Welcome, everyone, to this webinar entitled, "Vicor Earnings Results for the Third Quarter Ended September 30, 2023." My name is Jano, and I'm your producer for today. During the presentation, all participants will remain on listen-only mode. If you require assistance at any time, please put the message in your chat box and send it to the host. I would like to advise all parties, this conference is being recorded. And now, I would like to hand it over to Jim Schmidt, Chief Financial Officer. Please go ahead. Thank you. Good afternoon, and welcome to Vicor Corporation's earnings call for the Third Quarter Ended September 30, 2023. I'm Jim Schmidt, Chief Financial Officer, and I'm in Andover with Patrizio Vinciarelli, Chief Executive Officer, and Phil Davies, Corporate Vice President, Global Sales and Marketing. After the markets closed today, we issued a press release summarizing our financial results for the three and nine months ended September 30. 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 related 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 any 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 in or implied by any of our remarks today. The risks and uncertainties we face are discussed in Item 1A of our 2022 Form 10-K, which we filed with the SEC on February 28, 2023. This 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, Tuesday, October 24, 2023. We undertake no obligation to update any statements, including forward-looking statements, made during this call, and you should not rely upon such statements after the conclusion of this call. A webcast replay of today's call will be available shortly on the investor relations page of our website. I'll now turn to a review of our Q3 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 changes for P&L and balance sheet items, and refer you to our press release or our upcoming Form 10-Q for additional information. As stated in today's press release, Vicor recorded total revenue for the third quarter of $107.8 million, up 1% sequentially from the second quarter of 2023 total of $106.7 million, and up 4.6% from the third quarter of 2022 total of $103.1 million. Advanced Products revenue decreased 13.5% sequentially to $58.4 million, while Brick Products revenue increased 26% sequentially to $49.4 million. Shipments to stocking distributors increased 50.5% sequentially and 81.5% year-over-year. Exports for the third quarter decreased sequentially as a percentage of total revenue to approximately 62.8% from the prior quarter's 68.1%. For Q3, Advanced Products share of total revenue decreased to 54.2%, compared to 63.2% for the second quarter of 2023, with Brick, Brick Products share correspondingly increasing to 45.8% of total revenue. Turning to Q3 gross margin, we recorded a consolidated gross profit margin of 51.8%, which is a 10 basis point increase from the prior quarter. I'll now turn to Q3 operating expenses. Total operating expense increased 7.7% sequentially from the second quarter of 2023 to $40.2 million. The sequential increase was primarily due to R&D spending and an increase in legal fees, which will remain at substantial levels through the completion of the investigation by the International Trade Commission of the unlawful importation into the United States of modules and systems that infringe the asserted Vicor patents. The amounts of total equity-based compensation expense for Q3 included in cost of goods, SG&A, and R&D, was $693,000, $1,788,000, and $977,000, respectively, totaling approximately $3.5 million. For Q3, we recorded operating income of $15.7 million, representing an operating margin of 14.6%. Turning to income taxes, we recorded a tax provision for Q3 of approximately $1 million, representing an effective tax rate for the quarter of 5.9%. Net income for Q3 totaled $16.6 million. GAAP diluted earnings per share was $0.37, based on a fully diluted share count of 45,187,000 shares. Fully diluted EPS decreased approximately 3% sequentially compared to $0.38 in the second quarter of 2023, and increased approximately 825% from $0.04 per share earned in the same quarter a year ago. Turning to our cash flow and balance sheet, cash and cash equivalents totaled $227.8 million at Q3. Accounts receivable, net of reserves, totaled $62.6 million at quarter end, with DSOs for trade receivables at 42 days. Inventories, net of reserves, decreased 1.9% sequentially to $104.6 million. Annualized inventory turns were 2.1. Operating cash flow totaled $23.8 million for the quarter. Capital expenditures for Q3 totaled $7.7 million. We ended the quarter with a construction-in-progress balance, primarily for manufacturing equipment, of approximately $26 million, and with approximately $16.7 million remaining to be spent. I'll now address bookings and backlog. Q3 book-to-bill came in below one, and one-year backlog decreased 19.6% from the prior quarter, closing at $174.7 million. Turning to the fourth quarter of 2023, with reduction in backlog, including overdue backlog, we are more dependent on turns orders, and that results in less visibility to our near-term outlook. While that is the case, our current expectation is that revenue, gross margin, and operating expenses will be approximately flat sequentially. 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 possible in the limited time available. If you have more than one topic to address, please get back in the queue. Phil? Thank you, Jim. Let's begin with an update on our high-performance computing, or HPC, business, which will continue to be our major growth driver in the next few years. For the next few quarters, we will be focusing in 3 key areas. The first will be ramping production of our Gen 4 48-volt bus converter and Factorized Power point-of-load products in our new ChiP fab. The second will be completing development of our Gen 5 Factorized Power point-of-load solutions and delivering models and tools in Q1 of 2024. The third will be continuing to expand our customer base beyond the major accounts that dominated our revenues in the HPC market over the past 5 years. Regarding revenues in HPC, we expect customers using both lateral and lateral vertical Gen 4 products to be in production through 2025, before introducing new processes utilizing Gen 5 Vertical Power Delivery, or VPD, solutions midway through 2025. In reference to the expansion of our customer base, we have continued to have substantial discussions with large data center, AI, and network processor companies on their challenges in powering next-generation high current products. All of these companies recognize they need scalable access to more adept power system technology to effectively address the technical and operational challenges of generative AI at scale. The one major technology challenge that is foremost in everyone's minds, and heard repeatedly, was power density and power delivery. Power delivery to the processors, power delivery to the AI accelerator cards and their rack systems, and last but not least, power delivery to the data centers while driving towards a carbon neutral objective. HPC customers are becoming aware that our Gen—our current Gen 4 lateral vertical solutions can reduce power losses in an AI-enabled data center by 1-3 megawatts, while enabling high processor performance. Future processes will, however, require full Vertical Power Delivery, or VPD, to continue power loss reduction. Vicor's first-generation VPD solutions, introduced in 2020, required complex stack packaging to incorporate bypass capacitors in a gearbox layer due to insufficient current multiplier density. Putting their customers at risk, competitors are going down the same route, with even lower current density based on multi-cell, multi-phase solutions, running into greater mechanical and thermal challenges as they try to deploy VPD using thick, heavy, and thermally inept stacked packages. Our Gen 5 MCM technology steps up current density by over three times and reduces the multiplicity of bypass capacitors needed, eliminating a stacked capacitive layer and enabling a second-generation VPD solution to the power system requirements of the AI card that is thinner, more thermally adept, reliable, and cost-effective. Customer engagements for our Gen 5 VPD solutions are happening at an accelerating pace, and our objective in coming quarters will be to secure significant design wins. In view of the current density and performance gaps enabled by our 5G solutions and evolving AI power system demands, I am confident that within a few years, we will gain a dominant share of the AI power system market. One of the major objectives in the design and development of our Gen 5 product line was to have a scalable, low cost, short cycle time and vertically integrated ChiP fab, with a short time frame for capacity expansion. We will need this capability to meet the supply chain demands of our customers, who are in two distinct groups at the moment, based on different priorities. The first group, where the priority is supply chain flexibility, is focused on a multi-source, multi-phase VR technology. The second group, where the priority is competitive advantage from product performance, is focused on the power system attributes needed to enable superior AI. Due to competitive market forces, our belief is that the first group will soon embrace the level of innovation and scalability enabled by 5G power system solutions from a multiplicity of ChiP fabs. I am very pleased with our progress in other key markets, which are critical to developing a robust and flexible business portfolio of our own. We have reached a very important milestone in our automotive business development, achieving PPAP qualification for 3 of our platform power modules for 800-volt to 48-volt power conversion, which enables production for these products in the second half of 2024. As in previous quarters, we continue to develop new collaborations with OEMs and Tier One suppliers, who value lightweight, high density power system solutions. These collaborations will enable design wins for 2026 production and beyond. Toward the end of Q3 and early into Q4, we have seen demand strengthen in our broad industrial, aerospace, and defense markets for both large OEMs and smaller customers who purchase through our channel partners. Demand in China remains weak for both legacy brick and advanced products, and we have been shifting our focus in recent quarters toward the Korean and Asia Pacific markets, where we see new opportunities for our advanced power modules across a broad range of industries. Our new sales and marketing team in Japan has been making excellent progress, developing new pipelines of opportunity with large industrial automation accounts, and are on track to add significant revenues in the coming years. Momentum with our operational excellence initiatives continues, with teams working on specific performance improvements with our top 100 customers. With new products set to launch in Q4 and Q1 of 2024, we are on track to meet our OGSM goals. Customer visits from our top 100 accounts to view or audit our new ChiP fab have been averaging one per week in recent months. This pace will pick up in 2024 as we ramp production and have the ability to host more customers. Visitors have left impressed with our new fab and its capacity and scalability. They understand their need to access our fab capacity for power systems, with power density and performance attributes that cannot be supported by multi-source, multi-phase solutions, that cannot keep up with our current density and PDN flexibility. They also understand our commitment to operational excellence, as clearly reflected in the equipment, process, and systems of our ChiP fab. Thank you, and with that, we will now take your questions. Okay, Operator, we're ready for questions now. Sure. Hello, everyone. If you wish to ask a question, please click on the right-hand icon at the bottom of your screen. If you would like to withdraw your question, please click on the hand icon again. Thank you. And first question is coming from John Tanwanteng. You are unmuted. Please go ahead. Thank you for taking my questions, guys. First one, I was just wondering how qualifications have gone at the new facility. Can you talk about when you'll start shipping volume through the vertical planning capacity and kind of the initial demand that you're seeing and the response that you're seeing from customers? I think we had trouble hearing part of your question. Could you repeat it, please? Sure. I was wondering how the qualification process went for the initial customers for the new vertical, vertically integrated planning capacity, and when you expect to start shipping volume on that new equipment? Okay. So as Phil pointed out in his prepared remarks, we've had visits at an accelerating pace, frequent visits, weekly visits. As you mentioned, these visits have generally gone quite well. Visitors are impressed with the equipment, the processes, the systems we put in place to achieve much shorter cycle time in scalable capacity. This is very evident to every visitor that has come through the fab. The fab, at this point, in terms of its vertical integration, is what I would say, essentially complete. But that's not to say that- ... all of the equipment has been delivered and installed. The strategy that the operations team has pursued in terms of enabling initial capacity has been to get the core equipment with respect to our three-dimensional integrated packaging capabilities in place, while deferring some of the other measure in order to, you know, facilitate some of the challenges by some of the vendors. That other measure is coming in and is getting installed over the next few months. But while we are in effect not all done, we are done to a very large extent. We can, at this point, make complete units, including all of the three-dimensional package integration steps that are essential to our 5G products, in terms of vertically integrating processes that have been outsourced, as well as enabling our 5G platform capability, which has some very exciting new process steps. Okay. To be clear, are you already shipping, or are you still in the qualifications and maybe, you know, finishing out phases of the facility? Or are you producing out of that piece that you've been working so hard to insource, you know, over the last year or two? We are using it for some of our in-house needs. I would say most of our in-house needs at this point, and beginning to selectively use it for certain customers who are seeking short cycle time or rapid turnaround to service their needs, but not on a mass scale yet. Got it. Okay. Just to follow on, Patrizio, when do you think the book-to-bill will start to creep back over one, and you see your backlog increasing again? Well, that could happen relatively soon. It could take a little longer. We're not going to make any specific prediction. I think it's a complex landscape, and there's a number of variables at play. So, I think we need to be non-committal with respect to that. Okay, fair enough. I'll jump back in queue. Thank you. Thank you. The next question is coming from John Dillon. You are unmuted. Please go ahead. Hey, Phil, I'm wondering if you can give us a little more color on the bookings. For example, how do the bookings look for the next couple of quarters? Are we gonna see sequential increases in the bookings, or do you expect them to be flat or down?ker We may see substantial increases. Again, we don't want to be very specific because of uncertainties that are outside of our control. But there is a range of scenarios that include a pretty steep climb, but then again, it may take a while longer. Can you just give us a little more color on that? You know, what's going on? It sounds like you could possibly see a nice increase in bookings, but... I understand bookings, trust me, I really do. But, if you could just give us a little more color on that, that'd be helpful. So, John, this is Phil. So as Patrizio said, it's a complex landscape of, you know, older programs ramping down, newer programs coming up. There's a whole host of things out there, complex-wise, in terms of the deployment of next-generation solutions. So as Patrizio said, it's better to just take a little bit of a wait and see approach to that at the moment, given, as I said, the complexities that we're looking at. I guess I understand that. The problem is there's a bunch of people that are short on the stock, and the shorts are running around saying, "You know, you guys aren't going to see any bookings increase, and you're out of the GPU business." Maybe you can just answer that question a little bit better because they're pretty vocal about the demise of Vicor, and they're really betting against you and the company. So I'm just wondering if you can help us out a little bit here, give us a little color on, you know, what you see as far as GPU land is concerned. John, as you know, I think you've been an investor for a long time. We don't run a company based on what the shorts might do or any near-term type of consideration. We take the long view. We're very committed. We believe we are in a very unique position, the only position that can support critical market needs. So that's how we run the company, that's how we operate. We're not going to get into any debate regarding that, which to us is quite obvious with respect to the tenure of our technology, the need for it. The customers that are literally flocking to us in terms of their next-generation AI needs, they confirm what we believe, and is objectively supported by... numbers such as current density and, PDN flexibility and Vertical Power Delivery capabilities that are without equal in the industry. So that's what I think investors should be relying upon. But obviously, they have a choice to believe us or not believe us. We believe ourselves, and time will tell with respect to that. Yeah, I completely understand. I was involved in programs where there was voltage drop, and I understand that all too well. And I don't know if all the investors do, but I completely understand, and I understand how the technology is. So if some don't, that's going to be too bad for them. But I think we need to move on to the next topic. I'll get back in the queue. Thank you very much. Thank you. The next question is coming from Quinn Bolton. You are unmuted. Please go ahead. Hey, guys. Can you hear me? Yes. Hi, Quinn. Yes. Hey, I can hear. So I guess first question, you know, last quarter, you guys seemed pretty excited about this new AI platform that you expected to ramp in the fourth quarter of 2023 and throughout 2024. Can you just give us any updates on that program? How are you feeling about it? Is it still on track? Have you started to see more bookings associated for that? And a related question, there are now two platforms on the market, one by NVIDIA, one by AMD, that I think both are rated at a 1,000-watt TDP. It seems like a 1,000-watt is kind of the key power level where you guys bring some real advantages, especially with lateral vertical. Can you confirm whether this AI platform is indeed 1,000 watts to you? Quinn, this is Phil. So the first part of your question, I think, was what we talked about, the last call. And my prepared remarks, I basically said that the first area of focus was to ramp in Q4 our 48-volt bus converters and Factorized Power solutions. So I hope that answers that question pretty clearly. The second, in terms of power, we're seeing, you know, 1,000-watt GPUs and network processors and all sorts of ASICs and mixes of CPU, GPU combos out there. As Patrizio talked about, you know, we have the technology to address those that offers, as I mentioned in my prepared remarks as well, significant power savings with lateral vertical solutions of the scale of megawatts in data centers, which is really critical to any data center company. With our Gen 5 technology coming along, I mean, the level of engagement now is very, very high. As I said, we're having substantial conversations now with customers that will diversify us away from the two big guys that we've been doing business with for the last few years. So, as I said, I'm very confident in the future and where we stand, and it's a bit of a complex landscape, as I said, because you've got new programs starting up, old programs ending. There's a bunch of other stuff going on out there with technology and product introduction. So, you know, as I say, we're confident in our position in the market. Thank you. Thank you, Phil. I guess a question, and this is kind of highlighted in, I think, some of your legal proceedings and ITC complaints against Delta, but it looks like one of your big motherboard customers has moved, it looks like, in scale to a two-stage, you know, architecture and away from Factorized Power, and I think Delta has come in and won some of the sockets away from your NBM. I guess, can you give us any sense of what's going on in the motherboard business? How much of that business do you think goes to stage? How much of it stays single stage? Because it seems like, you know, a big customer has moved away from Vicor, you know, with that transition to two-stage architecture, and, you know, Delta's come in to do the 12 or 48 to 12-volt module. So as you may know, Vicor pioneered the NBM bus converter. We have substantial IP. We've asserted three different patents coming at it from three different directions, and they're not the only patents we have that cover that technology. We have licensed it. There are OEMs that are paying royalties for those NBMs, and they're the ones that they have certainty or continuity of supply. There are other ones that have been taking chances, and those are going to go lying down in the next year. That's what's going to happen. Quinn, I would say that when our Gen Five technology is introduced to the market next year, you know, the CPU requirements have been creeping up, you know, 500, 600 amps now for some of these motherboards. I think our Gen Five solutions will cause a number of customers to reevaluate that two-stage approach, given the performance that they can get from our Gen Five. So, I think, you know, the market has moved from two to one to two, and it'll go back to one, in my opinion. Yeah, I second that. So to be clear, in answer to your question, the NBM is not, you know, as much as we love it, we invent it, right? But you hear it from me first, it's not the long-term solution to 3 amp per square millimeter, high density VPD, scalable, robust, cost-effective VPD for next generation AI. It is not. It's an interim step, it's essential. It's an attempt to, in effect, drive a multi-source, multi-phase capability that is fundamentally handicapped. It's not really panning out to be when you get up to the kilowatt level or the 1000 amp level, truly multi-source. It has brought about significant trade-offs in terms of performance, which are not sustainable in a competitive landscape. Got it. I will get back. Thank you. Thank you. Just a reminder, everyone, if you joined using the phone line, and if you wish to ask a question, please press star and three. The next question is coming from John Dillon. You are unmuted. Please go ahead. Yeah. On the last call, you stated you had a lateral and a lateral vertical opportunity with a major customer, and I was wondering if that was for the same- John, John, sorry to interrupt you, but it's hard, at least for me, to hear what you're saying. Phil, can you hear? Yeah. It's coming across a little bit muted and mumbled, John. If you can do something with your speaker there, that would be great. Yeah, yeah. And let me... Is this a little bit better? Oh, yes, that is. Yes. Yeah, yeah. Okay. On the last call, you stated you had a lateral and a lateral vertical opportunity with a major GPU customer. I was wondering, was that for the same GPU, or was it for two separate GPUs? So what we talked about there was that we have lateral and lateral vertical solutions for not just one customer. We are bringing that solution forward, and we have customers looking at that, both of those, solutions. Certainly, the number of customers looking at lateral deployment is a little bit higher than the number with lateral vertical, but we have both. A-and that's- Gotcha. Also, the way in which, you know, systems have evolved. Yeah. But make no mistake, the future, and the future is coming next year, is no longer with lateral PDMs. In fact, all of the design activities that we're engaged in at this point is beyond lateral PDM. I'm on a call with an important potential customer tomorrow. We're not even going to consider or entertain a lateral PDM. It's either a lateral vertical or what we call second generation VPD, which is a more advanced, more scalable, more robust form of VPD that follows on the heels of the first generation VPD that Vicor pioneered, and most of those companies have tried to copy. Got it. So, with the one major customer, though, do they have two different designs with you? One for, you know, are they working with two different... The one customer, do they have two different GPUs that are going to be using, one is using lateral, the other is going to be using lateral vertical? Or is it the same GPU that's initially going to be used lateral, then go into lateral vertical? John, we're not going to talk about any one customer. I'm sorry, but, you know, bear with us. That's, that's not the level of specificity that we want to get involved with. Okay. And then one last question then. When do you expect the GMs, the gross margins, to improve with the new factory? Well, I think we are on a general upward trend. That's not to say that we're going to see a positive improvement each and every quarter. But we have been in the low 50% range. And I think the three of us here, Phil, Jim, and myself, have line of sight to considerably higher numbers. Partly due to the unique fab capabilities that we put in place, a considerable investment, but also significantly in terms of the 5G point-of-load technology that takes us to a much stronger position in terms of not just performance, but cost effectiveness. And some of that is going to be passed along to customers in the form of more cost-effective solutions. But at the same time, those more cost-effective solutions at a lower price point in terms of cents per amp to a customer will result in substantially higher margins for Vicor. Great. Thank you very much. The next question is coming from the attendee who joined over the phone. So please introduce yourself before you take your question. You are unmuted now. Hi, Richard Shannon with Craig-Hallum. Can you guys hear me? Yes. All right, excellent. Let's see, a couple questions. Maybe following up on the topic of bookings here. I think last quarter, you felt fairly confident that the backlogs would improve either in the ending third quarter, fourth quarter. Now it seems you're less certain of that. And I think if I understood one of the answers to a prior question, you're still expecting the design with a major customer to that is still active here. So seems like a couple simple explanations for that would be either that design is delayed or your share of the size of the opportunity is more limited than what you initially had thought, or potentially there's other reasons. So can you help us understand those dynamics relative to your last conference call? I think I made clear that we really don't want to go into the level of detail. To be clear, while I appreciate the reason for the interest, the curiosity, it's really got very little to do with Vicor's opportunity in the medium and long term, and that's what we're really focused on. Okay, I guess I'll jump to another question here, maybe looking a little bit longer term. Phil, I'm going back to your prepared remarks here about time frame for 5-year technology to be ramping. I think you said in 2025, if I caught your commentary correctly. Is this the expectation of one that would intersect with the first ramp of a 3-nanometer accelerator you should see in the market? Or is there some dynamic you're expecting to intersect with? No, I think that 5G is, I believe, looking at what it's capable of doing to the market, is gonna be very ubiquitous. I think we'll see design-ins, as we've talked about, even down in the, you know, the low hundreds of amps because of the density and cost effectiveness and performance level of the technology. So it's gonna be ubiquitous across all sorts of different high-performance computing markets. But with regards to what we see from a deployment perspective, 2024 will be obviously a big design win year for us, with an increasing number of customers, and then a ramp to production in the 2025 time frame. Some customers early in 2025, other customers sort of midway through the year. So it'll be a mix and a blend of both, you know, domestic and international customers, actually. So again, that's going to set the scene for us to take really significant share in the ever-expanding AI market. That's what we're looking at right now, Richard. Okay, thank you. I'll jump in again, back in the queue. Thank you. The next question is coming from Quinn Bolton. You are unmuted. Please go ahead. There we go. I guess just a follow-up there, Phil, just to Richard's question. You know, if 2024 is sort of a transition year, design year for Gen Five, and 2025 is the real ramp of the Gen Five technology, would you expect, you know, quarterly revenue to sort of stay flattish at about current levels until you get to that Gen Five ramp? Or do you see the opportunity that as some of the Gen Four lateral and lateral vertical solutions come to market, that you could actually see growth in quarterly revenue? Now, I'm not trying to get you to give us a quarter when it may grow. I'm just, how do you think about revenue over the next four or five quarters? You know, do we need Gen Five to ramp before we see a significant increase in quarterly revenue, or can that happen sooner with Gen Four lateral and lateral vertical? Thanks. So, Quinn, as we said, it's a complex landscape right now, and you know, we've got confidence in our Gen Five-Gen Four lateral and lateral vertical solutions. We're gonna see how that goes, but I believe that that technology, again, as we talked about, I mean, you can't not save megawatts for your end customer and not consider it seriously for deployment, right? I'd just go back to that. So it's a very important step for us towards Gen Five, but we've got great products that we're gonna be ramping this quarter and into next quarter. So we have a bridge, if you like, to the Gen Five. Got it. Thank you, Phil. The next question is coming from John Dillon. Please go ahead. You are unmuted. Hi, thank you. I was wondering, Jim, if you could break out the actual legal expense in the quarter and kind of what you expect the run rate to be, as the ITC does its investigation, over the next several quarters? Incrementally, John, I won't quote an exact number, but it's in the millions of dollars, and it's very substantial. ... as a, you know, a smaller company. But we believe it's well worth taking on because of the strength of our position. Got it. Do you expect it to increase from what you did in the past quarter here? No, we are- We're prepared to invest as much- Yeah As necessary. Again, in one way of looking at it, this the intellectual property side of our business is profitable, right? The operating expense relating to a certain intellectual property is more than covered by intellectual property-related income, and we expect that to continue to move in the right direction. Particularly as it becomes evident to OEMs who have been taking a wait-and-see attitude with respect to how this may all play out, that they're going to be left in the lurch by, you know, companies that have stolen our technology. Got it. Okay. So I was wondering if you could expand just a little bit on the enthusiasm you're seeing out there for the Gen Five VPD. What, where, what's like the breadth of the customers that you're seeing today versus where you were, you know, maybe in the same time in the development cycle for the current gen of AI processors? Would you say that there's a lot more volume and opportunity out there today, just because of all the... I guess, the amount of competitors that are out there, number one. Number two, the size of the opportunity increasing. Just help me size, you know, what that opportunity looks like, Gen Four versus Gen Five, if you can. Yeah, let me... The current density improvement... Well, first of all, you've got the drivers of the much higher currents coming along for all of the processors across networking, AI, CPU, right? That's the first thing. Secondly, the market's expanding at an incredible rate, particularly on the AI side. But as you add more AI, you also need to add more CPU, you also need to add more networking. So everything's sort of getting the big uplift. Now, then, you factor in that our Gen Five has got 3x the current density over the Gen Four technology, and the reaction to that, and we've shown a lot of the customers, actually, when you go down the list of the majors in data center, AI processors or network processors, we've shown them examples of the mechanical examples of the packaging that we're going to have. I mean, the reaction is astounding. They're astonished that we can put as much current as we can into that small of a package. And they're... If they're looking at VPD today, because that's where they're going to go, as Patrizio said, all of the conversations now are about VPD. It's not about lateral. The current Gen Four is lateral, vertical, but Gen Five is all about vertical. They look at that and they say, "My God, I don't need to disturb my capacitive layer underneath my board. I can put one of these tiny little current multipliers there. I don't have to worry about mechanicals, thermals," you know, everything sort of fits. And so the reaction is incredible when compared to similar Chinese companies that copied our NBMs, trying to do this thing with VPD, copying basically the wrong thing, which is a stacked package, really heavy, thermally terrible. You know, they're leading customers down the wrong path, and the customers can see that when they see our Gen 5 technology. So the excitement is really incredible, and I'm very confident. As I said, we're going to take major share here in this market. Third generation VPD is a horror show from a manufacturability perspective and from an IP perspective as well. So, there, too, unscrupulous foreign suppliers are putting not just themselves, but major OEMs at substantial risk with respect to continuous supply, both in terms of, you know, the viability of the solution and from a robustness perspective, and from the perspective of viability, from an IP perspective or non-infringement perspective, I should say. Got it. So, fair to say that the pull is much stronger on Gen 5 than it was in the Gen 4, Gen 4.5 that you have out there? Yes. I think that customers are gonna get both performance, right? And power savings and like and we talked about all the advantages of reliability, of cost that add on to all of that. And with our scalable ChiP fab, we're going to be able to work with customers on flexible supply chain solutions. So we're sitting in a very good place, John. Okay, great. Thank you. Next question is coming from the attendee who joined over the phone. So please introduce yourself before you have your question. You are unmuted now. Hi, Richard Shannon from Craig-Hallum again, guys. Can you hear me still? Yes. Yes. Okay, great. Thank you. Phil, I wanted to ask you about one of your statements in your prepared remarks here about 5G technology and kind of targeting two different groups with different priorities here. The last part of that statement was, you believe the first group will embrace level of innovation for 5G from a multiplicity of ChiP fabs... since you only have one, at least that you've talked about or in plan, can you parse the statement a little bit more and tell us what you mean by that, and over what timeframe we could see a multiplicity of ChiP fabs, please? Well, I'll try to answer that question. Again, even the lack of sharp visibility with respect to that, so bear with me as I answer your question in general terms. As you know, it took many years and a very substantial investment to bring together a first ChiP fab. In some respects, this initiative is similar to the kinds of fabs most of us are familiar with, semiconductor fabs. And as in that case, the technical complexity, the complexity from the perspective of equipment and processes is such that bringing to closure a first fab takes, again, considerable time, persistence, and investment. But the great news with respect to having done it, is that replicating it is something that can be done on a much shorter cycle time with a high degree of predictability. And the investment involved, while substantial, it's in the hundreds of millions, in the right perspective, from the perspective of OEMs wishing to have, you know, flexibility from a sourcing perspective, given their system capabilities and value propositions, it is, in that perspective, a relatively small investment. So we do anticipate more than one fab coming to the market to bring about an ecosystem, where large OEMs that cannot, for good reason, rely on capacity from just the first Vicor fab will avail themselves of capacity from our facilities. Okay. I guess we'll parse that statement and ask about in the future, Patrizio, thanks for that. I'm gonna follow up on one of your answers to a prior question here, talking about, I think, and I'll probably not get your term or your wording correct here, but you're only engaged with customers that are interested in vertical-only solutions, either first or second gen here. Is that essentially saying, are you saying that you're not seeing anyone with a sufficient level of power, and I'll use 1000 amps as maybe that demarcation line, tell me if it's different, that are not looking? Are you telling me they're not looking at lateral at all, or you're just talking with the guys that are only looking at vertical? They are typically looking at programs on different timescales, in some cases, a few months, or the better part of a year or a year out, with different current requirements. You know, our focus is to engage where we can contribute substantial value to, in particular, 5G solutions with their unique set of attributes. Those are particularly differentiated when you get past lateral, right? It can be lateral or vertical. We demonstrated that with lateral vertical relative to lateral at current levels of roughly 1,000 amps. You can achieve something of the order of nearly 150 watts of PDN, both direct and indirect, power savings. Those are very substantial, and those when applied across data centers result or can result in the megawatt scale savings that Phil referenced earlier. So there's a value proposition there. And that can be done with our 4G technology, even though the current density of that technology is, you know, a small fraction of current density with 5G. So it is at that, a lot of vertical. There's a value proposition there, and we can engage there to enable customers to achieve their objectives. But the much bigger opportunity is looking a little beyond the next few months or 6-9 months, systems that are going to go into production, as Phil said, late next year or early in 2025, that were with 5G MCMs, a few amps per square millimeter. They're all new world of capabilities that enable and in turn enable solutions that it got all the other attributes, right? They are, they're scalable, they are robust from a mechanical perspective, they're robust from a thermal management perspective, and they're more cost effective. So, Richard, this, this is Phil. Just to add on to that, a couple of weeks ago, I got invited to a big data center company's strategic supplier day, where they had their executives presenting on the future roadmaps and the challenges of building AI out in their existing data centers, as well as adding more data centers going forward. As you can imagine, as Patrizio mentioned here, we're talking about data centers of the 20-megawatt-plus level, and getting power into those while also trying to get carbon neutral is a massive challenge. So if you look at the amount of compute that's going to be needed to support AI going forward, both on the CPU side and on the, the GPU or ASIC side, plus the network processing, even if you save 10 watts or 5 watts per the CPU, that's a massive savings. When you multiply the amount of compute in a data center, it gets over megawatts very quickly. So even to save 10 watts or 15 watts in a 400-amp or 300-amp CPU motherboard, and you can do it vertically, why not do it vertically if you can offer that to your customer base? So that's the change that's going on in the market, that's- To add to that, historically, the answer to Phil's historical question, why not do it that way, is that you couldn't do it that way. You need technology that has got both the high current density, the high bandwidth, that enables, you know, a significant fraction of the caps, historically, taken out the socket to be swept away. So, power savings is gonna be it as this stuff gets deployed, because you can't power it. You're competing also with all the EVs out there. The same grid supports all of that, plus the data center. So they're also trying to use renewables, but really significantly reducing the impact, you know, on a megawatt scale is massive value add for any of these data center hyperscalers. You know, it's really important. Okay, operator, I think we're gonna have to take- Maybe one more call. Maybe one more question, please, and then we'll have to wrap it up. All right, so the last question is coming from John Dillon. Please go ahead. Your line is unmuted. John? I'm sorry. I did not have my hand raised. That wasn't me. Oh, sorry. In that case, we have no more question. Okay. Thank you. Thank you, everyone, for joining the call. Thank you, everyone. We're ready to wrap it up. Thank you. Thank you, everyone. That marks the end of your webinar. Thank you for joining.