Valens Semiconductor Ltd. (NYSE:VLN) Q4 2022 Earnings Call Transcript

Dror Heldenberg : So, it’s, it’s an interesting question. As of today, if you remember, we mentioned that just as a reference, if you remember, we mentioned that today’s a Mercedes Benz car we deploy about three chips per car, and the average revenue per car is a bit close to $25. And that’s supposed to give you the order of magnitude of the ASP for the VA6000. When we look at the $7,000 as VA 7000 revenue contribution, and we say that per chip, the ASP is going to be a bit lower. Because if you remember our analysis, we assumed an ASP between $4 to $5 per side, which means that the ASP per link or the revenue per link, supposed to range between eight to $10. I think the nice thing about the VA7000 is the difference in volume. Because while in the case of the VA6000 the content per car is something like three to four chips. In the case of the VA7000 We can reach easily to 10 and even close to 10 chips per car.

Suji Desilva : Thank you for that very detailed info Dror. And last question for me and I’ll go. Audio-video. Sounds like a non-traditional segments are coming up. Can they be a meaningful percent of the revenues in ’23 I mean, the medical the industrial education. Thanks.

Dror Heldenberg : So again, thanks, Suji. The first I think that’s what we’re announcing, we’re seeing now it’s a nice mix of revenue coming from different vertical. This is what we see already. During 2022, and especially towards the end of 2022, we started to see the new product, the newer product, the USB, and power extender. And of course the VS3000 getting a new verticals. Just to give you a few examples, we just announced the Florida made that we won, this is based on the VA6000 by the way that was originally designed for automotive. And if we talk about the VS3000, so Crestron just announced that they have a list of dozens of different products powered with the VS3000. And by the way, just in the recent exhibition, the ISC 2023, we so almost 80 different products, powered with the VS3000.

So it gives you the power of this device, said that there is a time gap between the design the design win or the selection of our customers in this device, until we see the volume in the market or ramp up. There is this period time window where they designed and qualified your product. And only then we start to see the volume ramped up. So I believe that towards the end of 2023, we will see a more significant contribution from the VS3000. Over time in the longer term, definitely VS3000 is going to take the lead from the first — second generation of our product.

Suji Desilva : Okay, thank you, Dror. Thanks, guys.

Operator: The next question is from Vivek Arya of Bank of America. Please go ahead.

Unidentified Analyst: Hi, this is filling in for Vivek. Thanks for taking my questions. I just want to look more into the inventory corrections. I was curious if you can quantify the impacts of the Q1 guide. And I assume it’s mostly on the audio-video side. So curious about the potential for a second half recovery, your visibility into that. Thanks.