Gayn Erickson: All right, two things. First of all, silicon photonics as we — it’s different than when we talk about maybe photonics 2D, 3D sensing. And it is — they’re very different. Our 2D, 3D sensing in mobile those applications that people understand what 2D and 3D sensors are the things that recognize fingerprint or facial recognition or proximity sensors, et cetera, okay? Those actually have a reasonably high infant mortality rate, but they also sometimes have redundancy. It has proven so far that because of the life of those devices, they may only be on for 10 seconds lifetime because they’re only on for a millisecond at a time — times 100,000 or whatever the math is. They have — the customers that are using it, we have multiple installed base applications, they’re all doing sampling, okay?
So they only sample 1% or 2% or some number. And as such, they don’t do 100% for that application, okay? That’s one thing. We actually didn’t spend any time until now talk about 2D, 3D sensing, which is still an ongoing business that we get annuities from, et cetera. Silicon photonics is actually the definition of where they are actually putting a photonics transceiver, fiber optic transceivers a way of thinking about it on to a piece of silicon bypassing the normal discrete modulators, demodulators and infrastructure that’s required to create transition electricity to optical and back again. This has been the holy grail that people like IBM and Intel have been working on for over 20 years for several reasons. One is to continue to meet the shrinks of silicon and the process or improvements over time, electrical signals can only travel so fast, and we’re very close where within people say a generation of it cannot go faster.
About 240 gigabit is the upper high end range of an electrical signal on a conductive path. is 112 today. So we’re like one generation or double from that’s it. So the folks that have been writing the white papers have been saying, what we’re going to need to do is we’re going to have to switch to photonics transmission, which if you remember from your business class, photons are neither waves or particles. In the case that they’re not a particle, they have no mass, therefore, there’s no limitation to go to the speed of light and you can modulate it at much faster rates than you can in the electrical signals. So where electrical signals completely cannot go faster than 200 gig, photonics is just getting started. And so Intel, AMD, NVIDIA, IBM, TSMC, GlobalFoundries, these guys have all been making announcements recently to talk about their investments in what is referred to as silicon photonics to put that photonics transceiver on to chipsets, microprocessors, graphics processors, okay?
When you do that, instead of the traditional market that I said two years ago, you would have heard me say on these calls, I do not believe silicon photonics is going to be bigger than silicon carbide. When I said that, I meant it related to transceivers. Now that there’s been public announcements for leading suppliers of intent to put those transceivers into chipsets, the market is 100 times larger than silicon photonics and the test times are longer, okay. I’m sorry, yeah, longer €“ 100 times larger than the silicon photonics transceivers. And I believe — and I’ve now stated, I believe it is ultimately larger than the silicon carbide market. It is way more devices. It is 100% burn-in and it is much longer test times. And so because of the stabilization of silicon photonics is very real, and it’s been around for 20 years, this is not a 4 hour burn-in time or 6 or 12, nobody is going to be that low.
And so with these long burn-in times, that’s a big opportunity. And we’re — like you said, we’re all over that. And then if you make an investment in us, you are making investment in that as well as some of the other markets we’ve talked about like memory. And one of the leading edges of that is the — is our new automated aligner.
Thomas Diffely: Well, that’s an exciting stuff. Look forward to the second and third phase of growth here. Thanks for your time today.
Gayn Erickson: Thanks, Tom.
Operator: The next question comes from Larry Chlebina with Chlebina Capital. Please go ahead.
Larry Chlebina: Hey, guys. Great quarter. Ken, your beat on the gross margin, which drove the bottom line. Is that sustainable? I know the mix was a factor, but since the revenues are going to be going up, you feel confident you can beat 53%, maybe 55%? Your thoughts on that?
Ken Spink: So Larry, I would think that the Q2 was an unusual quarter. We had some benefits that were onetime benefits like we talked about, we had some reversal costs that were previously accrued. We had the mix issue. We also had labor and overhead going to inventory with some of the growth in inventory that we had as well as the mix like we talked about in the . But I think mix would be pretty consistent in the second half though kind of more close. Yeah.
Gayn Erickson: There is lots of items driving the margin. So in terms of 53% saying, are we going to get up to 55% that was what your question? I would not plan on that. In fact, I’d reiterate what I talked about in previously and said I think we forecasted for an overall gross margin for the fiscal year being about 50%, and I think that’s what the plan should be.
Larry Chlebina: All right. So the automated aligner, the automated XP, I know, ideally, you want a long burn-in to drive more equipment sales. But I think there could be a heck of a market out there for — as you mentioned parametric testing of all sorts, whether it’s threshold mortgages and silicon carbide and figure out how many cells are operable on a 3D NAND wafer? What is — do you have a sense of what the maximum throughput is on a fully automated XP if that thing was constantly moving wafers and WaferPaks? What’s…
