Good day. And welcome to the Aehr Test Systems Fiscal 2021 Fourth Quarter and Full Year Financial Results Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Jim Byers of MKR Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon. And welcome to Aehr Test Systems’ fiscal 2021 fourth quarter and full year financial results conference call. With me on today’s call are Aehr Test Systems’ President and Chief Executive Officer, Gayn Erickson; and Chief Financial Officer, Ken Spink. Before I turn the call over to Gayn and Ken, I’d like to cover a few quick items. This afternoon right after market close Aehr Test issued a press release announcing its fiscal 2021 fourth quarter and full year results. That release is available on the company’s website at aehr.com. This call is being broadcast live over the Internet for all interested parties and the webcast will be archived on the Investor Relations page of Aehr Test website. I’d like to remind everyone that on today’s call, management will be making forward-looking statements today that are based on current information and estimates that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These factors that may cause the results to differ materially from those in the forward-looking statements are discussed in the company’s most recent periodic and current reports filed with the SEC. These forward-looking statements, including guidance provided during today’s call are only valid as of this date and Aehr Test Systems undertakes no obligation to update the forward-looking statements. Now, with that said, I’d like to turn the conference call over to Gayn Erickson, President and CEO.

Thanks, Jim, and good afternoon. And welcome to our fiscal 2021 fourth quarter and full year earnings conference call. Thank you for joining us today. Let’s start with a quick summary of the highlights of the quarter and the improve business momentum we’re experiencing. And then I’ll dig deeper into our expectations for increased revenue growth in our new fiscal year, which is already underway. We saw continued signs of recovery and a strong increase in customer demand during the fourth quarter, which is a positive turnaround from the customer production ramped delays and push outs we experienced past -- this past year related to COVID-19. I’m pleased to report improved revenue and operating profit for the fourth quarter that reflect the return to above pre-pandemic levels. Fourth quarter revenue was up 45% sequel -- sequentially quarter-on-quarter and up over 100% from Q4 last year and we’re profitable for the quarter on a GAAP basis. Additionally, we’re off to a strong start for fiscal 2022 with $5.4 million in booking and an effective backlog of $7 million as of today. We are seeing improvement in multiple test and burn-in segments including silicon carbide, silicon photonics and mobile sensors, each of which we expect will contribute to our expectations for significant revenue growth year-over-year in our new fiscal year. Now let me dig a little deeper into each of these opportunities starting with silicon carbide. This past fiscal year we made significant inroads into the emerging silicon carbide device market, which continues to be a very promising key growth driver for Aehr and will be a major focus in the coming fiscal year. Silicon carbide power semiconductors have emerged as the preferred technology for battery electric vehicle power conversion in on-board and off-board electric vehicle battery chargers and the electric power…

Thank you, Gayn, and good afternoon, everyone. As Gayn noted, we saw continued signs of recovery and a strong increase in customer demand during the fourth quarter, resulting in improved revenue and operating profit for the fourth quarter that reflect a return to above pre-pandemic levels. To add some perspective on this, our fourth quarter revenue of $7.6 million is our highest reported quarterly revenue since Q2 of fiscal 2018. Looking at our financial results in more detail, starting with the fourth quarter, fourth quarter net sales of $7.6 million are up 45% sequentially from $5.3 million in the third quarter and up 102% year-over-year from $3.8 million in the fourth quarter last year. The sequential increase in net sales from the preceding Q3 reflects an increase of $2 million in wafer level burn-in revenue and 386,000 in customer service revenues. The increase in wafer level burn-in revenues is primarily due to an increase in system revenue of $1.4 million and an increase in WaferPak, DiePak revenues of $577,000. The increase in Q4 last year includes an increase in wafer level burn-in revenue of $3.4 million and customer services revenue of $509,000. The increase in wafer level burn-in revenue is primarily due to an increase in system revenue of $3.8 million, partially offset by a decrease in WaferPak, DiePak revenue of $487,000. It is important to note that there were no system revenues in Q4 of fiscal 2020. Non-GAAP net income for the fourth quarter was $870,000 or $0.04 per diluted share, compared to a non-GAAP net loss of $464,000 or $0.02 per diluted share in the preceding third quarter and a non-GAAP net loss of $720,000 or $0.03 per diluted share in the fourth quarter of the previous year. The non-GAAP results exclude the impact of stock-based compensation and…

Thank you. [Operator Instructions] Our first question comes from Christian Schwab of Craig-Hallum Capital Group.

Hey. Congratulations guys on a great quarter and a solid outlook. Gayn, in your greater than $28 million outlook. Can you tell us your expectations for how many 10% customers you’ll have in that?

Let me think. My guess is we’ll have two or three, three, I’m getting the signal three from Ken off the left, about three in our current estimates.

Okay. Fantastic. And then by application, can you walk us through between silicon carbide, silicon photonics and just maybe recovery orders from existing customers that were kind of pushed out last year. Can you give us an idea of the mix…

Yeah.

… application at all?

Yeah. I think I want to be a little careful not for any proprietary reasons, but just it’s always difficulty in understand how it looks like. But let me just give you a little bit of windage and elevation. I think we’re quite confident that silicon carbide will be our largest segment this year. And I think as it plays out, then it would be followed by silicon photonics and then the 2D, 3d sensor markets, each of those being substantial 15%, 20% or more. So you kind of do your own math there. I think we do plan to get some -- see some package part burn-in business, but it’ll still be relatively small. I think we probably do about 10% to service and support. But, clearly, we do see strength in silicon carbide and I think pretty confidently it will be the largest segment this year.

Fantastic. And then my last question has to, we talked a lot about electric vehicles and have you guys done the math is penetration rates look to improve meaningfully over the next five years to 10 years, for sure? Do you have any idea of the potential market cam that your products could address over kind of a mid- to long-term basis?

We do and I think what I do is I may defer and take that too as we go forward with a little bit more clarity. But we’re -- as we are engaging with multiple customers and we start to understand their -- both their capacities and their anticipated test and burn-in times and the level of quality expectations versus those times, it continues to reinforce a model that I think I shared in our last call, which is if you just start to take a look at the number of systems that are required for every call million cars that are out there, it’s substantial. I think we estimated about eight systems or so for every million incremental cars that are shipped per year. And so you start looking out at 30 million cars in 2030, which, fair enough, that’s eight years, nine years away. The world needs to purchase a lot of our full complement FOX-XP class systems. And currently we have not only an enormous cost advantage and -- but footprint advantage, if, like, a large silicon carbide customer is likely to have tens of systems for certain on their floor, keeping in mind that each system has 18 wafers in it. Another way of thinking about it for every 10 systems, they can basically process 180 wafers per day at one day test times, for example. And you start looking at capacity forecasts that are out there that are well in excess of that in order to meet the silicon carbide requirements of the battery electric vehicle market and the on- and off-board chargers, and you can see that it’s a very significant number. So I -- maybe I’ll give you a little bit more clarity. I’d like to make sure I have all our math…

Great. All right. Fabulous. Thank you. No other questions.

Okay.

[Operator Instructions] Our next question comes from Jon Gruber of Gruber & McBaine (sic) [Gruber & McBaine].

Hey, Jon.

I have a, I guess, it’s a nitpick here. You said your effective backlog is a backlog plus the orders but then it should be minus a shipment since the quarter is 60% over. I take it you did not take the shipments out of that price is really…

Correct.

… backlog, correct? Okay.

That is correct. Yeah.

You are correct. Yes.

And it’s not backlog then. Okay. So don’t call it backlog. Okay. Second of all, in excess of $28 million, I mean, if things go well, are we talking $28 million to $30 million. Are we talking $28 million to $36 million? I mean, give us sort of some range here that, because $28 million, you were looking for $28 million three years ago and so $28 million in a good year is sort of Elon [ph]. So, how do you, if things go well, what -- what’s the upper end here on the shipment side?

Yeah. I appreciate the question and I fully understand that, in fact, last year, we were talking about doing $28 million and we clearly were much less than that. And I do -- I sit here with certainly more competence, because they would, at least certainly in the U.S. and U.S. base customers and the customers that are talking about ramping, they seem to have gotten through the COVID aspects that are letting us get on their floor and do the installations and all that well. I -- we chose the words pretty specifically not to be coy. I actually don’t want to put a high end on it. There is significant upside to the $28 million and as we get the bookings and print them and give a competence, we’ll go from there. But candidly, Jon, we’ve been talking about how great it’s going to be for a while and we will -- we continue to believe we’re taking a conservative stance in the forecast we give you. I believe stronger this year than ever before. But I will…

I take it…

We will give you…

You’re talking $28 million to $36 million more likely than $28 million to $30 million, correct?

If you had to pick a number and I’m not going to have you do another one. Yes.

Okay. Thank you guys. Right.

Thanks, Jon.

Thank you. [Operator Instructions] We’ll take our next question from Larry Chlebina with Chlebina Capital.

Hi, Gayn.

Hi. Hi.

Congratulations on the highest EPS score, I think in six years, right, is that correct?

It sounds about right. Thank you.

And the next silicon carbide hopeful for customer that you discuss, that’s a current customer on your 3D sensing. Have you started the testing of those wafers yet?

I just want to…

You are not quite yet.

Yeah. Not quite yet. Yeah.

That’s just start any time now?

Yeah.

Any, like, within days?

I tell you what, Larry. I’m not trying to be coy to you folks. Competitive knowledge is, there’s lots of ears out there. If I’m less concerned about being clear with my shareholders than I am with being letting everybody know what we’re up to exactly. But we will be on wafer with test results this quarter and we’re only halfway through it.

The $4.3 million system that you delivered in the May quarter, and obviously, something slipped on an application. Is that the application? Is there a problem with it, where it may actually not show up in the next product release nor is it just kind of delayed? I will say a month or two and it’s...

You know, Larry, actually I’m sorry, I am not really found you. The $4.3 million in what segment?

For the pick and place application on the sensor?

Okay. Okay. Okay. Okay. Yeah. That’s, I mean, actually, the revenue for that was it was in a Q3 or something. Okay. Fair enough. What was the question again?

That may relate to, there apparently was a problem and that product launch, the ultimate product launch may have flipped. But is it just a slippage of the launch of that product and why you haven’t had a follow on?

Yeah. Let me know.

Had a follow on orders?

Well, you guys keep these really good questions, again. That particular customer in particular is unbelievably secure and understanding. What I will share is the following. We continue to believe that that program is going well. We continue to believe we are planning to record and we do have forecast for incremental systems and DiePaks in our fiscal year and I think that’s the most I can say right now. But generally speaking, at least, I personally believe that that was going to happen a little sooner and I’ll leave it at that rather than talking about whether there was actually a product slipped or not. I think that’s best. But they’re very happy with us.

All right. Then, lastly, there any opportunity on the big OSAT that you’re currently engaged with or other…

Yeah.

… you…

You know what, that OSAT and they’re kind of front end customer, each of which have systems now. There is active engagement with customers beyond the first lead customer for those guys and at -- rather just giving me updates on where they are. They still think, at some point we’re going to work this in. They still think there’s still some front end new customer engagement impacts related to COVID. I plan to fly to Europe next Sunday and our reps there said, get on teams, your customers aren’t going to see you, that -- we’re still doing everything faced, over the phone, et cetera. So while the U.S. to me at least in California here for the most part it’s just wide open. I -- Ken and I are in the office now and we actually are not masked in the facilities. For everybody has been vaccinated. So, but I’ll tell you what, customers still, there’s still a little bit of slowing on that. But that’s okay. I don’t really need that to hit my plan or the upside. But I -- I’m still hopeful. We know that they’re engaged. They’re serious about it. But we’ve heard some things too from the big OSAT that they are pretty booked out. That -- a lot of the interesting things with the whole semiconductor supply chain is they talked about, well, we’re booked all the ways, for the next six months or nine months. So, I’m not currently all that hopeful. And I’m certainly not forecasting a lot of volume in and sort of new customers and that, that you’ll sue them this year, but maybe late in the year and definitely into next -- the following year. Does that helps?

Yes. And you said, you’re traveling to Europe next week, did you say?

I didn’t say where, I don’t think I did.

You said that…

But I say what it, I do it. It was Europe, that was where I was headed. And I was ready to go Sunday, and I’m not.

So you’re not going.

No, I going to sit here and do some more teams meetings and things like that for right now. So even though I’m the CEO, I think they -- I’m a thinly disguised sales guy, too, sometimes. So I think right now they’ll let applications engineers and support people to go in and install things. But there are a lot of the restrictions in Europe up and down, are still with salespeople. So and that’s true also in Asia.

One last question, then on the CP opportunity for the data centre. Is that still ongoing and do expect that to get kicked off anytime soon?

It is still ongoing. They use it every day. In fact, I think last quarter, the quarter before they were buying some parts and spares. And that system continues to have incredible uptime. I was curious why they were buying some parts since it hadn’t gone down or anything. But my understanding is they’re using it, like 24x7 right now. It’s my understanding and since we’ve been so elusive about who it is, I’ll be a little bit more forward because actually, no one’s guessed yet who it is. My understanding is that program has been pushed out in time again, and I think we have very little to if any forecast in this fiscal year again, but they are continuing to operate with full intent to go down that path. But it’s -- that project is kind of continue to push out I’d say total is what two years different than what we originally heard so far.

All right. Is that a silicon photonics application?

I haven’t said what it is. I called it a data storage application. And I’ve been wonderfully elusive that nobody’s guessed who it is because once you find out, you’ll know why. Sorry.

All right. That’s all I have. Thanks for your time.

Thanks, Larry.

Thank you. We’ll take our next question from Matt Winthrop of Aegis Capital.

Hi. How are you, sir?

We are good.

Congratulations. It sounds like things are doing much better. And I’m not going to beat you up like these other guys. I’m excited for the story.

You’re just going to ask me if it’s greater than 36. I’m waiting for each one of you to ask me just one question, I know. All right, go ahead, Matt.

No problem. I have two quickies? Can you sort of in layman’s terms because I talk to clients all the time. I’m a retail guy, I’m not an analyst. On the electric vehicle, how can I explain in an elementary level, what your product addresses, in terms of average vehicle, is that okay to ask?

Yeah. I’ll try. I’ll try to. All right. So I’m on -- you walk out to a Tesla, okay? And that the Tesla basically has an onboard charger internally, okay. What it means is if you apply electric power to it from your grid in your garage, it actually converts that AC electricity to DC and charges the onboard batteries. That AC to DC charger has these power semiconductor FET [ph] inside that are made out of silicon carbide which are way better than IGBTs. And in fact, Tesla and Elon Musk are credited with the people that basically, I guess had the nerve to try silicon carbide without going through the 10s of years of other things and have identified it as a superior product, put it in their model three and then immediately had like 10%, 20%, extended battery rage. Since then they have put it in all of their cars. And as we understand all suppliers are following suit. And I think that’s well publicized by multiple people out there. So in that charger, it converts AC to DC and it’s extremely efficient. And what that means is you can do it faster, and you can do it with more efficiency. Then when the battery is charged, the funny thing is, is the battery which you can only charge battery with DC direct current, just like, a regular battery in your, in your flashlight, right? But then the motor in the Tesla, and everyone else is actually an AC motor. So it’s not a DC motor. So now you have to convert it back to AC in order to work. And that’s called an inverter. And it uses the same assets. Right?

Okay.

So it’s pretty interesting. And so their MOSFETs are there to efficiently charge your car. And they’re there to efficiently power the car. And they’re directly in line with the power to the electric engine. So if they fail, your car is dead, right?

Okay.

So there’s one other place and that is the more and more we’re seeing them were like, the electric gas stations where you go in, there’s a electric charge pump.

Yes.

Those are big converters as well. And they also have silicon carbide electric MOSFETs in them. And some of these modules, if you look at them, I’ve got one in my hand that doesn’t do any good. But you look at this module and it’s some of our -- about the size of your hand or a small hand. And in there are eight or 10 different semiconductors. In this case, they’re that silicon carbide FET switches. And the reason they have eight or 10 of them in there is because they’re all in parallel. So they can have 400 Amps of current. So maybe each one of them can only do 50 Amps. But if you put eight of them in parallel, you can do 400 amps. So what -- the first thing when the first customer that was using us was realizing that they put eight of these silicon carbide devices into this module, right. And then they had to burn it in. But every one of the devices had some material failure rate, let’s say 1%. So they had on eight devices, you have an 8% failure rate in 24 hours of that device, and you have to throw away the module. Those modules, if you go right now and click on Digikey, or Mouser or eBay, they’re $600. Right. And they’re coming down quickly. But imagine that you have one of the devices fail. And you have to throw away a $300 module or something. So our value proposition was we test the devices before they’re put into the module. And not only is it cheaper per device, but now all of that -- all those failures are removed. So you don’t throw away the $100 package.

Is it fair to assume that this technology also would be applicable to a Ford or GM or an Audi. It’s not just a Tesla thing. This is…

100% of them. Every electric vehicles going to have silicon carbide in it, every one of them.

On the sales side because last couple of quarters you were a little better last time, a couple of quarters ago you were pretty upset about how things are progressing. But it sounds like you’re more excited. You had built this room in your facility where people [indiscernible] is that starting to open up? Are you doing actual displays in this room now that…

Displays, we’re testing wafers how’s that? Customers still aren’t coming. But that’s okay. It actually works out pretty nice. We kind of marketed as, hey, look, it’s a touch free environment. But we’re kind of lonely. It’d be nice to have that people come here, but we’re getting really good with teams in Zoom and WebEx. But for example, that customer wafers that are going to be tested with silicon carbide will be in that room.

So you can do it and just virtually show it to them. They don’t have to physically be there, they give you the product in advance to test or something like that.

Absolutely. So the silicon wafer has, say 1,000 die just to make it easy, right? Those devices already have some level of actual failure to them, so they don’t get 100% yield. So let’s say whatever. It doesn’t matter how many 10%, 20%, 30% of the die are failed. They’ll give us the wafer map or not. When we test it, I can tell you immediately which die have failed, and over 24, 48, 96-hour period, I can tell you exactly when it failed. On every single device with 100%, traceability. So if they’re wondering if we’re serious, they could give us the wafer without the wafer map. I’ll tell them which way which die failed, and it always correlates.

All right. And I’ll leave it with this one. That’s great. I appreciate it. I’ll leave you this on an upside battle, let’s say you, you’ve scored a bunch of -- new sales manager scored a bunch of really nice contracts. What kind of run rate can you guys what is your capacity if like everything hit in the next three or four quarters? Now, I’m not saying you’re saying that sales, but what could you do out of California without a band on your factory, let’s say.

So there’s a few ways to look at it. We have subcontractors that...

Is that a fair question?

Yes. That’s a fair question. I mean, the simple answer is, there is nothing in our supply chain that couldn’t within six to nine months get us to even 10 systems a month. You just -- some of it, some of it would include some of the people growing and adding some people, but…

What 10 systems retail out to you or wholesale out to your…

If you include an ASP of, say a silicon carbide configuration let’s say $2.5 million or so and the compliment WaferPak set $1.5 million, it’s $4 million a piece and I -- that’s correct. And that seems I’m sure people are like, okay, okay. But that’s real. Even, I mean, that seems like big numbers to us here. But that is not big. I mean, 10 systems a month is although they have 18 wafers of capacity in each one of them. So, if you were comparing it to say a J750 from Teradyne, each of our blades has more pins than a J750 and more electrical channels. So these factors -- go ahead.

Listen, so I would suggest, because you guys are on a roll, get off this Q&A’s and you can get on the phone and close a couple more, because it sounds like you’re really get some…

Let me say…

I know why you hate…

Burn-in is not...

You hate…

Yeah. Burn-in is not doing right...

Yeah. But some of these guys, I’m tired of these guys whining and crying. We’re finally here. Let’s go out and close it and I think you’ve got the opportunity

Thank you, Matt.

Thank you. We’ll take our next question from Frank Barresi with Ameriprise.

The people with all this COVID in interfering with new installations and sales, a lot of these electric vehicles that are being sold now aren’t using. I mean, they’re not using your system in production, correct as of yet.

Correct.

Okay. And so Tesla, of course as using it for everything. Are there many other of the other…

Wait, let me clarify this. Okay, there’s a couple ways look at it. So of the electric vehicles, okay, all of them have this inverter and battery charger, et cetera, okay. Until 2018, none of them used silicon carbide. And keep in mind, that’s like Toyota Prius, all the hybrid electric vehicles, et cetera and then Tesla, zero market share of silicon carbide, okay. Then the model three did it, then 2019 Tesla did it. I believe there’s an Audi out there right now, I believe that my understand is that Toyota Titan is still IGBT. So even some of the new models that are coming out do not use silicon carbide yet. But projections from folks like [inaudible], which is another big forecaster, they’re projecting pretty dominant share, to almost 100% share of all of those power modules -- all of the semiconductor -- the power sets in these devices will go to silicon carbide over the next three years to eight years or something. And now, so that’s the devices. For us today we currently have one lead customer, okay, who is currently moving everything to wafer level on our system. So you’d have to say well, how many of their customers, how many design wins, how many cars have they got into who do they have, and we know more than will ever admit to, but they obviously don’t have 100% market share yet. So that -- we’re also capturing other customers, at some point, there’s an opportunity for us to compete with every single customer and potentially everyone could use our tools, then it doesn’t matter who wins. But for now we -- this is a pretty hot way for us. And our systems work. It’s right in the sweet spot of the capability, this machine fully loaded 18 wafers, this is a great opportunity for this platform.

And that’s just in the, well, it’s charging the battery and discharging the battery that needed on both sides, and then the chargers that, okay, okay, and so, basically, like them a lot of the Tesla’s say, then they, they don’t have 100 -- I don’t know if it’s a Tesla’s necessarily, but the companies that are using silicon carbide, a lot of them they’re not able to do, they’re not able to use your system. So they must have a lot of these failures you’re talking about?

No. No. That’s not fair. So what they’ll do is just like our lead customer, they actually test them in a package form, after they’ve already been packaged up in many cases with multiple devices per package. So it’s -- they basically can do it, we sell package part burning systems too, we currently are forecasting zero for silicon carbide. Because why would you do that when you could do it at wafer level?

Right.

Yes. So everyone is testing silicon carbide and doing some sort of a burning of it, there’s no way they’re shipping those to automotive suppliers without it. And they’re either doing it packaged part, okay. Or they’re doing it with our system. In this case, we’ve already talked about the one customer or they’re evaluating trying to figure out how to get to wafer level, we have heard every customer we’ve talked to is planning to move to wafer level. Now, the question is, well, what is the competitive situation? what’s the alternative? The most obvious alternative that we know works, right, we know is in production and is capable, is you take an ATE system, automated test equipment system from multiple suppliers that are out there, you design it, you put lots of power supplies on it, and you put it on a prober. And if you take then AC system that ranges from a few 100,000 to a million bucks, and you put it on a prober that’s $350,000, right? And you take a prober card that’s 50, or $100,000, you’ve got a system. And I’m generically, it’s a million dollar test. And you can test it and then in 24 to 48 hours, you can do theoretically, everything we can do, we think we have some competitive advantages with the way we do it, right? But it’s a million dollar test sell for 24 hours. Our system, and remember, I just did the math with you, it’s about $4 million divided by 18. You’re like a $200,000 or less.

Okay.

So you’re a fifth of the cost, and so you could test it five times longer for the same price point for the capital depreciation perspective. But a wafer prober, if you’ve seen one, if you stood in front of it is like a, it has a footprint of a lot of Prius, right. And maybe it hailed as our system, it’s actually a little smaller than that, so as our system, but it has one wafer, and in that same footprint, we have 18. So now go test 180 wafers. And it’s 10 of our systems, 10 Prius next to each other, actually increases big, but I’ve never used that analogy before, but I’ll go with it. And with them its 180, a 180 in a clean room space. So you want to put in place 1000 wafer starts, you have 1000 probers. Okay or hundreds of them. So, the cost effectiveness is a fifth from a cost of ownership and a capital appreciation on the capital cost. And it’s a 20th of the footprint. And we make good margins.

So somebody -- they’re going to have to design a system that compete with you.

And they’re going to be stomping all over our patents and IP if they try.

Well, that’s good.

Yes.

And I guess is the situation analogous in the silicon photonics is it this does the same. Well, that silicon carbide.

Very similar.

Oh! It is similar.

Yes. Silicon photonics and silicon, I mean, it’s a different application. In this case, it’s a fibre optic transceiver fully integrated onto a piece of silicon. And the huge advantage of it is they can actually manufacture like 1000 transceivers at a time on a single wafer. The cost effectiveness is so dramatic, that folks like Intel’s of the world have already put out multiple companies have gone under because they simply can’t sell them at the cost that the folks like Luxtera or Intel, Infi [ph] or Sequoia, which are known names are building them for. And so the beauty of it is, is that with our FOX systems that can either test them in wafer form or singulated die form, we’re able to actually do this so cost effectively on the integration that we’ve heard from our customers that it actually enables them to, in fact, deuce whole wafer silicon photonics manufacturing. And they then they test them, and they burn them in, in this case, they stabilize them before they’re put into the packages, where they’re extremely expensive to burn in. And there’s yield loss associated with it. Same kind of value proposition, the only difference is, is that on a, the foot, the fibre optic transceiver market is measured in millions of units a year, like 10 million units a year total. That’s it. Okay. The, I think a Tesla has 48, MOSFETs in each car. And so if you’re going to do 31 million of them, it’s literally two orders of magnitude an order to two orders of magnitude higher size, given the same test time similar die per wafer, the silicon carbide market is absolutely more than 10 times larger than the silicon photonics one. Then you have to follow all that math, but that’s trying to do it quickly.

Oh! Sure. Sure. And then on the sensors, you’ve talked about 2D and 3D sensors. I mean, is that a…

Historically and it has proven to be has not been a very big market. We make good margins, the customers happy with us, they’re very unique, but has traditionally been, and we’ve talked about it before a sampling market, what it means is that the devices do not inherently have either a high enough infant mortality or need the structural stabilization to test every one of them. So the customer has proven to themselves that by sampling some percentage, we don’t get into it. But imagine small, they’re able to by buying just a few systems from us, they can actually sample hundreds of millions of parts a year, right? And we continue to execute for them. We keep our fingers crossed, we have put in place in us infrastructure that if we want to do 100% sampling, whereat so far, they have not chosen to do that. Now we do have a couple of devices that we have done that are hard, we know where our 100% sampling comes funny, if they’re 100% burnt in. But the volumes are much smaller because of the target device it’s going after and we don’t go into it. But most people have guessed that when you think about mobile, certain mobile devices are in hundreds of millions and others are gone and millions. And so if you get 100% of the millions, it’s about the same size as a few percent of the 100 million. So as soon as we get 100% of the hundreds of millions, then we’ll let you know. But I’m tired of saying how great that one’s going to be because we continue to get forecasts that seem bigger than they actually plays out. But we love them. They love us and we continue to execute.

Okay. Good deal. Well, it sounds exciting…

I’ve been so glad 2020 is behind us. And all our employees made it through safe. We actually, as we look back at our records, we had only one employee that had mild symptoms in the whole company, one employee that tested positive but was convinced later that that was a false test. And we’ve gotten through this, so we’re pretty happy about it. And I can tell you, the manufacturing folks are thrilled to death not to have to wear masks anymore out on our floor. So, that is because they’ve been here through thick and thin the entire time. So, I am glad…

Yeah. Me too. I’m glad you’re back. So and even in Europe, aren’t these the people and that work in, I mean, aren’t most of them essential? I mean, I don’t know if they have that category in Europe or in central employee or…

Most of them and most of our customers had continued to operate. We’ve heard this time and time again that what they did is they were not ramping new devices. They were just building what they had before. I mean, silicon photonics is a perfect example. It turns out there absolutely were less fibre optic transceivers purchased last year. But the biggest differences, people didn’t ship silicon photonics away from the standard fibre optics. So our customers had pretty bad years. And if they’re not growing, they’re sure as heck not buying equipment from us. So now we’ve seen that they’re publicly strengthening, projecting things, we watch the testers, they get filled up. And so we can, you can kind of see it’s like, okay, they’re about full, they’re going to need another system. And that’s why we can confidently project volumes from them this year.

And then, depending on how quickly AV sales grow, they just are going to need more, because once they’re installing new systems, they’re not going to go back to this old way. They’re going to…

That’s automotive, it’s even more sticky than that, once you get qualified, it’s actually quite hard to change. So there’s a mad land grab right now. But one of the things that we’re actually hoping to see is, when our customer qualifies apart, the way it works is they not only qualify us, but their customer qualifies the process. But we know for a fact that there are some of the big suppliers out there think automotive guys, that have teams or individuals that have to sign off on a FOX-XP system for wafer level burning. And they have done that. What we’re actually hoping is that that rubs off, that that same company can turn to another supplier and say, hey, how come you’re not doing this? And so we think we’re just going to continue to execute. We have a lot of domain knowledge too. We’re not just picking it up from any one customer. So we believe ourselves to be expert enough to help people with these challenges with burning because we’ve been doing it forever. On the IP right here on my staff, but I’ve only been here 10 years, I have people and the staff here, they’ve been doing this for 40 years, and can really understand the challenges. And we’ve -- I mean without being offensive, we’ve corrected people, they said we’re doing it this way. And we push back and say that doesn’t make sense. And they come back and said, you’re right. So we hope to be a partner and help them. And hopefully we’ll be an advocate and a enabler to a rising tide of silicon carbide. And we think all the customers that use us are really smart. But I think if everybody used us, the whole industry would be better off because there would be more demand for silicon carbide because it’d be more quality.

And this the silicon, there’s plenty of silicon carbide, I guess. I mean, I saw were some…

Yes. I think so. It’s been debatable how easy it is to get it. I mean, there’s been a mad rush for people to get it. I feel like there’s still some constraints. But and there’s still a lot of people getting into it. I think it will be more available as time goes on than it is now. How constrained it is now, I’m not sure.

Well, that one company in Cree, I think they’re building a fab another fab -- I don’t remember though, but I’m pretty sure they’re building a fab in the U.S…

100% and they supply substrates under contract to other -- to their competitors. So that’s always interesting.

Okay. Yes. And they’re also making the MOS -- I guess MOSFETs…

Yes.

Okay. Well, Gayn, thanks for the information. Appreciate it. It sounds like you should have a really good year.

Thank you, Frank.

Thank you. At this time, we’ll turn it back to management for closing remarks.

Okay. I -- there were a couple things that we had had somebody call in, I want to just make sure they kind of hear this. One was actually there was some questions related, loading our systems and we sometimes on purpose, sometimes on accident, we confuse people and I say on purpose because there’s competitors listening and things like that. But our FOX-XP systems in particular, can test up to nine high power wafers or 18 lower power wafers. And sometimes we ship them full. And sometimes we ship them partial. That tends to be at the discretion of the customer and being able to indicate what their capacity is. I want to make it absolutely clear that these products are fully released, that our lead customers in 2D, 3D sensors are doing full nine blade systems up to 2000 watts per blade. Our silicon photonics customers are also 2000 watt per blade, nine blade systems, and we’ve shipped multiple of them, they’re fully loaded, they’re fully operational, and our silicon photonics customer -- silicon carbide customers, because the lower power wafer is actually 18 wafers. And the systems we’re shipping are fully loaded 18 wafer system. So software’s released, they’re fully functional, they have great MTBF in terms of reliability themselves. And I just want to dispel any rumors that there’s any concerns related to if they work full, because sometimes we ship them partially populated, because that’s what the customer asked for. So it didn’t come out, I want to get that out there somewhere. And then I’ll just take this one, Ken was going do it, too. There was some discussion related to quarterly revenues. And Christian, I think we covered some of that too. But I just want to get it out there. There have…

This concludes today’s call. Thank you for your participation. You may now disconnect.