Electrical and thermal models representing the Gen 5 chips have now been delivered to leading customers, enabling their system simulations at process occurrence up to 2,000 APs. We are on track to deliver evaluation systems and power module samples in Q2 and Q3 respectively. Q2 will be very busy for our Automotive business unit as we hosted the current count, 6 customers at our new facility in Andover, Massachusetts. New collaborations and design-ins continue with significant new engagements with OEMs and Tier 1s in the Asia Pacific region, where investments in electric vehicles and 48-volt zonal architectures are leading the rest of the world. The team had a very successful WCX in Detroit once again this year with four technology papers that showcased our power module-based power system value propositions for 800-volt and 48-volt powertrains.
The new 48-volt zonal architecture will provide both product and OEM licensing revenue opportunities. Thank you. And with that, we will now take your questions.
Operator: Thank you. [Operator Instructions] It comes from the line of Quinn Bolton with Needham & Company. Please proceed.
Quinn Bolton: Hey, guys. I was wondering if you could start with I think the ITC case is going to be heard next week, but I was hoping you could give us just sort of an update on the ITC schedule, what you expect to happen next week? And then what would you expect to sort of follow over the summer until the expected decision date, which I believe is in early October, but anything you could sort of provide us on the – what the next key milestones in the ITC case are would be helpful?
Patrizio Vinciarelli: So to your point, the proceedings remain on schedule. There is going to be a trial next week and a decision by the administrative law judge in September with the deadline of early October. We look forward to an outcome that we expect to be fair altogether. We are on the right side of the issues and our opponents are on the wrong side of the issues, and that’s clear or should be clear to everybody. But again, we are going into trial, prepared, confident of positive outcome.
Quinn Bolton: Great. And then you had mentioned both in the press release and the prepared script, the royalty revenue has continued to increase in the March quarter. Just wondering if you might be able to quantify that, how much of an uptick did you see in March? And then would you expect that royalty line to continue to grow through the remaining quarters of 2024?
Patrizio Vinciarelli: So generally, we expect the royalty contribution to our revenues and bottom line to continue to expand as far as we can see. And there maybe setup events that occur at certain points in time. But to be clear, we are taking a very long-term view with respect to the opportunity and approaching it with the right balance in terms of Vicor’s interest as well as the interest of OEMs that elect to take a license as opposed to potentially Vicor confronted with lying down situations following exclusion.
Quinn Bolton: I will go back into queue. Thank you.
Patrizio Vinciarelli: Thank you.
Operator: Thank you. [Operator Instructions] And it comes from the line of Richard Shannon with Craig Hallum. Please proceed.
Richard Shannon: Hi, guys. Thanks for taking my questions. I guess I’ve got a couple of interlocking questions on your 5G second-gen PPD product here. I guess I wanted to get a sense of kind of the milestones that we should expect to see over the next coming quarters towards getting bookings and eventual revenues here. I think in the past, you’ve talked about models and tool delivery, which I think I heard some detail that I missed some of that. I think last quarter you talked about some – maybe some more equipment need to be delivered to support that. And then anything about manufacturing experience required for essentially the larger customers to have confidence in the ramp here? If you could kind of detail that what we should be looking for this year that would be great, please?
Patrizio Vinciarelli: Sure. So let’s start with the revenue opportunity. I think as we made clear in prior calls, 5G is not a 2024 revenue opportunity. Revenue opportunity starts in 2025. This is a year of delivery of solutions to initial key customers and we’re far long, particularly with one and before too long with more. So I will look again at 2024 is bringing this development effort to fruition, setting the stage with some leading customers before we get into production volumes next year.
Richard Shannon: Okay. Let me follow-up and kind of looking at the 5G opportunity a different way and certainly understanding it, as you said last quarter that this is not the year for 5G revenues at all here. But I guess, do you expect to be able to intersect with the first generation of 3-nanometer accelerators, GPUs, CPUs, whatever is out there to be ready by then or is that something we might be lagging the leading edge there?
Patrizio Vinciarelli: I would say that we high expectations, both premise on our capability, the much higher current density, the other performance attributes of our 5G VPD solution, which is what we call a second-generation VPD distinct from the first generation by the self pioneer and parented in which is being practiced by competitors with a great deal of difficulty from the performance perspective, from the ability perspective and last but not least, from the intellectual property perspective. So we believe that customers with the visibility to all the issues and we’re engaged with some of them. I understand that to get to reliable, scalable and not challenged by touch property issues, Vicor is the source. And at this point in time, no other source for a VPD system that works well, that is scalable, and the is now devoted to intellectual property challenges.
Richard Shannon: Okay, fair enough. Thank you.
Operator: Thank you. [Operator Instructions] It comes from the line of Jon Tanwanteng with CJS Securities. Please proceed.
Jon Tanwanteng: Hi, good afternoon. Thank you for taking my questions. I was wondering if you could give us an update on the potential for lateral vertical product shipping, if that might contribute to 24% or 25% and if there’s active programs in the pipeline for that?
Jim Schmidt: I’m sorry, I missed the potential for which, if you could repeat?
