You mentioned the planned capital investments, which is the production equipment to make these sorts of next generation devices. And you mentioned the R&D investment, which is the ingenious folks who are working on developing the process and capabilities to make these parts and to make these prototypes. So you’re right. We are seeing some historic opportunities and we’re willing to invest in it. And our board has been very supportive.
Jeffrey Bernstein: Got you. And then Dan, are you delivering anything that’s in a chip scale package of this nature today for current customers? And now you want to do it internally or is this going to be brand new?
Daniel Baker: Primarily, this will be brand new, Jeff. We are delivering prototypes, but we’re not currently in production. What we’re doing now is relatively small scale. And it allows us to get sample, to test parts and to get samples to our customers for evaluation and to develop the market. As I said, our goal is to be in production later this fiscal year. And so that will mean getting the equipment in, getting the processes developed, and getting a variety of production processes up and running. And it’ll mean some expansion in the building and some repurposing of some of the space that we have now.
Jeffrey Bernstein: Got you. And is there any relationship between this investment and new relationships that were established as a result of the COVID semiconductor shortages and you’re getting in front of more customers who really just had to find better and other sources of supply?
Daniel Baker: They are related, Jeff. You’re absolutely right. We have customers who are interested in this. And then also one of the things that the pandemic highlighted was the risks of the supply chain, the supply chain risks that we face and that were highlighted during the pandemic for encapsulated parts. So like most companies in the semiconductor industry, the encapsulation or packaging is done in Asia by OSATs or contractors, subcontractors. And that exposed a significant vulnerability in the supply chain for these types of parts. So we had customers wanting us to onshore and to bring processes in-house to encourage us to do that. And so some of these investments are a response to those, that kind of customer interest and feedback that we got during the pandemic and the chip-again shortages.
Jeffrey Bernstein: Got you. Okay. And lastly, in the K, and you mentioned on the call here some of the new product development initiatives, I was curious to see you mentioned in the K some even higher power isolators. And just kind of wondering what the application is there. I think previously you had the capability to work with things like silicon carbide modules and GaN and some of the do really higher power compound semis out there. But what’s happening in that higher power domain?
Daniel Baker: Well, that’s a very exciting area because there’s so much interest in power conversion and more efficient power conversion. So as you know, and as you pointed out, our devices are uniquely situated to drive some of these wide-bandgap transistor switches that are now becoming available, that switch at higher and higher voltages and higher and higher powers. So the higher voltages generally mean more efficiency. And the higher power allows larger and larger motors and systems to be controlled. So we see applications in electric vehicles, in alternative energy and clean energy conversion, and power storage. So that’s an area that we see as providing excellent growth opportunities. And we’re continuing to expand our product line in those areas.
As I mentioned in the prepared remarks, we’re going to higher and higher voltages that our devices can withstand in order to keep up with the market for those ultra high efficiency power switches. So we have the highest isolation voltage, which is a key figure of merit in the industry, the highest of their type. And we also have the highest switching speed capability with sometimes called CMTI or Common Mode Transient Immunity, which is another figure of merit. So we have the best devices in the industry in a market that’s growing rapidly, and that is demanding more and more efficient power switching.
Jeffrey Bernstein: Got you. Okay. And then we’ve talked about in the past, the challenges of engaging with folks like the auto manufacturers and the major OEMs there, et cetera. Sounds like some of these parts would be appropriate for more industrial kinds of applications and electricity transmission and storage and those kinds of things where maybe the ability for you guys to market might be easier. Can you just talk to that a little bit?
Daniel Baker: Exactly. So we have cautioned that automotive markets can take a while to develop, but it remains an area that we’re focusing on. But nearer term, we’re expanding our DC to DC power conversion product lines, which we talked about. And those have potential in solar and energy storage markets, wind power conversion. Those are important, fast growing markets. So we see a broad range of opportunities for these products. Automotive and clean energy are two of the most important.
Jeffrey Bernstein: Great. Thanks very much for the time. I’ll let someone else ask some questions.
Daniel Baker: Thanks, Jeff.
Operator: [Operator Instructions] And I see no further questions in the queue at this time. I’ll turn the conference call back to you, Mr. Baker, for any closing remarks.
Daniel Baker: Well, thank you, everyone. We were pleased to report strong earnings for the quarter. We’re pleased to talk about our expansion plans and capital investment. We’re well positioned for an industry recovery. We look forward to speaking with you again at our next earnings call in July to review first quarter, the first quarter of fiscal 2025.
Operator: Ladies and gentlemen, that concludes the conference for today. Thank you for your participation and you may now disconnect.
