Ladies and gentlemen, thank you for standing by, and welcome to the SkyWater Technology First Quarter Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during this time, you will need to press star then one on your telephone. If you would like to withdraw your question, you may press the pound key. If you require any further assistance, please press star zero. I would now like to hand the conference over to your first speaker today, Heather Davis. Please go ahead. Good morning, everyone, welcome to SkyWater's conference call for the first quarter of fiscal 2021. With me on the call today from SkyWater are Thomas Sonderman, President and Chief Executive Officer, and Steve Manko, Chief Financial Officer. I'd like to remind you that our call is being webcast live on SkyWater's Investor Relations website at ir.skywatertechnology.com. The webcast will be available for replay shortly after the call concludes and will remain available for one year. During this call, any statements made about our future financial results and business expectations are forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially. For a discussion of these risks and uncertainties, please refer to our filings with the Securities and Exchange Commission, including our earnings release filed on Form 8-K yesterday and our prospectus filed on April 22nd, 2021. All of our forward-looking statements are made as of today, and we assume no obligation to update any such statements. During this call, we will discuss non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in our earnings release, which is available on our investor relations website. I must note that all comparables referenced today are versus the prior year or the first quarter of fiscal 2020. With that, let me turn the call over to Tom. Thank you, Heather. Good morning to everyone joining our first earnings call at SkyWater Technology. We appreciate your interest. It's been an incredible journey from the formation of our company in March of 2017 to the successful completion of our IPO last month. Today, I'll briefly cover last quarter's financial highlights and reinforce why we're optimistic about the growth opportunities ahead. Steve Manko will then go into further detail on our financials. In the first quarter, net sales grew 30% to $48.1 million, driven by an acceleration in our Advanced Technology Services, our ATS business. ATS sales were $38.1 million, an increase of 61% over Q1 of 2020. We believe this record revenue is a testament that our strategy is working. Gross margin improved 170 basis points to 19.1%. Our net loss attributable to shareholders was $2.8 million, and adjusted EBITDA was $5.6 million. Our vision at SkyWater is to improve the world by revolutionizing technology realization because we're impatient waiting for the promise of tomorrow, so we're focused on making it happen faster today. Our industry-transforming Technology as a Service, our TaaS business model, allows us to co-create next-generation technologies with our customers, accelerating their time to market with the confidence of automotive quality manufacturing and extensive IP protection. Since our inception, SkyWater has been committed to accelerating the development of next-wave technologies in partnership with our customers. I am proud to announce one of those today, Rockley Photonics. After a multi-year technology and product development collaboration, we are now aggressively moving their silicon photonics platform to volume production. This is an exciting milestone for both companies, and we are proud to have reached it together. During the quarter, we also continued to fill our ATS pipeline with new customer wins across several technology platforms and verticals. Our active customer engagements leverage both our emerging technology and feature-rich platforms. Our strong customer acquisition capability is supported by a world-class sales and business development team. We expect to continue to add the best talent in the industry as we grow our core customer base while expanding programs with our existing customers. In collaboration with our strategic partners, we have built a strong foundation of differentiated technology platforms that we believe are well-positioned to drive significant revenue growth for our company over the next several years as they transition through our technology as a service offering. I would like to discuss four of these in more detail. The first is extreme environment microelectronics. The United States Department of Defense awarded SkyWater $170 million as part of a public-private partnership in October of 2019. Since completing the expansion of our Minnesota fab last October, we've made good progress towards qualifying our 90 nanometer fully depleted silicon on insulator technology in partnership with MIT Lincoln Laboratory. The first copper wafers from our dual damascene interconnect process were also successfully fabricated during the quarter. The rapid enablement of this radiation-hardened platform for space-based electronics is being achieved through direct engagement with multiple USG primes and design houses through our early access program. The second area of growth is advanced packaging. We continue to execute the startup of our new advanced packaging fab in Osceola County, Florida. This includes hiring 20 new SkyWater employees who are actively working on both clean room and process tool qualifications. The existing Department of Defense programs at the fab have been reactivated. We also have several exciting new customer engagements that continue to make good progress towards design wins. These include both existing customers who are consolidating their value chains at SkyWater, as well as brand new engagements. We expect SkyWater's domestically sourced and highly differentiated advanced packaging capabilities to bring significant value to both current and future customers. The third area is biohealth. Leveraging our expertise in MEMS technology, we continue to accelerate the technology realization of several new point-of-care diagnostic solutions. Many of these applications are one-time use, providing the potential for robust volumes as these new microfluidic-based technologies move into the market over the next couple of years. SkyWater is also proud to continue to support the work of COVID-19 epidemiologists with our DNA sequencing technology. Finally, a few comments on our high-performance power management connectivity platforms. Building on a long legacy of producing feature-rich mixed-signal devices, our Minnesota fab remains focused on ramping our S130 platform for existing automotive and IoT customers. This includes executing our capacity expansion plans. We also continue to attract new customers with our highly differentiated S130 platform, including, for example, a telecommunications company that is working with us to rapidly bring one of their new products to market. In addition, two of our power management customers have moved into product qualification, keeping pace with our planned ramp for these differentiated discrete power MOSFETs in the second half of this year. Our nation's focus on the importance of domestically sourced semiconductors is very encouraging. SkyWater is a strong believer in the importance of public-private partnerships, as is evident by our DoD-funded carbon nanotube 3D SoC and RadHard programs in Minnesota and our new advanced packaging partnership with Osceola County in Florida. Currently, only 12% of worldwide semiconductor manufacturing occurs in the U.S. This must change. I was honored to represent SkyWater at President Biden's recent chip summit to reinforce the importance of domestically sourced semiconductors across the entire value chain. We believe semiconductors are the fuel of the 21st century. It is critical for our nation to commit to increasing the research, development, and manufacturing of semiconductors, from wafer fabrication to advanced packaging to final assembly and test. We believe SkyWater remains uniquely positioned to take advantage of this renaissance in domestic semiconductor R&D and manufacturing, which is directly coinciding with the increased adoption of many of the exciting megatrends affecting our industry. At a time when the appetite for co-creating possible has never been greater, we're excited to be able to accelerate the adoption of our customer-driven Technology-as-a-Service business model across the entire semiconductor value chain. I will now turn the call over to Steve for further information on our financial performance in the quarter. Thank you, Tom. I am excited to share the financial results on our first earnings call as a public company. SkyWater has built a team to execute on the growth opportunities for disruptive technologies that customers need. Net sales for the first quarter were $48.1 million, an increase of 30% versus the first quarter of 2020. ATS sales grew 61% to $38.1 million, and wafer services revenue decreased 25% to $10 million. ATS growth was driven by $15 million in tool-related revenue we recognized from customer-funded tool purchases. As part of our TaaS model, we offer our ATS customers services to procure, facilitate, and qualify the tools needed for their technology development and capacity requirements. We recognize these services related to customer-funded tools as sales. Q1 tool-related revenue is higher than usual. The decline in wafer services sales is primarily attributable to lapping our original foundry supply agreement in Q1 2020. Cost of sales was $38.9 million, an increase of 18%, and gross profit was $9.2 million, increasing 43% from Q1 last year. The resulting gross margin of 19.1% improved 170 basis points. Margin improvement was led by the increase in ATS sales, which is our high-margin business. Cost of sales included $3.5 million in the first quarter related to purchase accounting depreciation for existing building and equipment already fully depreciated under prior ownership. R&D in the first quarter was $1.9 million, an increase of $1.3 million as we added leadership, engineers, and expanded design enablement capabilities to accelerate and support the development of our platforms. SG&A was $8.6 million compared to $5.6 million in the first quarter last year. The increase was driven primarily by strategic and tactical investments to our organization. We're making investments in our business, including additional sales and marketing employees, IT and security upgrades, and further developing our government relations function. As such, we anticipate this level of SG&A throughout the year. Adjusted EBITDA of $5.6 million improved slightly from $5.3 million last year. The improvement in gross profit was mostly offset by the increases in operating expenses as we ramp up our business. Cash used in operations in Q1 was $8.4 million. We spent $5.4 million in CapEx in the quarter, including customer-funded CapEx of $4.4 million. We ended the quarter with $3.8 million of cash and cash equivalents. Total cash numbers are before our Initial Public Offering in April 2021. Net proceeds from our IPO were approximately $100 million. We anticipate using the IPO proceeds for working capital and other general corporate purposes, including financing inorganic growth and offering new technologies and services to our customers. Total debt outstanding was $85.5 million. As of April 4th, 2021, we had $19.7 million available on our revolver. Total inventory at the end of Q1 was $33.4 million, compared to $29.2 million in the first quarter of 2020. We are building a world-class development and manufacturing team to co-create with our customers the next generation of semiconductors and advanced packaging services that are changing the way we do business and live. We anticipate strong year-over-year revenue growth in 2021 and beyond. With a backdrop of expected semiconductor industry growth this year in the teens, we expect our growth to outperform the industry in 2021. Excluding the impact of customer tool revenue, which has a high degree of variance quarter-to-quarter, we expect ATS sales to achieve healthy full-year growth driven by both existing customer programs and new customer acquisition. We anticipate our wafer services sales to grow significantly as our utilization is improving over 2020. We also anticipate wafer services to grow as we expand a key partnership and transition ATS customers into high-volume wafer services. We have an incremental revenue opportunity with our SkyWater Florida advanced packaging operation now being online, which also adds to our capacity and our full-year growth outperforming the industry. We anticipate long-term top-line growth to be driven by technology platforms and markets Tom already detailed, which are extreme environment microelectronics, advanced packaging, biohealth, and high-performance power management and connectivity platforms. In addition to revenue growth, we believe there are opportunities to scale and improve our gross margin over the next several years. Equipment in our Minnesota facility acquired at the time of the creation of SkyWater will become fully depreciated in the first quarter of fiscal 2024, reducing our depreciation expense by $13 million annually. These assets were already fully depreciated under prior ownership. We have implemented actions we believe will improve utilization in our Minnesota fab through expanding our clean room space and kicking off operational excellence and automation initiatives. By successfully transitioning our ATS customers to wafer services, we are planning for improved wafer services margin as our wafer services production mix transitions to a higher margin mix. We are investing in SkyWater Florida to grow our new advanced packaging platform for the long term. However, we anticipate this will be dilutive to gross margins in 2021. We expect our RadHard program to support gross margin expansion in 2022 and beyond. We are investing in the expansion of our fab and qualification of the tools and processes related to this technology. Until RadHard goes into production and generates revenue, we anticipate these investments will also be dilutive to gross margin. In summary, our goal is to create long-term shareholder value through top-line growth. There's a lot to be excited about at SkyWater, and I look forward to updating you on our progress on future earnings calls. With that, I'll turn the call back to Heather and welcome your questions on SkyWater. Thank you, Steve. SkyWater will be presenting at the Needham Technology, Media & Telecom Conference on Thursday, May 20th at 1:30 P.M. Eastern Time. Webcast information for the conference is available on our website at ir.skywatertechnology.com. Operator, please open the line for questions. At this time, ladies and gentlemen, if you would like to ask a question, please go ahead and press star, then the number one on your telephone keypad. Again, that's star one to ask a question. Your first question today comes from the line of Mark Lipacis with Jefferies. Please proceed with your question. Hi. Thanks for taking my questions. When you started running your RH90 process for copper interconnects, that was a little bit earlier than we were expecting. Did you recognize revenues from this in the March quarter? Going forward, do you plan on breaking out advanced packaging revenues separate from ATS and wafer services? Thanks for joining the call, Mark. Good to hear your voice. As far as the RadHard technology development, it is proceeding as planned. We're still doing what we call technology qualification. That's being done on the front end of the process, which is the fully depleted SOI with MIT Lincoln Labs. In parallel, we're starting up our copper interconnect back end. Right now it's all technology qualification, no revenue generation, really, until we get into 2022. As far as the question on the AP, we will not be breaking it out. Think of AP as, again, another capability that we're offering. It will have both ATS-type engagements that ultimately evolve into wafer services in alignment with our Technology as a Service model. Gotcha. I had a couple of follow-ups. In the Florida facility, can you help us understand what level of revenues the facility could support today based on the equipment that you have there? What's the arrangement with the Osceola County regarding capital equipment? I think you also mentioned you took on 20 new employees. Was that just as part of the acquisition of those operations, or is this 20 new employees added additional to kind of taking on that operation? Again, good questions, Mark. Let's start with the last question and work backwards. The employees that we hired were essentially new employees for SkyWater. Some of them carried over from the University of Central Florida, which had been the partner with Osceola County before SkyWater took over. We did offer a few of those employees to transfer over to SkyWater. They're all actively engaged with starting up the facility. As far as the revenue projections, I would say it's really too early to start projecting revenues out of the facility. It's currently in qualification. We are restarting the existing DoD programs. There was three programs that had already been awarded to the facility when we took it over. Those have been restarted. We're qualifying the equipment to be able to actively start generating revenues from those programs while working with our existing customers to bring in additional capabilities for advanced packaging. This is essentially an expansion of the supply chain, as well as talking with multiple new customers as well. I'd like to mention is that we do have, and have positioned the facility as it relates to the CHIPS Act. The U.S. government wants a domestic source for advanced packaging, and we believe we're the fastest path to do that in the industry, and we fully expect to take advantage of that as the chip funding becomes a reality. Gotcha. Okay, last question, if I may. Can you give us some color on the announcement around the Google-sponsored open source 130 nanometer multi-project wafer shuttle? What is that program, and what are the implications for you guys? That's all I had. Thank you. Okay. Thanks, Mark. Google has partnered with SkyWater to create a disruptive approach using an open source platform on our 130 nanometer offering to really develop application-specific markets for the IoT and advanced computing markets. The immediate result of this for SkyWater was 40 new customer engagements. The first shuttle has, again, 40 unique customer designs on it. It was oversubscribed. It is running through the fab as we speak. It has a variety of different IC designs, open processor cores using RISC-V, which is another open source platform. It's got multiple system on a chip. It's got a cryptocurrency miner and several other unique capabilities. The other thing I'll mention is it not only is leveraging existing IC circuit designers, but also software developers. It's a disruptive program. We're excited about the potential. I'll say the data's still out in terms of what the benefit will be if this particular open source approach works, but we're really excited about the opportunity it can provide not only to SkyWater, but the industry as a whole. Gotcha. Thank you very much. Your next question comes from the line of Krish Sankar with Cowen and Company. Please proceed with your question. Yeah. Thanks for taking my question, and Tom and Steve, congrats on the first earnings call out of the gate. I had a few questions. First one is, the gross margins came in a little stronger than we expected. Can you give some color on what the gross margin split between ATS and wafer services were in the quarter? Yeah, good morning, and thanks for joining us. Yeah, we don't break out the margin between wafer services and ATS, but you know it's our plan to grow and expand our gross margins in 2021 and beyond. Our ATS business, as we communicate, is our higher margin business. We can expect to expand gross margin as we're successful in growing our top-line revenue from an ATS perspective. Got it, Steve. Just two other follow-ups. One is, can you just say what is the utilization rate at your Minnesota factory today, or what is the capacity in terms of wafer starts for today? Thanks, Krish. I'm glad you actually brought this up. It's important to recognize that SkyWater is not a typical foundry. What we focus on is margin per activity, which we optimize based on the mix. Again, this is ATS mix as well as our wafer services mix. Our goal is to optimize that to obviously maximize the margin per activity. This is done by focusing on what we need to do to meet customer development milestones as well as production delivery commitments. What I'll say is that we are running above our target utilization. As Steve said in his opening remarks, we were underutilized last year because we specifically focused on accelerating ATS. In general, our real focus is on margin per activity, and we're very confident and excited about the direction that that's moving in. Got it, Tom. That's kind of helpful. One last question from me. You kind of mentioned about how you're going to grow your gross margins from here onwards. I understand increasing ATS, increasing customers is a big driver for that. I'm just kind of curious, can you just give us the list of big levers that you have to improve the gross margin from, let's say, 19% today to 40% down the road? Yeah, sure. Happy to do so. I really want to make sure you understand what our plans are. They're really simple levers that we're focusing on to do that. As I already mentioned, we expect to grow gross margins as we drive higher ATS revenues. Another lever that we can pull is obviously covering our fixed costs within our manufacturing facility. Having a high number of activities, as Tom alluded to, coming through the manufacturing facility and keeping that running efficiently will be another lever. As Tom mentioned, we're excited about moving some of our customers from ATS into high-volume wafer services. As we continue to be successful in doing that, we believe we can expand margin there as we have a healthier, richer margin mix from our high-volume wafer services production. Got it. Just one last housekeeping. Steve, what do you feel is the tool revenue in the quarter? The tool revenue in the quarter was $15 million. That's clearly higher than the typical run rate for tool revenue on a quarterly basis. Okay. Thanks, Tom. Thanks, Steve. Thanks. Your next question comes from the line of Harsh Kumar with Piper Sandler. Please proceed with your question. Hey, Steve and Tom. Congratulations on two things. First, your first call as a public company, secondly, solid results. We as investors really appreciate the second one for sure. I had a couple of questions. One, several times in the call, Tom, you noted you have a lot of confidence and growth for ATS business. Maybe you could talk about qualitatively where that confidence is coming from. Any numbers you can help us with backlog or activity, anything like that, and how you see the growth in the ATS business progressing for the rest of the year. Good question. ATS obviously is very exciting for us because it allows us to innovate with our customers. I think there's a growing appetite for innovation as it relates to many of the emerging platforms. This is what I refer to as tying to some of the mega trends that are going on, whether it's MEMS devices, which of course we're gaining a lot of traction. We have some very unique capabilities in that space. Obviously, we're excited about the traction we're getting in with our RadHard early adopter program. The ability to get some of our S130 capabilities beyond our partnership with Infineon is also progressing well. Some of those actually do start out as ATS because we do offer a degree of customization prior to going to production. The other, I would just say, as far as your question about book-to-bill, we have a very healthy backlog. We're confident that a lot of the customers that we're working with are going to expand their engagements with us, so that's really important. We don't have to just get new customers to grow the business. We can expand our relationships with existing customers. That said, I think as we continue to get more traction, our business model of Technology as a Service is really resonating in the industry. I would say very selective about the customers that we bring on. When we do, we're committed to bringing them not just through our ATS capability, but ultimately ramping them to volume production. We feel really good about how all that's come together. Hey, thanks, Tom. Another one for you on that topic. I think Steve mentioned that one of the drivers for gross margin is conversion of ATS to wafer services. Could you help us with maybe what you saw in the quarter, this quarter, how many of your ATS customers expanded engagement to wafer services? Any kind of metric you can give us around that? Yep. Again, great question, and it's really what has us so excited about this year. It's really the first year where we have multiple customers moving out of ATS into wafer services. Three of those customers transitioned last quarter. Then as I mentioned in my opening remarks, Rockley Photonics is another long-term partner of ours. They are also moving into wafer services, I mean, this quarter, sorry. We have multiple other customers, 10 in total for the year, that will be transitioning as the year unfolds. Okay, great. The last one. You came off as a sort of a spin from Cypress Semiconductor, and then Cypress Semiconductor got taken out by Infineon Technologies, so you had a sort of an abnormal customer concentration there. You've done a great job of bringing that number down each year, each quarter. Curious if you could just give us some update on where your top, how many 10%-plus customers you've had this quarter, and maybe the scale of your largest customer. Yeah, sure. I'll take that question. You'll see this broken out when we file our Form 10-Q. From a customer concentration standpoint, for looking at our Q1 2021 revenue, we had three customers that were above 10% of our overall revenues. One customer was significantly higher given the concentration of the tool revenue that we talked about earlier in the call. That's not indicative of the concentration going forward. We had three customers that were 10% or more of our Q1 2021 revenues. Hey, appreciate it. Thank you. Thanks, Harsh. Again, ladies and gentlemen, to ask a question, please press star then one on your telephone keypad. Your next question comes from the line of Mark Lipacis with Jefferies. Please proceed with your question. Hi. Thanks for working me back into the queue. A lot of times what we're hearing is about capacity and supply constraints in the industry. Can you talk about, are you experiencing any raw material or supply constraints or maybe on a second order impact are your customers seeing it anywhere else that's impacting how they're thinking about layering into your wafer services business? Yeah, thanks, Mark. Good question. At this current time, we're not experiencing any challenges in terms of supply constraints, whether it's raw silicon wafers, our chemicals, gases. Really, we believe that we have good supply chain transparency. We're actively watching it, but as of now, we're not seeing any issues that concern us. Got you. You called out the ramping automotive and IoT-related production activities. Can you provide us a sense of how your revenues are breaking down by vertical market? Yeah. Thanks for the question, Mark. Given the sensitivity of what we're doing with our customers, we don't give a lot of breakdown from vertical market on how we're generating our revenues. We can give you the information like we talked about with what we're doing primarily with the wafer services, which would go into automotive and IoT right now, also with some of the announcements we've been making in the past. Clearly, with the funding and partnerships we have with the DoD, we're generating revenue in the aerospace and defense market as well. Got you. Tom, you had mentioned the CHIPS Act. How do you expect to benefit from this? How does this manifest to SkyWater? To what extent do you expect this to be tax credits versus direct funding? Can you give us a sense of how you think this plays out for SkyWater? Yeah, again, another great question. Very timely. There's a lot of dialogue going on. Obviously, President Biden had the CHIPS Summit a few weeks back. There's actually a follow-on meeting tomorrow with Secretary Raimondo from the Department of Commerce, and they're gathering information about where investment needs to occur. What I'll say, and certainly the message I've been amplifying is we can't just focus on advanced-node leading-edge technologies, which is the TSMC, Samsung, Intel. There's a whole lot of other semiconductors that are required across the entire value chain, and I believe that a lot of the innovation that we're driving is going to displace eventually a lot of the Moore's law-related activities, which we all know is going to come to an end just based on physics. We're excited that that message is resonating. It's analogous to when our nation created fracking technology as a way to reestablish independence within the petrochemical industry. I believe a lot of the things we're doing is going to basically result in the same type of transformation. Certainly, I believe that will allow us to reestablish leadership not only in R&D, but in manufacturing as well. That's really got to be the focus. That's why we're impatient waiting for some of these more traditional approaches and are really focused on differentiating through our disruptive technologies. Got you. Then a couple of questions for Steve, I think. There's a non-controlling interest line item of about $760,000 in the income statement. What is that attributed to? How should we think about modeling that going forward? Yeah, sure. Good question. You'll see more information on that in the footnotes of the financial statements in Form 10-Q when those are issued. Part of what that relates to is a variable interest entity that we have related to the sale and leaseback transaction of our primary facility in Bloomington, Minnesota. With that, we triggered the VIE accounting guidance, and that's the amount that you're seeing flow through. That's a good approximation of what you'll see likely for the remainder of 2021. We are not stuck with the VIE accounting forever. There is a point in time when that could go away, but that is not likely to take place in the near term. Got you. From an accounting standpoint, is there a cash flow implication of that non-controlling interest line item? There's not a significant cash flow related to that, no. Okay, got you. The depreciation amortization was $6.5 million in the quarter. How do we think about that for the rest of this year? As we go into 2022, do we expect that to drop down a bit? Sure. Yeah, you'll see increased depreciation and amortization. Primarily, it's going to be depreciation, and that's related to putting our facilities online and the investment we're making in our Minnesota facility for the RadHard technology. You'll see that basically coming through depreciation, and that will be another, as we communicated, a drag on our gross margins that's coming through cost of goods sold. What we're really targeting is a range of approximately $29 million-$31 million in depreciation for the year 2021. Got you. Last question, do you have an estimate for the share count in the June quarter? Yeah, the share count for the June quarter will just go back to what was communicated in the S-1 that was filed of around 39 million shares outstanding. Got you. All right, that's all I had. Thank you. Our next question comes from the line of Rajvindra Gill with Needham & Company. Please proceed with your question. Thank you, and congratulations on the IPO and great results as well. Steve, Thomas, I was wondering if you could talk about your strategy in power management. In the past, you've talked about your focus on developing your own power management capability, MOSFETs and IGBTs. This seems to be a strong area of demand and growth, particularly with the need for U.S. sourcing. I wanted to get your thoughts on that as part of your long-term growth strategy. Yeah, great question. Thanks for joining the call, Raj. The real strategy for us in MOSFET is differentiation. We have been working on several different platforms using our expertise in CMOS, ironically, and translating that into kind of a grounds-up design for our MOSFET technology. We're not going to be bringing a typical MOSFET design meet or leveraging things like fin-based technologies to, again, drive differentiation. Obviously, domestic sourcing is also important. The real long-term objective actually is to move not just into silicon-based solutions but also GaN-based solutions. I think our strategy is really to innovate, create unique solutions with our customers, and then eventually evolve into GaN-based technologies, which we believe there's a strong demand for domestic capabilities in that space. It's definitely a new area of focus for us, and we're excited to be bringing two of those programs to volume production in the second half of this year, as I mentioned in my opening remarks. Yeah. Very good. In terms of adding additional capacity, I think in the past you mentioned adding additional capacity both on 130 nanometer and 90 nanometer. The 90 nanometer kind of RadHard is lower volume but more profitable. I wanted to get a sense in terms of how you're balancing the mix of capacity that you intend to add as it relates to margin per activity as well as just overall process flows. Again, you have to kind of think of our fab as being three fabs in one. We have 90 and below technologies. Today, that's very focused on RadHard, also readout ICs and our carbon nanotube program. The 130 offering is our mixed signal platform. We're always looking at how we get more out of the existing install base that we have, so we're very focused on using automation and other operational excellence activities to drive more without having to actually add equipment. That said, we do have an existing test floor that Cypress used to run in the facility, and we plan on converting that to more traditional clean room capabilities, and that'll drive further expansion and capacity. That'll again be targeted not just around 130 and 90, but specifically our copper interconnect platform that we'll be expanding beyond just what we have for RadHard. Very good. Maybe a point of clarification, Steve, and correct me if I'm wrong on this, but the wafer services margins are lower than your ATS revenue. You had mentioned that you expect wafer services sales to grow significantly as kind of utilization is improving. I'm kind of transitioning some customers over. How does that fit in terms of the overall strategy to expand gross margins if the wafer services is lower margin? Right. The way that would fit in the lever would be is we would expect to get gross margin expansion as we bring newer technologies into production that will sell for an average higher sale price and also drive enhanced margin in wafer services. It's expanding the inherent gross margins in wafer services. Right, as we bring new technologies into production. Got it. Okay, great. Just last question, just broadly. This innovative business model that you're kind of providing in conjunction with the push to have a domestic semiconductor manufacturing operation in the U.S. seems to be kind of good timing. I'm wondering kind of what the feedback has been from customers on your new business model, controlling basically the whole process for them, wafer fab to advanced packaging, nano assembly, and test. What's been the advantages that these customers are getting? I would expect that as more customers learn about the value proposition, that they would start to kind of move to this more innovative business model. Thank you. Yeah. Again, great question, and thanks for asking. I think it's an important message. The way I like to think of it's a virtual IDM. We engage with our customers during the product creation process. That obviously gives them the opportunity to optimize their product while we're working on the process that gets optimized together, that creates a more robust design. We, because we're doing it all in the same facility, have the ability to accelerate their time to volume, and we get to do all that again, on the same equipment with the same engineering team, the same production team. There's a time to market advantage. They get the assurance of automotive level quality because that is a core business of ours and has been for literally decades, going back to when Cypress owned the facility. The other is trusted IP. We protect IP as it relates to our U.S. government relationship. All of our commercial customers get to enjoy that same benefit. It's all about time to market, the ability to optimize their product along with the process simultaneously, and the ability to have the assurance of domestic sourcing and IP protection along the way. I think there's a real reluctance to do things, especially on innovative new products, where IP protection is in question. That's the beauty of this renaissance in domestic manufacturing going on, especially as it ties a lot of the R&D that's happening here at SkyWater. Yes, thank you very much. Appreciate it. Thanks. Your next question comes from the line of Harsh Kumar with Piper Sandler. Please proceed with your question. Hey, guys. Thank you for the opportunity to ask a follow-up. Tom, there are two powerful forces going on at a macro level. There's the geopolitical problems, and then there's a push by the U.S. to make things here in the U.S., and you're kind of at the center playing for both of those. I'm curious at this point, if you have seen customer activity or customer conversations or kind of any color around that, pointing to that and wanting to work with you at a higher level. Yeah. Again, great question, and again, very timely. There's definitely an appetite for sourcing out of the United States, and a lot of this has to do, again, with the repositioning of supply chains out of China. That started back when the tariff wars were going on, and then when COVID hit. I think we're certainly in a unique position to take advantage of that. Our relationship with Infineon is a great example, where they're getting as concentrated around some technologies we've made for many years with sourcing out of the U.S. as well as some of our other customers who are expanding their value chain with us. We have customers that are doing AP overseas that now want to do that here at our Florida facility. We believe the momentum is already underway. I think this is going to be decades in the making, this recalibration of supply chains, and SkyWater is certainly right at the center of that, and that's what really gets us excited about the future. Thanks, guys. Your next question comes from the line of Krish Sankar with Cowen and Company. Please proceed with your question. Yeah, thanks for taking my follow-up. I just had two quick ones for you, Tom. One is, you mentioned about the 90 nanometer copper dual damascene that kind of started taping out in Q1. Do you think that at some point your IoT auto customers start migrating to copper 90, or do you think they're going to stay at 130 for a while? I have a follow-up. Yeah. We certainly expect at some point to be evolving our 130 and 90 nanometer platforms to include copper interconnects. Obviously, it's all aluminum today, but it's not unexpected that we would evolve to those capabilities. Copper offers a lot of advantages over aluminum, so we expect to have both offerings for both platforms as time evolves. Of course, our focus right now is standing it up for our RadHard platform, but once that capability's in play, as I alluded to, we expect to be adding capacity for our copper interconnects to complement our aluminum back-end. Got it. Then my final question, Tom, is the Florida facility for advanced packaging, are you doing any traditional wire bonding or bumping there, or is it all truly 100% advanced packaging? Yeah. I would say today it's all traditional advanced packaging, so you're talking interposers, et cetera. That said, we do have partners here in the U.S. that we are leveraging to provide more traditional capabilities. That's part of our vision is to provide a comprehensive supply chain, not just wafer fabrication, but AP final assembly and test here within the United States. Whether it's done directly with SkyWater or through our partnerships, that's certainly our strategy. We believe there's a very strong appetite for that from the customer base. Terrific. Thanks, Tom. Thanks, team. Thank you. There are no further questions in queue at this time. I turn the call back to the presenters for closing remarks. I just want to thank everyone for joining us on our inaugural call today. We're very excited about the future at SkyWater. Obviously, we're at a unique time in our country's recognition of the importance of semiconductor manufacturing, and we believe that SkyWater has proven public-private partnerships work, and we expect to continue to exploit our Technology as a Service model while enjoying, again, this recognition of the importance of domestic sourcing. We expect to continue to be a leader in the transformation in the industry. Thank you again for joining us.