Good day, and thank you for standing by. Welcome to the Transphorm Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jack Perkins, our call moderator. Please go ahead. Thank you, operator. Good afternoon, and welcome to Transphorm's second quarter fiscal 2023 earnings conference call. Joining us today from Transphorm are Mario Rivas, Chief Executive Officer, Primit Parikh, Co-founder, President, and Chief Operating Officer, and Cameron McAulay, Chief Financial Officer. Before we begin, I'd like to point out that there's a slide presentation associated with today's prepared remarks, which management will be referencing during the conference call. These slides can be accessed through the live webcast linked in the investors section of the Transphorm website, where they will also be posted and available as a link to a PDF subsequent to today's conference call. Additionally, during the course of this call, the company may make forward-looking statements regarding the company's financial position, strategy and plans, future operations, specific end markets, and other areas of discussion. It is not possible for the company or management to predict all risks, nor can the company assess the potential impact of all factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. In light of these risks, uncertainties, and assumptions, the forward-looking statements discussed during the call may or may not occur, and actual results could differ materially and adversely from those anticipated or implied. Any projections as to the company's future performance represent management's estimates as of today, November 9th, 2022. Neither the company nor any person assumes responsibility for the accuracy or completeness of the forward-looking statements. The company also undertakes no obligation to publicly update forward-looking statements for any reason after the date of this call to conform such statements to actual results or to the changes in the company's expectations. For more detailed information on risks associated with the company's business, we refer you to the risk factors described in Transphorm's most recent quarterly report on Form 10-Q and other subsequent filings with the SEC. With that said, it is now my pleasure to turn the call over to Transphorm CEO, Mario Rivas. Please go ahead, Mario. Thanks, Jack, and welcome to everyone on today's call. Thank you for joining us. This quarter, revenue was $3.7 million, up 11% on a year-over-year basis when excluding one-time licensing revenue in the prior year. Product revenue was up 38% compared to the same period a year ago. We improved supply from Japan Epi reactors and completed the acquisition of additional MOCVD reactors. Increased shipments from previously announced Fortune 100 laptop adapter win, a top three worldwide laptop manufacturer, and secured a new Fortune 100 laptop adapter design win. We strengthened senior operations, sales, and marketing teams with seasoned industry leaders, secured ARPA-E program to innovate on Transphorm unique bi-directional GaN technology that replaces two to four silicon devices with a single FQS GaN in applications like microinverters and motor drives. Secure the approval for a wholly foreign-owned enterprise in Shenzhen, China, to enhance the local customer support, sales, field applications, and marketing. We expanded package offerings by adding industry-standard PQFN products, which enable pin to pin with multiple sources. This complements our existing high-performance PQFN products, both validated to deliver superior results versus competing GaN products. With that, it is now my pleasure to turn the call over to Primit Parikh for a more detailed overview of the quarter. Thank you, Mario, and good afternoon, everyone. We are pleased to report Transphorm's second quarter revenue of $3.7 million. That is slightly higher than the current consensus estimates. While this revenue was lower sequentially over fiscal Q1 due to the supply constraints we had previously alluded to in August, the product revenue in fiscal Q2 represented a 38% increase over the prior year, FY 2022 Q2. Product revenue continues to be well over 80% of the total revenue, in line with our long-term goals, and high-powered portion of the product revenue was over 65% of the product revenue. All of this amidst what is still quite a challenging environment with multiple macroeconomic headwinds. We have continued our leadership in high-power GaN, continuing shipments of products for multi-kilowatt systems, serving the gaming, energy, server computing, and blockchain, as well as industrial power market segments. In parallel, more and more customers are recognizing the simple strength of our easy-to-use, higher efficiency T-GaN FET versus competing E-mode gallium nitride solutions, which is exemplified by us now shipping to a worldwide top three laptop manufacturer and securing another laptop adapter design win at a Fortune 100 customer. These successes have been a direct result of our targeted investments in these areas, and we plan to continue investing in these areas in the future, both internally and with our external design partners. We are in the midst of addressing some of our supply chain challenges, notably bringing more of our existing reactor capability in Japan online, and we are now seeing a nice progress there, especially with the COVID-related travel restrictions now no longer a hindrance. The increased wafer output will allow us to address growth in product revenue for fiscal Q3. Moreover, we are also acquiring additional reactors expected to be delivered in calendar Q1 2023 that will facilitate further expansion later in calendar 2023, as previously discussed. Transphorm has continued to lead on the innovation front and are now executing on an ARPA-E program to develop bi-directional gallium nitride switches. This is a very unique attribute of our lateral GaN technology and IP that allows two to four traditional silicon-based devices to be replaced by a single bi-directional GaN in applications like solar micro inverters and motor drives. We have expanded our package offering, which is one of the most comprehensive in the GaN industry, to include industry-standard surface mount PQFN packages that allow pin-to-pin compatibility with multiple GaN sources. This complements our existing high-performance PQFN packages, and both are validated for superior results versus competing GaNs. The key challenge for us in front of us over the next two quarters and FY 2023 is both continuing the vector to increase our wafer capacity and increase demand across multiple applications. As reported by many companies, laptop and mobile market softness is continuing, and our goal in this area is to win new accounts for gallium nitride, increasing our market share. Blockchain, traditionally one of our stronger areas, is experiencing weakness presently. However, our customers expect recovery over the next six months or so. Meanwhile, with our proven leadership in high-power GaN, we are addressing growth in the server, renewable, and gaming segments while building design and momentum in the electric vehicle, two-wheeler, three-wheeler area. While it is too early to comment on FY Q4 2023 in the current environment, we believe these efforts will help keep us on track and address our targeted revenue growth in the third quarter. To continue our momentum, we have now expanded our Asia presence, added new partners, and bolstered our senior team. We are pleased to report the establishment of our Shenzhen entity focusing on sales, field applications, and local marketing activities. We also continue to add partners and deepen relationships with controller and IC companies, as well as independent design houses or IDHs. This key part of our ecosystem is enabled by easy-to-use gallium nitride FET that can be driven by standard, discrete, or integrated drivers seamlessly. We are very pleased to have recently announced six new leadership appointments comprising both internal champions and new industry veterans hired from well-known power semiconductor leaders like onsemi, STMicroelectronics, and Alpha and Omega Semiconductor. To the best of our knowledge, Transphorm is still the only GaN company to be shipping anything in high volume in multiple programs in the kilowatt range today, making us a true one-stop shop for GaN from low power to high power kilowatt class. With our high power strength and strong IP, including application-based IP for high power, we remain poised to expand into new segments. For example, we aim to convert the EV two-wheeler, three-wheeler opportunity into a multi-million dollar revenue base for us in FY 2024, while systematically penetrating the four-wheeler segment after that with onboard chargers, DC-DC auxiliary converters, and ultimately drivetrain inverters. I will talk about our progress in these areas later. Overall, with the proven performance and design benefits of Transphorm over competing solutions and leadership in high power, backed by a strong application-based patent portfolio, we remain well-positioned to address the $3 billion GaN TAM in diverse areas like servers and communications, blockchain computing, gaming, energy, and electric vehicles, two-wheelers, three-wheelers, four-wheelers, while also allowing for growing our share in the lower power fast charger and adapter segments. With that outline, I will next review some of the salient points of Transphorm's value proposition as a recap, then review the results of our planned execution in September 2022 ending quarter, and our key challenges over the next two quarters, as well as our expansion strategy for beyond FY 2023. Moving on to slide three now. Gallium nitride is a wide bandgap semiconductor material for power conversion that reduces electrical energy waste, enables compact and cost-effective power systems across a variety of electrical power conversion applications. Low power laptop or mobile chargers, fast chargers, high power computing power, or automotive inverters. By virtue of its inherent properties, does this much better than traditional silicon and also better than newer semiconductors like silicon carbide. Transphorm, a pioneer and leading manufacturer, is a supplier of these high voltage GaN power semiconductor products over the widest range of applications, from 30W low power to over 4kW high power. The success in these applications for Transphorm has been a result of our continued core strengths, investments, and strategy. Our fundamental IP platform with over 1,000 patents worldwide, as well as our high-performance, high-quality products that now have more than 80 billion hours in the field, have been validated by blue-chip partners, customers, investors, including financial partners, IC design partners, manufacturing partners, automotive industrial market leaders, and the U.S. Department of Defense. Our core and differentiated product offering is enabled by a high-quality wafer manufacturing base that we essentially own. Above all, GaN is addressing a large, growing multi-billion-dollar market, including electric vehicles and 5G smart charging, among other things that our passionate team members are helping us to penetrate. Moving to slide four now. Transphorm is in a unique and differentiated position among the GaN suppliers with our one core platform strategy that spans a wide range of power spectrum, with products in the market today that address a tremendous multi-billion-dollar market opportunity for GaN power conversion. Again, from low power adapters and chargers to high power server, blockchain, datacom power to industrial energy and PV inverters, renewables, that we are already ramped in all of these areas. In the mid to long term, large growth opportunities with automotive electric vehicles, both EV two and three -wheelers first in calendar year 2023, followed by EV four-wheelers, further continuing GaN and Transphorm's growth beyond 2024, 2025. Transphorm GaN solutions in pre-production today deliver high efficiency, compact systems with easy-to-use and easy-to-interface products for the customer with proven performance benefits, which are a combination of efficiency, smaller size, lower weight, faster charging against silicon carbide and other GaN solutions like E-mode. In slide five, we talk about one of our key attributes, and that is the ownership of our GaN wafer production supply chain, an advantage that is becoming even more important in today's changing geopolitical climate. This vertically integrated strength starts from the design of our safe, robust, easy-to-interface, normally off gallium nitride FET. We directly own and control our gallium nitride epi wafer manufacturing with multiple MOCVD reactors. These are tools used for making or growing GaN material on said silicon wafers in two geographical locations, California and Japan today. Our wafer fab factory is a joint venture with our financial strategic partner, and as a recap, is a high-quality manufacturing site with the only publicly reported data that show yields for GaN can match those of silicon CMOS running in the same factory, a feature that has contributed to our high-power GaN products yield and quality. While packaging is done with our high-quality OSAT partners, we bring TPH Transphorm IP in these designs. For example, allowing the GaN to be efficiently used in robust TO packages desired by high-power customers. Last but not the least is our application and design effort, both with customers and our solution partners who prefer now to rework with our GaN because of seamless integration with their controller and driver products. Now on slide six, as one looks at the competitive landscape, the Transphorm T-GaN FET performs as a leader in various verticals from low power to high power, delivering the broadest range of power. As silicon is falling short of meeting rising demands in form factor or size, speed and efficiency, gallium nitride is penetrating the power market. Many good companies are in the market with gallium nitride, notably at lower power adapters and chargers, while Transphorm addresses both high power and low power together. A few key inherent factors that outline Transphorm's differentiated benefits versus competing GaN. First of all, superior efficiency, superior performance due to lower losses from the gallium nitride FET, and especially at operating temperature due to the design of our GaN FETs. Secondly, due to our integrated silicon FET gallium nitride high voltage device combo, a robust architecture and easy-to-use platform is enabled, capable of both thermally robust high power packages and use of standard drivers and controllers, and often integrated drivers that are already existing literally for free in existing controllers. What we are also seeing now is some of the so-called ICs that are attempting to go to high power. The IC component is actually removed and a discrete FET is used, basically a regular GaN. Another important attribute is that our integrated architecture's robust silicon-like interface and strong high voltage gallium nitride device combo has resulted in proven operational reliability in both low power and high power applications versus most of the field data in competing GaN, so far at least, coming from only lower power. For our gallium nitride, we also aim to deliver on higher voltages. For example, certain 900-V products are already in the market today, and 1,200V is in R&D. That will certainly challenge silicon carbide at the higher voltage, higher power node, where silicon carbide is gaining traction today. This is especially because GaN is proven to be a much lower loss, as much as 25%-35%, as we have previously discussed, versus silicon carbide, and does not have the high cost substrate and the complex supply chain associated with it. Next in slide seven, we talk about these advantages that are increasingly being validated with proven wins with customer systems in production as T-GaN FET is adopted in many more market verticals today with higher range, higher reliability and higher performance. As you can see, applications like server power, gaming, blockchain, and a variety of industrial and renewable, and also high-rel applications, are delivering more than 10 times the power level that some of the other GaN offerings enable today in customer systems. Again, why do we win? This is due to the inherent GaN platform, with features like use of a single device instead of two in higher power applications. More than 30% effectively lower resistance or loss benefit for similarly specified competing GaN devices like certain E-mode GaN and scalability to high power. Finally, higher the power, higher the energy, and higher the impact on carbon footprint, where gallium nitride can deliver a very meaningful gain. A 1% efficiency advantage in system is very significant because it can save several hundred kWh for, say, a 3-kW system, and well over 100 lbs of carbon footprint just from a single device, depending on your source of energy. As we show in slide eight, with these benefits, a variety of customers have selected T-GaN in adapters and chargers. Out of the 70-odd design-ins that we have ongoing that span 30 W to 250 W in this lower power range, we are now shipping to one of the top three worldwide laptop manufacturers. Some examples of new wins this quarter are at the 65-W and 100-W nodes, and we show them here. Moving on to high power on slide nine. As we emphasize, the high-power space is a very large market for GaN, and very importantly again, higher energy impact, higher savings for our customers, and for Transphorm, higher semiconductor content. Our Gen IV and Gen V offerings are now gaining momentum, and we are working with about 45 design-ins, many in production, some examples of which are shown below. In diverse applications like gaming, data center server power, where Transphorm, by the way, was first to show Titanium-rated GaN efficiency with its patented totem-pole architecture now being used by many, UPS, where our gallium nitride enabled a 50% form factor reduction from two U to one U, and other industrial, medical, and blockchain power applications. As customers endorse and also featured in certain third-party teardowns, all of this is enabled on the foundations of efficiency, performance, ease of use and reliability. While there is a very significant high power and low power growth that I talked about, now in slide ten here, we show that EV applications continue to present a massive long-term opportunity as the performance of GaN enables continued performance of EVs, addressing fundamental issues of power loss, heat generation and anxiety of range with the high power density delivered by GaN, Transphorm GaN, enabling things like faster charging, reduced size and lower losses that ultimately results in higher range. Transphorm has AEC or automotive qualified products today with our Gen Four high-power solution already ramped in the market in various commercial and industrial applications with proven field reliability. Our 1,200-volt gallium nitride platform today in R&D has delivered early results, already showing efficiency similar or even higher to silicon carbide in the multi-kilowatt range and built on a simple architecture, not requiring any fancy designs like vertical GaN structures, for example. Like we first talked in August, we are working to accelerate the EV adoption with two-wheeler and three-wheeler electric vehicle charging segment that fall into the sweet spot of our today's high-power solution. The specific GaN opportunities in the EV today remain in the areas that we are focused on, onboard chargers, DC-DC auxiliary power converters, and off-grid DC to AC inverters, with the main drivetrain inverter opportunity opening up after 2025, 2026. That can actually triple the accessible GaN content to $200 per vehicle conservatively. We aim to be in the full market with 650-volt devices today and higher voltage, 1,200V in future, including addressing future 800-volt battery vehicles, to enable Transphorm to address all key EV slots. Our 1,200-volt gallium nitride demo results, like I showed before, has better performance than silicon carbide, and this has started to generate attention now from EV customers. For the two- and three-wheeler, we are directly addressing a variety of charging opportunities, including the onboard charger. This is also a very attractive market, more near-term, with a TAM that approaches $1 billion to unlock opportunities for Transphorm to address by end of calendar year 2023. Looking at the holistic picture in slide 12, we wanted to point out one of the key ESG impact of gallium nitride and Transphorm's offering, a tremendous amount of energy that can be saved over the next several decades. This is not just one Transphorm, but the ecosystem together in gallium nitride-based power. Our bottom-up internal analysis shows that multi-hundred terawatt-hours of savings potential is achievable with gallium nitride power in computing and communication, industrial and renewable e-mobility segments. Next, in slide 13 now, we move to where we are today, our September quarter performance and execution on key vectors that drive our growth. With our continued leadership in high power at 65% of product revenue this quarter and continued penetration in low power, we have modestly exceeded consensus estimates, delivering $3.7 million of revenues, including $3.2 million of product revenues, while also dealing with some of the supply chain and capacity challenges that we faced. We added both new design wins, 10+ in the low power adapter segment, bringing our total design-ins to over 70, driven by our GaN FET's ease of use, high performance, and facilitating a lower total BOM bill of materials for the customer. Out of these, around 25 are now in production, with three new transitioning to production this quarter. We also won a design at a tier one laptop manufacturer, and we are also now shipping to a worldwide top three laptop manufacturer. In the high power segment, we added 10+ design-ins this quarter, bringing the total to over 45+, with 20+ in production, including five moving to production this quarter. Here, our evaluation and reference kits for high power, the availability of thermally robust packages, which are not easily available or available at all with other gallium nitride, has helped us to continue our traction. We plan to continue to leverage this and expand into more segments, notably accelerating EV adoption by addressing the EV two-wheeler market with revenue potential in CY 2023. We are making progress with reference evaluation solutions in this segment and are in discussions early design-in with several target customers now. We started sampling our pin-to-pin compatible PQFN packages that enable customers to use higher performing T-GaN products while allowing them the comfort of multiple GaN sources, as is required in some of these designs. These complement our performance PQFN packages that have already been in production with our SuperGaN platform, and both packages delivering higher performance than other gallium nitride. We have made sound progress in getting more of our internal wafer existing capacity online and acquiring new epi wafer capacity. To this end, our Japan epi reactor capacity is significantly improved now, enabled in part by seamless travel between California and Japan and procurement of some of the pending reactor hardware items. We are also evaluating incremental investments in our JV factory for FY 2024 growth and beyond. For packaging, as we previously mentioned, we have sufficient capacity in place for adapter charger PQFN products as well as our high-power products at this time, and emphasis there will be adding SKUs, package SKUs, to broaden our application space and offering more flexibility to our customers. Our near-term business focus remains squarely on supply chain management and capacity expansion, with equal emphasis on demand generation and diversification to remain ahead of the challenging macroeconomic issues in semiconductor and some of our end target application areas as well. As we move to slide 14, strategic partnership and government initiatives are key for our business. We are now adding two more epi reactors that we aim to be fully online with in the second half of CY 2023, bringing the recently acquired new reactor capacity to 4 and per our targeted plan on track for doubling epi wafer capacity, but by end of CY 2023. We are making these investments ahead of time, especially due to the long lead times for securing equipment as well as qualifying its release to production. The GlobalWafers Corporation partnership and epi expansion is well on track and allows us in future to be even more aggressive on the capacity side for our long-term demand scenarios and growth model. On the wafer fab, we continue to align plans with our JV partner and are investing in incremental capacity for next year, FY 2024. With respect to our customer partners, firstly with Yaskawa, where we focus on robotics applications, the focus is now on the next development and funding milestone for end of the year. The Nexperia partnerships remain strong with continued focus on epi and wafer supply. In the electric vehicles area, we are executing on our strategy to accelerate revenues here by addressing the two-wheeler segments in Asia for nearer term penetration in CY 2023, and are developing our own reference design solutions for the same. This segment represents a roughly $1 billion TAM for our automotive qualified high power GaN products in the multi-kilowatt range. The four-wheeler opportunities for the mid to long term focus on onboard charger, auxiliary converters, DC/DC converters, and investigative efforts at small drivetrain inverters started in the 50-kW range. On the government side, our fiscal Q2 billing on the Navy program was around $0.5 million. We are now targeting a follow-on program in fiscal Q4 as the current program wraps up in fiscal Q3. We are also continuing R&D on new nodes like the 1,200V and the innovative bi-directional switch, a unique topology enabled by our lateral GaN, like I talked about under a small ARPA-E program. With a significant portion of our core epi wafer manufacturing in the United States, we are also aiming to position for the CHIPS Act funding, and submissions for that are expected to be in calendar year Q1 2023. All in all, while II-VI and the broader semiconductor industry have been in a challenging spot these past few quarters, we remain positioned to tackle near-term headwinds and progress towards our long-term model, aided by both capacity expansion and aggressively increasing our worldwide sales outreach. GaN's focus remains in three key areas. First, capacity expansion and supply chain management, keeping up with and then next year staying ahead of demand. Generating as well as diversifying demand, both expanding our leadership in high power GaN and winning marquee lower power adapter and charger opportunities. By the end of CY 2023, starting to bring in EV wins in the two-wheeler, three-wheeler segment. Third, continued execution on our product roadmap and key partnerships. The strategy and initiatives that we have outlined here are expected to allow us to resume sequential revenue growth in the third quarter and then emerge stronger going forward into FY 2024. With that, over to Cameron to walk you through our financials in detail. Thank you. Thank you, Primit, and hello to everyone joining us today. Let me start with a brief recap of our financial results for our most recently completed quarter. For my re-remarks, I will refer both to GAAP and non-GAAP results, which are reconciled to GAAP in our press release kit. Non-GAAP results exclude stock-based compensation, depreciation and amortization, and adjustments to share value over previously held convertible notes. Starting with the income statement, total GAAP and non-GAAP revenue comprising product and government was $3.7 million in the quarter. This represents an 11% quarterly growth when compared to $3.3 million product and government revenue for the same quarter in the prior year, excluding licensing. Product revenue, as with the prior quarter, now forms the majority of our total revenue number, over 85% in the quarter just completed, much of this revenue being generated in the higher power applications. Continuing to focus on product sales, solid execution allowed us to meet our target and generate product sales of $3.2 million. Despite the reduction relative to the prior quarter, this still represent a 38% increase from the same quarter in the prior year. We expect to see further growth in the current quarter. This revenue is being driven across a broad range of power conversion applications, including fast chargers and adapters, gaming, data center, UPS, and blockchain. The gross margin in the quarter was 12%, a decrease of 10% from the prior quarter. This decrease is driven by the quarterly revenue reduction, with indirect manufacturing costs constituting a larger drag on margins. This drag will reduce as we resume revenue growth. Our direct margins remain consistent, and we continue to progress towards a long-term model of gross margins in excess of 40%. A number of actions, including new product introduction, discrete ongoing cost efficiency activities, and benefits that we will receive as we continue to grow and scale will contribute to this. Operating expenses on a non-GAAP basis were $5.1 million in the current quarter, compared to $5.4 million in the prior quarter. This 5% reduction being driven largely by a reduction in G&A costs associated with our year-end procedures incurred in the prior quarter, together with ongoing tight spend discipline across the company. Enabled by our strong balance sheet, the company continues to increase our team to support our operations across all aspects of the company, including leadership, G&A, sales, applications, and R&D. When comparing non-GAAP OpEx to the same quarter in the prior year, we saw a 13% increase, primarily due to personnel increases across the company as just referenced. Turning to EPS, I will focus my remarks here on the non-GAAP results. Despite the reduced revenue in the quarter, our tight OpEx controls enabled us to execute to a non-GAAP EPS loss of $0.09, $0.01 lower than the prior quarter and flat in the same quarter in the prior fiscal year. From an operational perspective, we continue to see solid traction in our targeted markets. The company is fully booked for the current quarter. Our short-term focus being on product execution and enabling capacity expansion to support medium- to long-term growth. We also continue to invest in the long-term growth engine of the company, including new reactors. We anticipate bringing these reactors online in the second half of calendar 2023. Turning now to the balance sheet. Q2 saw the company maintain a strong, healthy balance sheet. Our operational burn, excluding capital investments in the quarter, was reduced to $5.8 million, driven by continued focus on cash and working capital management together with solid receipts. This performance affords the company a stable runway to resume its growth trajectory and invest in growth. Inventory grew as we look to support our backlog position. Other assets and liabilities remained largely stable. Our activities have improved the shareholders' equity position $55 million when compared to the same quarter in the prior fiscal year. Looking ahead, we will remain open to opportunities to further strengthen our balance sheet to ensure that we're able to continue to invest in the company growth. Turning now to our target operating model on the next slide. Transphorm is in the process of building a high-growth, cash-generative business. From a revenue perspective, there are three streams of revenue: licensing, government, and product. In the current fiscal year, product revenue has accounted for over 80% of our total revenues, as we look forward to expecting that trend to continue. The company anticipates rapid top-line growth and GaN adoption across multiple end markets with a five-year CAGR in excess of 50%. We are confident that the company can achieve overall gross margins of over 40%. All segments will be able to benefit from the improved cost structure in our current Gen Four and Gen Five products. Gross margins will improve via a number of specific actions, including new product introductions and discrete ongoing cost efficiency activities, as well as economies of scale. With respect to operating margin, the company will continue to invest to support all aspects of our core operations. We have a very stable OpEx structure, which will ultimately allow us to translate our gross margins into an operating margin model that will deliver over 20% to the bottom line. From a cash generation perspective, CapEx will be required for increased scale in the medium to long term, but with a strong manufacturing footprint already in place, we will be able to generate free cash flow in excess of 10%. Finally, I wanted to touch on our positioning. The company is well positioned to grow across multiple segments, including consumer, data centers, blockchain, industrial, and in the medium to long term, the EV market. We are now at a stage where we have seen and continue to see strong adoption, as evidenced in the prior quarter in the higher power space by an over 500K production order for 3-kW class power supply. In the consumer segment, we increased shipments on previously announced Fortune 100 laptop adapter win, a top three worldwide laptop manufacturer, and secured a new Fortune 100 laptop adapter design win. Revenue traction exists today in several segments, including consumer, data centers, blockchain, and industrial applications. We have seen strong traction and expect to grow revenues from our solid base. Looking ahead, our solid balance sheet will allow us to continue to invest in our growth engine across all aspects of the company, both from a staffing and a capacity perspective. With this strong foundation in place, our focus turns to execution, ensuring that we can support the growing demand and what we believe will be a broad market inflection point in the medium term. In addition to our existing revenue streams, we expect to see initial wins in the automotive segment in this time frame. From there, the company will rise toward our long-term target model, enabled by continued momentum across multiple segments. Concluding on the final slide with a few key highlights. Transphorm, publicly listed on the Nasdaq exchange, is a pioneer and leading provider of GaN power conversion devices. We have disruptive technology that provides solutions today across a number of significant growing markets. We have established a strong network of blue-chip partners, including KKR, Marelli, SES, Yaskawa and others. We have a comprehensive product offering today that meets our customers' needs across a wide range of power levels and segments, all of which is underpinned by a strong balance sheet, the industry's strongest IP position, and a deep and talented team. That completes our prepared materials and remarks. We would now like to open the call to any questions. Operator, please proceed with the Q&A portion of the call. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from the line of David Williams from The Benchmark Company. Your line is open. Hey, good afternoon. Thanks for letting me ask a question. Congrats on the continued progress here. Thank you. I guess maybe first, Primit, you had talked about the guidance. You noted a 20% growth quarter-over-quater with an opportunity for 25%. I'm just wondering if maybe you could walk us through the puts and takes there to achieving the 25% and if there's an opportunity maybe to outgrow that as well. Is this more of a demand or a supply side challenge for you? Sure. Like, we also noted, right, we have made definitive improvements on the supply side, since last time. It continues to be a very dynamic mix today of both demand and supply. We are executing on both fronts. We definitely feel good about 20% sequential growth, which is in today's environment, beyond the current quarter too, that we just announced. Yeah, it's not easy to say today how much more we can do, we do need to execute on both supply side and demand side, simultaneously. That's the range we are feeling reasonably good about at this point. Okay, fantastic. Thank you. I wanted to ask a little bit about on the technology front. You've got a new four-quadrant GaN switch with bi-directional current flow and operational control there. Just kind of wondering what you're seeing in terms of that market. It seems like that could be a very large market for the circuit breakers and kind of the matrix switching applications. Just kind of curious if you could give us some color on your thoughts there, where we are, and what your expectations would be. Sure. First, it's definitely a very unique application of a lateral GaN, in which Transphorm has been working on for a long time now, since one device is replacing many, and those are the two markets. It's early. I want to just be also clear it's early R&D stage right now. We know a lot about that device from previous experience, but those are the two markets. There is a large market in microinverters architectures, PV microinverters for bi-directional GaN, and then, as you rightly pointed out, a matrix converter, which is a unique topology for motor drives and then circuit breakers. Yes, all it opens up all of those areas, notably microinverters in the midterm. Okay. Okay, very good. Maybe Cameron, I know that last quarter you had thought that maybe you'd mentioned anyways that first quarter and the second quarter fiscal quarters would be relatively flat, excluding the COVID and kind of reactor issues. It looks like you've cleared some of those reactor issues and some of the COVID, but your guidance, it looks like it's not quite where we would've expected that 1Q to 2Q transition to be. I'm just kind of curious, is it just a demand side issue that you're facing going into the third quarter in terms of not recovering that, what it was, about a $1.1 million of the decline there? Is there? Is it more of a, I guess, the manufacturing side you're dealing with or more of the demand side, I guess, as you see some of these slowing market conditions? Sure. No, I think it's a combination of both, quite honestly. You know, I think the market conditions are well understood and known, and there are some challenges there. You know, we're also trying to ramp our manufacturing footprint up and you know, you've got to execute on both. To Primit's comment earlier, that's where we feel comfortable with a 20% sequential increase quarter on quarter and dependent on those dynamics, we hope to do slightly better on that. Great. Thanks so much for the time and the color, guys. Certainly appreciate it. I'll jump back in the queue. Thank you. One moment for next question. Our next question comes from the line of Craig Ellis from B. Riley. Your line is open. Yeah, it's Craig Ellis. Hey, guys. Nice to speak again. So I just wanted to follow up on the demand environment and drill down on what you're seeing in the laptop market, because you did start to ship to a new program and it looks like you're having follow-on success with another opportunity. The question is this, Primit, when you look at that market, how much of the laptop market are you targeting? Are you targeting just the high end, the high-end and mid-range? Can you give us a sense for where you're trying to position the business? Sure. In the current kind of planning scenarios, it's a very low percent of the overall laptop market. We are now in a position to target sort of the high volume aftermarket, right? You know, aftermarket also there is lower volume marquee designs. Now with this, some of the wins we talked about, the Fortune 100 and then the top three worldwide customer, we are now targeting the higher volume of the aftermarket and then working on in-box with the laptop adapters. Those are several ongoing design-ins now. Even overall, even counting all of that, it's still the percentage of the laptop market is still quite small. Yep. Got it. Then on the margin structure of the business, Cameron, we expected gross margins to go down in the quarter, but I think there were about 600 basis points below what I expected in the low teens% versus high teens%. Beyond volume, were there any items that are notable? And can you frame for us what your expectation is in the fiscal third quarter and just outline the combination of factors that get the business back to 20% and then towards 30%, if you would, please. Sure. I think the first thing I would say, there weren't any other particular factors, Craig, in the quarter. You know, the direct product margins are stable, and we expect that stability to continue. You know, I think the gross margin decline in the quarter was really squarely, you know, looking at sales volume and looking at absorption of indirect costs of manufacturing that the business has. As we grow our revenue, the drag that has on the margins will reduce, and it really is just a function of volume, maintaining our execution on our new products and of course the fact, you know, bringing our costs down and those combination of factors that will bring us, you know, to 20% and beyond. Got it. As we look out to a period in the second half of next year, fiscal 2024, when we expect to get some significant capacity benefit as you get more reactors online, would it be fair to think that gross margins can get back up towards 20% at that time, Cameron? Or do you really need more capacity than you would be bringing on then to get that 20% level? No, I think we can get there with the capacity that we have, Craig, and we will be in excess of that as we continue to bring the additional capacity online, toward the tail end of calendar 2023. Yep. Got it. That's helpful. Just two more. OpEx, you mentioned it was tight. It certainly was about $1 million lower than I expected. Was there anything from a timing standpoint that benefited OpEx? And is that lower OpEx structural, or should we expect it to bounce back up? On cash, can you just break down the three or four factors that contributed to that quarter-over-quarter cash decline? Thank you. Yeah. Thanks, Craig. For OpEx, you know, there were one or two factors, but they were mainly in the prior quarter. You know, you go through your year-end procedures, and there's lots of G&A activity associated with that. There wasn't anything there. For this quarter, you know, if I look ahead to next quarter, sorry, I think we will see OpEx increase kinda low single digits%, and that's mainly a factor of headcount additions. You know, we added senior members to our team. We've continued to add across the board, and you start to see the full quarter's impact of that as we look at OpEx in subsequent quarters. From cash, yes, we did bring OpEx cash burn down in the quarter to $5.8 million. I think the overall burn was higher because of the investment that we made in the capital equipment. I think that burn comes down next quarter, mainly due to the function of the capital CapEx investment being slightly smaller in the quarter that we're in. I think that the cash burn of $5.8 million, we hope to land, you know, pretty close to that. There are obviously puts and takes involved in each individual quarter, but as a trend, we don't see anything changing significantly. We could expect inventory levels which have been moving up through the year to start to come down. Cameron, do you feel like you can start turning that faster and convert that to revenue? We've certainly looked to do that, yeah. I mean, managing inventory is managing working capital and managing cash flows. That's something we're keeping a very close eye on. Got it. Just to add, Craig, if we have to build more, right, with some of the lead times on the supply side, we won't hesitate to do that. Yep. Okay. Yeah, I know you wanna make sure you meet customer demand. All right. Primit, Cameron, thank you very much. I'll hop back in the queue. Thank you. Thanks, Craig. One moment for next question. Our next question comes from the line of Ananda Baruah from Loop Capital. Your line is open. Hey. Yeah, good afternoon, guys, and thanks for taking the questions here. Just a couple, if I could. On the demand side, if I recall accurately, you guys last quarter also thought that you could, you know, sort of begin to see 20%. I think 20% was what you talked about. Kinda like 20% growth increase in 3Q. I guess the point is even with macro. Is that accurate? 'Cause it sounds like you're, even with macro, you're actually holding the demand cadence that you thought you could. Let me just ask for clarification on that first. No. Yes. That's, yeah, we had your second point very important for us. Even with the macros, we are showing a growth trend here. Now, we had said last time, just to be accurate, I believe we have said around 30% from that point. Right now what we said it's still growing and it's again mix of demand supply constantly now head to head, but still we are saying 22% with an opportunity for around 25%. Just your first statement is slight different and then but your second statement is spot on that even in this challenging environment, we are still growing, which we are very happy to be in this position. Primit, thanks for the clarification. Okay, great. Are you on the qualification side seeing sort of what's going on with macro impacting the qualification process, you know, in any context, or are things still sort of full bore? Our internal product qualification, that's unequivocally no. I mean, that's in our control more or less. Customized side qualification, sometimes I would say 80%-90% no on the qualification that's going on fine. Once in a while we do encounter some shipments, other components like some specialized ICs or DSP lead times affect pilot runs getting delayed and things like that. Those are precisely the uncertainty that we face right now, on the demand side. That's super helpful. I think, Cameron, I think last quarter I asked you the same inflection point question, but I'm gonna ask it again here. The inflection point sort of the upcoming, can you just give us context, remind us of the context around, you know, to any degree you're able, you know, sort of timing and breadth, you know, and maybe, you know, specifically the applications you see coming, you know, sort of sooner rather than later. Thanks a lot. Sure. Thanks, Ananda. Yeah, it clearly remains a very dynamic environment. I think if I look at the design and progress that we've made, those broader inflection points are likely in the lower power and for us, certainly in this higher power applications. My timing hasn't changed from my last time round, Ananda. I think we're late 2023 in that regard. You see a continuation of that momentum and that's what in 2024 will enable us to achieve our target model. Okay. Awesome. Let me sneak one more in here, actually. Are you seeing sort of the demand areas that have been impacted by macro? Have you seen those broaden over the last 90 days, or are they fairly consistent with what you were seeing 90 days ago? Just the areas and the applications. Thanks. I think it's fairly consistent. I would not say that for us, they have broadened. It's the laptop and the mobile, there we are candidly starting from a lower base, relatively speaking. It's offset. Blockchain continues to be. We have large wins there which are all intact, but that continues to be a little soft. Like I said, our customers appear, they tell us the recovery in about six months is what they are predicting at this time. Those are the two. They haven't broadened. In some other areas like renewable, actually we are seeing increased demand and interest, right? As exemplified by the, we added about 10 new design wins and, 5 new production into production this quarter on the high power side. Those will start to bear fruit in a couple of quarters. Overall, those two areas, not any big shift. Okay, great to hear. Thanks, guys. Appreciate it. Thank you. Once again, that's star one one for questions. One moment for next question. Our next question comes from the line of Sam Peterman from Craig-Hallum. Your line is open. Hi, guys. This is Sam on for Richard Shannon here. I wanted to ask just two quick ones. First one, on the reactors that you guys are adding. I know you're trying to double capacity by the end of next calendar year. Can you remind us how many more reactors you need after you've got two more this quarter to reach that goal and kind of what the CapEx might look like to do that? The CapEx to do doubling, total, you know, we are to get to that double I referred to, that CapEx is already done. That's the good news. Now, beyond that, if we continue to evaluate with triggers of again, demand and supply, dynamic considerations, that will be additional. The CapEx to acquire the reactors to double the capacity, that has been done. We will have incremental CapEx to install some of those reactors, right? We are working on those both ourselves here in California and some with our partners. We will have incremental installation and facilities CapEx, but not the main reactor CapEx. That's done. Gotcha. Okay, thanks for clarifying. Then secondly, you talked about, I think, last quarter having pretty strong backlog coverage of kind of what you're expecting for revenue growth. Are you seeing that backlog kind of persisting, or are you seeing any cancellations or pushouts just as the environment kind of softens broadly? I think generally speaking, I mean, the backlog remains solid. I mean, there's always puts and takes, and we are seeing some softness there, and we are experiencing some pushouts. Overall, it remains solid and we remain, you know, confident in the traction that we're seeing. Okay. Thanks, Cameron. That's it for me. No worries. Thank you. One moment for our next question. Our next question comes to the line of Orin Hirschman from AIGH Partners. Your line is open. Hi, how are you? Good, thank you. Just a quick question again. Thank you. I know you alluded to it and discussed it a little bit, but can you get any more granular just in terms of the bi-directional views and the two-wheelers and three-wheelers, which are obviously getting popular very quickly in other parts of the world. Can you talk about actual design win, when do you think you'll actually have something in production? Indeed. The two-wheelers and three-wheelers, addressing those two separate points, the two-wheelers and three-wheelers EVs, we are targeting, and this is a target at this time, design win and some early revenue by end of calendar year 2023. That we are still marching towards that goal. The bi-directional, there are actually two aspects of the bi-directional. One is simply bi-directional means charging in both directions, right? For example, if you have a two-wheeler, you are charging the battery and that's one direction. Then that battery you can take with you and then do a DC to AC and use that battery for off-grid power. That's the second direction. That's a bi-directional in an application. Now, what we talked also in the press release about a bi-directional device, that is a true gallium nitride bi-directional switch. Where a single device allows to do that job in both direction, which is a very unique attribute of gallium nitride in particular in lateral GaN, the architecture we have, specifically. Okay, great. Thank you so much. You're welcome. Thank you. I'm not showing any further questions in the queue. I'd like us to turn the call back over to Primit Parikh for any closing remarks. Thank you everyone for listening to our call and the interest. We will look forward to continuing the solid progress with the demand we have, the supply considerations and capacity initiatives that we have undertaken and look forward to meeting the needs of our customers in gallium nitride power. Thank you all. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.