Alan Hicks: So that will go both in the car and the charging station?
Patrizio Vinciarelli: No, this is a device that certain other makers are going to incorporate within the vehicle in order to facilitate flexible charging.
Alan Hicks: Okay. How far away are you from design wins there?
Patrizio Vinciarelli: We have designed wins with two smaller other makers.
Alan Hicks: Okay. And one last question. You say you are going to fill the factory to $1 billion in 3 years or whatever. So, that’s in addition to whatever OEMs are also manufacturing or licensing your products?
Patrizio Vinciarelli: I feel I am having a hard time here with my audio. Phil, could you respond to that?
Phil Davies: Yes. So, our goal is product revenues out of the factory at as Patrizio said, just over $1 billion out of that new fab and OEM licensing activities, adding to that, yes.
Alan Hicks: Okay. Thank you very much.
Patrizio Vinciarelli: Thank you.
Operator: Thank you. [Operator Instructions] And it comes from the line of John Dillon [ph] with DMB Capital. Please proceed.
Unidentified Analyst: Hi guys. Thanks a lot for taking my questions. I appreciate it. Now, that your factory is finished, and we are seeing processors that are 1,000 watts and higher coming to the market. And also in your prepared remarks, I think I heard you say target production dates for HPC. When will we start seeing evidence of GPUs from major manufacturing factors using the Vicor POL solutions?
Jim Schmidt: So, I think Patrizio talked about that, John. I think that as I mentioned in the prepared remarks, we are delivering electrical mechanical thermal models to leading customers right now. Then we will follow that up at the end of Q2 with a demo system that they will be able to check out hardware and test the models against the demo system. And then we will be sampling in the – towards the end of Q3, and we expect production probably towards the second half of 2025. That’s when we will have vertical power delivery and production.
Unidentified Analyst: Is that what you are referring to…
Patrizio Vinciarelli: There is one notable customer that may well be in production come at the very beginning of next year. And for that customer, the hardware is due to be delivered in the summer months.
Unidentified Analyst: Excellent. And Phil is that the target production dates that you were talking about, or is that something different?
Phil Davies: No, that’s the target production dates, yes.
Unidentified Analyst: Got it. And are there current Gen 4 designs in production or about to go in production that will act as a bridge to the Gen 5?
Phil Davies: Yes. We have some Gen 4 design wins. But again, as Patrizio pointed out, there have been some market shifts with people changing strategies with supply chain considerations ahead of performance and technology. But vertical power delivery comes along. We have with the Gen 5 technology, an incredible solution with the current density that we can get to 3x over what the competition will be had. So, I think there will be some really hard reassessments being made as we move forward here with a number of accounts, but we will see that happen. But we have some very good interest from the accounts that are building really big investments into AI and developing their own processor chips, and they are the people that you would expect, and we have great engagements with them right now. So, I am confident Gen 5 is going to be all that it can be. And we are going to be having a very exciting 2025.
Unidentified Analyst: And you are pretty confident then that the productization schedule will stay on schedule?
Phil Davies: I am personally confident. Patrizio, do you want to comment on that, but…
Patrizio Vinciarelli: I am also confident. I think you were leveraging for the most part, processes and equipment that we have installed and have fully vetted. There are a few process steps that are going to be used in order to scale up capacity, not to deliver initial units that are still under some level of refinement. But generally speaking, the capability is in place, and we have a fab with the capacity to build very, very large quantities of panels and system solutions for customers.
Unidentified Analyst: So, you guys have working alpha or beta product right now?
Patrizio Vinciarelli: So, we have a lead customer that we are going to be delivering functional systems. We started some initial partial delivery, but we are going to be delivering complete systems in late June, July timeframe. That – so the lead application to be followed by others as we get into the other part of the year.
Unidentified Analyst: Excellent. I will get back in the queue. Thank you very much.
Patrizio Vinciarelli: Thank you.
Operator: Thank you. [Operator Instructions] And it comes from the line of Quinn Bolton with Needham & Company. Please proceed.
Quinn Bolton: Hey. Jim, just a question on the royalty, how it works? The royalty revenue you recognized in the first quarter, is that for shipments of your licensee that took place a quarter in arrears, so effectively shipments in the fourth calendar quarter of last year, or is it sort of for shipments that took place in 1Q of ‘24?
Jim Schmidt: It’s real time. It’s based on shipments that basically they take received [ph]. So – but it’s not in arrears, it’s in the quarter.
Quinn Bolton: Okay. Perfect. And then just sort of following up on John’s question around the Gen 5 deliveries, the lead customer is for Gen 5, I assume that, that’s a data center or sort of AI or HPC application, but just wondering if you could give us in broad strokes, what sort of the application is for that first Gen 5 customer?
Patrizio Vinciarelli: It’s within the compliance you just defined. But at this point in time, we really don’t want to be specific. We want to give this customer the full advantage being first and having an element of surprise. But it’s within the general field that you identified.
