Q4 2025 Aehr Test Systems Inc Earnings Call
Greetings and welcome to the Air Test systems fiscal 'twenty 25 fourth quarter and full year conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please press star zero on your.
Telephone keypad. Please note this conference is being recorded.
Speaker Change: I'll now turn the conference over to your host Jim Byers of Pinedale Wilkinson Investor Relations you may begin.
[music].
Speaker Change: Systems.
Speaker Change: Goal 2025 fourth quarter and full year financial results conference call.
Speaker Change: On today's call are are test systems, President and CEO gain Ericsson and C F O Chris Cu.
Speaker Change: Before I turn the call over to gain and Chris I'd like to cover a few quick items. This afternoon, Brian after market close their test issued a press release announcing its fiscal 2025 fourth quarter and full year results.
Speaker Change: That release is available on the company's website at <unk> Dot com.
Speaker Change: This call is being broadcast live over the Internet for all interested parties and the webcast will be archived on the Investor Relations page of the company's website.
Speaker Change: To remind everyone that on today's call management will be making forward looking statements 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 in the forward looking statements. These factors are discussed in the company's most recent periodic and current reports filed with the SEC.
Speaker Change: These forward looking statements.
Speaker Change: Are only valid as of this date and <unk> test systems undertakes no obligation to update the forward looking statements.
Speaker Change: And with that I'd like to turn the conference call over to gain Erickson President and CEO.
Gain Erickson: Thanks, Tim Good afternoon, everyone. Thank you for joining us and <unk> test systems fiscal 'twenty five fourth quarter full year earnings conference call before we begin I'd like to thank our customers employees and partners for their dedication throughout this transformative year of execution expansion and strategic diversification for air in fiscal 2025.
Speaker Change: I'll start with an update on the primary markets Erez targeting for semiconductor test and burn in as well as the significant progress. We've made this year in new markets. After that Chris will give a detailed review of our financial performance and finally, we will open up the floor to your questions. I just want to also point out that we've had a lot of inbound questions related.
Speaker Change: To the AI market and what that means to air test. So we'll be doing a deep dive as we have often done in other markets today to hopefully let people really understand the implications and how areas playing in that.
Speaker Change: This past year, we made significant progress expanding into additional key markets for our semiconductor Brennan solutions, including artificial intelligence processors.
Speaker Change: Nitride power semiconductors data storage devices, silicon photonic integrated circuits and flash memory.
Speaker Change: This diversification of our markets and customers is significant given our revenue concentration and silicon carbide devices used in electric vehicles during our previous fiscal year.
Speaker Change: Silicon carbide wafer level burn in accounted for over 90% of our revenue in fiscal 'twenty four whereas it made up less than 40% of our revenue. This fiscal 'twenty five in contrast, the burn in of artificial intelligence processors represented zero percent of our revenue last year, but this year accounted for over 35% of our revenue.
Speaker Change: And we had three companies representing over 10% of Ers revenue. This year with two of these representing new markets and customers.
Speaker Change: As we grow we expect that expanding into new markets and customers will not only allow us to grow faster, but also do so sustainably the main growth areas for us in markets beyond Silicon carbide included production wafer level burn in of AI processors packaged part burn in for qualification and ongoing process monitoring of AI processors and also production.
Speaker Change: <unk> package part burn in screening of those AI processors.
Speaker Change: We also had wafer level burn in of gallium nitride semiconductor and silicon photonic integrated circuits wafer level Barnett.
Speaker Change: And while there was only a small amount of revenue in the fiscal year from wafer level burn in hard disk drive components about 10% of our order bookings for the fiscal year came from this new market all of which we expect to ship and generate revenue for from during this fiscal year now 26.
Speaker Change: Looking back on the year, we're excited about the significant progress we've made with the key initiatives to expand these total addressable markets diversify our customer base and develop new products capabilities and capacity all aimed at driving revenue growth and increased profitability.
Speaker Change: One of our biggest milestones this past year and what we believe is currently the most important for future revenue growth was a completion of development validation shipment and customer acceptance of the first ever wafer level burn in system for AI processors.
Speaker Change: Delivering the industry's first wafer level burn in solutions for the AI processor market. The only one of its kind in the world marks a major technological and commercial milestone and significantly expands the market potential for our Fox XP wafer level test and burn in systems.
Speaker Change: Our new high power Fox XP wafer level burn in system can test up to nine 300 millimeter AI processor wafers at the same time. This achievement is a result of extensive development efforts over the last decade, and test technology, particularly in delivery massive amounts of power and correct to a wafer joining test wafer contacting technology and <unk>.
Speaker Change: Thermal control on heat removal as well as wafer handling and automation.
Speaker Change: I lead a customer first approach us about testing and burn in their AI wave for AI.
Speaker Change: AI processors at the wafer level. It wasn't clear if this was even technically feasible, even with our proprietary and unique technology, we leverage the technical capabilities. We have developed over the years, along with the technology and design for test methods used in state of the art wafer foundries to meet these unique test and burn in stress requirements. This.
Speaker Change: Included applying thousands of amps of current to a single wafer to test devices capable of withstanding thousands of watch and then not only doing it with one wafer, but nine wafer simultaneously. We also expanded our proprietary wafer pack contact rates to support very high current testing capabilities, including the ability to adapt the thermals to create uniform.
Speaker Change: Across a wafer that by definition is not otherwise uniform during burn in conditions.
Speaker Change: With are demonstrating and now shipping the first ever solution for wafer level burn in EMEA of processors in partnership with this customer's outsourced Assembly and test partner one of the largest SaaS worldwide. We have proven that our high power Fox XP multi wafer systems and proprietary wafer pack contact centers are a viable solution for high volume testing and <unk>.
Speaker Change: Vernon of AA processors in wafer form.
Speaker Change: This approach eliminates the need to burn in these devices and package our system form where test costs and yield losses due to failing devices. During bernann are significantly higher and have a much more significant impact on overall manufacturing yield.
Speaker Change: Many AI processor companies are talking about billions of dollars of devices a year with the largest AI processor company in the world shipping over $100 billion worth of processors in the data center applications. This year alone.
Speaker Change: Even a 0.1% increase in yield by shifting the burn enough devices for the system or heterogeneous package level to wafer level is very significant.
Speaker Change: Today Brennen related screening and early life failures at the system or packaged level causes the entire package our system to be to be discarded due to the inability to repair. These devices at this stage moving this screen to wafer level allows devices that would otherwise fail during screening at the package or system level to be removed before their pack.
Speaker Change: <unk> or worst put into the system level.
Speaker Change: We believe using wafer level burn in will result in savings and manufacturing cost increases in revenues associated with the limited supply of these devices and a reduction in field related failures and warranty cost as you can afford to put more screens in place our brennan longer to ensure the highest quality and reliability of devices.
Speaker Change: We're also receiving feedback from potential customers that doing this screening at wafer level is not only cheaper overall, but requires less electrical power from the grid, which has significant benefits.
Speaker Change: An important part of our story, which we have discussed for years is the evolution of semiconductors that has driven the increased need for wafer level burn in.
Speaker Change: This includes the fact that semiconductors are becoming less reliable with the transition to smaller geometries.
Speaker Change: <unk> are physically larger and more devices are being developed on compound semiconductors like silicon carbide, and gallium nitride, which require additional burden and then stress testing such as air provides to meet the stringent quality and reliability needs of their customers in the end markets.
Speaker Change: AI processors and other high performance central processing units, our Cpus and network processes are also facing limitations related to their physical size due to the radical limit in semiconductor manufacturing.
Speaker Change: Radical limit is the maximum area that can be exposed in a single pass of the lithography equipment due to the radical limit a single chip or di cannot exceed this maximum area. This is a physical constraint imposed imposed by the manufacturing process.
Speaker Change: AI models, especially large language models require massive amounts of computation and memory. This translates to the need for increasingly large and complex chips. The gpus used for AI training and have already reached the radical field limits.
Speaker Change: In order to overcome the radical limit that prevents them from building a single massive chip manufacturing manufacturers are using chip list, which are smaller died that can be interconnected to form a larger system. This approach effectively circumvents theoretical limit and allows for a much larger total transistor counts.
Speaker Change: <unk> packaging technologies, such as co op or chip on wafer substrate and Soi see our system on integrated circuits enabled data integration of multiple chip, let's onto an inner poser, allowing for complex high performance systems that exceed the size of a single radical as AI processors require increasingly large and complex designs.
Speaker Change: Chip like our architectures and advanced packaging technologies are being used to overcome this limitation and enable the continued scaling of AI compute power.
Speaker Change: The reason these matters these matter to air test is that these devices all need production burn in screening to remove early failures that would otherwise occur during the lifespan of the processor. These failure rates are unacceptable and costly impacting the end customer and increasing warranty costs were the supplier in many case.
Speaker Change: They can also pose safety issues, especially for processors used in autonomous or driver assisted vehicle technologies, the screening and Bernann durations vary by process and device, but generally range from one to several hours or even 24 hours or more depending on the desired quality and reliability level for the end application of our customer.
Speaker Change: These gpus, particularly those used in data centers and then the creation creation and use of large language AI models are not the commodity consumer semiconductors at the $90 in 2000 and.
Speaker Change: These are not chips used in $200 graphics cards for gaming instead, these are nodes, where tens of thousands of dollars operated in parallel thousands at a time.
Speaker Change: One node fails you can completely disrupt the development or construction of the entire language model as.
Speaker Change: As we've discussed with automotive another application reliability is critically important for these customers.
Speaker Change: Air now offers a high volume production solution for package level burn in with our new Sonoma product line. Following the acquisition of <unk> technology last year for customers seeking to perform production screening of these devices and packaged form we now provide a highly cost effective solution with upcoming fully automated <unk> traded trade device handling.
Speaker Change: And testing.
Speaker Change: Before our Fox XP wafer level test and burn in system. The only solution for doing this screening was products like carcinoma system.
Speaker Change: And while this screening step is cost effective and we believe our Sonoma systems offer the lowest cost solutions on the market for packaged part burn in of AI processors. It not only weeds out defective processors or memory, but also results in discarding highly expensive advanced packages, such as the <unk> packaging substrates along with <unk>.
Speaker Change: All of the other devices packaged in the failed device.
Speaker Change: For example, multiple new AI processors feature to our more AI asics or GPO processors in the advanced package with each AI processor that guide containing up to four high bandwidth memory or HBM stacks totaling up to eight or more HBM stacks per package.
Speaker Change: Following her each of these HBM stacks can be eight die or more in the future I mean, it has eight stack memory dies for HBM stack.
Speaker Change: Go through all the math and there is a total of up to 64 or more HBM dies and tour more AI processors, plus a very expensive co ops packaged substrate per package.
Speaker Change: If one of the AI processors or one of the HBM die fails during the production burn in after packaging all of the other died plus the co our substrate are discarded.
Speaker Change: You can see the cost impact of performing burn in our packaged part level.
Speaker Change: If you just take this step if you take this a step further companies also perform a burden at the system level when the GP or AI processor multi die package is installed on a computer system printed circuit board along with the device power supplies heat sinks and supporting infrastructure such as all the high speed interconnect technology for.
Speaker Change: AI processor to AI processor communication.
Speaker Change: Forming brennan at this stage impacts cost and yield even more significantly.
Speaker Change: You can see why the industry is so showing such interest in our ability to test these devices at the wafer form.
Speaker Change: In addition to this lead customer for AI wafer level test. We have now received multiple inbound requests from several high profile processor companies that are very serious about wafer level testing. This ecosystem is very small and having demonstrated that wafer level burn in of high power processors is feasible, we're gaining visibility.
Speaker Change: <unk> beyond our own sales and marketing efforts with the growing recognition that moving the AI processors and Cpus to wafer level is overwhelmingly advantageous for both a cost but cost perspective and for yield.
Speaker Change: We're extremely busy right now engaging with multiple companies who are asking can you test my parts the.
Speaker Change: The conversation is Ken Eric do it not do we want it.
Speaker Change: I'm very excited to report today that one of these companies has now asked us to move forward with an evaluation for wafer level testing other devices with one of their current high volume processes. This feasibility study will allow them to see the real advantages in performance or doing their production burn in at wafer level instead of in package or system level for them as they do today.
Speaker Change: Based on what they have shared with US we believe that if this evaluation of success. They plan to transition to high volume production wafer level testing, which would be a significant opportunity for air. While this evaluation involves new wafer packs for their specific wafers, we believe that Erik can address the needs in the near term with our proprietary AI processor optima.
Speaker Change: <unk> wafer packs designed specifically for these devices.
Speaker Change: We also have systems needed to run their wafers on our floor today, demonstrating this capability as well as fully automated a liners to showcase the automation of the 300 millimeter wafer handling.
Speaker Change: We expect this evaluation to take one or two quarters to complete fully at the same time, we're working with this customer to determine their production capacity needs and discussing lead times to meet their requirements. Their capacity requirements are significant and we feel we have the manufacturing capacity for systems are liners and wafer packs to meet the.
Speaker Change: Demand if we're successful with this evaluation and they decided to move to wafer level burn in using our solution.
Speaker Change: We also expect to move to evaluation phases with other AI companies. During this fiscal year and believe we can capture a meaningful share of the total production burn in market for AI processors, with our Fox wafer level test and burn in systems and proprietary wafer pack contractors.
Speaker Change: So let me spend a few minutes on some of the other markets quickly and I'll start with packaged part burn in as I mentioned earlier, we also offer customers. The option performed in a package part burn in screening as well as the qualification reliability characterization further Gpus AI processor CPU as a network processors, we completed our acquisition of <unk>.
Speaker Change: Last July 31, expanding our product portfolio to include their highly regarded package part burn in and test solutions, especially their ultra high power capabilities for processors Gpus and computing processors since that date air has shipped more packaged part burn in systems and <unk> did in the last three years is a record break.
Speaker Change: <unk> sales achievement for the qualification and production burn in of AI processors, we're very excited that with the added capabilities and resources from air we have been able to ramp up production to levels that <unk> had never achieved meaning the demand from AI processor companies for the qualification and production of their devices with the addition of significant number of people processes and scale.
Speaker Change: We've been able to shorten lead times maintain low cost address quality and do this in a high reliability platform, which has been overwhelmingly positive for customers.
Speaker Change: As a result, we want our first production AI processor customer for packaged part burn in during the fiscal year, receiving initial volume production orders for the multiple Sonoma authorized power systems.
Speaker Change: This customer is one of the Premier large scale data center hyperscale or that is making their own AI processors and is growing this capacity significantly.
Speaker Change: Their first devices that use a production burn in system at the packaged part level instead of at the system level.
Speaker Change: They plan to ramp this device over the next year and are already discussing their next generation process as well as the one after that with air to ensure we can meet their production capacity needs. We said before that one of the best things about this acquisition is that it gives us a front row seat to the future requirements of a large number of these AI processor customers, providing us with <unk>.
Speaker Change: Ability into the production burn in needs as a result, some of these customers from packaged part side are coming to us asking about our wafer level burn in capabilities as the only company in the world that offers both the wafer level packaged part burn in system for both qualification and production burn in of AI processors, we can provide them with options and show direct side by side comparison.
Speaker Change: The cost of test capacity output footprint operational cost and impact on yield based on how they decide to do their barnett. We're in the perfect position to help them. While also remaining balance. So we can tell them, yes, regardless of how they want to do their barnett.
Speaker Change: We're very excited about all of our new AI product offerings and expanded total addressable market. They bring to air and we look forward to discussing our progress to further capitalize on this new market as we move through our new fiscal year.
Speaker Change: Another key milestone this past year was expanding their production level burn in for gallium nitride power semiconductors, we secured an additional order for our Fox XP high power wafer production system with high volume for vote for volume production of Gan devices from a leading automotive semiconductor supplier and a key player in the gallium nitride power <unk>.
Speaker Change: Connector market, marking their commitment to advancing volume production of wafer level burn in of the Gan devices using our XP platform. This achievement expands our production wafer level burn in market for power semiconductors beyond Silicon carbide applications used in electric vehicles datacenter power conversion and solar to now include Gan high performance comp.
Speaker Change: Semiconductor optimized for mid power applications, such as data centers solar energy automotive systems, and consumer electronics and Pcs.
Speaker Change: Additionally, we are in discussions and engagements with multiple other potential new gan customers about their needs gans, and new and exciting semiconductor technology with high value applications, including automotive power conversion solar Inverters converters in solid state Transformers Breakers Gan offers a much broader application range in silicon carbide and us.
Speaker Change: Poised for significant growth in the coming decade.
Speaker Change: We've also made significant progress in the hard disk drive market. This past year, a lead customer began ordering multiple fox CP single wafer production test and burn in systems, featuring an integrated high power wafer appropriate for their new high volume parts and a new application for Bernann and stabilization of new devices and hard disk drives.
Speaker Change: These are follow on system orders to the first production order we received all the way back in 2019 as we stated in previous calls their plans for this new product were delayed during the pandemic, but they continue to work on this new device continuously over the last five years to ensure the performance and reliability of their devices, we understand from several analysts and shareholders that this customer.
Speaker Change: <unk> has publicly called out our Fox systems as a key contributing factor in helping them achieve the long term reliability needs of this market. This customer is one of the top suppliers of data storage devices and we're very excited to start this production ramp after all these years of working with them on qualification and process development.
Speaker Change: During our last earnings call I noted that the high power progress for our Fox CP for this HDD customer are sourced from Japan, and it was unclear how the tariff uncertainty might affect the timing of receiving these progress at that time, we were hoping and received a shipment by the end of may but because of tariff uncertainties. These progress did in fact get significantly delayed.
Speaker Change: We just received the first one last week, we're working quickly to do the integration and engineering steps needed to finalize the test cell to be able to make the first shipments. This quarter. In addition to multiple systems in backlog the customers told us that they will be purchasing additional systems. Both in the short term and over time.
Speaker Change: I know it must be a broken record to hear terms like uncertainty around tariffs on many company earnings calls, but this is still the case.
Speaker Change: Despite this we're extremely excited about our growth opportunity for our wafer level solution for HDD market and look forward to updating you further on our progress next quarter.
Speaker Change: Now turning to Silicon Photonics Ics. This market continues to demonstrate market adoption for optical chip to chip communication and optical network switching several companies, including AMD, Nvidia Intel TSMC and Globalfoundries have announced product roadmaps for devices that utilize optical chip to chip communication.
Speaker Change: We have several customers in this space at last count It was five to six customers with one of our customers being an OS at that purchases our tools for one customer, but sparking it to others. We've seen a significant number of new wafer pack designs from our installed base of systems for new designs that they use for qualification development work on their Fox wafer level.
Speaker Change: Test and burn in systems.
Speaker Change: We also now offer a new system with higher power 3500 watt per wafer configuration to meet the needs of new higher power wafers for optical Io and chip to chip communication devices. This is also available as an upgrade to our Fox NP systems for low volume production as well as for our Fox XP nine wafer production systems.
Speaker Change: Recently, we received another order for an upgrade to one of the Fox XP is we shipped a few years ago that includes upgrading to include our new integrated wafer pack auto liner, which provides fully hands free factory automation, a silicon photonics integrated circuit wafers. We also have forecast for new systems for incremental capacity this fiscal year for both systems.
Speaker Change: And wafer packs, we are well prepared with expanded manufacturing capacity for Fox high power systems and remain enthusiastic about the silicon photonics market, especially for the new application and silicon photonic integrated circuits and optical chip to chip communication, which we see as a significant market opportunity for our products.
Speaker Change: It seems odd to wait this long to talk about silicon carbide, but let me talk a little bit about that market as well the silicon carbide power semiconductor market remains a significant opportunity for <unk>. We believe we are well positioned to continue to grow with our current customers in this sector.
Speaker Change: <unk> adds some additional customers in this space over time.
Speaker Change: Despite a slowdown in the growth of electric vehicle shipments electric vehicles are still growing significantly worldwide and we believe the silicon carbide market continues on a robust long term growth trajectory demand for silicon carbide remains significantly driven by battery electric vehicles, but silicon carbide devices are also gaining traction in other markets include.
Speaker Change: <unk> power infrastructure solar and various other industrial applications.
Speaker Change: This quarter, we shipped our first configuration of the Fox XP, which can test 18 wafers at a time in a single system with support for our high voltage test resources that can test devices up to 2000 volts in wafer form. The system also includes a proprietary arc suppression technology that prevents the devices from electrically archaean at these high voltage while testing all.
Speaker Change: This is at a time in a single an assertion on each of 18 wafers.
Speaker Change: This capability has already proven in our nine wafer configuration, but has now extended to the 18 wafer system.
Speaker Change: It's also capable of being directly doctor are fully automated wafer pack aligner that takes the industry standard wafer cassettes and fuchs to allow full factory integration.
Speaker Change: We believe we're well positioned in the silicon carbide market is we have a large customer base and the industry leading solution for wafer level burn in.
Speaker Change: So lastly, a little bit on our flash memory proof of concept project that we've been working on this year as noted in earlier calls we're collaborating with one of the world's leaders in flash memory to demonstrate the capability and cost effectiveness of our Fox XP platform for high volume production wafer level test and burn in in Flash memory wafers. This is a very.
Speaker Change: Exciting because we believe Erick can successfully demonstrates how to create a high density high power fully automated test cell, which will help us move to the next development phase that next step involves working together to a drop in next generation test system, specifically designed to meet this customer's needs. Although this memory validation benchmark has taken us a bit longer than <unk>.
Speaker Change: <unk> due to shipment delays and some of the components of this integrated system. The new Mems based fine pitch wafer pack full wafer contactor is in house and ready to complete the benchmark, we're very encouraged and we hope to generate data and results. This quarter with the aim of completing the benchmark by next quarter.
Speaker Change: New technologies in NAND or driving new requirements for wafer level burn in to address the manufacturing and negative yield implication of testing. These devices at package or system level. We believe that airs Fox wafer level test and burn in platform combined with our proprietary wafer pack full wafer contactor is well positioned to offer competitive and cost advantaged solution in this.
Speaker Change: <unk>.
Speaker Change: Looking ahead, and concluding era is well positioned to capitalize on growth in the overall semiconductor market.
Speaker Change: We remain focused on addressing the critical reliability requirements of next generation applications and leveraging key mega trends shaping our industry today reliability is a vial vital priority across diverse sectors, including combustion electric vehicles data centers and infrastructure of electrification and then expanding.
Speaker Change: Range of AI applications as we enter fiscal 2026, we've established the infrastructure and capacity to support significant growth. This was the purpose of the investments. We made this past fiscal year, including the upgrade of our manufacturing facility, including upgrades to power and infrastructure consolidating package in wafer level burn in under one roof.
Speaker Change: And implementing the necessary process to support a very high volume of both wafer level and package level test and burn in systems and our proprietary wafer pack contact us. These foundational efforts are now complete.
Speaker Change: In the year ahead, we plan to increase our research and development investment to support further product enhancements expand our R&D resources hire additional talent to serve our growing AI customer base and enhanced automation to improve scalability.
Speaker Change: These initiatives the new fiscal year, we'll focus on securing and executing orders, we believe that nearly all of the opportunities and market verticals. We discussed today will experienced order growth in fiscal 2026.
Speaker Change: The one exception, maybe silicon carbide as customer forecast for this market are back half loaded with stronger growth expected in our fiscal 'twenty seven still there are many variables and silicon carbide may end up growing faster than expected given the market share shifts currently underway and our lead customers increasing market share in the industry.
Speaker Change: During our previous earnings call, we announced the temporary withdrawal of our financial guidance. Following the U S. Administration's tariff announcements just a few days earlier at that time, we were concerned about the potential secondary impacts on our current and prospective customers as well as the possibility of pauses or delays in customer orders and shipments are supply chain deliveries.
Speaker Change: We remain very confident ARAS long term outlook, but we are still seeing the impact of tariff related uncertainty on the timing of specific orders, particularly in our first quarter. As a result, we've chosen to maintain a cautious approach and are not reinstating specific guidance at this time beyond what we've already stated which is that we.
Speaker Change: Dissipate order growth across all segments in this fiscal year with this possible exception of Silicon carbide, we're very optimistic about our growth opportunities in all of the segments, we've discussed and our ability to meet the potential demand in these markets and.
Chris: And with that I'll turn it over to Chris Thank.
Chris: Thank you again before I review, our financial results I would like to provide an update on the integration of our <unk> acquisition, which we completed on July 31 of last year.
Chris: Since the acquisition <unk> has dedicated significant financial and human resources to ensure a successful integration of <unk> into our operations.
Chris: We are fully migrated in Calais financial records into our Oracle Netsuite cloud ERP system, and integrated the HR and manufacturing functions into areas broad information systems.
Chris: Additionally, we have completed the transfer of all inventory as well as comprehensive documentation of product designs, So, let's code and assembly and test the instructions into areas processes.
Chris: I'm pleased to report that our plan to consolidate personnel amendment factoring into areas Fremont facility was complete by the fourth quarter of fiscal 2025, and we successfully close to encounter facility on May 30th 2025 ahead of our original schedule.
Chris: I wanted to express my sincere thanks to our teams for their commitment dedication and outstanding execution throughout this integration.
Chris: As a result of the consolidation, we incurred onetime restructuring charges of $864000.
Chris: Fiscal fourth quarter relate to the closure of the in Cal facility.
Chris: With the integration of the two companies will be able to create synergy and reduce our facility caused by over 800000 per year going forward.
Chris: Turning to the full year results, we would pull through revenue of $59 million down 11% year over year.
Chris: Our full year non-GAAP gross margin was 44% compared to 49, 6% in the prior year.
Chris: Full year non-GAAP net income was $4 6 million or 15 cents per diluted share in fiscal 2025 compared to non-GAAP net income of $35 8 million or $1 21 per diluted share in fiscal 2024.
Chris: Which included the impact of a one time tax benefit of approximately $27 million, we sold them for them to at least the company's full income tax valuation allowance.
Chris: Our annual bookings in fiscal 2025 was $61 1 million up over 24% compared to $40 9 million in the prior fiscal year.
Chris: The increase in bookings was primarily related to the sales of AI processor burdening systems wafer packs and Bernie module boards, partially offset by lower customer orders related to silicon carbide wafer packs.
Chris: Our backlog itself, Ian was $15 2 million with $1 1 million bookings received in the first five weeks of the first quarter of fiscal 2026, we now have an effective backlog of $16 3 million.
Chris: Turning to our Q4 performance. We are excited about our continued momentum in penetrating the artificial intelligence market with AI processors burning now accounting for over 35% of our business this year compared to zero last year.
Chris: For the fourth quarter, we had three customers representing over 10% of total revenue and two of these customers target the AI market.
Chris: Revenue for the fourth quarter totaled $14 1, million% to 15% decrease compared to $16 6 million in Q4 of last year.
Chris: The year over year decrease was primarily due to a delayed shipment of a fox CP system that was forecasted to be shipped to our hard disk drive customer.
Chris: Because of tariff related uncertainties cobos source from Asia to support their Fox CP system were delayed.
Chris: We now expect to complete this shipment.
Chris: Current quarter Q1 of fiscal 2026.
Chris: Wafer pack revenues were $4 2 million and accounted for 30% of our total revenue in the fourth quarter.
Chris: Wafer pack revenues continued to represent a sizable revenue stream for our business driven by the ongoing demand for new wafer pack designs from both existing and new customers and securing new end customer designs and strive to meet the market requirements.
Chris: We are pleased with the significant progress we've made integrating products from our <unk> acquisition into our product portfolio to capitalize on emerging opportunities in the AI market.
Chris: Sales of our Sonoma Tahoe and alcohol packaged part burn in systems continue to contribute strongly accounting for 44% of our fourth quarter revenue.
Chris: We believe our strategy to expand its product offerings and diversify beyond silicon carbide applications is gaining meaningful traction in the marketplace.
Chris: non-GAAP gross margin for the fourth quarter was 34, 7% compared to 51, 5% in the same period last year.
Chris: non-GAAP gross margin decreased primarily due to lower overall revenue level compared to Q4 last year and less favorable product mix.
Chris: Additionally.
Chris: We incurred high manufacturing overhead due to under absorption. That's all manufacturing capacity utilization was lower during the renovation of our three months site and the consolidation of inventory from the <unk> facility.
Chris: non-GAAP operating expenses in the fourth quarter were $5 4 million, reflecting a 6% increase from $5 1 million in Q4 last year.
Chris: This year over year rise is primarily attributed to the inclusion of <unk> operating expenses in our financial results as well as higher legal and professional service fees.
Chris: We anticipate incurring additional legal expenses in the upcoming quarters as we continue to protect our intellectual intellectual property rights in China.
Chris: non-GAAP non-GAAP net loss for the fourth quarter, excluding the impact of stock based compensation amortization of intangible assets and restructuring charges was 248000 or negative one penny per diluted share in line with the street consensus.
Chris: This compares to a non-GAAP net income of $24 7 million or <unk> 84 per diluted share in the fourth quarter of fiscal 2024, which as a reminder, including included a onetime tax benefit of approximately $20 7 million, resulting from the release of the company's full income tax valuation allowance.
Chris: Moving to the balance sheet at the end of Q4, our cash cash equivalents and restricted cash totaled $26 $5 million down from $49 $3 million at the end of Q4 fiscal 2024.
Chris: During fiscal 2025, we.
Chris: We used $11 million quite in Cal, which enabled us to enter the AI market and secure key customer relationships with us.
Chris: Superior package part burn in product Sonoma.
Chris: Additionally, we spent $5 million on capex to support the consolidation and upgrade of our Fremont manufacturing facility in headquarters and.
Chris: And used $3 $6 million procure inventory and $3 8 million for the remaining working capital.
Chris: We have no debt.
Chris: And continue to invest excess cash in money market funds to generate interest income.
Chris: Let me provide an update on the class action claims and derivative lawsuit filed against their tests on December three 2024.
Chris: We are pleased to report that on May 16, 2025, the court appointed lead plaintiff for the class action lawsuit elected to voluntarily dismiss the case with all parties bearing their own fees and costs.
Chris: On June nine 2025.
Chris: The court also dismissed the derivative lawsuit without prejudice.
Chris: The company believes to claims in all those cases were without merit.
Chris: Following the voluntary dismissal of the shareholder class action in the courts dismissal of the consolidator derivative action no related proceedings are currently pending.
Speaker Change: As Scott mentioned containing the secondary effects of the tariff announcements on our current and potential new customers along with the uncertainty this quarter regarding possible passes or delays in customer orders and shipments or supply chain delivery delays.
Speaker Change: Temporarily with holding our guidance for our fiscal 2026 year, and we will reassess our guidance policy as clarity develops.
Speaker Change: Despite the uncertainties around tariffs, we excited about the long term growth opportunities across our more diverse target market.
Speaker Change: We are especially encouraged by the progress we have made in addressing the artificial intelligence processes market.
Speaker Change: The potential high growth sectors, including gallium nitride power semiconductors data storage devices silicon photonic integrated circuits and flash memory.
Speaker Change: To succeed in this new market, we plan to increase our research and development investments this fiscal year by expanding our R&D resources and hiring additional talent in the U S. In the Philippines to support our growing AI customer base and increase automation for scalability.
Speaker Change: With more R&D talent, and a strong infrastructure and enhancement and factoring capabilities in place, we're more prepared than ever to achieve our growth objectives.
Speaker Change: Lastly, you may have noticed that we are holding this earnings call one week earlier than usual because of the CEO summit has been pushed back from July to October and will be held in Phoenix instead of San Francisco.
Speaker Change: Looking at the Investor Relations calendar <unk>.
Speaker Change: Their test will be participating in two upcoming conferences over the next month.
Speaker Change: We'll be meeting with investors virtually at Needham.
Speaker Change: And new semiconductor and semi cap one on one conference on Wednesday August 20th.
Speaker Change: The following week, we'll meet with investors in person on Tuesday August 26 at the Jefferies Technology Summit Conference in Chicago.
Speaker Change: We hope to see some of you at this conferences.
Speaker Change: This concludes our prepared remarks, we're now ready to take your questions. Operator. Please go ahead.
Speaker Change: Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing.
Speaker Change: The Star Keys, one moment, please while we poll for questions. Once again. Please press star one if you have a question or comment.
Speaker Change: Our first question comes from Christian Schwab with Craig Hallum. Please proceed.
Speaker Change: Question Gabe.
Speaker Change: I have received a lot of questions regarding your most recent slide in here.
Speaker Change: Investor deck.
Speaker Change: A lot of.
Speaker Change: Well known marquee names.
Speaker Change: Is that it should investors think of that list.
Speaker Change: A list of current and previous customers or doesn't include.
Speaker Change: You know maybe names of prospective customers.
Speaker Change: You know such as new AI customers that youre working with their new silicon photonics customers et cetera, how should we be thinking about that slide.
Speaker Change: Okay. So when we introduced that slide we updated the customers slide a few weeks ago.
Speaker Change: Compared to the deck that we've had on our on our website prior to that and we were actually at a conference that had a public.
Speaker Change: Speaking it is recorded and available to all people through our website.
Speaker Change: That specific conference I pointed out that we have updated the customer list to reflect the current customers from the <unk> package part burn inside of our business.
Speaker Change: Those are customers not prospects.
Speaker Change: And yes, there is some notable names on there.
Speaker Change: Not every single customer is still on there actually theres been some historical 10% customers.
Speaker Change: That we had with specific agreements with or or limitations of ever saying their names publicly other than referenced when they were doing 10% of our revenue, but yes.
Speaker Change: Yes, theres some theres some good names on there.
Speaker Change: Great and then as it relates to 10% customers or are you.
Speaker Change: Since you didn't mentioned it a few times without naming names is that going to be in your K. When you file it or are you not going to name a 10% customer so where were the new FCC rules do not require you to name. It so unless we already had prior range agreements with the customers to name them are no longer doing.
Speaker Change: Matt.
Speaker Change: Prior to the FCC rule, we could name them, even if the customer's objected if you will but we're not doing that now.
Speaker Change: Great and then.
Speaker Change: The you know the AI opportunity seems quite significant I know you in previous conference calls said that that market could be materially bigger than what you had previously said that the silicon carbide opportunity could be over time.
Speaker Change: Wafer level burn and was used by many people.
Speaker Change: Do you have can you give us any idea.
Speaker Change: Not this year next year, but.
Speaker Change: Over time, you know have you.
Speaker Change: You walked through the math.
Speaker Change: Yes.
Speaker Change: You can imagine we have I think we have.
Speaker Change: So similar to how we built up the original Silicon carbide models that took a look at say the target applications for silicon carbide, which primarily the electric vehicles, how many evs, how many components would be in it et cetera et cetera, you could you could come up with how many wafer starts that would require in say <unk>.
Speaker Change: <unk> 30.
Speaker Change: And I know that you had put some models together at that time, there were about 4 million wafer starts we looked at 12 hour burn in times single insertion with our systems long story short we saw that the total market was somewhere three to 350 of our systems with Asps is about 4 million bucks apiece or something like.
Speaker Change: That if you look at the AAR market the AI market.
Speaker Change: Interestingly in that same timeline timeline may actually be half as many wafers, which seems a little odd, but the 300 millimeter wafers and you actually don't test them in one single touchdown.
Speaker Change: Take multiple touchdowns to test these wafers because they might have 20000 watts of power on them and we're testing 304000 lots at a time you can kind of go through the math.
Speaker Change: Even significantly lower average burn in times than say, the silicon Photonics I am sorry, the silicon carbide is.
Speaker Change: You go through the math and the market is <unk>.
Speaker Change: Three to five times larger.
Speaker Change: Then the silicon carbide was.
Speaker Change: One of the things that we'll be looking at is what are the burn in times, we have we're doing burn in our customers around the world and we have customers that are doing one hour stress time.
Speaker Change: Some for our burn in times in 24 hour burn in times for example, all the way up so it'll be interesting to see and we think thats related to how much the longer the burn in time to hire the quality ends up being to the end customer and so it kind of depends on both availability of capacity and what the target customers required and how critically.
Speaker Change: Important it is to get to the quality levels. So theres a little bit of dynamics in here, but there is no way to do the math and not come out with it being significantly larger.
Speaker Change: Yes.
Kim: No other questions. Thanks Kim.
Speaker Change: Thank you.
Speaker Change: The next question comes from Jed <unk> with William Blair. Please proceed.
Jed <unk>: Hi, yes, thanks for taking my question.
Jed <unk>: I guess first one either gain or Chris just the step down in gross margin.
Jed <unk>: Quarter to quarter.
Jed <unk>: Our year over year or two I'm assuming.
Jed <unk>: A mix issue in terms of.
Jed <unk>: Drop off.
Jed <unk>: Wafer pack consumables.
Jed <unk>: The mix towards <unk>.
Jed <unk>: Is there anything else that should be called out with respect to.
Jed <unk>: Sure.
Jed <unk>: Margins of course lower.
Jed <unk>: Lower revenues and to spread the fixed costs, but.
Is it primarily mix.
Jed <unk>: Revenue levels.
Jed <unk>: There's two types of mix in this thing too there definitely was a mix in that we actually within some of the wafer level burn in orders Didnt materialize as we were kind of thinking at the time, we actually pulled in some packaged part systems and the packaged part systems have a little lower margin the consumables have a lot less margin than <unk>.
Jed <unk>: Our wafer packs for example, but the other pieces during that quarter, we had the full burden of the <unk> facility as well, which we've talked about now not having kind of carrying forward. So we have the double whack of both facilities going on with primarily just packaged part burn in revenues.
Jed <unk>: And some wafer packs so.
Jed <unk>: I think as we go forward the same quarter would be materially better.
Jed <unk>: And of course.
Jed <unk>: <unk> has the potential of much higher volumes as we go forward.
Jed <unk>: Yes, just to add on that also the utilization was not as high as.
Jed <unk>: Before because we were moving.
Jed <unk>: Some of the folks actually we're helping with the moves into operations not building and not building product and set up now so we got to expense those labor costs.
Jed <unk>: Got it that's helpful. Thanks, and then.
Jed <unk>: Just maybe if you could.
Jed <unk>: Aye.
Jed <unk>: Your tenor around AI.
Jed <unk>: AI processors is certainly.
Jed <unk>: Skewed much more positively over the past year.
Jed <unk>: And I.
Jed <unk>: I know the silicon photonics.
Jed <unk>: Took time to call that out.
Jed <unk>: Packaged objects are becoming a.
Yes.
Jed <unk>: Meaningful part of the design I'm just curious.
What was.
Jed <unk>: Is it just the size of the Tam.
Jed <unk>: There seems like there is there is a.
Jed <unk>: Specific shifts in terms of your excitement around this market.
Jed <unk>: Is it a function of.
Jed <unk>: Your technology and and the moat that you have.
Jed <unk>: I wouldn't mind, just explain maybe I have that wrong, so but yes.
Jed <unk>: Yes, I think.
Jed <unk>: I believe I think it's people off is what makes me lose sleep at night and what makes you excited.
Jed <unk>: If there isn't a material difference in our and our story related to AI from.
Jed <unk>: Nine months ago, maybe six months ago nine months ago, we were serious when we said we're doing this evaluation with the first AI customer and while we believe it will work we still have to work through it. We also didn't finalize the burn in times et cetera.
Jed <unk>: Now that we've proven that it works understand the size of the market through the burn in times and.
Jed <unk>: Candidly delighted the customer if you will we're now also recognizing that.
Jed <unk>: The features that we implemented in that machine are applicable to other customers. So at the time. If you said, okay nine months ago. It's like I think this is going to work and the customer was cheering us on then it works and then the customer two quarters ago gave us an order and we shifted.
Jed <unk>: Weeks later it felt like okay.
Jed <unk>: Now we have inbounds from customers to were now evaluating on paper.
Jed <unk>: The qualification of those devices and recognizing we can test your parts and this is why.
Jed <unk>: So you are starting to see in the eyes of the customer is looking back at you the value that you have in doing this and the sincere interest in trying to make this happen until like how can you make this happen. So if it's not coming across clear enough and I know as a CEO you have to be careful of.
Jed <unk>: I'm always a cheerleader, but this is very real and their eyes, and we used to talk about.
Speaker Change: Stacked memories and how important it would be to burn them in before you stack them. Okay. You are taking devices that are maybe $2 and youre, putting them eight high to make a 16% or $20 part.
Speaker Change: Then we talk about silicon carbide devices that were going into these modules for Evs, we were taking $10 parts, putting 10 of them into a package and selling them for $200 and look at the value added by doing that now we're talking about HBM stacks, where the stack of memory is hundreds of dollars.
Speaker Change: Times eight stacks processors that are a thousand dollars a copy.
Speaker Change: Out of a TSMC fab Theyre, all stack together and they all need production burn in the.
Speaker Change: The math is so obvious about the value of that will move this to wafer level that it's just more about what can you do to prove it and we have the ability now to not only physically show. It we can bring customers and we have tools in house that are configured for AI high power 300, Melanie.
Speaker Change: Peter wafers with our aligner, they can see wafer packs, we've upgraded the facility with enough power to be building 10 to 20 systems at a time if needed that's not to imply that that's how big our forecast is but we have that capacity and they come in and look and go okay I get this.
Speaker Change: So the other thing I made I made some comments kind of a side comment.
Speaker Change: The customer enthusiasm exceeds our ability to sell and market and thats not a dig on my sales and marketing team.
Speaker Change: We believe has happened is that these customers are being walked by the tool.
Speaker Change: And tools I should say because tools actually and seen.
Speaker Change: The feasibility of it and so the biggest <unk> SaaS is marketing this capability and we're getting these people calling in so we'll hold on a second I mean, I guess I got the press release, but I just thought.
Speaker Change: Our understand it.
Speaker Change: What do I need to do to do that.
Speaker Change: So you can imagine it would be pretty excited about that.
Speaker Change: Yes, certainly.
Speaker Change: That's helpful.
Speaker Change: Question for you along those same line you mentioned the OCI starting to market. So you've got to note that in your silicon photonics.
Speaker Change: Oh sat or two that youre, working with and the AI processor.
Speaker Change: Mostly customers.
Speaker Change: On the design for the AI processors.
Speaker Change: Would you haven't mentioned you did mentioned TSMC, but I'm just curious from a foundry perspective.
Speaker Change: What's the where.
Speaker Change: Where are the discussions with.
Speaker Change: With foundries.
Speaker Change: In the process are you seeing okay organization like you are with that.
Speaker Change: Sure Yeah, so I wouldn't use the I think it is a little different vocabulary.
Speaker Change: In this world, there's only really two foundries I want to be respectful for <unk>, maybe three that can build them. So.
Speaker Change: Globalfoundries is it really building AI processors because of the notes there on so you're really talking about TSMC and potentially Intel Cai with TSMC be having right now I think everybody by Intel.
Speaker Change: And then you then you talk about design houses design houses are the companies that are actually working with the <unk>.
Speaker Change: Hyper scaler in designing their new Asics are AI processors. So you are talking about Marvell Broadcom all chip as examples.
Speaker Change: Those are the big guys that are actually doing the new designs.
Speaker Change: Then of course, some of the big Hyperscale or have in house designed.
Speaker Change: They then work with the model say for example, with TSMC that will provide them with the models based upon what particular note there at <unk>.
Speaker Change: That will have DFT design for Testability features and functionality inside of it that interestingly make them common.
Speaker Change: And then they can outsource that to fill a two or three of the big SaaS the biggest one being.
Speaker Change: ASC, who also about spiel, but people think those are two different companies, but candidly, they're really the same and then you have amcor.
Speaker Change: Japan is trying to get some of their business Jason.
Speaker Change: <unk> and then they're.
Speaker Change: They're not in Osaka, they're just test and Thats Ky AUC. So it's a pretty small community and very a lot of cross polymerization of ideas I would say and awareness and so once this system got put.
Speaker Change: Put into production.
Speaker Change: <unk> started to go on in the phone call. The phones started to ring with people, saying, Hey, wait a minute.
Speaker Change: That was just a marketing thing. This is real can you do my part two.
Speaker Change: Thank you.
Speaker Change: I hope that helps.
Speaker Change: The next question comes from Igor <unk> with Freedom broker. Please proceed.
Speaker Change: Hello, Gents. Thank you Paul it sounds like market comments I wanted to get a glimpse into your outlook for 2027 essentially for TSMC.
Speaker Change: Metro which will be reported.
Speaker Change: There were reports that TSMC plans to wind down gloomy drives foundry services by 23% to seven.
Speaker Change: Could you share your thoughts on how these shifting market can impact your business.
Speaker Change: And addressable markets.
Speaker Change: Okay. So.
Speaker Change: We chose not to give guidance on 2006, RB struggled with 27, but we do believe we can get back to the track of growing significantly over this period of time the size of the market for example between AI Silicon photonics for optical chip to chip communication.
Speaker Change: And you add in silicon, even silicon carbide are all kicking in pretty hard in 2007.
Speaker Change: So we're planning for.
Speaker Change: Pretty significant growth I will leave it at that.
Speaker Change: Now you specifically talked about Gan at TSMC, TSMC, mostly I wake up everyday thinking about all the AI wafers that TSMC is doing.
Speaker Change: Gan gallium nitride can be put onto multiple different process substrates, the most kind of.
Speaker Change: Interesting one would be on silicon large silicon substrates.
Speaker Change: But a lot of both.
Speaker Change: Folks around the world like Infineon for example, or people that have dedicated foundries.
Speaker Change: And then TSMC is also doing a foundry I don't know what tsmc's market share is but.
Speaker Change: I candidly when I talk to customers I hear a lot more about the other foundries or their own.
Speaker Change: Sources and TSMC, so I don't believe that it.
Speaker Change: Has a negative impact on us if they start to wind down that business I think that just shows up somewhere else either at one of the idms or one of the other foundries.
Speaker Change: Okay, great. Thanks, and in terms of your new <unk> lines.
How long will it take to bustle qualifications for Richard final decisions for your client after you get the first glance.
Speaker Change: There are delivered.
Speaker Change: So we already have the first client we announced that we were.
Speaker Change: I think this year exactly we announced that we had a commitment from our first customer to evaluate our solution for AI. We said, we're very excited about it but there is still a lot of uncertainties the customers seem extremely willing and pulling us in I think I use the term theyre more.
Speaker Change: Then we are more hopeful about getting the business.
Speaker Change: Which of course was good then within a quarter, we said it was progressing pretty well.
Speaker Change: Following quarter. We said, we are now testing wafers and the data looked good and within that quarter. They placed an order and we shifted at the same time that was the first customer which there is some argument is takes longer than the second one I will tell you our enthusiasm and confidence is.
Speaker Change: A lot more higher because of actual evidence, but theres still some variables in things that we still need to worry my attorneys will always tell you be careful there's always risk in.
Speaker Change: You never know till until.
Speaker Change: Until the orders in hand, but we.
Speaker Change: Think that a decision could be made.
Speaker Change: Within say six months or so.
Speaker Change: And potentially orders placed somewhere thereafter.
Speaker Change: Okay I got it.
Speaker Change: Useful.
Speaker Change: The next question. Thank you.
Speaker Change: The next question comes from Larry <unk> with <unk> capital. Please proceed.
Speaker Change: Hi, Gabe.
Speaker Change: Plus we're at you're all set.
Speaker Change: So there are you.
Speaker Change: Under the.
Speaker Change: We believe that we're really pleased with it and do you expect.
Speaker Change: More orders from them in the near future.
Speaker Change: Yes to both of those.
Speaker Change: I was wondering you said near future.
Speaker Change: I want to be careful as setting any timelines, but.
Speaker Change: I'll go out and say, we expect more just mortgage this year, though.
Speaker Change: And then.
Speaker Change: Do you have another customer.
Speaker Change: Valuation.
Speaker Change: So that's a second one for wafer level burn in and then you have a third one.
Speaker Change: That's going after the production.
And the packaged part burn in.
Speaker Change: The three distinct.
Speaker Change: Hey.
Speaker Change: Customers are they yes.
Speaker Change: Yes, so totally different totally.
Speaker Change: Totally agree.
Speaker Change: And.
Speaker Change: And the write up you said that you shipped.
Speaker Change: <unk> waiver.
Speaker Change: Way for high power Silicon carbide.
Speaker Change: System.
Speaker Change: Did that ship and booked in the may quarter.
Speaker Change: Yes, yes it was.
Speaker Change: And there was an upgrade to one of the systems that they had purchased earlier.
Speaker Change: Part of our strategy and one of our commitment to customers is this commitment to our platform that allows people to maintain maintain forward backwards compatibility. So it was a really big deal. They ship the system here, we rework the system and then shifted back to them capable of testing 18 wafers at a time and high voltage which is amazing.
Speaker Change: It also included the automated aligner.
Speaker Change: Actually in this case that it didn't.
Speaker Change: It did not is shipped back without the automated Atlanta.
Speaker Change: Do you anticipate.
Speaker Change: So that by the way they.
Speaker Change: They have automated they have automated a liners, but we only upgraded the system basically.
Speaker Change: Okay do you in.
Speaker Change: Dissipate going forward at all the Silicon carbide systems will be Hy Bon.
Speaker Change: Actually we refer to them as high voltage.
Speaker Change: I know what you need.
Speaker Change: Mostly yes, we've been working really closely with the Oems.
Speaker Change: And making them aware.
Speaker Change: Car suppliers, the E&P guys to making them aware of the capability to be able to continue to provide lower and lower cost solutions that include the high voltage insertion as well if they want to do it.
Speaker Change: I would say that it's.
Speaker Change: It's mostly likely that people will buy it with that and then allows you to do it with multiple.
Speaker Change: Multiple different stress conditions, but this allows you to also do this stress condition with high voltage which is very valuable.
Speaker Change: Does that include a premium.
Speaker Change: Do you get a premium price on it.
Speaker Change: Going forward or.
Speaker Change: Yes, the option does cost additional dollars that's correct.
Speaker Change: Okay ill give my memory question and you talked up.
Speaker Change: All I've made so much sense for them to go to wafer level burn in when are you going to get a valuation going for an HBM application.
Speaker Change: That's.
Speaker Change: That's a good question we've talked about.
Speaker Change: Walking before we run and the walking to begin with was the was the wafer level burn in application for the NAND Flash.
Speaker Change: But one of the critical things that we mentioned last time, but I'll mention it again today one of the most specific things we were implementing was a new fine pitch Mems wafer pack.
Speaker Change: That allow us to get to very attractive price points at extremely high pin count.
Speaker Change: But it also allows us to go to <unk>.
Speaker Change: Four times or one fourth the pitch. These are distances if you will.
Speaker Change: And what we have today.
Speaker Change: That fine pitch.
Speaker Change: As technically fully capable of doing DRAM as well we knew that on purpose. So one of the critical things is there was no way to contact a DRAM hbf device with our previous wafer packs, but we now enable it through this wafer pack.
Speaker Change: So there is also things on the AI roadmap that are reusing the technology developed under this as well.
Speaker Change: So I'll, let you have the Mems.
Speaker Change: Fine pitch wafer pack.
Speaker Change: Prove it out on flash is that correct.
Speaker Change: It seems like you can work through this.
Speaker Change: Trying to get it finalized throughout this quarter here.
Speaker Change: Okay. So it seems like that would entice.
Speaker Change: One of the HBM guys.
Speaker Change: So the boys, who can solve a big problem because we.
Speaker Change: Go from eight eight stacks to 12.
Speaker Change: Possibly eventually up to 24.
Speaker Change: Yes.
Speaker Change: I think I think youre right on that.
Speaker Change: Alright, well.
Speaker Change: We'll be waiting to hear when you do that.
Speaker Change: That's all the questions I guess.
Speaker Change: Thanks, Larry Thank you.
Speaker Change: Sure.
Speaker Change: Okay. We have no further questions in the queue I'd like to turn the floor back to management for any closing remarks.
Speaker Change: Alright, well I, thank everybody for their patience and I fully recognize that our prepared comments, where at least 10 minutes longer we added about a 15 minute chunk in the middle to do detailed get on record.
Speaker Change: Information around the AI that we.
Speaker Change: We will need to do next time as well and hopefully we can just give you an update on the successes that we're having there. So I appreciate everyone's patience and listening through this and if you have any follow on questions. You can reach out to us we'll be happy to take the call. Thank.
Speaker Change: Thank you very much.
Speaker Change: Thank you.
Speaker Change: This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.