Good day and welcome everyone to the Vicor earnings results for the fourth quarter and year ended on December 31, 2020 call. My name is Mathew and I'm your operator today. [Operator Instructions] I would also like to advise all parties that this call is being recorded for replay purposes. And with that, I would like to hand it over to your host, James Simms, Chief Financial Officer. Please proceed.

Thank you, Matthew. Good afternoon and welcome to Vicor Corporation's earnings call for the fourth quarter and the year ended December 31, 2020. I'm Jamie Simms, Chief Financial Officer. And with me here in Andover are Patrizio Vinciarelli, Chief Executive Officer; and Phil Davies, Vice President of Global Sales and Marketing. After the markets' close today, we issued a press release summarizing our financial results for the 3-month and 12-month periods ending December 31. This press release has been posted on the Investor Relations page of our website, vicorpower.com. We also filed a Form 8-K today related to the issuance of the press release. I remind listeners this conference call is being recorded and is the copyrighted property of Vicor Corporation. I also remind you various remarks we make during this call may constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Except for historical information contained in this call, the matters discussed on this call, including any statements regarding current and planned products, current and potential customers, potential market opportunities, expected events and announcements, and our capacity expansion as well as management's expectations for sales growth, spending and profitability are forward-looking statements involving risks and uncertainties. In light of these risks and uncertainties, we can offer no assurance that any forward-looking statement will, in fact, prove to be correct. Actual results may differ materially from those explicitly set forth in or implied by any of our remarks today. The risks and uncertainties we face are discussed in Item 1A of our 2019 Form 10-K, which we filed with the SEC on February 28, 2020. We presented certain updated risk factors regarding the COVID-19 pandemic and our current construction project in our Form 10-Q for the third quarter filed with…

Thank you, Jamie. I would like to start my comments with a short review of our progress in 2020, which I would characterize as successful on many fronts, critical to our business growth objectives. We continue to strengthen our position as the leading supplier of high-performance power modules to customers in the data center, advanced processor and high-performance computing markets. In 2020, we not only expanded our customer base, but also solidified our position with existing large customers by starting next generation projects for higher performance processes with significantly higher power levels, currently under development and scheduled for introduction in 2022 and 2023. Our leadership position is clear and that customers worldwide are selecting Vicor, because of the increased performance that they can achieve with our factorized power solutions, which are characterized by much higher power and current density. In 2021, we will begin to ship our new proprietary vertical power delivery modules in volume to customers developing highly advanced supercomputers. These supercomputers utilize large clusters of AI processors in close proximity to enable faster parallel processing of heavy and complex workloads such as those found in autonomous driving applications. These complex systems can utilize greater than 50 processes, all requiring a vertical power delivery module from Vicor. I'll now turn to a new product strategy and growth initiative that was launched in 2020 and what should bring additional opportunities and revenues in 2021. This is our new line of single phase and 3 Phase AC power modules, incorporating our latest advances. These are successes to our former RFM assemblies. As rack and data center power requirements grow, the need to leverage existing facility footprints and rack infrastructure becomes a priority. Vicor's new high density AC front end product families will meet this challenge head on. These new OEM customer…

[Operator Instructions] And we already have a few incoming questions. The first one is coming from the line of Jon Tanwanteng. Please proceed.

Hi, guys. Thank you for taking my questions. Very nice quarter and it's nice to see that the strength is continuing. First of all, Jamie, congratulations on your decision. It's been great working with you, and hopefully, we'll cross path in the future. I was wondering if you could repeat your gross margin commentary heading into Q1, I'm not sure I caught it all. And maybe address the components of that, given the volatility we've seen in the world, whether it's component pricing availability, freight cost and timing, all the things that are impacting the world at the moment.

Well, obviously, as I mentioned, tariffs continue to have an impact, but it was roughly $300,000 lighter. We really benefited from higher volumes and a much better mix profile. The volume of our Advanced Products based on the leverage in that model, higher volumes allow us to absorb a great deal of our overhead, and that was the driver of the increase right there. So it's 48% for the quarter.

Got it. I was actually asking about the first quarter as we head into the outlook you had and what the gross margin commentary there was?

Oh, for this quarter?

Yeah.

We expect all other things being equal to actually have some incremental improvement as the trends continue.

So I would add, though, that one should not expect an improvement on the scale of the one we just recorded in the most recent quarter.

Yeah, we're not going to pick up 5 points.

Right. So I think that as suggested in the prepared remarks to margin expectation, so margin improvements, the next major contribution to margin improvements will come about with the vertical integration in our new facility. The vertical integration process that's been outsourced and which have created significant inefficiencies, long-cycle times, bottlenecks, some [Technical Difficulty]

Hello? Hello?

Sorry for the interruption. This is the operator speaking. As I can see the speaker line has just disconnected, so please bear with us for a few minutes.

Okay.

Hello, Matthew.

Hello. This is the operator speaking. You are now back live in the call.

Okay. So we stopped for the - where did we end?

In interruption I think I was setting expectations with respect to margin improvements, and basically repeating myself. I want to be clear with respect to this. We saw, obviously, a substantial step-up in the more recent - in the most recent quarter with respect some further improvement this quarter and in quarters ahead. But the bigger opportunity will come once we can leverage the vertical integration at the expanded manufacturing site.

Understood. Thank you. Can you hear me?

Yes.

Okay.

Yeah, I just want to make sure you were back on.

Yeah. No, I'm here. Thank you. And then, just wanted to address all the new opportunities and success you've had in 2020 and heading into 2021. You've mentioned a lot of applications, automotive has obviously been on the radar, this new data center product, the satellite opportunity. As I understand you're opening your new facility, as soon as you can and you need all of that capacity, just to supply current customers. How should we think of your expansion plans beyond that and the growth of these products over a 2- or 3-year timeline and how you're going to address those needs?

Phil, do you want to take that or...?

No, you take that and…

Okay. We do address it in the 10-K, which will be published on Monday.

Yeah.

But, so generally speaking, the factor expansion gets us to the $750 million total capacity. As we had discussed in prior conference calls, as soon as the dust settles with respect to this capacity expansion, we're going to start pursuing the next phase. Just to say, as we get further out with automotive opportunities going into volume production, there is plenty of opportunity for growth. I think in the near-term, the progression with respect to the bookings and backlog should continue this quarter. We're ahead of where we were last quarter at this time. So it's a positive trend that will carry us through this year and into next year before we get to the beginning of participation automotive programs. Phil, do you want to expand on that or...?

No, I think that's a great summary. I think that the focus is going to be continued growth through data center and artificial intelligence, design ins and wins that we've gotten as that business grows itself, we'll grow along with it. And our expanded customer footprint will add revenues at the end of this year and through 2022. So as we start to move to 2023, when automotive kicks in, we're going to need follow-on facilities later on. So...

So there are various dimensions to this, right? One of the dimensions is the footprint in AI, data centers, all these applications are point-of-load applications, so to speak. They address, the escalating current requirements of AI chips, servers, those kinds of opportunities. These are all fundamentally what we call DC-to-DC converted-type applications. As suggested in the prepared remarks, this complementary dimension of AC-to-DC systems, which are also called front-ends, they are, in effect, providing a power system functionality upstream of the point of load, to the extent that we succeeded in making 48-volt to the center of gravity in AI data center applications. And to extent that 48-volt is also becoming the standard for a lot of electrified systems in automotive. There is opportunity, in effect, going from 48 to the point of load, autonomous driving, other kinds of applications, AI applications. And there is at least as much of an opportunity getting to 48 volt. So we think of this in the airline analogy of 48 volt being the hub. And there is as much opportunity taking the load to 48 as there is going from 48 to the point of low.

Great. Thank you for that color and nice job again.

And the next incoming question is coming from the line of Hamed Khorsand. Please proceed.

Hi, I wanted to - I had one clarification and one question. The clarification, Jamie, could you just repeat what your growth expectations are for Q1? Is that sequential for the revenue line? Or is that year-over-year?

No, it's sequential. We expect some degree of improvement across the P&L sequentially.

Okay. And then my question was, are you seeing any kind of inventory stocking, order stocking, as far as customers go, given what's going on in the industry with lead time expansion and any ordering trends?

Yeah, this is Phil. So yeah, I would say that in January and February, we saw a lift in what we call POA bookings placed on us by our large distributors, global distributors. It wasn't massive. It was certainly an increase above what we had forecasted but not by a huge amount. But there's definitely going to be some of that going on, right, given the whole supply chain sort of horror stories coming out from lots of different places. So we can expect some of that as we go through the year, sort of as we did in 2018, and that was actually a very big year of over ordering, if you like. So yeah, there's some of that going on.

Okay. Thank you.

And the next incoming question is coming from the line of Quinn Bolton. Please proceed.

Hi, guys, congratulations on the nice results. And Jamie, pleasure working with you and the best wishes on your next endeavor. I wanted to start with the new single-phase and 3-phase AC-to-DC power conversion units for data center applications. That historically has been, I think, a fairly low gross margin business when you look at folks like Artisan or Delta or LightOn, I don't think those guys are getting 50%-type gross margins. Can you talk about - are there factors that will allow you in that front end or AC-to-DC market to drive good corporate gross margins? And can you give us any sense, I think, you said it was going to start to ramp in Q3. What kind of revenue opportunity you might be looking at with the AC-to-DC?

So, we believe that the margin opportunity for front end products is on the same - on par to the margin opportunity for point-of-load devices, which as discussed earlier, we're looking to expand well beyond 50%. The traditional front-end products, that you're referencing from the power supply industry is down compared with the level of capability that we offer. The density that we offer in our front end is literally in an order of magnitude greater than those solutions. So those are not really effective solutions in applications that are challenged from a power density perspective, or are challenged in terms of systems that require liquid cooling in order to enable a dense total power system solution. So I have no concern whatsoever with respect to margins in terms of our front-end business, either AC-to-DC, or in particular, front ends for DC-to-DC. In fact, with some of those, the margin opportunity is even bigger. As an example, 800-volt, 400-volt-type of DC systems, we have an even more, if you will, unfair advantage vis-à-vis the competition. Regarding the part of your question has to do with the level of revenue that we expect from AC to DC products this year, it will be small. It won't move the needle on other revenue or bottom line this year. But the issues start contributing to the top-line appreciably and to the bottom line, as suggested earlier, starting next year. So in particular, we're very excited about what I regard as the most advanced supercomputer on a wafer that will benefit from our AC-to-DC solution to take it to its next level of proficiency, and we expect that's going to be a significant contributor next year.

Understood. Thank you, Patrizio. The second question, I think, is probably going to take some of those benefits you talked about in power density as it applies to the automotive market. But just what kind of advantages do you have, whether it's power density, lower weight in the cabling versus the competition in the electric vehicle market? I mean, you talked about the content opportunity is somewhere between $100 to $1,500. But can you just give us some sense how much weight you can take out of the vehicle? How much longer you can get out? How much longer drive time can you get with the better power efficiency and power density of your solutions as you move into the automotive market over time? Thank you.

So an example of the level of capability that the technology enables, we have a chip that measures 60-millimeter by 23-millimeter, and it's about 8-millimeter thick. And that's a very small device, right? It can hold between 2 of your fingers. And that device is capable of, roughly speaking 5 kilowatts of power conversion, 800 volts to 400 volts, and that's a major market opportunity. It is so dense and so efficient; the efficiency is pretty close to 99%. It's density is very, very high as you can infer from the numbers I quoted. It can be cost effective to the automotive OEMs, while being very high margin for us. And in terms of value proposition in electrified cars, as you know, weight and the reduction in weight is a direct contributor to range, so there is a strong value proposition there that the technology enables.

Great. Thank you, Patrizio.

Thank you.

And the next incoming question is coming from the line of John Dillon. Please proceed.

Yeah, guys. Congratulations on the quarter, especially the gross margins and the cash flow from operations was really outstanding. Jamie, I'm really sorry to see you leave, and I personally want to thank you for your service. I really appreciate your help over the years.

Thank you.

So my - yeah, you're welcome. We're going to miss you, yeah. I'm going to ask the same question about the front-end products to start off with, maybe, Phil, you could give us a little more color on the customers. This seems like a major product. And I'm just wondering, do have customers lined up? At one time, I think I've heard that there may be one customer who could take all the capacity of Vicor. And I'm just wondering what does it look like for the customers? And what does it look like for next year's revenues?

So, John, we're obviously starting with some lead OEMs that are helping with funding projects. And that's a great thing, right? I mean, they're committed to us. And we see really good revenues, as Patrizio talked about in 2022 from the supercomputer company that we've been working closely with. So what we're going to be doing now is expanding beyond that and taking that technology to the list of companies that we deal with on the point of load solutions. Because every single one of them is challenged by what I talked about in my remarks, which is the fixed footprint of the data center and the fixed footprint of the racks, where the power is going up. They're looking at new cooling technology, such as liquid cooling. And so having something that's incredibly dense, power dense, and the performance is very, very high on efficiency is really, really meeting a big challenge that they have. And so our plans this year will be to now leverage off of those initial customers and take that technology to the big customer base that we have for point-of-load. So that's what we'll be doing.

Nice. Nice. My follow-up question is on the automotive. And you've talked a lot about automotive, and it sounds like things are really going well there. In some of your presentations before you're forecasting about $250 million in revenue, I think, in 2023, with all the advances, do you see that number going up?

I think we have a great opportunity to drive that number up. Yes, I do. I think that the engagements that we have, it wouldn't be in the 2023 time frame, by the way, but certainly, the number is big. And the opportunity is very, very big. And the success that we've had in 2020 and what I see happening in 2021, I think, we'll double our engagements with customers in 2021. And so that's really building an incremental revenue stream for us that is critical to our desire and opportunity here to become a billion-dollar company. That's the plan.

It's sounds great. I'll get back - go ahead.

Just as a reminder, this is still - yeah, the automotive contribution is still relatively long-term, right? And it's still a few years out. I mean, going back for a moment to the AC-to-DC and giving you a little bit more quantitative sense of things. So we have a couple of customers that are lead customers, as Phil articulated earlier. I would think that the supercomputing application is a few million dollars in the next year. The LED lighting application is $10 million to $15 million in the next 12 months. So these are the test cases where the technology is proven out and the benefits get displayed. And to Phil's point, we've been keeping our pilot dry with respect to showcasing this capability to major customers in the point-of-load. We believe they are going to see the value proposition. There are also opportunities in 5G. I don't know if you want to say a few words about that or...

Yeah. I mean what we're seeing in 5G, I mean, particularly on, again, also in the edge, if you like, edge networks, customers are looking for very low-profile systems, and that's where we come in. If you look at the profile of our chips, our modules, I mean, they are incredibly thin and incredibly dense. So it really fits a real high demand that we see emerging with 5G systems of all different kinds and particularly also in edge computing. So we're talking to one quite large customer there at the moment. And they're very excited about this new family that I talked about earlier. So those conversations will go on in the next few months, and I'm hoping that will turn into another customer funded program for product development for us.

The next one is coming from the line of Richard Shannon.

Thanks, guys, for taking my questions. Jamie, it has been great working with you. I look forward to another call, but you've been great. So congratulations on your next move. I guess a tactical question for me. If I did my math right on the bookings here, your Brick bookings went down a fair percentage here in the fourth quarter. How does that play out into your thought process in the first quarter? And maybe understand the reasons why the bookings came down here. I kind of talked about some geographical changes maybe give us some color on that that would be great, please?

Yeah. Sure. Richard, this is Phil. So basically, in Q2, Q3 last year, we saw big large bookings coming from the China market for our Bricks, driven by the trade wars with the United States. The distributors and the customers down there were stocking up. And then that sort of corrected back in Q4. We've seen good bookings through the first 8 weeks or so of the start of this quarter. So there was a sort of a bit of a correction in Q4, but I think things will get back to normal now through this year.

For Bricks.

For Bricks.

For Bricks? Okay. And then just thinking about the first quarter guidance, is this - I mean, we're going to see growth in Advanced Products and Brick coming down? Or any way you'd help us understand those differentials there?

I think Bricks will be flat, maybe a little bit up because the North American military market is a little stronger. As far as the Advanced Products, they will continue to increase.

Okay. Great. And then my follow-on question is related to the IP situation. It sounds like you're inferring that there are - and you have identified OEM customers are maybe using infringing products out there. And maybe you can talk about to the degree what you're seeing that? And should we infer that we could be seeing some sort of license or multiple license agreements happening this year in the near-term?

Well, we are seeing the evidence of infringement. We are getting up to deal with it. We're having discussions with OEMs that recognize that they might have a serious issue. So stay tuned. That's all I can tell you at this point.

Okay. Great. Thank you, Patrizio. That's all for me.

And the next incoming question is coming from the line of [Christopher Hillary] [ph]. Please proceed.

Hi, good afternoon.

Hi, good afternoon.

With the broadening demand for your products from several of these large end markets and industries, do you see potentially a larger role for licensing and royalty contribution in future periods as you look to meet the sizable demand that's building?

We do. So we recognize that the OEMs have real challenges with respect to continue to supply access to enabling technology. Needless to say, their preference would be to have multiple easy sources. And when we have the situation that is present in our industry today, with Vicor literally 5 years ahead of any competitor, in terms of technological capabilities, that creates, in effect, a stress that needs to be addressed and we're mindful of that. We'll consider it of our customers. We want to address their needs. We view ourselves as a reliable supplier, but we do appreciate the fact that it takes a great deal of faith to put all your eggs in one manufacturing basket, the Vicor basket. So we want to provide the level of flexibility that OEMs would prefer to have, do it in a way that makes sense all around that gives proper credit for the investment that Vicor has made, not just in recent times, but over the last 20 years. So we built the technological edge. We've achieved with a major investment. We're literally talking over $0.5 billion in R&D, a lot of sweat in terms of creativity, innovation, lots of patents. And we see the value of the IP side of the business running on a parallel path to our core competency of development and manufacturing in particular automated U.S.-based manufacturing of state-of-the-art products. So it's a complementary opportunity, one that to your point should contribute to the total margin and net profitability of the company. And it's got to work all around, right? It's got to work for our customers, and it's got to work for Vicor.

Great. Thank you.

Thank you.

The next incoming question is coming from the line of James Lieberman. Please proceed.

Thank you. It's always good to hear such a fabulous presentation and best of regards to Jamie.

Thank you, Jim.

Thank you. Could someone given some color on the magnitude of the opportunities, market size that you see developing in the advanced robotics and drone markets that you've been starting to talk about?

Yeah, this is Phil. It's a little bit difficult to do only because it's early stages for a lot of these market segments. And it's really difficult to peg from how the growth is going to go. It's just that - again, you start to see all of this - all of the robotics going on, all of the different drones, underwater, unmanned aerial vehicles, all of the delivery vehicle investments going on, factory automation, smart cities, all of that stuff. And it's certainly going to be a very, very large market. And where Vicor comes in, of course, in any market that we participate in is bringing tremendous value to customers that value and will pay for the density, the performance, the efficiency, the modularity of our solutions. And so we're working with some really, really top-notch leadership companies in those market segments that I talked about. And our early introduction is in 48-volt systems, of course, and also in some of the tethered vehicles, in drones, with our high voltage bus converter technology, which again is very dense, very efficient high performance. And so these markets will emerge over time, but it's definitely going to be a very big opportunity for us, but it's very difficult to put a number on it.

Yeah. So it almost you have to be a visionary to see how it's going to play out, but it sounds extraordinary in these developments.

Yeah, it's huge investments, right, going on in all of those areas. So it's going to be big.

Thank you.

And the next incoming question is coming from the line of Alan Hicks. Please proceed.

Yeah, congratulations on all the progress you're making and the great quarter. And I second everybody's comments, we are going to - the long-term investors are going to miss, Jamie. So anyway my question is about - on capacity, there's been some question there. Have you been able to keep up with all the orders you're getting? And I see your spend, I think, it was $11 million last quarter. And, I think, I heard a number of $19 million from new equipment possibly for this year. Are you putting in new equipment in your existing plant to keep up with orders? And can you just give some color on that?

Yeah, so we're doing a combination of things. First of all, we've been adding equipment within the walls of the existing facility. We have ordered the equipment for the new facility. Some of that equipment is going to get delivered into the new facility as early as the late April, May timeframe. But it's not going to be until the end of this year that the lion's share of the equipment in the new facility will get installed. And between here and there, there's going to be more equipment deployed within the existing walls as well. And by the way, the new facility is about 12 walls. I mean, the ceiling is in place and the roof is in place, and the walls are coming up as we speak.

Okay. So you're adding to capacity for Advanced Products each quarter to keep up...

We're adding capacity for Advanced Products each quarter. We're getting more capacity out of our outsource partners. In the interim, while we get vertically integrated, we will retain access to the outside partners even after we're vertically integrated for most capacity or incremental capacity. So it's obviously an exciting ongoing requirement, and it's frankly a very good challenge to have.

Okay. My second question was, Intel says they are shipping in volume this quarter, their new Ice Lake server processors. I know they have great majority of the market. Has that added to your orders in the last quarter and this quarter? And then, looking to the future, are you getting any engagement on the new processors that are being developed like the Facebooks or Microsofts or Amazon?

Yeah, so to talk about the Intel CPU line, the new line, so the way we're participating in that particular market at this point in time, for the majority of it will be with 48-volt to 12-volt non-isolated bus converters, our proprietary MBMs. Those will be ramping in production Q2, Q3, Q4 of this year, with several of the hyperscalers. We're using 48 volts now. And then with regards to follow-on processor developments, we're focused on the high-current processes, right, providing solutions to where they are really difficult challenges at the point of load with our - again, our proprietary current multiplier technology. So yeah, we are engaged on next-generation and even generations after that of processor development with our leading customers today and several new ones that we've been able to work with in 2020.

Okay. So you're saying that the impact of Intel is still yet to come, Q2, Q3, Q4?

Yeah, yeah, it is. Yeah.

Okay, good. And any views…

Yeah, we're shipping - sorry, we're shipping solutions today, of course to the older VR 15 and stuff, but the VR 14 will start towards the back half of this year, which is where we'll participate then.

Okay. And you are in discussions with some of these customers with the new processors?

That's right. Yes, no, we're engaged with most of them in terms of GPU, ASIC, FPGAs, a lot of great engagements.

Yeah, so, fundamentally, a good way of partitioning these opportunities is, clear part is Intel in this sort of the rest of the world. So Intel is for a long time now relied on an internal switching regulator scheme to enable the power source for their devices to be at a somewhat higher voltage. It's typically around 1.8 volt. So at that level, while our technology offers benefits, they're not nearly as compelling as they are for sub-1 volt AI ASICs, whose current requirement, because of the lower voltage, tend to be much higher. So there we're seeing an escalating set of requirements, both in terms of applications and the current levels of these applications, which are getting past the 1,000 amperes with peaks, in some cases exceeding 2,000 amperes. So there the value proposition of current multiplication, which is at the heart of our point-of-load technology is greater than it would be in Intel processor running from 1.8 volts, up, let's say, a couple of hundred amps. So at a couple of hundred amps there is still have some level of flexibility with respect to traditional multiphase, so to speak, solutions. Now where the power source has transitioned from 12-volt to 48 volts, to Phil's point, we have a role to play in converting the 48 to 12. But that opportunity, frankly, given that the rest of the world is focused on finer lithography, running directly from voltage levels down to 0.6, 0.7 volts and going further down, and with that, higher and higher current levels. That's where the current multiplier solution with a higher value contribution comes into play.

Okay. So sounds like you're saying the best is yet to come for your technology.

Yes. Certainly, the center of gravity and that will - will have to include Intel before too long, right? The center of gravity is shifting from high voltages at lower costs to lower voltages at much higher costs, and that's where our point of low technology shines.

Okay, thank you very much.

Thank you. I don't know if there is one more question. It will be the last one.

And the last incoming question is coming from the line of John Dillon. Please proceed.

Are you seeing more hyperscalers going to 48 volts? It sounded like from the last question, answer to that question, there are some people going to 48 volts and you're going to using 48 to 12 for the Intel chip.

Yeah, so if you go down the hyperscalers here in the United States, they're all moving to 48-volt, some of them moving slower than others. I expect in 2 years they will pretty much all be at 48-volts.

Great. And, Phil, in auto, can you talk just a little bit about - what solutions do you solve in auto? Do you have a building-block approach from all the way from 800 volts to the point-of-load? I mean, are you winning design wins for all the different aspects of those, like for example, do you have point of loads for autonomous driving, design wins for that?

So to answer the question, the point of load design-ins we have for autonomous driving are in the data center. That's where we're participating today. In terms of the question about 800 volts, John, when I talk about $1,500 content per car, that's what I mean. If you go - we go from 800 to 48 and 48 to 12. And we do it at many, many kilowatts. So there are lots of dollars there. So, yeah, we have a customer actually doing that with us. It's a really nice chipset, modular chipset that we were supplying, and they'll be in production in 2023 with that chipset.

And that sounds really exciting. So it's a building block approach where they can go all the way from 800 to the point-of-load in the car. And you're really getting all the content of the converters, it sounds like?

Yeah, part of the value proposition that we have in one of the many elements of our intellectual property is the opportunity to actually eliminate some of the batteries, because with our technology, you can start energy at a voltage, distribute a voltage that is relatively high and easy to distribute with copper wiring that is not nearly as heavy and it's more cost effective. And then, using 48 to 12 bus converter, service legacy lows are still running at 12-volt and running a 12-volt for quite some time in these electrified vehicles without having to have duplication of battery systems that carry with them extra weight, extra cost and extra complexity. So in a typical system of this kind, you might have 800 to 48, then 48 to 12, but in some cases 5, 10, 15 kilowatts.

Excellent. And then you will do 48 to point of load also, I would imagine.

Well, to Phil's point, as of now, we are not yet engaged on point-of-load as in powering processors at 1-volt or thereabouts in a vehicle. We are heavily engaged with respect to a vertical power delivery system for autonomous driving applications, but that's really not moving with the car. It's obviously supporting that motion but from stationary side.

Got you, got you. Is that because the processors in the cars are not as powerful as the ones in the data center, they don't need the amps that you provide?

Right. Needless to say, to the extent that one can do the heavy lifting in terms of computing in a stationary site, away from the vehicle and rely on very high bandwidth communication with the vehicle, that's a preferable alternative, because obviously in the stationary side you can burn a lot of power to do some intense computing without limiting mileage in electric vehicle. So the strategy for obvious reasons, that the other makers are following is to remote as much of the computing as possible.

Got you.

You want to really sort of push that compute to the edge, right. And then, the edge will communicate with the data center and the heavy, heavy lifting, so.

Got you. Got you. Okay, cool, very good. Congrats, guys. All this sounds good.

Thank you. And with that, we'll be done for today. Thanks, Jamie.

All right. Bye-bye.

Thank you very much, everyone. That concludes our conference call for today. You may now disconnect. Thank you for joining and enjoy the rest of your day.