Richardson Electronics partners with NoMIS Power on SiC tech

Richardson Electronics announced a global strategic partnership with NoMIS Power to expand its silicon carbide portfolio from 1.2 kV to 10 kV, targeting AI data centers, energy storage, renewables, industrial, aerospace, and defense applications. The deal supports a shift from silicon IGBT solutions to SiC architectures, which offer lower switching losses and higher power density. The article also notes recent fiscal Q3 2026 results above expectations, with EPS of $0.07 versus $0.06 consensus and revenue of $55.5 million versus $54.09 million.

Analysis

This is more important as a distribution signal than as a product event. For a sub-$300M name, expanding into medium/high-voltage SiC gives RELL a way to monetize the next wave of electrification without needing to win the hyperscaler CPU race directly; the economic value sits in enabling the power stack behind AI servers, BESS, rail, and defense systems. The second-order effect is that system integrators may increasingly prefer vendors that can source both legacy silicon and SiC transition parts from one channel, which can lift wallet share even if unit growth is modest.

The near-term catalyst is less about revenue from the partnership and more about validation: these deals can compress the perceived technology risk premium and keep momentum investors engaged for 1-2 quarters. But the market will eventually demand evidence of design wins and gross margin durability; if the partnership is mostly catalog expansion without meaningful OEM conversion, the stock can fade quickly. The balance sheet reduces insolvency risk, but not valuation risk, so the setup is asymmetric only if management can show backlog conversion before sentiment rotates.

The contrarian miss is that SiC demand in infrastructure is real, but the easiest monetization may accrue to larger component suppliers and system-level beneficiaries with pricing power, not to a small distributor/solutions platform. In other words, RELL could be an early marketing beneficiary while the larger upside leaks to adjacent names that capture manufacturing scale, especially if AI power architecture cycles take longer than expected to convert. A failure mode is overestimating how fast customers replace silicon IGBT architectures in mission-critical power systems, which can push the payoff horizon into 2027-2030 rather than the next 2-4 quarters.

Key Decisions for Investors

• Long RELL only as a tactical momentum trade for 4-8 weeks; size modestly and use a tight 12-15% stop because upside depends on follow-through design-win announcements rather than the partnership headline itself.
• Prefer a pair trade: long RELL / short a more mature industrial electronics peer with less SiC optionality, to isolate re-rating from any broad clean-energy or AI infrastructure beta over the next 1-2 quarters.
• If liquidity allows, buy RELL call spreads 3-6 months out to express upside while defining downside; target a 2:1 payoff only if the market starts assigning value to SiC channel expansion before next earnings.
• Watch for confirmation in the next earnings cycle: if backlog, margin, or order commentary does not inflect, take profits quickly because headline partnerships without operating leverage tend to decay after 30-60 days.