Vicor Corporation (NASDAQ:VICR) announced on September 16 that it has licensed its Vertical Power Delivery patents to a new manufacturer of AI systems. The customer may buy patented modules from other suppliers and pay Vicor royalties, discounted if it sources the most demanding parts from Vicor. The shares rose about 18% the next day and have held the gain.
Vertical Power Delivery solves what Vicor calls the “last inch” problem. AI processors draw huge current at low voltage, and Vicor holds patents on feeding it vertically rather than across the board.
Import Bans Give AI System Makers a Reason to Pay Vicor:
It is Vicor’s second license in four months, and the first helped it raise second-quarter guidance from $126 million to $142 million. The quarter came in with revenue up 27% and backlog at a record $380 million, up 145% from a year earlier. The roughly $300 million Vicor expects from settlements through 2026 is one-time money for past infringement. A license is a running royalty on future shipments.
The leverage comes from the courts. In early 2025, the US International Trade Commission barred imports of infringing power modules and systems from Delta Electronics, Quanta Computer, and two Foxconn units, though not from the wider industry. Vicor’s release said supplier indemnification “cannot overcome importation bans,” so any AI system builder using those suppliers and selling into the US has a strong reason to sign.
The discounts exist because Vicor wants to sell the most demanding modules itself, and it bought sites for two more fabs in New Hampshire this month to do so.
A Small Company Betting on Patents Against Much Larger Suppliers:
The first problem is what investors do not know. Vicor has not named the licensee, disclosed the terms, or said whether royalties are charged per server, per module, or as a flat fee, and that one term decides whether AI unit growth flows to Vicor or trickles in.
The second is that the license lets the customer buy from Vicor’s competitors. A royalty on a commodity module is worth far less than selling it, so if licensees send most volume to cheaper suppliers, Vicor collects a fee on a business it hoped to own.
The third is legal risk. Litigation over the ITC order continues in the Federal Circuit, and a ruling that narrows it, or a design that delivers power vertically without touching Vicor’s claims, would remove the reason to sign.
Conclusion:
Vicor’s latest license strengthens the case that its patents can earn recurring royalties from the AI build-out while it keeps the higher-value orders for itself. However, the undisclosed terms, the risk that licensees favor cheaper suppliers, and patents that rivals will keep testing remain key concerns. Third-quarter results in October are the test. Licensing revenue rising with product margins intact means the discounts are working. Margins falling means the volume is going elsewhere.
Market Sentiment:
Vicor Corporation was held by 55 hedge funds with a combined stake value of about $907 million at the end of Q2 2026 in the Insider Monkey database. This is up from 42 hedge fund holders with a cumulative investment value of around $333 million in the previous quarter.
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This article is originally published at Insider Monkey.
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