Unidentified Analyst: Appreciate it. Thank you.
William Miller: Thank you, Way.
Operator: Thank you. Our next question comes from the line of Dave Duley with Steelhead Securities. Please proceed with your question.
David Duley: Yeah. Thanks for taking my question and thanks for giving us the assortment of helpful information here. I guess, first off on, you mentioned that you were seeing potential for evaluation systems to be shipped into a second high bandwidth memory customer. Could you just remind us how big the high bandwidth memory opportunity or TAM is now, and how much bigger it might be with another customer? And if you had to guess when you might see production systems to customer number two, when might — when that might be?
William Miller: Yeah. So we see numerous opportunities in AI overall, split between GPUs, high bandwidth memory, and advanced packaging. And so when — in the totality, we’ve kind of sized that all that business at about 10% of Veeco’s revenue this year. And I think, obviously as we bring on a second HBM memory provider, I would think that we would — that would probably drive incremental. I don’t have the number right at the tip of my thumb here, but I would say probably $30 million, $50 million over a year, two-year period for that customer. I would say, Dave, at this point, we are in the demo phase and not yet to the point of an evaluation agreement. And so from the time we place an eval, that would probably be a year of evaluation plus integration. So we — I don’t believe we would expect any revenue in 2024, and maybe this would probably be out more in mid 2025 timeframe.
David Duley: And then could you just help us understand what — how big you think — I understand there’s several opportunities here, but I think the biggest driver of your revenue now is in the memory area. Could you help us understand how big the high bandwidth memory opportunity is, either in 2023 or 2024, or whenever you’d like to — how much revenue Veeco should get from that market?
William Miller: Yeah. It’s hard to say, David, here’s why. Last quarter, we became qualified with our first customer in HBM. We’ve now learned that we’re qualified in their more — most advanced generic memory. And so for us, we can’t now know before I could say these shipments were going to high bandwidth memory, but now we don’t really know what’s the mix between high bandwidth and standard memory. So it gets very hard for us to look at it in totality. But if I step back and look at it at a higher level in laser annealing, we see ultimately the opportunity in aggregate for laser annealing to be a $900 million market in 2027. And about half of that in memory. The mix between …
David Duley: I was going to…
William Miller: Go ahead Dave.
David Duley: Just to clarify. So you basically said your first high bandwidth memory customer has now taken your LSA product not just into high bandwidth memory, but into standard DRR5 and other products.
William Miller: Yes.
David Duley: Okay. Then just to switch gears and — or did you have something to add on to what you were saying, because I interrupted you.
William Miller: No, I’m fine. Thanks Dave.
David Duley: Okay. And then, this nano LSA, TAM information, thank you very much. That was awesome. Do you think the applications in the founding logic business are going to be tied to backside power and gate all around? Or is that the way we should be thinking about it and that’s when we would expect the ramp of that type of revenue? Or maybe just elaborate a little bit more for us. Thanks.
William Miller: Yeah. I would say, yes, there are opportunities in backside power distribution that customers are very interested in evaluating our nanosecond annealing tool for, but there are also other applications that they’re just starting to explore things like void reduction, recrystallization, and really we haven’t sized those markets, but when we talk to customers, they’re very interested in trying those type applications out with this new product.
David Duley: Okay. Final question from me just has to do with the epi tool for silicon carbide. Could you just give us a little bit more elaborate update on when you expect demos and evaluations and whatnot? And then just — you mentioned that you have a single wafer approach. I think the other guys in the market are a batch approach. Why are you pursuing this particular approach and what do you think the advantages are? Thanks. That’s it for me.
William Miller: I would say, Dave, that we are on track with our plan post our silicon carbide epi equipment company acquisition in January of this year. We have a tool operating in Somerset, New Jersey. We are running films. We’ve demonstrated high growth rate, we’ve demonstrated good film quality, good uniformity, morphology, et cetera, and we’re building out our demo bingo sheet, if you will, and making progress there. Our plan is to be demo ready by year-end, and so we’re feverishly working toward that with the goal of putting a few silicon carbide evaluation systems out in the field next year. Because I feel we’re on track with the original plan we laid out. Regarding your question on single wafer versus batch, we’ve spoken to a lot of Tier 1 customers in the industry and we feel very comfortable with our single wafer approach in that.
There’s really no solution on the market today that meets all of our customers’ needs. And they really from — introducing the tool to customers and having some customers crawl over the tool, they really like the simplicity of the machine. They like the opportunity that the design has to be green to green from going into a maintenance cycle and then coming out of a maintenance cycle. And these tools require today a fair amount of maintenance, which is a real detractor to the cost of ownership, and also the fact they’re putting so many machines in these fabs, they really need to be — they can’t all be run by a PhD. And this I think is an area where Veeco has excelled in the past in putting large fleets of equipment in place. And so we feel pretty, pretty comfortable where we stand today in silicon carbide.
David Duley: Thank you.
William Miller: Thanks Dave.
Operator: Thank you. Our next question comes from the line of Mark Miller with Benchmark. Please proceed with your question.
Mark Miller: Thank you for the question. Congratulations. Another good quarter. Just was wondering, in terms of your data storage business, are there opportunities as we transition into Hammer type technology for upgrades that you would expect next year or this year also?
