Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you elaborate on the yield issues with semi-insulating gallium arsenide and when you expect them to be resolved? A: Morris Young, CEO: We were too aggressive in entering the HPT market for wireless, which led to yield problems. However, we have identified the source of the issue and expect a quick recovery, aiming for a 10% gross margin next quarter. The market opportunity remains, and we plan to approach it more carefully to ensure effective production.
Q: Why is it taking more than a quarter to fix the yield issues? Is this a new product? A: Morris Young, CEO: The product is not new, but commercial volumes and changing customer specifications require recalibration of our production line. We need to approach this problem more measurably to protect our gross margin and profitability. We expect to recover to a 10% gross margin in Q2.
Q: Regarding Indium phosphide, are there any risks of losing customers due to shipping delays? A: Tim Bettles, VP of Business Development: We are a major supplier with 40-50% market share, and qualifying new suppliers takes time. Customers are still placing orders and waiting for permits. We expect a healthy bump in shipments once permits are approved.
Q: What impact do tariffs have on your business, especially with shipments to the US? A: Tim Bettles, VP of Business Development: Revenues to the US were about 8% in 2024 and may be less in 2025 due to trade restrictions. Tariffs are still under discussion, and we expect to navigate this issue. Some customers may pick up the tariffs, but it varies case by case.
Q: Can you quantify the business opportunity with the wireless HBT market despite the yield issues? A: Morris Young, CEO: The opportunity is with a large customer, and we haven't lost it. Once we align specifications with customer demand, we expect to generate around $1 million to $2 million per quarter from this market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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