Jon Tanwanteng: Lateral vertical products, so the in between product.
Jim Schmidt: Yes. So I think as it turns out, the potential is limited. I will let Phil fill in with more color on this with a global view because the asset depends on which particular end market we’re looking for. Phil?
Phil Davies: Yes. So we do have – still have engagement with customers on lateral vertical designs. We’ve also seen lateral vertical be used with some reference designs for the network communications market for the Broadcom model type of processes from some of the contract manufacturers in Asia. So there could still be some revenues on lateral vertical towards the end of this year, early next year. So that’s still a potential for us.
Jon Tanwanteng: Got it, thank you. And then – so you mentioned something about licensing enabling more rapid scale in automotive. Are you allowing your partners there to produce your designs? Or is this something more similar to the current status quo where you are on allowing people to use your IP from different vendors like it’s happening in the HPC markets?
Patrizio Vinciarelli: So we are open to the opportunity for selective licensing in, among others, the automotive market. And there’s been some expression of interest, which you said to them is predicated on the distinct attributes of our solutions, and I’m referring to solutions involving 400-volt, 600-volt bus conversion as well as other solutions, including zonal architecture, which is once again something that Vicor conceived of 10 years ago with respect to which we have the intellectual property. So we have a number of opportunities in the automotive area in particular. There are some are now beginning to develop also related to CDC. I do expect that over time, some of these opportunities may turn into licensing deals.
Jon Tanwanteng: Okay. Great. And then finally, could you – Jim, could you break out the legal expense in the quarter and what you expect over the next two or three of the ITC case reps up?
Jim Schmidt: Like, we said on the prepared remarks, legal expense was the primary driver of the $4 million incremental OpEx. I would stop short of trying to predict the future on that, Jon. And I might let Patrizio comment as well because he’s obviously been very close to all of it.
Patrizio Vinciarelli: Yes. So to Jim’s point, last quarter, there was a significant step-up primarily relating to progressions for the upcoming trial next week. We are not in a position to forecast the evolution of legal expenses. Frankly, they could keep stepping up. They could level off or they come down depending on a variety of scenarios. So I think if you wanted to pick one among those three scenarios, keeping it pretty much level would be probably the middle of the road alternative, but it could step up again because of additional actions we might take.
Jon Tanwanteng: Understood. Thank you.
Operator: Thank you. [Operator Instructions] It comes from the line of Don McKenna of D.B. McKenna & Company. Please proceed.
Don McKenna: Thank you. Patrizio, the comments that on future sales opportunities, again, are pretty positive. And with the exception of last quarter, the outlook has always been quite positive. And if you go back and read the transcripts, it’s obvious that the potential markets that you envisioned in the superior products that you’re offering just haven’t produced the results you would hope for. And I’m wondering what you’ve learned from that failure to capture the potential and what changes you’ve made in your approach to improve the sales and profitability?
Patrizio Vinciarelli: So as suggested in my calls, we believe we are executing well with a clear vision of what challenges and opportunities are. And frankly, I think this is a big part of the answer to your question that has to do with the vagaries of what has been going on with certain leading OEMs where their priorities have taken them in terms of product development. And to keep it at a very high in general level, I would say that from our visibility, a unique perspective with respect to the evolution of our system requirements. Some of the choices that have been made with certain OEMs are going to get those OEMs into a real bind both in terms of the performance of their platforms. And more importantly, the competitive spending relative to other companies that are starting to capture market share, and they see the opportunity of leveraging superior power system technology from Vicor.
So I guess I’m not apologetic with respect to how we got to where we are. We don’t control our destiny in every stack. Obviously, we make critical decisions with respect to strategy and how we’re going to make the most of the opportunity both in terms of fab, our 5G technology and importantly, our intellectual property. And I would say that quite excited with how we got to where we are. And I think we have tremendous opportunity. It takes perseverance, clarity of vision, persistence. We have all those trades, and we expect to be far too long capitalized on the opportunity.
Don McKenna: Yes. And I realize it’s very difficult for you to try to make any projections on the short-term. Can you give us some kind of a feel for where you would expect revenues as a percentage increase over current, let’s say, 3 years down the road? What would you be satisfied with?
Patrizio Vinciarelli: I don’t know that I can honestly give you numbers or general stations without substantial risk in either direction. I think I can say that we do expect to fill our fab. As we know, the fab has got $1 billion worth of capacity and maybe a little more than that. We’re going to be able to fill that fab with opportunities relating to 5G in AI in the center type applications as well as automotive applications. And generally speaking to Phil’s earlier point, our top 100 customers undiversified several markets.
Don McKenna: And would you expect to fill that fab in the next 3 years?
