Transphorm, Inc. (NASDAQ:TGAN) Q4 2023 Earnings Call Transcript

Or if you look at our second vertical in the government business, there actually we do GaN-on-Silicon Carbide for [RF AP] (ph), right, which is our second — we call it our second vertical, primary vertical being power. So all growth of GaN on all substances has always been an expertise of Transphorm. So we look forward to doing that. But again, to be clear, our 650 volt baseline continues to thrive and accelerate on GaN-on-Silicon, 1200. We are looking at GaN-on-Sapphire. We have demonstrated excellent results, which led us to now release those simulation models. And then we also do for the RF part, we also do some GaN-on-Silicon carbide, especially on our government contract.

David Williams: Okay…

Primit Parikh: And our IP is strong — across these segments, our IP is quite strong.

David Williams: Fantastic. Thanks. If I could squeeze in just one more. I just wanted to ask about your kind of relatively strong position in the data center and in the power supply market. Just kind of curious if you’re seeing anything in terms of just the AI trend and the immense amount of power that that requires. Are you seeing increased interest from the data center for specifically for kind of AI based workloads?

Primit Parikh: Yes. So generally we — we put all of that under our computing segment, which includes server power, AI. We are seeing some increased inquiries recently. We hope that translates to more design-in momentum specifically for that along with the server computing. And then we also put blockchain in our computing segment as well as high performance gaming power. So this is — all four are part of our computing segment, which as you rightly said on the high power GaN site having been one of the original players, we have a good lead and performance with reliability demonstrated in the market.

David Williams: Thank you.

Operator: Thank you. [Operator Instructions] Our next question comes from the line of Craig Ellis of B. Riley Securities. Your question, please, Craig.

Craig Ellis: Yes. Thanks for taking the question Primit Cameron. Cameron, I wanted to just make sure I understood the elements to the revenue guide for the fiscal 1Q. So I think you said revenues in a range of $5.8 million to $6 million. So should we look at that as having a component in it that’s about $1.5 million of the federal government revenue that we didn’t get in the prior quarter and then the balances. A nice sequential increase in product revenue and if so, what are the drivers for the sequential gain in product revenue?

Craig Ellis: Sure. Thanks, Craig. Good question. I think you’re right. With the government contract being concluded in the quarter, we will see that revenue coming through in the quarter. I think that the overall product line revenue will be flattish. As Primit mentioned, we’re looking to see products starting to grow from the September quarter. So I think particular to this quarter, we will see a higher proportion of government revenue and with that normalizing as we head into Q2 and beyond.

Craig Ellis: Yes. And so really we’ve got two quarters in the fiscal first quarter, Cameron, one catch up and one kind of normal and then it regresses back to a more normal level beyond that. And then you get the boost from product revenue. Is that what we’re seeing? And it was helpful to get Primit’s view on the reactor ramp over the next three years. How are you feeling about the ability to convert the growing design win activity the company has into product revenue as we go through 2024. What is the linearity of the revenue ramp look like?