Gayn Erickson: Yes, a little both. And we’ve already done that. I mean, I think we have a dozen customers in China. Most people don’t remember that. But if you go back and look, we had a bunch of ABTS systems that were sold all over China which has a FOX system. So we have local Aehr employees there, both sales, applications, and infrastructure. But in China, it’s pretty typical that you also use reps that have close relationships with sort of different geographies, and we have that as well. So they would get a specific commission on a sale. And that’s, I think, almost everything we’ve sold in China has had some of that. Not all of it, but most of it. So it’s a little both. But we’re also looking at upping our presence pretty significantly, including dropping in a demo center, some local infrastructure, and some other things to give us more girth, specifically at the request of about a half a dozen companies.
Christian Schwab: Okay great. No other questions, Thank you.
Gayn Erickson: Okay.
Operator: The next question comes from Jed Dorsheimer with William Blair. Please proceed.
Jed Dorsheimer: Hey guys, just a few questions. I guess first one, the FOX-NP new customer, you described as a semiconductor — global semiconductor manufacturer. Is that also a Tier 1 automotive customer? I’m just wondering if some categorize it as both.
Gayn Erickson: So I’m going to try throughout today and in each call try and get more and more vague only because we’ve been getting feedback from customers to be particularly vague. Now this particular customer wasn’t one of those. But I’ll answer that question, it’s not a Tier 1. Their entire business is semiconductors.
Jed Dorsheimer: And what would you expect the timing to be in terms of conversion from an NP to an XP with that customer?
Gayn Erickson: I actually — I want to hold back on that a little bit with respect to what their timing is because my understanding is, that’s part of their secret sauce etc. But if I told you over the next couple of years, it’s pretty generic, I realize, but they — we know that they have made some substantial purchases for front end equipment and other things as well. And the NP is just their engineering bring up tool. And that has no intention of being able to address their production. So whether it be next year or the following year, you can leave it at that for now. Maybe I’ll give you more visibility next time, okay?
Jed Dorsheimer: Okay. And then, it’s helpful on your excitement over the China market. I’m just curious, are you going to outline how you intend to address the dilemma, which has kind of caught most tool companies off guard where local subsidies require re-engineering of tooling to a local supply chain?
Gayn Erickson: Yes. I mean, I think what I want to say is, we’re not ignoring that and we’re not believing that we have all the answers. We have some specific legal IP security and contractual things that we’re going to use. I’d love to tell you something besides to slow it down, but we’ve also have — there’s reason to believe that it’s not that easy to directly knock off our system without actually violating our IP or to get close enough to do it. We also have a lot of software and a lot of other things. I don’t think it’s that easy to just simply do it and then if you did you would have some other issues. So we’re conscious of it. I don’t want to be and we’re specifically doing things and we’re not going to publicly announce all the things that we’re doing as part of the reason to keep it secure.
Jed Dorsheimer: Got it. And that non-silicon carbide, Gayn. For silicon carbide, the inherent defect density of the material combined with a shift to modules kind of created this perfect opportunity for wafer level burn-in. If you look at the silicon market where you have a homogeneous material structure and chipset, is it to open up memory and to some extent silicon photonics, is this or largely memory in silicon, is this really just a function of moving to modules or chiplets that kind of triggers that? Could you help articulate what you think will be the gating factor there?
Gayn Erickson: Okay, so if you want to step back and just say, okay, what are the really big things driving our market? Okay, first of all, the market is growing from $600 billion to $1 trillion. Semiconductors, many of them are not actually getting more reliable. Things like very low geometry processes, the processors that we’re talking about, AI processors, CPUs, they’re all burnt in today. That’s nothing new. They’re just burnt in in a package form in normal. But then people are actually putting them into — and by the way, in some cases, they weren’t burning them in. Then they’re putting them into applications where they were. There are processor companies that ship devices to a consumer application that don’t burn them in, but always burn them in into automotive.
Well, there’s more and more automotive and other things that matter to the reliability. And then the last thing which really drives wafer level would be you’re putting into multi-chip modules, right? So specifically on memory, you’re like, wait a minute, which ones does it matter? Memory has long required a burn-in process. Every DRAM is burnt in and all of the NAND devices that are going to end up going into a solid state disk drive have a cycling and burn-in measured in fractions of days, many hours. So that burn-in, if you’re looking for opportunities, you look for the devices that then themselves need burn-in, right? Silicon photonics, every single device is burnt-in. Doesn’t matter where it needs to be burnt-in. Then you’re looking for maybe discontinuities where large volumes are going to a new application where it matters.
