Silvaco Group (NasdaqGS:SVCO) FY Conference Summary Company Overview - **Company**: Silvaco Group - **Founded**: 1984 - **Industry**: Electronic Design Automation (EDA) - **Core Product Lines**: - TCAD (Technology Computer-Aided Design): Approximately 50% of revenue, a core business with a strong customer retention rate - IP (Intellectual Property): About 10% of revenue, identified as a significant growth area - Traditional EDA: Comprises the remaining revenue, focusing on niche markets to compete against larger companies like Synopsys and Cadence [3][4] Key Insights - **AI Integration**: Silvaco sees AI as a major long-term growth driver, particularly in manufacturing processes. The company aims to leverage AI to create new markets rather than just improve existing processes [5][6][7] - **Digital Twins**: The transition to virtual prototyping using AI and digital twins is essential for the semiconductor industry, allowing for more efficient process development [7][8] - **Customer Engagement**: The process of acquiring new customers for AI-driven solutions is described as a gradual engagement rather than a traditional sales approach, requiring significant collaboration and commitment from both parties [10][11] Financial Performance and Strategy - **Current Financial Status**: The company is focused on achieving profitability after experiencing losses. Plans include reducing expenses by at least $15 million annually and modest revenue growth in 2026 [19][20] - **Growth Projections**: Modest growth is anticipated due to a significant revenue spike from a major renewal in 2025 that will not recur. The company aims to overcome this loss and achieve growth [23] - **Long-term Goals**: The strategy includes building a strong AI franchise while focusing on short-term revenue growth primarily from the IP business [21][22] Market Position and Competitive Landscape - **Market Dynamics**: Silvaco operates in a highly consolidated EDA market dominated by a few large players. The company focuses on niche markets where it can maintain a competitive edge [12][16] - **Niche Specialization**: Silvaco has established itself as a leader in specific areas, such as TCAD for display manufacturing, holding over 80% market share in that segment [16][17] M&A Strategy - **Acquisition Focus**: The company has successfully acquired several firms, including Mixel, which is expected to significantly enhance Silvaco's product offerings and market position. Future acquisitions will target smaller companies with strong technology that can be integrated into Silvaco's existing framework [36][37][38] - **Cash Management**: Currently, Silvaco is focused on replenishing its cash reserves before pursuing further acquisitions [42] Challenges and Considerations - **Revenue Recognition Issues**: Silvaco faces challenges with revenue recognition due to its accounting practices, which can lead to volatility in reported earnings [45][46] - **Competitive Pricing Dynamics**: The EDA market is characterized by complex pricing strategies, where larger companies often offer discounts or free licenses to retain customers, complicating Silvaco's competitive positioning [49][50] Conclusion Silvaco Group is navigating a challenging EDA landscape with a focus on AI integration, niche market specialization, and strategic acquisitions. The company aims to achieve profitability while laying the groundwork for long-term growth through innovative technologies and customer engagement strategies.

Core Viewpoint - Silvaco Group, Inc. has announced a strategic partnership with Kyung Hee University to advance display technology through AI-driven Digital Twin modeling and FTCO integration [1][2][4] Partnership Details - The collaboration is a four-year initiative that began on February 1, 2025, focusing on Micro-LED and OLED technologies [1][2] - Silvaco will fund Ph.D. students at KHU and work closely with Professor Jin Jang's team to provide high-quality measurement data [2] Technological Integration - The partnership aims to combine experimental data with Silvaco's simulation tools and FTCO solution to create a comprehensive Digital Twin for display technology [2][3] - Silvaco will utilize its Victory TCAD™ simulators along with SmartSpice™ and UTMOST IV™ EDA tools to run simulations and develop a complete FTCO flow [3] Goals and Expectations - The collaboration seeks to demonstrate how FTCO and AI-enabled Digital Twins can enhance the development and production of advanced display technologies [3] - The integration of physical experimentation with virtual modeling is expected to improve decision-making speed and accuracy in manufacturing environments [3][4] Industry Impact - This partnership is seen as a significant advancement in optimizing next-generation display technologies, aiming to unlock new efficiencies in process optimization and yield improvement [4] - Silvaco's expertise in semiconductor design and digital twin modeling positions it well to lead innovations in display manufacturing and related fields [5]