Good day, and welcome everyone to today's conference call, which will begin shortly. If you require assistance at any time, please key star zero on your telephone. In the meantime, we will continue to play music. Thank you for your patience. Good day, and welcome everyone to the Vicor earnings results for the second quarter ended June 30, 2022, hosted by Jim Schmidt, Chief Financial Officer. My name is Nandi, and I'm your event manager today. During the presentation, your lines will remain on listen only. If you require assistance at any time, please key star zero on your telephone, and the coordinator will be happy to assist you. I would also like to advise all parties that this conference is being recorded. Now I'd like to hand it over to the host, Jim. Please proceed. Thank you. Good afternoon, and welcome to Vicor Corporation's earnings call for the second quarter ended June 30 th, 2022. I'm Jim Schmidt, Chief Financial Officer, and I am in Andover with Patrizio Vinciarelli, Chief Executive Officer, and Phil Davies, Vice President of Global Sales and Marketing. After the markets closed today, we issued a press release summarizing our financial results for the three and six months ended June 30th. This press release has been posted on the investor relations page of our website, www.vicorpower.com. We also filed a Form 8-K today relating to the issuance of this press release. I remind listeners this conference call is being recorded and is the copyrighted property of Vicor Corporation. I also remind you various remarks we make during this call may constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Except for historical information contained in this call, the matters discussed on this call, including statements regarding current and planned products, current and potential customers, potential market opportunities, expected events and announcements, and our capacity expansion, as well as management's expectations for sales growth, spending, and profitability are forward-looking statements involving risk and uncertainties. In light of these risks and uncertainties, we can offer no assurance that any forward-looking statement will in fact prove to be correct. Actual results may differ materially from those explicitly set forth or implied by any of our remarks today. The risks and uncertainties we face are discussed in Item 1A of our 2021 Form 10-K, which we filed with the SEC on March 1, 2022. The document is available via the EDGAR system on the SEC's website. Please note the information provided during this conference call is accurate only as of today, Thursday, July 21, 2022. Vicor undertakes no obligation to update any statement, including forward-looking statements, made during this call, and you should not rely upon such statements after the conclusion of this call. A replay of today's call will be available beginning at midnight tonight through August 5th, 2022. The replay dial-in number is 888-286-8010, followed by the passcode 64490033. This dial-in and passcode are also set forth in today's press release. In addition, a webcast replay of today's call, along with a transcript, will be available shortly on the investor relations page of our website. I'll now turn to a review of our Q2 financial performance, after which Phil will review recent market developments, and Patrizio, Phil, and I will take your questions. In my remarks, I will focus mostly on the sequential quarterly change for P&L and balance sheet items and refer you to our press release or our upcoming Form 10-Q for year-over-year comparisons. As stated in today's press release, Vicor recorded total revenue for the second quarter of $102.2 million, a 15.7% sequential increase from $88.3 million in the first quarter of 2022. Advanced Products revenue increased 27.8% sequentially, while Brick products revenue declined 2.4% from the prior quarter. Advanced Products revenue increased 64.9% from the same quarter a year ago. Shipments to stocking distributors decreased 3.4% sequentially and 34.1% year-over-year. Exports for the second quarter were relatively flat sequentially as a percentage of total revenue at approximately 69.2% from the prior quarter's 72%. For Q2, Advanced Products share of total revenue increased to 66.2% compared to 59.9% in the first quarter of 2022, with Brick Products share correspondingly decreasing to 33.8% of revenue. Turning to Q2 gross margin, we recorded a consolidated gross profit margin of 45.8%. Gross margin increased sequentially from 42.6% in the first quarter of 2022, primarily as a result of higher volume. Headwinds impacting our gross margin, including elevated cost of securing supply and outsourced capacity, continued in Q2. In addition, tariffs continue to be a drag on gross margin at $2.1 million in Q2 and 2.1% of revenue. Our work to reduce tariffs by reducing imports from China continues. I'll now turn to Q2 operating expenses. Total operating expense increased 8.3% from the first quarter of 2022. This above-average sequential increase was largely due to legal fees incurred in connection with an intellectual property litigation. Vicor is both a defendant in a case scheduled for trial in October and a plaintiff in an upcoming ITC case to stop importation of infringing OEM products into the U.S. In the larger context, as described previously, Vicor has developed proprietary power modules and system architectures providing superior power system solutions. These capabilities are being broadly adopted by OEMs purchasing Vicor modules, by an OEM licensing Vicor technology to procure otherwise infringing modules from unlicensed suppliers, and by OEMs taking their chances with the importation into the U.S. of infringing products. Vicor is committed to vigorously enforce its IP. The amounts of total equity-based compensation expense for Q2 included in cost of goods, SG&A, and R&D was $431,000, $1,440,000, and $751,000 respectively, totaling approximately $2.6 million. For Q2, we recorded operating income of $11.3 million, representing an operating margin of 11.1%. Income taxes for Q2 were a tax provision of $802,000. Net income for the quarter totaled $10.6 million. GAAP diluted earnings per share was $0.24 based on a fully diluted share count of 44,866,000. Before I review our financial position, just a brief update about COVID-19 on our workforce. As previously discussed, as a designated essential manufacturer, using masks and practicing social distancing from the onset of the pandemic, we have continuously operated three shifts at our Andover manufacturing facility. Cases and absenteeism due to COVID-19 are now negligible. Nevertheless, because much of the potential influence of the COVID-19 pandemic are associated with risk outside of our control, we cannot estimate the extent of such influence on our financial or operational performance or when such influence might occur. In particular, the Zero-COVID policy adopted by China has caused disruptions in parts of our supply chain, and the impact and timing of the effects on our results are unpredictable. Turning to our cash flow and balance sheet, cash equivalents, and short-term investments totaled $207.6 million at the end of Q2. Accounts receivable net of reserves totaled $54.5 million at quarter end, with DSOs for trade receivables at 37 days. All balances are current. Inventories net of reserves increased 12.4% sequentially to $83.1 million and with annualized turns at 2.62. Operating cash flow totaled $10.8 million for the quarter. Capital expenditures for Q2 totaled $14.2 million. We ended the quarter with a total construction in progress balance of $50.8 million and approximately $35.1 million scheduled to be spent through the year, primarily for manufacturing equipment. I'll now address bookings and backlog. Q2 book-to-bill came in below one, and with one-year backlog decreasing sequentially by 3.2% from the first quarter of 2022. Turning to the third quarter of 2022. As we updated at the annual shareholders meeting in June, our ChiP fab is nearing completion, and we expect vertically integrated production in Q4. As it ramps up, our ChiP fab will provide the capacity we need to further improve output and the efficiency necessary to improve gross margins. With that, Phil will provide an overview of recent market developments, and then Patrizio, Phil, and I will take your questions. I ask that you limit yourselves to one question and a related follow-up so that we can respond to as many of you as we can in the limited time available. If you have more than one topic to address, please get back in the queue. Phil? Thank you, Jim. Q2 bookings are a result of securing long-term NCNR orders in prior quarters that now form a large part of our backlog. The outlook for the data center market is positive as hyperscalers continue to build out their machine learning technologies and capabilities, as well as upgrading their 48 volt CPU racks with the latest Intel and AMD CPUs. Our backlog, which stands at over $400 million, is strong and made up of major HPC customers with a mix of older and newer programs that are just beginning their ramps. Our objectives in the next two to three quarters are to catch up with customer demand and reduce lead times. As discussed in our annual shareholders presentation a few weeks ago, we are working on next-generation AI processor and AI systems in the HPC market with lateral-vertical solutions and with new network processor-based designs for backhaul speed upgrades. Since the ASM, we have also agreed to a funded collaboration agreement with an additional automotive OEM. Our legacy product backlog increased in Q2, and although a smaller percentage of our overall business mix, legacy products remain important to our business. Many of our 8,000+ customers, representing a very long tail and loyal base, are transitioning to our Advanced Products for next generation programs. This is important to our portfolio as we build out our broad-based industrial and channel business. I cannot emphasize enough how important our new ChiP fab is to not only increasing short-term revenue growth for our Advanced Products customers globally, but also to our mid and long-term strategic goals. Our major HPC customers need access to scalable capacity with shorter lead times in support of their critical production ramps and volume requirements. Our automotive customers also need assurance that the power modules they use in vehicle platforms are manufactured in an automotive qualified facility under Vicor's full control. In conjunction with world-class manufacturing of chips in our first fab, our company-wide operational excellence initiatives are now being rolled out. Our pivot from a product-centric company to a more customer-centric company is at the heart of this change. On the ASM call, I spoke of a focused set of 100 customers that had the SAMs to get us to $1 billion revenue target. We will be laser-focused on this customer set with the objective of achieving the highest possible scores across technology, quality, responsiveness, delivery, and cost, more commonly referred to as TQRDC, such that the most impactful companies around the world trust us to deliver power system solutions with the high performance necessary to enable their innovations. Thank you. Patrizio, Jim, and I will now take your questions. Everyone, your question and answer session will now begin. If you wish to ask a question, please key star then one on your telephone. If you then decide to withdraw your question, simply key star two. All questions will be answered in the order received, and you will be advised when to ask your question. All other lines will remain on listen only. We already have a couple questions. The first one is coming from Quinn. Your line is open now. Please proceed. Great. Thank you. Congratulations on the nice increase in quarterly revenue. I wanted to ask Phil, you gave a little bit of color on bookings. Looks like on a quarterly basis, bookings declined pretty meaningfully. You mentioned the NCNR orders in previous quarters, but can you sort of just elaborate a little bit more? I'm not sure if I know the term NCNR, so maybe first start with what those are, and perhaps more importantly, when would you expect to see bookings recover? Are you already starting to see better bookings in the September quarter, or do you expect them to remain subdued as you work down backlog? Hi, Quinn. NCNR is non-cancellable, non-returnable. You know, that was necessary pretty much across the board because we are booking out really, you know, way beyond some cases, 40 weeks. Our lead times are at 32 weeks for Advanced Products. Obviously, big customers to secure, you know, their supply chain and guarantee, you know, they're able to build their product, have been placing very large orders with us, NCNR orders with us, in prior quarters. Very lumpy, very up, very high in some cases, and so, you know, I'm not concerned about bookings at all, you know, with the backlog being so strong and visibility out there, it's, you know, okay. I'm very confident in the backlog. I guess maybe a related question, you talked about some of the next generation platforms that may ship later this year or in 2023. Should investors Assume that perhaps orders for those advanced next-generation platforms were already placed under the NCNR terms that you talked about? Or would you expect platforms for 2023 to book, you know, later this year? No, we're seeing orders, as I've mentioned, the backlog is made up of older programs and new ones, recent ones, and those are NCNR and for the 2023 timeframe. Some of them will start to ship in Q4. Great. I'll get back in the queue. To expand on that, if you are referencing next-generation solutions triggering additional bookings, those are approaching availability, but we have not yet booked orders for those devices. Got it. Okay. Thank you, Patrizio. The next question is coming from the line of John. Your line is open now. Please proceed. Hi, good afternoon, guys. Thanks for taking my question. Nice quarter. I was wondering if you could just give us a little bit more color on what enabled the sequential increase, whether it was your internal capacity, you know, freeing up, or was it external supply chain? Just help us, you know, get to where you got to today and if that's sustainable actually going forward. It was a combination of a couple things. I think that the investments we've made in capacity did help us in Q2, so the beginnings of some positive results from particularly surface mount technology, not necessarily the, you know, package process steps, the plating operations. We did get some benefit from that. We still had the headwinds associated with, for the most part, outsourced operations, and that continues now as we bring our own line up. There was some benefit there. I think, you know, we have to give a lot of credit to our operations team who worked against long odds to get supply and really drive supply hard in 2Q to get the revenue lift. Understood. Thank you. Are things getting better or worse as you head into Q3 in any place? I know that you're gonna start up your new lines. Externally, should we be think of any other headwinds? Supply is still tight. We've talked about that internally. I've talked to our operations people. It's still a very tight environment for supply. Okay, understood. I'll get back in queue. Thanks. The next question is coming from the line of Don. Please proceed. Hi, guys. I'm following up on Quinn's question. I was trying to get a feel for the dollar value of the bookings received in the quarter. Am I right to assume that you net out new orders with any cancellations or move-outs of existing orders when you determine your book-to-bill ratio? If that's the case, could you please identify what the dollar value of the new orders were? Otherwise, it looks like it was only about $76 million. The bookings were higher than that. There's minimal cancellations in our order pattern, really. I think the book-to-bill was, as we said, below one. Backlog Not that far below one. Not that far below one. I think the telling number that we quoted was, you know, the opening backlog dropped sequentially by 3%, which is on the order of. Yeah. It's really the best way to understand it is as Phil described, which is $400+ million of backlog over multiple quarters. Yeah, as I mentioned. What I was trying to get a feel for is what was the dollar value of the new orders you received during the quarter? We're not providing detailed information with respect to the bookings. As Jim has pointed out in the past, bookings within a quarter are subject to, you know, the vagaries of some large orders falling within the quarter or at the start of the next quarter, and they're not necessarily indicative of long-term trends. I think if you want to draw the right inference with respect to the long-term trend, the key parameter to look at is the progression of our backlog within the last 12 months. Needless to say, we've been capacity constrained, allocating our capacity, and customers have had to place orders with very long lead times. That's been a factor with respect to within the last several quarters, the bookings pattern, the backlog pattern, and that's ongoing. As Phil pointed out, booking orders is not our concern. Thank you. The next question is coming from Doug. Your line is open now. Yes. Hi, guys. I just have two brief but unrelated questions. Have you received the final piece or pieces of equipment for the new facility? Switching gears, you guys brought up the litigation. What capital requirements or any distraction will these litigations create moving forward? I was kind of under the impression that the technology was not repeatable or recreatable, so I'm a little confused at how these guys are infringing on your technology. Thanks. Okay, let me take that. Let's start first with the work standpoint in terms of our new facilities at Federal Street and bringing on capacity. As Jim pointed out earlier, we're already benefiting in Q2 from some of that capacity, and equipment is being installed at a high rate, and lines within the new facility are being tested. In fact, one of the lines relating to the packaging process is beginning to be applied with respect to some of the engineering prototypes. We will have to wait for the balance of Q3 to have the bulk of the production equipment installed, and then we'll have to wait for a fraction of Q4 for us to in effect reclaim the lion's share of the capacity of our production for Advanced Products. There will be some incremental contribution this quarter, and that's going to happen at an increasing pace as the quarter progresses, but it will not be until the fourth quarter that in effect all of the production equipment that is in the critical path. Needless to say, there will be additional production equipment coming next year. All of the critical production equipment with respect to Advanced Products, for that to be in place, that would be Q4. But before-- Yeah. Yeah, just a quick- Go ahead. - question, because obviously I've been on every call. I've been an investor with you guys for eight, nine years now. Has that been delayed? Because my original impression when you guys were starting the facility was a little bit sooner on the final piece of equipment. Has there been some delay in that, those last couple of pieces of equipment? I would say generally not. That's not to say that given the multiplicity of pieces of equipment and general complexity of what we're bringing together in terms of a first fab, that's the way to think about it. For power components, it's the very first fab that's been conceived, developed, implemented. That's a major task that has happened pretty much on schedule. We won't quibble with respect to whether the bulk of the production volumes for Advanced Products would happen in Q3 versus Q4. There may be a couple of months with respect to delay with respect to the expectation. Regarding the delivery of the equipment, it's been remarkably on time, on budget. We're very happy with what our operations team has executed on that general front. Yes. I was not questioning the production of your product. I was just simply asking the delivery of the equipment. I'm not worried about your guys' transition. I've again listened to all your calls, how you've trained your staff. I'm very optimistic about how efficient you guys start pushing out product. I was concerned with just the delivery of some of the equipment so that you guys can get started. That was the nature of my question. Yeah. Delivery of the equipment has been pretty much on schedule. Now we've had and we're continuing to have to air freight, you know, some of this equipment. Some of the equipment is heavy and it's frankly really costly to ship by air because of, you know, the timelines and the constraints. But for the most part, I think everything has happened pretty much on time. We're now going through, in effect, a different phase, which is with all the equipment that's being delivered, we're bringing up new lines that perform certain portions of the Advanced Products process steps. There's still some equipment due to be delivered in the next month or so that would be commissioned late in this quarter and would become operational in the fourth quarter. Terrific. I don't mean to dominate the time, but if you could just talk about the litigation. That seems to be a new topic that popped up. We have some long-standing litigation in which, you know, unfortunately, we've had to play mostly defense, which is coming to a head in October. That will be behind us in a few months. In the meantime, we're gearing up for the more important litigation opportunity, which has to do with, in effect getting return on investment with respect to all of the IP that Vicor has developed, in terms of power system technology, power components, and other aspects of the overall power system challenge. There are, as we discussed in past quarterly calls, on the fringes instances of infringement regarding the earlier part of your question, as to why it is that, you know, people can " copy." To be clear, nobody has either the technical wherewithal or the chutzpah to copy our Advanced Products, right? Let's be clear with respect to that. Even if they have the chutzpah, they wouldn't have the wherewithal. Good. That's what I wanna hear. Good. On the fringes, the fact that broad-based copying is not taking place, it doesn't imply that there isn't some aspect of our product portfolio that is being infringed. Now with respect to that, as you might recall from prior quarterly calls, we've had a program to enable OEMs to secure an OEM license for Vicor technology, so that they can source components that would otherwise be infringing, you know, from suppliers that are not directly licensed by Vicor, without concern with respect to adding value to those power components by way of their OEM product, which is then imported in the U.S. We have a well-thought-through strategy in litigation partners with respect to asserting our IP to, in effect, stop importation in the U.S. of any OEM product that incorporates any aspect of Vicor's proprietary technology. We've had success in terms of the licensing program. We expect to have additional success on that general front. Ultimately, we need to make clear to those OEMs that, as suggested in Jim's prepared remarks, may be taking chances as to whether or not, you know, we are determined to assert the IP to provide that evidence in order to catalyze closure with respect to what they need to do to secure their supply chain. Okay, good. Thank you very much. Go get 'em. The next question is coming from John. Your line is open now. Please proceed. Hi, guys. Congratulations, first of all, on the quarter, but also on the factory. I've got a little remodeling project here at my house, and I know how hard it is to stay on target and schedule just on this little project. I don't know how you guys did it for the whole factory, but it's really remarkable. My question here is for Phil. At the annual meeting, you presented what I call the bubble chart, and it referenced your major customers with the expected forecast for them. My question is, did the bubbles represent revenue, bookings, or opportunities? The bubble chart was basically to show the customers, you know, and the progression of customers that we're bringing on. It's really a mix of both bookings and revenue, John. I didn't get that granular on it. It was really meant as a visual to say to everybody, because I always get asked, "Have you only got one or two customers?" The answer is no, we've got a lot of customers, and we're building that customer portfolio out in the HPC market. It was really meant to represent that and a mix of bookings, revenue, different programs, and then visually showing how they grow, you know, over time. That's great. That's kinda what I thought. I guess a little more clarity maybe. Since it was bookings and revenue, would you expect the bookings and revenue from the large GPU customer to be back-end loaded next year, or is it fairly linear? Because that bubble got a little bit bigger, so I'm just wondering, is that gonna be a linear type of growth, or is it gonna be back-end loaded? I would say, as I mentioned in remarks, I think a couple of quarters ago, what we're seeing in the industry now is the existing sort of older programs living a little longer and overlapping with some of the newer programs. You know, in the AI market particularly, there's so much change going on and there's so much that you can do still in terms of performance with older GPU or processor platforms. Customers are still you know taking delivery of those with maybe higher memory content, higher speeds, higher power levels, performance levels. Then you've got some of the newer technologies, you know, at the 5 nm node coming on and being intermingled with that. We're seeing that you know at a number of customers, John. Gotcha. The GPU customer, it sounds like, their existing product line may be continuing a little bit longer than we thought. In time for the new product, you expect to get some revenue from the new 5 nm products that will continue that growth in that particular customer. That's correct. Excellent. Okay. My next question is, or the follow-up question is, you were quoting 32-week lead times last conference call, and you had a $450 million backlog. I assume that means that you're planning on shipping all that backlog before the end of the year. Is that assumption right? I'm not sure that we wanna answer such a question with any kind of specificity. Let's talk generalities. As Jim remarked, you know, we are appreciative of the progress that was made within the last quarter in the face of a good deal of headwind on a number of fronts, component availability, outsourced capacity. The operations team did a good job in terms of advancing revenues. This is a trend that we expect to continue this quarter and the quarter after that, you know, particularly as our internal capacity can be brought to bear to facilitate the operational challenge. That's the broad guidance that we can provide. It's clearly supported by the backlog, it's supported by the opportunities with existing products that have been designed in. It will be further supported by major further advances in Advanced P roducts that are coming to fruition, as we speak. Thank you. That's really helpful. Thank you, guys. I'll get back in the queue. The next question is coming from Richard. Your line is open now. Please proceed. Well, hi, guys. Thanks for taking my question. My first question is mostly answered, but just wanna make sure here that I understand about the Advanced Products backlog that was down sequentially. Am I correct in assuming that there may have been some pushout with some customers here of their programs as you have maybe a little bit of a lull in using Phil's words here just a couple minutes ago, they may be extending their current generation products while they wait for that. Is that a fair interpretation of what's going on? I think it's, you know, the fact that, Richard, they've got significant backlog, right? You know, they've had lots of long lead times on their equipment and building that. You know, the whole supply chain is stretched right out. I think that's a big piece of it. Then you've got the new 5 nm stuff coming on board. It's gonna be a mix. Okay. All right, fair enough. Maybe you can talk about the dynamics here of getting the new manufacturing facility up, and particularly with any new, and potentially more interestingly, larger volume customers that have been, you know, looking for that more predictable delivery. Are these customers waiting to see proof of this new manufacturing facility up and running, you know, get good performance and good cycle time before they place bookings, or are they already happening to some or even a great degree? Well, anybody that's got us, you know, designed in over the last number of quarters are, you know, eagerly awaiting the new facility to get, you know, shorter lead times, right? I mean, that's the key thing and, you know, have that great supply assurance from us, you know, being vertically integrated. With regards to new programs, again, you know, we've talked about single sourcing and, you know, being vertically integrated and having a great factory like this. That's why I mentioned in the remarks, it's so strategically important to us, to walk into some of these, you know, newer customers that we are working on with early programs and show that facility off and be able to stand up and say, "You know, we can service you. Don't worry." Now, obviously, there's supply chain of materials to us, but actually making the package, making the product, being vertically integrated is a huge weight off any risk in that supply chain. Okay. Fair enough. Let me follow up on that one a little bit later. I guess my question jumping out before I jump out of line here is just talk about the tactical execution here as you ramp up the new facility. Like, I assume that you're gonna number of iterations, runs, and including numbers of volumes to get a sense of product performance and then also being able to get the cycle times that you want. How many iterations does this take, and how long is each iteration? Meaning you're talking about ramp, I think, or at least start panels early in the quarter. When do you think you get that sense that you're gonna be able to produce at the, you know, the amount of throughput that your major customers would like to see? I think we're going to be in that privileged position by the end of this year. I think that because of all the learning that's been going on over the last year and a half our operations team doesn't have to in effect sort through challenging processes by trial and error. They understand what needs to be done. They've aligned themselves in terms of chemicals and you know equipment and capabilities with proven solutions that we expect will enable us to ramp without glitches having completed the validation of the equipment and the processes which again is something that has begun. It is taking place already with respect to, you know, some of the lines in the upper floor of the new facility, which are dedicated to advanced packaging. Again, that's a process that will continue over the next few months. As the parts of the equipment gets delivered, then the parts of the lines get turned on to complete the developed packaging capability. Okay, fair enough. I will jump out of line. Thank you guys. The next question is coming from John. Please proceed. Hi, guys. I got two follow-ups for you. The first one is, I think I get the sense that you're expecting sequential improvement over the next two quarters. My question is more around Q4 when you actually ramp up your advanced packaging and plating. Are you expecting a step function in margin in Q4 as you migrate away from outsourcing and towards internal capacity? John, I think the way to think about it is we're still in an environment of extremely tight supply. We're transitioning to in-house production. I think what we would say is incremental improvement in revenue and gross margin over the coming quarters is the kind of advice and guidance we'd wanna give. Okay, great. Second, where do you expect your lead times to be in a quarter or two from now? Should we expect, you know, orders to ramp back up again once that gets back down to your more, you know, historical range of maybe two quarters and maybe a little less? Yeah. I mean, as the new programs, you know, start to come on and ramp up, you know, dollar content for a lot of those programs is higher, volumes are higher. Yeah, I expect the bookings to start climbing again next year, yeah. Okay. Where do you expect lead times to be in the next, you know, quarter or two? I think that we should leave that question largely unanswered in that I think we are at a very interesting inflection point in the business, which makes it in terms of growth rates an opportunity a bit difficult to forecast. I think we're sensitive about not overcommitting and want to be able to pleasantly surprise in terms of results. Let's not get out on a limb ahead of what we expect to happen, which in general terms is the beginning of a long-lasting phase of growth for the company, leveraging the first of its kind ChiP fab. ChiP as in Converter housed in Package. It's not a silicon fab, but in many respects, it shares similarities with a foundry for silicon in the way in which the products are manufactured in panels similar to wafers. The many process steps, the fact that a lot of the process steps are chemical in nature. The kind of equipment involved is again, you know, similarities. We have lots of lasers and unique equipment that we have conceived and developed with partners to accomplish these unique packaging steps, which I firmly believe will give Vicor a long-term, sustainable cost advantage in addition to a major performance advantage. Backing that up is what I suggested earlier, which is the coming to fruition of next-generation technology that in [some theory specs] will step up the game by about a factor of two in terms of density and cost effectiveness. All that paves the way for significant long-term growth. As we suggested earlier, we expect the establishment of revenue growth that our operations team, you know, managed to deliver after a few disappointing quarters within the last quarter to continue this quarter after that. You know, at what rate? Let's not get into that. Let's wait and see what happens. Understood. Thanks for that. Thanks, Patrizio, and good luck, guys. Next question from Quinn. Your line is open now. Please proceed. Thanks for taking my follow-up question. Patrizio or Jim, just wanted to ask, on the vertical integration, when do you think you'll be fully vertically integrated at this point? Is that still sort of by the end of the year, or do you think that that potentially moves now into the first quarter, given you know, you're still taking some equipment for that step in early Q4? The way in which we monitor that is by, if you will, percentage of integration, right? You know, by definition, it will never be literally 100%, right? There's always going to be something that from time to time needs to be done externally. But if we look at the third quarter, the quarter we're in, with respect to a lot of processes, as the quarter progresses, we're going to get to a relatively substantial percentage, 20%-30% vertically integrated. I'm talking advanced power packaging, which is obviously the thrust of this line of inquiry. As we get into the fourth quarter, and as we get towards the end of the fourth quarter, we're going to be 80%-90% vertically integrated. I hope that answers your question in a quantitative way. This is not a digital proposition. It's not a zero or a one. It is a progression where, as suggested earlier, the advanced power packaging involving a combination of lines that perform different process steps get built up and released to production, in increments that achieve a greater level of vertical integration. Again, as we get to Q4, we expect to be substantially integrated, meaning not 100%, but the lion's share of it, which, going back to a variety of key considerations, ranging from our cycle time, our capacity, the cost-effectiveness of the process steps, will essentially deliver the goal. Understood. Thank you, Patrizio. The second question I have is just on the lateral or vertical, wonder if you might be able to give us an update there. Are those programs still sort of undergoing customer evaluations? Have you started to actually receive bookings for delivery of the vertical, lateral-vertical, solution at this point? There is a broad range of requirements and to go with that, a broad range of capabilities. Obviously, we've had success stories with what we call lateral PDNs, so lateral power delivery. We've had success stories competing with the competitive alternative of, if you will, what's called Intermediate Bus Architecture, and buck converters, so multi-phase regulators. That's been the landscape for the most part over the last 10 years. Most systems have been lateral. At the other end of the spectrum, we worked with some industry pioneers on fully vertical systems. Those are still what you might call bleeding edge initiatives. They involve stacking of our chips, and they're being supported to a limited degree, leveraging some of our older technology and without the benefit when it comes to the packaging of, you know, the vertical integration we are soon going to be able to nearly fully deploy. They've demonstrated the kind of capability that is going to become necessary to support wafer scale and cluster computing in leading edge applications that the industry at large will require. As lithography gets finer, as you get even below 5 nm, and the current levels get up into the several thousand amps. You get in effect two intermediate PDN architectures. One we call lateral-vertical, and another one we call vertical-lateral. As you can imagine from the sequence, the lateral-vertical is still mostly lateral, but deploys a vertical component on the other side of the substrate to provide for typically one-third of the current requirements of the primary rail. That's relevant because it makes a very substantial difference in terms of PDN losses and system capability in the 1,000-amp, 1,500-amp range. Above that current level, vertical-lateral becomes a necessity because even the deployment of a vertical component isn't enough in order to provide the current density and you know, bandwidth and overall system efficiency that is necessary by systems in the, let's say, 2,000, 3,000-amp total current range. Again, you have a broad range of requirements and with it, a varying landscape ranging from pure lateral, which is in effect becoming a thing of the past, to lateral-vertical, which is becoming a necessity in the 1,000, 1,500 amp range, to vertical-lateral as you get above that. When you get to powering, let's say, wafers that may consume 50,000 amps, 100,000 amps, there is no alternative to pure vertical. We're on the forefront of that technology as well. With our, you know, 5G capabilities, we're going to get to, generally speaking, much higher level of current density and performance with those applications, as well as the vertical-lateral and the lateral-vertical. I guess maybe just quick clarification. On the lateral or vertical for 1000-1500 amps, is that something you expect to go into production early next year, or is that further out? That's in, I would call it, early development stage, and hoping that we get to, you know, that solution sort of probably in the second half of next year. Okay, thank you. I think that's all our time for tonight. I'd like to thank everybody for joining the call and ask the operator, we're ready to conclude the call now. Thank you, everyone. That concludes your conference call for today. You may now disconnect. Thank you for joining, and enjoy the rest of your day.