm Stephen Oliver, Vice President of Corporate Marketing and Investor Relations. Thank you for joining Navitas Semiconductor's fourth quarter and full year 2023 results conference call. I'm joined today by Gene Sheridan, our chairman, president, CEO, and co-founder, and Ron Shelton, our CFO and treasurer. Also present is Janet Cho, who will take over as EVP, CFO, and treasurer following this earnings report, as announced earlier. A replay of this webcast will be available on our website approximately one hour following this conference call, and the recorded webcast will be available for approximately 30 days following the call.
Stephen Oliver Vice President of corporate marketing and Investor Relations. Thank you for joining <unk> semiconductor's fourth quarter and full year 2023 results conference call.
I'm joined today by Gene Sheridan, our chairman President CEO and co founder.
And Ron Shelton, our CFO and treasurer.
Also present is Jonathan Chou, who will take over as EVP CFO and Treasurer. Following this earnings report as announced earlier.
A replay of this webcast will be available on our website approximately one hour. Following this conference call and the recorded webcast will be available for approximately 30 days following the call.
Stephen Oliver: Additional information related to our business is also posted in the investor relations section of our website. Our earnings release includes non-GAAP financial measures. Reconciliations of these non-GAAP financial measures with the most directly comparable GAAP measures are included in our fourth quarter earnings release and also posted on our website in the investor relations section. In this conference call, we will make forward-looking statements about future events or about the future financial performance of Navitas, including acquisitions. You can identify these statements by words like we expect or we believe or similar terms.
Additional information related to our business is also posted on the Investor Relations section of our website.
Our earnings release includes non-GAAP financial measures reconciliations of these non-GAAP financial measures with the most directly comparable GAAP measures are included in our fourth quarter earnings release, and also posted on our website in the Investor Relations section.
In this conference call, we will make forward looking statements about future events or about the future financial performance of <unk>, including acquisitions. You can identify these statements by words like we expect we believe or similar terms.
Stephen Oliver: We wish to caution you that such forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from expectations expressed in our forward-looking statements. Important factors that can affect Navitas' business, including factors that could cause actual results to differ from our forward-looking statements, are described in our earnings release. Please also refer to the risk factors section in our most recent 10K and 10Qs.
We wish to caution you that such forward looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from expectations expressed in our forward looking statements.
Important factors that can affect never test business, including factors that could cause actual results to differ from our forward. Looking statements are described in our earnings release. Please also refer to the risk factors section in our most recent 10-K and 10-Qs.
Stephen Oliver: Our estimates or other forward-looking statements may change, and Navitas assumes no obligation to update forward-looking statements to reflect actual results, change assumptions, or other events that may occur, except as required by law. And now, over to Gene Sheridan, CEO. Thank you, Steve.
Our estimates or other forward looking statements may change and <unk> assumes no obligation to update forward looking statements to reflect actual results changed assumptions or other events that may occur except as required by law.
And now over to Jean Sheridan CEO.
Thank you, Steve and thanks to everyone for joining the call today.
Eugene A. Sheridan: And thanks to everyone for joining the call today. As we celebrate our 10-year anniversary, I am very excited to announce the number of major milestones for the company, which include cumulative shipments of over 150 million devices, savings of over 200,000 tons of CO2, a customer pipeline, as announced in December, of over 1.25 billion, and our highest quarterly revenue ever with over 26 million in Q4. This quarterly result exceeds our guidance and reflects an increase of 111% from Q4 of the prior year. In total, 2023 annual revenue comes in at $79.5 million, which reflects growth of approximately 109% over 2022, in a year when overall semiconductor revenues are generally down around 8%. Let me now turn to some of the market-specific developments and highlights. While the mobile market, in general, is experiencing limited growth in the near term, we continue to see solid revenue increases as major mobile players transition from silicon to GAN-based chargers. Our high-speed Generation 4 Janssen temperature platform is a key component in fast and ultra-fast mobile charging.
As we celebrate our 10 year anniversary I'm very excited to announce a number of major milestones for the company, which include cumulative shipments of over 150 million device sales.
Savings of over 200000 tons of <unk> customer.
Customer pipeline as announced in December of over $1 $2 5 billion.
And our highest quarterly revenue ever with over $26 million in Q4.
This quarterly result exceeded our guidance and reflect an increase of 111% from Q4 of the prior year.
In total 2023 annual revenue comes in at $79 5 million, which reflects growth of approximately 109% over 2022 in a year when overall semiconductors were generally down around 8%.
Let me now turn to some of the market specific developments and highlights.
While the mobile market in general is experiencing limited growth in the near term we continue to see solid revenue increases as major mobile players transition from silicon to Gan based charges.
Our high speed generation for Janssen Pepperidge platform is a key component in fast and ultra fast mobile charging.
Eugene A. Sheridan: All 10 of the top 10 mobile OEMs are now in production with Navitas, and GAN is climbing the adoption curve rapidly. In 2024, we expect customers like Oppo and Xiaomi to ship over 30% of all their chargers with GaN technology. Navitas now powers five different OPPO models, and we're excited to announce eight newly released Xiaomi phone models with GaN chargers ranging from 67 watts to 120 watts
All 10 of the top 10 mobile Oems are now in production with Alberta, and Dan it's climbing the adoption curve rapidly.
In 2024, we expect customers like Oppo, and Xiaomi to ship over 30% of all their charges with Gan technology.
Now lets us now powers five different Opel models, and we're excited to announce eight newly released Xiaomi phone models with Gan Chargers ranging from 67 to 121.
Eugene A. Sheridan: In Korea, our success with Samsung continues. We were already powering the S23 charger, and now we've been selected to power the new Galaxy S24. Dan has moved from beachhead to mainstream, and it's the technology of choice for new mobile designs across phones, tablets, laptops, and aftermarket chargers. We have also developed a new M-series version of our Generation 4 half-bridge IC, which is optimized for motor drives and a major driver in our home appliance pipeline. As noted in December, our Appliance and Industrial Pipeline totals over 200 projects and approximately $360 million in potential business. I'm pleased to announce another major appliance design win with a Tier 1 player, which leverages this latest M-series package, which we believe enables the highest frequency, highest efficiency, and highest power density motor drive for appliances and is expected to add over $10 million per year in new revenue starting late this year.
In Korea success with Samsung continues.
We were already powering the F. 'twenty three chartered and now we've been selected to power the new Galaxy S 24.
Dan it's moved from beachhead to mainstream and as the technology of choice for new mobile designs across phones tablets laptops and aftermarket Chargers.
We have also developed a new M series version of our generation four half bridge IC, which are optimized for motor drives and a major driver in our home appliance pipeline.
As noted in December our appliance and industrial pipeline totals over 200 projects and approximately $360 million in potential business.
I am pleased to announce another major appliance design win with a tier one player, which leverages. The latest M series half range, which we believe enables the highest frequency highest efficiency and highest power density motor drive for our clients and is expect to add over $10 million per year, new revenue starting late this year in.
Eugene A. Sheridan: In total, Navitas is in development with seven of the world's top 10 home appliance OEMs, which we expect will drive further revenue starting later this year and accelerate throughout 2025 to 2026. In appliance and industrial segments, major OEMs are moving to GaN or silicon carbide to meet regulatory requirements for energy efficiency and consumer demands for higher power density, along with transitions from gas-powered heating and cooling systems to the fast adoption of heat pump technology. We now have customer designs underway at two of the top three global leaders in industrial pumps and one of the top three global leaders in heat pumps, the combination which is anticipated to drive tens of millions of new revenue starting late next year or 2026. We are also excited to share that Navitas DNICs have been designed into the ground-based terminal for a major internet satellite rollout that is expected to drive over 5 million annually, with shipments beginning late this year and continuing for the next 5 to 10 years.
In total <unk> is in development with seven of the world's top 10 home appliance Oems, which we expect will drive further revenue starting later this year and accelerate throughout 2025 and 2020 states.
And appliance and industrial segments major Oems are moving to Gan on Silicon carbide can meet regulatory requirements for energy efficiency and consumer demand for higher power density along with transitions from gas powered heating and cooling systems to fast adoption of heat pump technology.
We now have customer designs underway at two of the top three global leaders in industrial pump and one of the top three global leaders and heat pumps, the accommodation, which is anticipated to drive tens of millions of new revenue starting late next year or 2026.
We are also excited to share that <unk> have been designed into the ground based terminal for a major internet satellite rollout that is expected to drive over $5 million annually with shipments beginning late this year and continuing for the next five to 10 years.
Eugene A. Sheridan: In September last year, we launched GANSAFE technology, a new industry benchmark as the world's most protected, most reliable, and highest performance GAN power semiconductor technology. Just this week at the prestigious APEC conference in Long Beach, we expanded that technology family to include a topside-cooled packaging option. With a 20-year warranty, GAN Safe breaks the glass ceiling that has prevented GAN from entering high-power, high-reliability markets for decades. As power-hungry AI processors increase power demand by 2 to 3x, now increasing to 1,000 to 2,000 amps per processor and up to 100 kilowatts per rack, new GaN-safe and Generation 3 fast silicon carbide technologies are enabling drivers to deliver the needed power, densities, and efficiencies required by these next-generation AI processors.
In September last year, we launched scan safe technology, a new industry benchmark as the world's most protected the most reliable and highest performance Gan power semiconductor technology.
Just this week at the prestigious APAC conference in long Beach, we expanded that technology family to include a top side pooled packaging option with a 20 year warranty can say breaks the glass ceiling that has prevented Jan from entering high power high reliability markets for a decade.
As power hungry AI processors increased power demand by two to three X now increasing to 1000 to 2000 amps per processor and up to 100 kilowatts per rack, new Gan safe and generation three fast silicon carbide technology are enabling drivers to deliver the needed power densities and efficiencies required by these next.
Generation AI processors.
Eugene A. Sheridan: Navitas dedicated data center design center is now achieving an unprecedented 4.5 kilowatts in the industry standard CRPS 185 form factor, more than double the power density of legacy silicon solutions with lower temperatures, higher reliability, and at a lower cost per watt. Over 20 designs are expected to ramp into initial mass production in 2024 at the top data center players, which we expect to contribute $3 to $5 million in new revenue in the second half of this year. In electric vehicles, we observe the same slower growth rates as observed by our peers, which is creating some short-term revenue headwinds. But we're also benefiting from the introduction of our new GANSAFE technology, plus our new Generation 3 fast silicon carbide MOSFETs, which are significant drivers in our revenue pipeline for on-board and roadside EV chargers for both 400 volt and 800 volt batteries. Silicon Carbide-based on-board chargers are in or moving to production this year with customers including top EV brands such as Zeker, Volvo, and Smart. We also have multiple design engagements underway in the U.S., Europe, Korea, China, and Japan.
<unk> dedicated data Center design Center is now achieving unprecedented four five kilowatt in the industry standard CRP is 185 form factor more than double the power density of legacy Silicon solutions with lower temperature higher reliability and at a lower cost per watt.
Over 20 designs are expected to ramp into initial mass production in 2024 at the top data center players, which we expect to contribute $3 million to $5 million in new revenue in the second half of this year.
Electric vehicles, we observe the same slower growth rate as observed by our peers, which is creating some short term revenue headwinds, but we're also benefiting from the introduction of our new <unk> technology, plus our new generation three fast silicon carbide, MOSFET, which are significant drivers in our revenue pipeline for onboard and roadside EV Chargers for both 400 volt.
An 800 volt battery systems.
Silicon carbide based onboard Chargers are in are moving to production this year with customers, including top brands, such as Zika Volvo and smart.
We also have multiple design engagements underway in U S Europe, Korea, China and Japan.
Eugene A. Sheridan: These sodium carbide chargers are expected to ramp later this year and into 2025. GAN-IC EV adoption is also on track for mass production ramps in 2025. Navitas is pioneering leading-edge onboard bidirectional charging at 6.6 kilowatts and 11 kilowatts with our dedicated ED design center.
Auto and card may charges are expected to ramp later this year and into 2025.
Dan I C. E. D adoption is also on track for mass production ramps in 2025.
<unk> is pioneering leading edge onboard bidirectional charging at $6 six kilowatt and 11 kilowatt with our dedicated design center.
Eugene A. Sheridan: Last year, we announced a joint design center with Geely, a top 10 EV player, and now we're excited to announce another joint design center with Shinri, one of the top EV onboard charger suppliers for Hyundai, BYD, Honda, Beely, and others. The first Shinri development projects are already underway and are expected to contribute appreciable revenues in early 2025. In EV roadside chargers, in addition to our ongoing silicon carbide production with SK Cignet, which is a major supplier to Electrify America and EVgo, we are adding multiple tier one developments in the US, Europe, and Asia, with mass production starting in the second half of this year, which is expected to contribute over $5 million in 2025. In the solar space, while we are observing a continued general market slowdown given high interest rates that limit our growth in the first half of 2024, we are seeing accelerating displacement of silicon with GANSafe and Generation 3 fast silicon carbide technologies in our solar and energy storage customer pipeline.
Last year, we announced a joint design center with <unk>, a top 10 player and now we're excited to announce another joint design center with Chenier, one of the top E onboard charger supplier for Hyundai BYD Honda sealing and other <unk>.
<unk> Shen redevelopment projects are already underway and are expected to contribute appreciable revenues in early 2025.
In EV roadside Chargers in addition to our ongoing silicon carbide production with FCA, which is a major supplier to Electrify America and EDI go we are adding multiple tier one development in U S Europe and Asia with mass production starting in the second half of this year, which are expected to contribute over $5 million in 2020.
Hi.
In the solar space, while we are observing a continued general market slowdown given high interest rates that limit our growth in the first half of 2024, we are seeing accelerating displacement of silicon with Gan safe and generation III faster Silicon carbide technology in our solar and energy storage customer pipeline.
Eugene A. Sheridan: We now have significant developments with three of the top five U.S. solar OEMs and the majority of the world's top ten solar players. While we are already shipping silicon carbide in the market today, GaN adoption in solar is on track to start ramping late this year, and together, these new GaN and silicon carbide customer designs are expected to add tens of millions of dollars in revenue in 2025. Overall, while we're not immune to the near-term market headwinds, which are translating to more muted revenues in the first half of 2024, the significant new winds that I've highlighted in my remarks, in combination with an anticipated market recovery starting in the second half of the year, are expected to translate into full-year 2024 revenue growth of 40 to 50% over 2023. For all of our target markets, the system benefits derived from gallium n These include energy source conversion from fossil fuels to renewable gas-powered vehicles, transitioning to all forms of electric transportation, and the intense and rapidly accelerating power demands of AI and edge computing.
We now have significant developments with three of the top five U S solar OEM and the majority of the world's top 10 solar players. While we are already shipping silicon carbide in the market today Gan adoption in solar is on track to start ramping late this year and together these new Gan <unk> private customer designs are expected to add tens of millions of revenue.
In 2025.
Overall, while we're not immune to the near term market headwinds, which are translating to more muted revenues in the first half of 2024, the significant new wins that as highlighted in my remarks in combination with an anticipated market recovery starting in the second half of the year are expected to translate into full year 2020 for revenue growth of 40% to 50 <unk>.
<unk> over 2023.
For all of our target market the system benefits derived from gallium nitride and silicon carbide are amplified by long term secular tailwind.
These include energy source conversion from fossil fuels to renewable gas powered vehicles transitioning to all forms of electric transportation and the intense and rapidly accelerating paradigm of AI and edge computing, our leading edge, Dan <unk> and Jonathan technology are both displacement technology in traditional markets and accelerating in the knee.
Ronald K. Shelton: Our leading-edge GAN ICs and Genetech technologies are both displacement technologies in traditional markets and accelerating and enabling technologies in new energy markets. As we've stated before, these drivers, combined with our unique position as the industry's only pure play power GAN and sodium carbide player, position Navitas to grow at a rate that is 6 to 10 times faster than the overall power semiconductor market for years to come. And now, over to Ron to review the finances. Thank you, Gene, and good afternoon, everyone.
<unk> technology, and new energy markets.
As we've stated before these drivers combined with our unique position as the industry's only pure play power Gan on Silicon carbide player possession now the task to grow at a rate at a six to 10 times faster than the overall power semiconductor market for years to come.
And now over to Ron to review the financials.
Thank you Jane and good afternoon, everyone. My comments today I will first take you through our fourth quarter and annual 2023 financial results and then I'll walk you through our outlook for the first quarter along with some of the market dynamics. We are currently seeing.
Ronald K. Shelton: In my comments today, I will first take you through our fourth quarter and annual 2023 financial results. And then I'll walk you through our outlook for the first quarter, along with some of the market dynamics we are currently seeing. Revenue in the fourth quarter of 2023 was again above our guidance, growing 111% year over year and 19% sequentially to approximately $26.1 million. For the full year of 2023, we grew revenue to $79.5 million, representing year-over-year growth of 109%. Before adjusting expenses, I'd like to refer you to the gap to non-gap reconciliations in our press release earlier today. In the rest of my commentary, I will refer to non-gap expense measures. Non-GAAP gross margin in the fourth quarter increased to 42.2% from 42.1% in the third quarter of 2023 and 40.6% in the fourth quarter of 2022.
Revenue in the fourth quarter of 2023 was again above our guidance growing 111% year over year, and 19% sequentially to approximately $26 $1 million.
For the full year of 2023, we grew revenue to $79 5 million representing year over year growth of 109%.
Before adjusting expenses I'd like to refer you to the GAAP to non-GAAP reconciliations in our press release earlier today and the rest of my commentary I will refer to non-GAAP expense measures.
non-GAAP gross margin in the fourth quarter increased to 42, 2% from 42, 1% in the third quarter of 2023 and 46% in the fourth quarter of 2022.
Ronald K. Shelton: Gross margins in the quarter were at the low end of our guidance, primarily due to an increased mobile market product mix as we continue to see strength in that part of our business. For fiscal year 2023, non-GAAP gross margin was 41.8% compared to 40.8% in the prior year. Fourth quarter total operating expenses were $20.7 million, comprising SG&A expense of $9.3 million and R&D of $11.4 million. This is a bit higher than our guidance due primarily to slightly higher spending on materials related to certain research and development activities. For fiscal year 2023, non-GAAP operating expenses were $73.5 million, compared to $56.7 million in the prior year.
Gross margins in the quarter, whereas the low end of our guidance, primarily due to increased mobile market product mix as we continue to see strength in that part of our business.
For fiscal year 2023, non-GAAP gross margin was 41, 8% compared to 48% in the prior year.
Fourth quarter total operating expenses were $27 million.
Comprising SG&A expense of $9 3 million and R&D of $11 4 million.
This is a bit higher than our guidance due primarily to slightly higher spending on materials related to certain research and development activities.
For fiscal year 2023, non-GAAP operating expenses were $73 5 million.
Compared to $56 7 million in the prior year.
Ronald K. Shelton: This increase reflects continued significant investments in new products, technologies, and markets. All of these investments are laying the stage for significant growth in the future. Putting all of this together, the loss from operations for the fourth quarter of 2023 was $9.7 million. Compared to a loss from operations of $12.4 million in the fourth quarter of 2022 and a loss of $40.3 million for the full year compared to a loss of $41.2 million in 2022. Our weighted average share count for the fourth quarter was 179 million shares. Turning to the balance sheet, it remains very strong with high levels of liquidity. Cash and cash equivalents at quarter end were $152.8 million, and the company would continue to carry no debt.
This increase reflects continued significant investments in new products technologies and markets. All of these investments are laying the stage for significant growth in the future.
Putting all of this together the loss from operations for the fourth quarter of 2023 was $9 7 million.
<unk> to a loss from operations of $12 4 million in the fourth quarter of 2022.
And a loss of $40 3 million for the full year compared to a loss of $41 2 million for 2022.
Our weighted average share count for the fourth quarter was 179 million shares.
Turning to the balance sheet remains very strong with high levels of liquidity cash and cash equivalents at quarter end were $152 8 million.
And we continue to carry no debt.
Ronald K. Shelton: Accounts receivable were $25.9 million compared to $17.6 million in the prior quarter, reflecting a product shipment pattern that was less linear than in prior quarters. This wasn't a surprise as we had significant demand in December from our mobile customers. Inventory increased to $23.2 million compared to $15.9 million in the prior quarter.
Accounts receivable were $25 9 million compared to $17 6 million in the prior quarter, reflecting our product shipment pattern that was less linear than prior quarters.
This was not a surprise since we had significant demand in December from our mobile customers.
Inventory increased to $23 2 million compared to $15 9 million in the prior quarter.
Ronald K. Shelton: Similar to accounts receivable, we were not surprised by the near-term increase in inventory levels, which grew in anticipation of January shipments to the mobile market. Also, we procured additional silicon carbide substrates and epi wafers to support expected significant growth in the second half of the year in the EV, industrial, and solar markets. Moving on to guidance for the first quarter, we currently expect revenues of $23 million, plus or minus $500,000.
Similar to accounts receivable, we were not surprised by the near term increase in inventory levels, which grew in anticipation of January shipments to the mobile market.
Also we procured additional silicon carbide substrates and <unk> wafers to support expected significant growth in the second half of the year.
Industrial and solar markets.
Moving on to guidance for the first quarter. We currently expect revenues of $23 million plus or minus $500000.
Yeah.
Ronald K. Shelton: At the midpoint, this represents substantial year-over-year growth of more than 70 percent over the $13.4 million we recorded in the first quarter of 2023, and it is slightly down from the fourth quarter of 2023, largely due to expected seasonality in our mobile business and some softness in the other markets, as we have already discussed. Those margins for the first quarter are expected to be approximately 41% plus or minus 50 basis points as our mix continues to lean more towards the mobile market in the near term. As we move through the year, we expect improving margins aligned with an expected recovery in higher-margin markets, including EV and industrial, in the second half of 2024. In total, operating expenses in the first quarter, excluding stock-based compensation and amortization of intangibles, are expected to be approximately $21.5 million.
At the midpoint this represents substantial year over year growth of more than 70% over the $13 4 million. We recorded in the first quarter of 2023, and it was slightly down off of the fourth quarter of 2023, largely due to expected seasonality in our mobile business and some softer.
And the other markets as we already discussed.
Gross margins for the first quarter are expected to be approximately 41% plus or minus 50 basis points as our mix continues to lean more towards the mobile market in the near term.
As we move through the year, we expect improving margins aligned with an expected recovery and higher margin markets, including EV in industrial in the second half of 2024.
In total operating expenses in the first quarter, excluding stock based comp and amortization of intangibles are expected to be approximately $21 5 million.
Ronald K. Shelton: We continue to invest in growth-oriented initiatives for our end markets. As we have indicated before, we expect increases in our spending will be substantially less and growth in our revenues as we continue to see leverage in our business model. To put that in perspective, compared to the first quarter of 2023, at the midpoint of our guidance, we expect revenues in the first quarter of 2024 to grow more than 70%, yet operating expenses based on our guidance are expected to grow only 20% over the same period. For the first quarter of 2024, we expect our weighted average share count to be approximately 180 million shares. Stock-based compensation is expected to be approximately $13 million, and amortization of intangible assets is expected to be approximately $5 million.
We continue to invest in growth oriented initiatives for our end markets.
As we have indicated before we expect increases in our spending will be substantially less than growth in our revenues as we continue to see leverage in our business model.
Put that in perspective compared to the first quarter of 2023 at the midpoint of our guidance. We expect revenues in the first quarter of 2024 to grow more than 70%.
The operating expenses based on our guidance our expected growth only 20% over the same period.
For the first quarter of 2024, we expect our weighted average share count to be approximately 180 million shares.
Stock based compensation to be approximately $13 million in amortization of intangible assets to be approximately $5 million.
Ronald K. Shelton: In closing, we're extremely pleased with the results for the quarter and for all of fiscal 2023. Our results continue to demonstrate that we can and expect to grow significantly faster than the overall market. While we are not immune to some of the same macro trends seen by others, leading to a more muted outlook for the first half of the year, we expect the strength of our pipeline and some market recovery in the second half of the year will support annual revenue growth of 40 to 50 percent in 2024 relative to 2023. Operator, let's begin the Q&A. At this time, if you would like to ask a question, please press the star followed by We'll pause just for a moment to compile the Q&A roster. Your first question comes from the line of Queen Bolton from Needham.
In closing, we're extremely pleased with the results for the quarter and for all of fiscal 2023.
Our results continue to demonstrate that we can and expect to grow significantly faster than the overall market.
We are not immune to some of the same macro trends seen by others, leading to more muted outlook for the first half of the year.
We expect the strength of our pipeline and some market recovery in the second half of the year will support annual revenue growth of 40%, 50% in 2024 relative to 2023.
Operator, let's begin the Q&A session.
At this time, if you would like to ask a question. Please press star followed by the number one on your telephone keypad will pause just for a moment to compile the Q&A roster.
Your first question comes from the line as Quinn Bolton from Needham.
Nathaniel Quinn Bolton: Please go ahead. Hey, guys. Congratulations on the strong finish to 2023. Um, most of the metrics, you know, look pretty good. And certainly the top line into next year, but the gross margin coming in, you know, a little light. You talked about the makeshift to mobile, you know, driving some of that lower margin in the near term. But Ron or Gene, can you give us a sense?
Please go ahead.
Hey, guys congratulations on a strong finish to 2023.
Yes, most most metrics look pretty good.
Certainly the topline into next year, but the gross margin coming in a little light you talked about the mix shift to mobile.
Driving some of that lower margin in the near term but.
Ron or gene could you give us a sense how do you see margin recovering through 2024 could you give us sort of any thoughts on where margin might exit 2024, and then I've got a follow up question.
Gene: You know, how do you see margin recovering through 2024? Can you give us sort of any thoughts on where margin might exit 2024? And then I've got a follow-up question. Yeah, sure. Thanks, Quinn. This is Gene.
Yes sure. Thanks Quinn this is gene.
Gene: Yeah, as you commented, and we explained, margins are a little bit more muted in the first half of the year, just purely due to market mix and the strength of the mobile market. Most other markets are a little softer in the first half of the year, as we anticipate automotive and industrial strengthening in the back half of the year, but also the four major growth drivers that I highlighted. AI Data Centers Ramping in the later part of the year, the Tier 1 Appliance Project Ramping later in the year, GANs starting in solar later in the year, even the Internet Satellite Project, all of these are, https://www.youtube.com.uk. Thank you, Gene. My next question, and I may have asked you this in the past, but, you know, just kind of walking the show floor here at APEC, you know, I know you guys are targeting a lot of the higher power GANs at 650 volts and above, but it seems like there's increasing opportunity for and kind of lower power, mid power GANs as well.
Yes, as you commented and we explained the margins.
Margins are a little bit more muted in the first half of the year, just purely due to market mix and the strength of the mobile market.
Most other markets are a little softer in the first half of the year as we anticipate automotive and industrial strengthening in the back half of the year, but also the four major growth drivers that I highlighted.
Data centers ramping in the later part of the year the tier one appliance.
Project ramping later in the year again, starting at solar later in the year, even the Internet satellite project. All of these are expected to be above that average. So all of these will contribute to modest margin improvement throughout the year. We expect to end the year still still below mid forty's, but we will see incremental improvement in Q3 and Q4.
Thank you Jane.
Mike.
Next question and I May have asked you this in the past but.
Just kind of walking the show floor air in APAC.
<unk> Gan all over the place I know you guys are targeting a lot of the higher power again to $6 50 volts and above but it seems like there is increase in opportunity in Canada.
Lower power mid power Gan as well and just wondering.
Quinn: And just, you know, wondering, you know, as you guys continue to grow, do you have any revised thoughts on potentially expanding the product portfolio to below a 650 volt GAN technology? Because, again, it seems like there's some pretty good opportunities in that lower mid-power market as well. Thank you.
As you guys continue to grow.
Do you have any revised thoughts on potentially expanding the product portfolio to below a 650 volt Gan technology, because again it seems like there is some pretty good opportunities in that lower mid power market.
As well thank you yes.
Gene: Yeah, I fully fully agree, Quinn, and that is definitely of interest. It's an area that we're actively working on. We don't have a specific launch schedule or development schedule to share.
Fully fully agree Glen and that is definitely of interest. It's an area that we're working on actively we don't have a specific fund launch scheduled development schedule to share. We certainly got our handful with all the opportunities at 650 volt, but I agree with you I think there's great opportunity for lower voltage Gan and it's something we plan to pursue overtime.
Quinn: We certainly got our hands full with all the opportunities at 650 volts, but I agree with you. I think there's a great opportunity for lower voltage again, and it's something we plan to do. Perfect. We'll stay tuned. I'll go back to the queue.
Perfect well, we'll stay tuned I'll go back in the queue. Thank you.
Ross Clark Seymore: Thank you. Your next question comes from the line of Ross Seymour from Deutsche Bank. Please go ahead.
Thanks Glenn.
Your next question comes from the line across.
From Deutsche Bank. Please go ahead.
Ross Clark Seymore: Hi guys. Thanks for asking a question. And Ron and Janet, congrats on both your transitions.
Hi, guys. Thanks for asking question and Rob and then Janet Congrats to both of your transitions.
Ross Clark Seymore: I guess my question for this year is whether being second half weighted is no different than a lot of the peers. But just how second half weighted do you expect it to be? Do you expect sequential growth in the second quarter? Or is it going to be much more of a stair step up as inventories normalize and a lot of these new design wins come in the second half? Yeah, sure. Thanks, Ross.
So my question for this year is being second half weighted is no different than a lot of the peers, but just how second half weighted do you expect it to be do you expect to grow sequentially in the second quarter or is it going to be much more of a stair step up as inventories normalized a lot of these new design wins coming in the second half.
Yeah sure. Thanks, Ross, Yeah, not too dissimilar than prior years, it's probably in the range of 40%, 60%. That's similar to what we saw last year. So I don't think theres much surprise there.
Gene: Yeah, not too dissimilar from prior years. It's probably in the range of 40%, 60%. That's similar to what we saw last year.
Gene: So I don't think there's much surprise. Okay, I guess as my follow-up, you talked about a ton of design wins, ramping at various times, and some really meaningful dollar amounts. How do you think the mix of the company changes by end markets? You guys had talked a little bit about how the split was between mobile and appliance, etc. What will that be in 2023?
Okay, I guess as my follow up you talked about a ton of design wins ramping at various times in some really meaningful dollar amount.
How do you think the mix of the company changes.
End markets, you guys had talked a little bit about how the split was between mobile and appliance et cetera.
How is that in 2023, and how do you expect that to transition into 'twenty.
Gene: And how do you expect that to transition to 2020? Yeah. Yeah, definitely. 23 saw a really nice surge in mobile that's continuing. As we explained early this year, that surge took mobile over 40%. The other markets were in the 10 to 20% range.
Okay.
Yes, yes.
Yes definitely.
Three saw a really nice surge in mobile that's continuing as we explained in early this year that search to a mobile over 40%.
The markets were in the 10% to 20% range I think we will see that shift back throughout the year given the anticipated recovery.
Kevin Edward Cassidy: I think we'll see that shift back throughout the year, given the anticipated recovery in industrial and EV, but also the ramps we talked about. The AI data center is brand new for us, so that's really coming off a zero base. Appliance strengthening with that strong pipeline and that major new tier one. I think we'll see a balance out pretty nicely where mobile goes below 40% and the other markets creep up from there. Thank you. Your next question comes from the line of Kevin Cassidy from Rosen-Dazs Securities. Please go ahead.
In industrial and EV, but also the ramps we talked about AI data centers brand new for US that's really coming off of a zero base appliance strengthening with that strong pipeline in that major new tier one <unk>.
<unk>.
<unk>.
Dan and sick, both ramping into solar in the second half of the year. So I think we will see it balance out pretty nicely with the mobile goes below 40% in the other markets creep up from there 10% to 20%.
Thank you.
You bet.
Your next question comes from the line of Kevin Cassidy from <unk> Securities. Please go ahead.
Kevin Edward Cassidy: Yeah, thanks for taking my question, and congratulations on the good results, and Ron, happy trails, and Janet, I look forward to working with you. On the mobile market, you mentioned that GAN has about a 30% market share. Do you see market share growing in mobile chargers, or is this going to be a steady state? Maybe, what do you see as the growth rate in the mobile market for GAN? Yeah, thanks, Kevin. That was a good question.
Yes, Thanks for taking my question and congratulations on the good results and round I'm happy trails, and Janet look forward to working with you.
Yes.
On the mobile market, you mentioned that Gan has about 30% market share do you see that market share growing in the mobile Chargers or is this going to be steady state maybe what do you see as the growth rate in the mobile market for Gan.
Yeah. Thanks, Kevin Good question about 30% with specific to Xiaomi and oppo kind of leading the charge so to speak.
Gene: And that 30% was specific to Xiaomi and OPPO kind of leading the charge, so to speak, but I think most GaN mobile is probably still single-digit adoption rates. So we don't believe there's any limit to switching. I think ultimately all of the silicon chargers will move to GaN over time. Part of that dynamic is not just driven by our technology or by customer choice but also by power levels moving up. So as the whole world goes from slow chargers, which are 5, 10, 15, 20 watts, where GaN doesn't bring much value, to fast chargers in the 30, 40, 50 watts, and then ultimately to the ultra-fast chargers where we're really, really strong at 100 watts or higher, there's no limit to switching everything over from silicon to GaN.
But I think most again mobile is probably still single digit adoption rates. So.
We don't believe there's any limit to switching I think ultimately all of the silicon charges will move to again over time part of that dynamic is not just driven by our technology or by the customer choice, but.
But also the power levels moving up so as the whole world goes from slow Chargers switch or 510, 15, 20 watts, where again doesn't bring much value to fast Chargers and the 30 40 50 Watson and then ultimately the ultrafast Chargers, where were really really strong at 100 watts or higher there's no limit to switching everything over from Silicon again. So it's just a question of time I think the.
Gene: So it's just a question of time, and I think the growth rates between now and then will continue pretty strongly. And maybe if we look at the other markets that you're penetrating now, you know, 20 design wins and data center and home appliances, can you draw a parallel to the mobile market for where those markets will be going? Yeah, I think it's almost identical.
Growth rates between now and then we will continue pretty strongly.
And maybe if we look at the other markets that you're penetrating now 20 design wins in data center and home appliances.
Yes, I mean can you draw a parallel to the mobile market for where those markets will be going.
Yes, I think it's almost identical I think you see these first few leader high performance examples setting. The example for the whole industry. Once you get your first beachhead customers beachhead applications within the market tends to be on the high end.
Gene: I think you see these first few high-performance examples setting the example for the whole industry. Once you get your first beachhead customers, beachhead applications within the market tend to be on the high end, setting an example for others, proves that the value is there, that the quality, the reliability, everything is there. And then we see a pretty effective domino effect.
As an example for others proves that the value is there that the quality the reliability everything is there and then we see a pretty effective domino.
Occurrence over the subsequent years, we're one project leads to two weeks to four leads to 16 and things start to grow exponentially. So I think you can look back at what's happened and what we've learned in mobile Chargers just in the last three years and we anticipate the same set of Domino effect, the same sort of accelerating adoption to occur in each of these new markets with their own sort of S curve adoption.
Gene: I think you can look back at what's happened, what we've led in mobile chargers just in the last three years, and we anticipate the same sort of domino effect, the same sort of accelerating adoption to occur in each of these new markets with their own sort of S-curve adoption. Okay, great. Thank you. Your next question comes from the line of Tristan Gerra from Bayard. Please go ahead. Hi, this is Tyler on behalf of Tristan.
Okay, great. Thank you.
Thanks, Kevin.
Your next question comes from the line of Tristan <unk> from Baird. Please go ahead.
Hi, This is Tyler on for Tristan Thanks for taking the questions. We noticed that anchor is advertising again, Brian on their web site for a home backup solution their advertising their products with your technology as a core competency could you. Please remind us how gan prime represents a step up in performance that potential size.
Tyler: Thanks for taking the questions. We noticed that Anchor is advertising GANprime on their website as a home backup solution. They're advertising their products with your technology as a core competency. Could you please remind us how GANprime represents a step up in performance, the potential size and growth of the home backup market, and your content in these boxes? Yeah, great, great. I'm glad you caught that.
And growth of the home backup market and your content in these boxes.
Yes, great Great I'm glad you caught that and we love. The fact that we've got now major players featuring game right in the headline in fact acre I think positioned themselves as the largest and charter lineup.
Gene: And we love the fact that we've got major players featuring GAN right in the headline. In fact, Anchor, I think, positions itself as the largest GAN charger lineup in the world. And while we're not the exclusive supplier, we're a major supplier to Anchor. And this whole positioning obviously benefits the whole industry. It certainly benefits Navitas.
In the world and while we are not the exclusive supplier, we're a major supplier to anchor it and therefore positioning obviously benefits total industry. It certainly benefits <unk> again prime products in particular can be up to 50% size reduction.
Gene: So the GAN Prime products, in particular, can be up to 50% size reduction, up to 30% energy efficiency improvement, and we're now actually at system cost parity, so they're not demanding a price premium for that solution. All of those same benefits that we've seen at OPPO, Xiaomi, and so many others, such as the SAMSUNG S24, apply to the GAN Prime.
To 30% in energy efficiency improvement.
And we're now actually had system cost parity. So they are not.
Demanding a price premium in that solution. So all of those same benefits that we've seen at Opel Xiaomi in so many other Samsung, yes, 24 apply to begin prime family.
Okay.
Operator: Operator, back to you for any follow-up questions. The next question comes from the line of Jon Tanwanteng from CJS Securities. Please go ahead.
Operator back to you for any follow up questions.
The next question comes from the line of John One thing from <unk> Securities. Please go ahead.
Jonathan E. Tanwanteng: Hi, thanks for taking my questions. Gene, I was wondering if you would expect 50% or more growth when you had your investor event in December. What are the biggest changes from there?
Alright, thanks for taking my questions.
I was wondering you would expect it to 50% or more growth when you add your investor event in December.
The biggest changes from there is it mostly automotive and inventory issues and then maybe some solar and there is a more broad based and that just help me understand what's what's changed in the pipeline for you.
Gene: Is it mostly automotive and inventory issues and maybe some solar in there? Is it more broad-based than that? Just help me understand what's changed in the pipeline for you. Yeah, yeah, John, that's exactly right. The last two months, two and a half months, we've seen the slowdown, as many have commented on. Really, it's not a decline.
Yes, John Thats exactly right last two months two five months, we've seen the slowdown as many have commented about really it's not a decline it's just slower growth in EV and slower growth in industrial anytime you get an adjustment in growth rates, you get pockets of inventory that buildup forecasts come down temporarily to kind of swallow that change in growth rate deal.
Gene: It's just slower growth in EV and slower growth in industrial. Anytime you get an adjustment in growth rates, you get pockets of inventory that build up. Forecasts come down temporarily to kind of swallow that change in growth rates and deal with that pocket of inventory. We see that a bit in the channel.
With that pocket of inventory, we see that a bit in the channel and so by all of our indications we think thats a couple of quarters and that's added to our more muted expectations for the first half of the year.
Gene: And so by all of our indications, we think that's a couple of quarters, and that's added to our more muted. Got it. Thank you. And then, is there any update on just how operating expenses are expected to, you know, step up this year, especially with the lower growth expectation? Yeah, sure. Maybe this is a good chance for Janet to jump in.
Got it. Thank you and then is there any update on just how operating expenses are expected to.
Step up this year with a lower growth expectations.
Yes sure maybe this is a good chance for Janet to jump in and share her thoughts.
Janet: Hi. We have a very disciplined way to manage our op-eds. We see a lot of operating leverage as we scale up revenue. Right now, as... From our guidance, we guided Q1 to grow revenue at 70% versus Alpex's gross of 20%. We will continue to monitor our headcount plan to make the necessary investment to drive profit. We laid out our long-term target model in our investor day, and we still remain committed to that. For the longer term, we're working towards an OPEX level of 20. Okay, great. Thank you for that.
Hi.
We have a very disciplined.
Disciplined.
Link.
To manage our Opex, we see a lot of operating leverage as we scale up of revenue right now as you can see from our guidance, we guided Q1 to grow revenue at 70% versus Opex growth of 20%. We will continue to monitor our head count plan to make the necessary investor.
To drive profitable growth.
We laid out our long term target model in our Investor day, we're still remain committed to that for the longer term, we are working towards to achieve opex level at 20% to 30%.
Okay, great. Thank you for that and then just any update on the timeline to either etfs breakeven or cash flow breakeven or profitability.
Janet: And then just any update on the timeline to either EPS, breakeven, cash flow, breakeven, or profitability. Yeah, we're not giving specific updates on the long-term model, although committed to it over the next few years. I think profitability is still targeted at $50 million a quarter. Where we hit that, I think depends on market dynamics. And of course, overall. Okay, great. Thank you. Your next question comes from the line of Jack Egan from Charter Equity Research. Please go ahead. Hey guys.
Yeah, we're not giving any specific updates on our long term model, although committed to it over the next few years I think profitability is still targeted for $50 million a quarter, where we hit that I think depends on market dynamics and of course, so overall growth rates.
Okay, great. Thank you.
Thanks, John.
Your next question comes from the line of Chuck Egan from Charter equity Research. Please go ahead.
Hey, guys. Thanks for taking the questions I had a couple on some of your end markets and how again in sick the interplay between those.
Jack Egan: Thanks for taking the questions. I had a couple on some of your end markets and how Gann and SICK, you know, the interplay, the So, you know, of course, there's a lot of buzz around AI, particularly with the big infrastructure build outs going on. And so I was just curious about your approach to that market, since both SICK and GAN can be used in data centers. So, you know, will those kind of be fighting for the same slots?
So of course, there's a lot of buzz around AI, particularly with the big infrastructure build outs going on and so I was just curious about your approach to that market since both sick and Gan can be used in data centers. So.
Will those kind of be fighting for the same slots or can they coexist in those applications different power levels or performance measures just anything there would be helpful.
Jack Egan: Or can they coexist in those applications that, you know, different power levels are and anything that will? Yeah, it's a great topic, a really interesting one for us. You know, we've got this data center design center that designs the entire power supply with really deep system expertise, and now we've got leading-edge GAN, and leading-edge silicon carbide. So we're in a unique position to figure out the right answers to exactly that question.
Yes, it's a great topic, a really interesting one for US. We've got this data center design center that designs the entire power supply. So a really deep system expertise and now we've got leading edge Gan, leading edge silicon carbide. So we're in a unique position to figure.
The right answers to exactly that question actually not very it's not very intuitive, it's not very easy for our customers to figure out, but we're doing some really.
Gene: It's actually not very intuitive, it's not very easy even for our customers to figure out, but we're doing some really exciting work on exactly that, a combination of silicon carbide and GAN. There are actually two stages in the power converter. The first stage is called power factor correction.
The exciting work on exactly that a combination of silicon carbide and Gan Theres actually two stage stages in the power converter. The first HR is called power factor correction, but where do you think silicon carbide often in that stage followed by the DC to DC converter stage with gallium nitride that kind of takes advantage of the strengths of each of the technology Silicon carbide.
Gene: We're using silicon carbide often in that stage, followed by the DC-to-DC converter stage with gallium nitride. That kind of takes advantage of the strengths of each of the technologies, silicon carbide being more mature and very proven for its robustness facing the grid, gallium nitride achieving very high frequencies and high efficiency. So there's a lot more to that story that I'm touching on here, but you brought up a really important point.
Being more mature and very proven on its robustness facing the grid gallium nitride, achieving very high frequency and high efficiency in that DC to DC converter. So theres a lot more to that story than I'm touching here, but you brought up a really important point youre going to see a lot of interesting we call them kind of hybrid designs, where we leveraged both gan on silicon carbide not only for this day.
Gene: You're going to see a lot of interesting, we call them kind of hybrid designs, where we leverage both GAN and Selenparved, not only for this data center space but others in that 1 to 20 kilowatt area, like onboard chargers. So you'll see a lot more developments in that area. Right, okay, that's helpful.
The center space, but other other than that 1% to 20 kilowatt area like onboard Chargers, so youll see a lot more developments in that area.
Right. Okay. That's helpful and then similarly on.
Jack Egan: And then similarly on the automotive side, so you're expecting Gantt to ramp up for that later this year. And, you know, we're seeing more OEMs move to or at least announce 800 volts, and so I'm curious how that changes the opportunity or, I guess, the mix of silicon carbide and GAN in some of those automotive applications, just because, you know, silicon carbide sometimes can be higher, better at higher voltages, but, you know, you still have the benefits of that high frequency for GAN where it can function. So, with more 800 volt systems, would it change your outlook at all? Or is it really kind of a wash for you since you do both silicon carbide and GAN?
The automotive side. So you are expecting Gan to ramp for that later this year.
And we're seeing more Oems move to or at least announced 800 volt systems.
And so I'm curious how that changes the opportunity or I guess, the mix of silicon carbide, and Gan and some of those automotive applications, just because silicon carbide, sometimes can be higher or better at higher voltages, but you still have the benefits of that high frequency for Gan.
Where it can function so.
With more 800 volt systems would it change your outlook at all or is it really kind of a wash for you since you do both silicon carbide and Gan.
Gene: Well, certainly, that's the beauty of it, whatever way the market goes. And I think 400 volt and 800 volt are going to coexist for a long, long time at a high level, just like you described. The 800 volt is a better fit for the 1200 volt silicon carbide. The 400 volt could be either, frankly, but we see a lot of that moving to GaN or a combination, again, of GaN and silicon carbide. I would point out, though, even for an 800 volt battery, when you plug it into a single-phase AC input, which runs 110 to 220, you could actually use GaN on that first phase, followed by silicon carbide, which then charges that battery.
Well certainly that's the beauty of it whatever way the market goes and I think 400 volt 800 golf are going to coexist for a long long time at a high level. Just like you described the 800 volt.
Fit for the 1200 volt silicon carbide for interval.
Could be either frankly, but we see a lot of that moving to again or a combination again of Gan on silicon carbide I would point out, though even for an 800 volt battery when you plug it into a single phase AC input, which runs 110 to $2 20, you could actually use gallium nitride on that first phase followed by Silicon carbide, which then sees the 800 volt battery.
Gene: So here, again, I think the combination of having both technologies puts us in a really unique position to figure out the right approach, and whichever approach is going to win, whether it's 400 volts or 800 volts, we're going to benefit. Great. Thanks, Gene. Your next question comes from the line of Richard Shannon from Craig Columns. Please go ahead.
The it charge that battery. So here again, I think the combination of having both technologies puts us in a really unique position to figure out the right approach and whichever approach is going to win whether it's further bolster 800 volts, we're going to we're going to benefit from it.
Great. Thanks gene.
Jack.
Your next question comes from the line up Richard Shannon from Craig Hallum. Please go ahead.
Great. Thanks, guys for taking my question.
A follow up from a prior question here really thinking about your yearly revenue growth by end market wondering if you guys answered. The last question about talking about mobile being about 40% going below as the other ones ramp up here, maybe asking in a different way here any way that you could you rank order kind of the dollar contributors to growth year by end market.
Richard Cutts Shannon: Great, thanks guys for taking my question. I think I'm gonna follow up from a prior question here, really thinking about your yearly revenue growth by end market. Wondering if you can answer the last question about talking about mobile being about 40% and going below as the other ones ramp up here. Maybe asking in a different way here, any way that you, could you rank order the dollar contributors to growth here by end market? I would assume mobile will probably be the biggest given it's starting at 40%, but if we get a sense of how much dollar growth we're adding in some other ones, that might not be obvious from how you described the opportunity you're seeing here, Gene. Yeah, thanks, Richard. It's a tough one to call.
I would assume mobile will probably be the biggest given that starting at 40%, but maybe get a sense of how much dollar growth were adding in some other ones that might be not obvious from how you've described the opportunities youre seeing here Jim.
Yes, Thanks Richard.
That's a tough one to call I gave a bunch of numbers.
Data centers is coming off a base of zero, So I said $3 million to $5 million in the second half of the year. So that's still going to be on the smaller side compared to everything else.
Gene: I gave a bunch of numbers. You know, data centers are coming off a base of zero. So I said 3 to 5 million in the second half of the year. So that's still going to be on the smaller side compared to everything else.
Appliance has been a great strength area for us, especially when mobile was a bit down and that's going to pick up strongly in the second half of the year.
I think the other markets depend a little bit on how the market recovers too we've got our product launches, which are going to give us some certainty of that growth that we outlined again going into solar a bunch of additional silicon carbide going into solar a.
Gene: Appliance has been a great strength area for us, especially when mobile was a bit down, and that's going to pick up strongly in the second half of the year. I think the other markets depend a little bit on how the market recovers, too. We've got our product launches, which are going to give us some certainty of that growth that we outlined. Again, going into solar, a bunch of additional silicon carbide going into solar, a bunch of OBCs we talked about, and silicon carbide that is ramping throughout. So it's pretty hard to predict it. But it feels pretty balanced, honestly, to me, as you look at what's going to add $20 or $30 million to the back half of the year.
A bunch of obesity, we talked about in silicon carbide that are ramping throughout the year. So it's pretty hard to predict it it feels pretty balanced honestly to me as you look at what's going to add 20 or $30 million to the back half of the year, it's going to be pretty broad based cost across each of those areas I just mentioned.
Okay. Thanks for that clarification Jean.
Maybe following up here thinking about your.
New products that are ramping in hearing you discuss some of them at your analyst event, a couple of months ago.
And I think you even less I think even on the last conference call you talked about the new half bridge offering here may be doing.
Gene: It's going to be pretty broad-based across each of those areas. Okay, thanks for that clarification, Gene. Maybe following up here, thinking about your new products that are ramping in here, and you discussed some of them at your analyst event a couple months ago. And I think even on the last conference call, you talked about the new Halfbridge offering here, maybe doing a $10 million run rate exit this year. I was wondering if that's still kind of in the range of what you're thinking and then, as you think about your other products like the bi-directional one and again, control, and again, safety.
$10 million run rate exiting this year wondering if that's still kind of in the range of what you're thinking and then as you think about the other products like the bidirectional one began control and again safe to what degree are those going to be contributing to your revenues by that by the end of the year.
Yeah, great questions, Richard Thanks for noting all of those exciting new products and.
Our comments on that on the <unk> tap rich, we're especially excited about the motor versions. We've created which are then tuned worthy for appliance motor in general, but our plants in particular in that major tier one that's driving $10 million a year starting late this year is actually adopting that motor version of our <unk>.
Gene: To what degree are those gonna be contributing to your revenues by the end of the year? Yeah, great questions, Richard, and thanks for noting all of those exciting new product announcements. On the Gansense half-bridge, we're especially excited about the motor versions we've created, which are morally tuned for appliances, motor in general, but appliances in particular. And that major tier one that's driving $10 million a year starting late this year is actually adopting that motor version of our Gansense half-bridge. And not only that, they're pushing it to a frequency, efficiency, and density that nobody's ever seen before. So we're super excited.
And not only that they are pushing it to a frequency efficiency and density that nobody's ever seen before so we're super excited once those products come out they tend to set an example for the whole industry. There is a lot of reverse engineering that we expect will happen and.
It will likely lead to a nice domino effect of even more than we've already got a pretty strong pipeline.
<unk>, if I mentioned sort of throughout because again safety is really our high power as you get above 1000 Watt Scansafe is our answer the most protected most reliable most states even at 20 year warranty to back it up and Thats going into solar later this year going into the data centers, it's going into EV.
Gene: Once those products come out, they tend to set an example for the whole industry. There's a lot of reverse engineering that we expect will happen, and it'll likely lead to a nice domino effect of even more, and we've already got a pretty strong appliance pipeline going. Gansafe, I mentioned sort of throughout because Gansafe is really our high power. As you get above 1,000 watts, Gansafe is our answer, the most protected, most reliable, most safe, even a 20-year warranty to back it up.
So almost across the board in those areas and the others you mentioned can control.
A big part of our mobile Chargers space I didn't specifically highlight it but thats a really nice growing family that's going first into a lot of aftermarket charters today.
<unk> going into a lot more inbox and tier one global players in the future.
Okay perfect. Thank you guys.
Thanks Richard.
Again, if you would like to ask a question. Please press star followed by the number one on your telephone keypad. Thank you.
Gene: And that's going into solar later this year. It's going into data centers. It's going into electric vehicles, so almost across the board in those areas.
Your next question comes from the line of Kevin Cassidy from Rosenblatt Securities. Please go ahead.
Gene: And the others you mentioned, Gansense Control is a big part of our mobile charger space. I didn't specifically highlight it, but that's a really nice growing family that's going first into a lot of aftermarket chargers today, and we expect it to go into a lot more inbox and Tier 1 mobile players. Perfect.
Yes, Thanks for letting me ask a follow up just on <unk>. If you could tell us a little more about the relationships maybe give some details what were they making prior or were they using gambling in the past or is this going to be their first scan products.
Kevin Edward Cassidy: Thank you guys. Again, if you would like to ask a question, please press star followed by the number one on your telephone keypad. Thank you. Your next question comes from the line of Kevin Cassidy from Ross and Blatt Securities. Please go ahead. Thanks for letting me ask a follow-up question. Just on Shinri, if you could tell us a little more about their relationships, maybe give some details.
Yeah, I know, it's not a named people would know, but theyre actually a major onboard chargers supplier to top players like <unk> BYD conduct and many others. So for us it's a super exciting way to kind of get access and into those cards in the future.
First projects here will actually be silicon carbide for onboard Chargers in it I do believe it's going to be their first implementation of silicon carbide.
Gene: Were they making prior models, or were they using GAN in the past, or is this going to be their first GAN product? Yeah, I know it's not a name people would know, but they're actually a major onboard charger supplier to top players like Hyundai, BYD, Honda, and many others. So for us, it's a super exciting way to kind of get access to and into those cars in the future. The first projects here will actually be silicon carbide onboard chargers, and I do believe it's going to be their first implementation of silicon carbide, certainly with us. And those are already underway and expected to launch early next year. Okay, great. Thanks. The next question comes from the line of Joe Moore from Morgan Stanley. Please go ahead.
Certainly with us and those are already underway expected to launch early next year.
Yes.
Okay, great. Thanks.
Thanks, Kevin.
The next question comes from the line of Joe Moore from Morgan Stanley. Please go ahead.
Great. Thank you.
I know at CES and at recent conferences, you had talked a lot about the specific opportunities in data center around AI servers, and just given the very high power on those servers that there should be opportunity for again there.
Can you just talk about that specifically.
With AI when you can start to see that more material revenue contributor.
Yes, Thanks, Joe It's a big one and I think we're still.
Tip of the iceberg here, we've got 20 projects in development.
Joseph Lawrence Moore: Great, thank you. Um, I know at CES and at recent conferences, you talked a lot about the specific opportunities in data centers around AI servers, and just given the very high power on those servers, there should be an opportunity for GAN there. Can, can you just talk about that specifically, you know, with AI, when you could start to see that be a much more material revenue contributor? Yeah, Joe.
They're all going to production throughout this year.
Estimated $3 million to $5 million revenue impact.
For the second half of the year.
We've had meetings with a lot of the AI guys and the numbers that power requirements and current requirements keep going up and up over the next two to three years I mentioned on my remarks, 1000 to 2000 amps per processor. So I think this ripple effect on how the power has to get delivered is still really being worked out by the industry.
And the numbers keep going up on our in our system design centers designing things that we never thought was possible a year ago. Four five kilowatts is unprecedented in a specific form factor that that's going to power all those processors and other pushing us to go to a $5 $5 $6 five even even higher so and I think this is all about the data center today, but ultimately.
Gene: It's a big one, and I think we're still at the tip of the iceberg here. We've got 20 projects in development. They're all going into production throughout this year. I estimated three to five million revenue impact in the second half of the year.
Gene: We've had meetings with a lot of the AI guys, and the numbers, the power requirements, the current requirements keep going up and up over the next few years. I think this ripple effect on how the power has to get delivered is still really being worked out by the industry. And the numbers keep going up, and our system design center is designing things that we never thought were possible a year ago. 4.5 kilowatts is unprecedented. I think this is all about the data center today, but ultimately, these AI chips end up in self-driving cars. These AI chips end up on the client, or edge computing. So I think it's early days, and it's exciting because the power requirements are really unheard of. And that's exactly the kind of challenge we want to tackle with our system design center.
These AI chips and depth and driver.
Self driving cars these AI chips and up in the clients and on the edge computing. So I think it's early days and it's exciting because the power requirements are really unheard of and Thats exactly the kind of challenge we went to tackle with our system design center and with our gallium nitride or silicon carbide.
Great. Thank you.
Thanks, Joe.
Yeah.
Again, if you would like to ask a question. Please press star followed by the number one on your telephone keypad.
As there are no further questions I would like to thank our speakers for today's presentation and thank you all for joining US. This now concludes today's conference you may now disconnect.
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Gene: And with our gallium nitride, Great, thank you. Again, if you would like to ask a question, please press star followed by the number one on your telephone keypad. As there are no further questions, I would like to thank our speakers for today's presentation, and thank you all for joining us. This now concludes today's conference. You may now disconnect.
Okay.
Okay.
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Okay.
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Yes.