Patrizio Vinciarelli : So, it changed from lateral product vertical. Is it changing PDN or power distribution network architecture? Many facets to this challenge, they need to do with the PDN architecture itself, what needs to happen in terms of reclaiming some of the real space within the processor socket that historically has been the case is to capacity bypassing to in effect keep up with the dynamic requirements of this processor, which entail very quick changes in current up to 10,000 amperes per microsecond. So, managing the combination of PDN dynamic requirements and making it happen within the mechanical thermal management concerns in other constraints of the application is a complex challenge that our intellectual property aspects of this, that there is know how that is not generally available.
And to make a long story short, this is not an easy transition requires, as of now, a close collaboration between the OEM and Vicor with respect to bring to fruition a solution that meets all the requirement. One of the major advances with 5G is that this whole process is going to become much more scalable, and OEMs are going to be in the driver’s seat with respect to their designing. But as of now, with 4G building blocks, and the know how that is available, it is a bit of a tedious process. And this in my opinion is — and has been for a while the obstacle to faster adoption of more advanced architectures.
Jon Tanwanteng: Great, thank you and it’s not a facility issue or anything like that are just waiting for that. That’s the random work?
Patrizio Vinciarelli : No, lot of vertical can be done as Phil suggested earlier without 4G building blocks, doing a full vertical with 4G, it can be done but it entails stacking chips or stacking certain functionalities with regard to which Vicor relevance AP, but it’s got complexities that with 5G we are doing away with in terms of leveraging the much higher density to facilitate VPD in a very simple and cost effective way.
Patrizio Vinciarelli : Great, thank you. I’ll jump back in queue.
Operator: Next, we have a question from the line of John Dillon. Please go ahead. I will unmute you now please also unmute yourself from your end.
John Dillon: I also have a question on the lateral vertical, in particular with the 4G. Are you still planning on doing 4G with lateral vertical? And would that be this year, or is that also that also stuck out next year? And can you give us a little color on the customers that are looking at your 4G technology for lateral vertical?
Patrizio Vinciarelli : So existing design activity for lateral vertical is, as of now still, based on our 4G module, existing 4G modules? Before too long, any incremental activity and expanding level of activity will be enabled by 5G building blocks. But as of now is still with existing 5G — 4G module?
John Dillon: And as 4G module opportunities, do you expect them to go to production later this year, then?
Patrizio Vinciarelli : Well, again we don’t have perfect visibility. There could be production on ramp with the level of PDN, significant production ramp with level of PDN using 4G modules, or it could be that the production ramp of waste the lateral vertical solution because of its significant improvements in in power capability, reduction in loss within the silicon and within the PDN itself.
John Dillon: Okay, so you still might have some new 4G lateral opportunity to come the second half of the year? Is that what you’re saying?
Phil Davies : Yes, John. That’s correct.
John Dillon: Okay, great. And do you have any kind of guesstimate on the timing of that? I mean is that again this year? Or is that also maybe next year?
Phil Davies : I think John, Patrizio put it well, earlier. It’s — we’re working through all this stuff. It’s complex, complicated, but we’re making good progress. And we’ll be able to talk about that a little bit more in future calls.
John Dillon: Okay. My follow up question is, Patrizio, I’ve been invested with you for about 25 years. And you only reflect back end, we’ve had a lot of successes, we’ve had some setbacks. But I can’t remember Vicor being positioned for consistent long term growth better than you are today. But then again, I’ve been surprised before when I plugged that before. Am I correct in my views that you are better positioned now than you have been? And if so, what makes it different from the past where we’ve had the successes and also setbacks?
Patrizio Vinciarelli : Well, that’s a very good question. I can tell you personally, I feel that way. I think in terms of articulating, why I feel that way. I think as suggested in the press release, it has to do with a combination of factors. First of all, we are very close to the first global foundry for chips. There is nothing that comes close or can come close. It is enabling in that it provides scalability in terms of volume, costs, very low cost pressure from very low power levels, it to applications ranging up to literally hundreds of kilowatts, in automotive applications. So whether it’s a fast charger for an electric vehicle in the hundreds of kilowatts or a current multiplier, in the 1000 amp or several 1,000 amp range on a multiplicity of rails for a future GPU or CPU.
The chip foundry is convert for housing package foundry gives us power unique capability to provide not just the highest power density or current density solution, as the case may be, the way he sees them so AI data centers type application, but enables us to do that with the lowest cost. So we’re not going to seeing any of the essential ingredients necessary to take full advantage of the general adoption of the 48-volt infrastructure that Vicor itself has pioneered. So that’s the simple story of where we are. I understand that that historically, it hasn’t been easy to bring all this about is taken a great deal of focus in terms of the complex facets of the puzzle as a whole, ranging from power conversion engines, control systems, unique components, packaging technology, that is underlying the converter house in package, scalable methodology, there’s a way for like, as you know, wafer foundry.
And the foundry itself, that we’ve invested upwards of $100 million to bring about to give us the capacity for about $1 billion in revenues. So that’s the simple reason. We think we’re well positioned for the market demands for high power density, high current density in a variety of growth and market.
Phil Davies : So, John, if I could just add one quick thing to that a second everything Patrizio just said. I think that from my tenure here the 12-13 years, we’ve never had a quality set of customers that we’re engaged with, like we have now. So that’s really critical right to who are you working with? And what is the future hold for those customers in their markets? Are they leaders and it can’t just be in high performance compute with a couple of big companies, hyperscalars or GPU guys. It’s got to be right across the four business units that we’re now developing long range revenue plans for and are engaged with great customers right across the globe. So just add that to Patrizio’s comments.
John Dillon: Yeah, I get it. And it seems to me like you’ve always had the performance card. But now the customers actually need your performance, they have to have it, it’s not a one to have. And then on top of it sounds like you’ve got the cost card to go along with it, which is a nice combination where they need your product, and you also are very cost competitive and from the sounds of Gen 5 can be even lower cost competitive down to the commodity server level, which is really exciting, because that really opens up a huge market view.
Phil Davies : Yeah, and the vertically integrated factory that Patrizio mentioned, that’s really critical for us, right?
