Core Viewpoint - Navitas Semiconductor has announced a strategic partnership with Powerchip Semiconductor Manufacturing Corporation (PSMC) to produce and develop 200mm silicon-based Gallium Nitride (GaN) technology after TSMC plans to terminate its GaN foundry services by 2027 [1][2]. Group 1: Partnership and Production - Navitas will utilize PSMC's 200mm wafer fabrication facility located in Zhunan Science Park, Taiwan, which has been operational since 2019, to support various GaN mass production processes [2]. - The collaboration aims to produce Navitas' GaN product portfolio with voltage ratings from 100V to 650V, addressing the growing demand for GaN in 48V infrastructure, including large-scale AI data centers and electric vehicles [2]. Group 2: Technological Advancements - PSMC's advanced 180nm CMOS process technology will enhance performance, power efficiency, integration, and cost-effectiveness of the GaN devices [2]. - The first devices are expected to complete certification by Q4 2025, with the 100V series anticipated to enter production in H1 2026, while the 650V devices will transition from TSMC to PSMC within the next 12-24 months [2]. Group 3: Market Applications and Collaborations - Navitas has recently made announcements regarding its GaN and SiC technology support for AI data centers, electric vehicles, and solar markets, including collaborations with NVIDIA and Enphase [3]. - The CEO of Navitas expressed confidence in the partnership with PSMC to advance the mass production of GaN-on-silicon technology, emphasizing ongoing innovation in product performance and cost efficiency [3].

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $14 million, in line with guidance, with a gross margin of 38% [6][16] - Gross margin decreased sequentially from 40.2% in Q4 2024 to 38.1% in Q1 2025 due to a less favorable market mix [17] - Operating expenses were reduced to $17.2 million, ahead of scheduled cost reductions, with a loss from operations improving to $11.8 million from $12.7 million in the previous quarter [18][19] - Cash and cash equivalents at the end of the quarter were $75 million, with no debt [19] Business Line Data and Key Metrics Changes - The decline in revenue was primarily attributed to lower revenues in the EV and solar markets [16] - The company announced significant design wins in various sectors, including AI data centers, solar microinverters, and EV onboard chargers, which are expected to ramp up in 2026 [9][11][14] Market Data and Key Metrics Changes - The EV market has seen some slowdown, but the company is excited about the adoption of silicon carbide technology with commercial EV customers [11] - The data center market is experiencing increased power demands, with the company launching a new 12-kilowatt design, an industry first [12][47] - The company anticipates growth in the second half of the year, driven by strong design wins across AI data centers, solar, EV, and mobile sectors [22][23] Company Strategy and Development Direction - The company is focusing on converting design wins into production orders, with a target of $450 million in design wins expected to generate revenue over the next few years [26] - The introduction of bidirectional GaN technology is seen as a game changer, enabling new applications in solar microinverters and EV onboard chargers [9][58] - The company is enhancing governance by separating the Chair and CEO roles and making executive changes to support growth and profitability [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged near-term headwinds due to channel inventory corrections in the EV, solar, and industrial markets but remains optimistic about recovery in 2026 [6][23] - The company is monitoring tariff impacts, particularly concerning silicon carbide products sold in China, but expects limited direct impact on GaN products [19][40] - Management expressed confidence in resuming growth later in the year, supported by significant design wins and technology advancements [22][23] Other Important Information - The company has achieved a 100 parts per billion failure rate in reliability, far exceeding industry standards [10] - A new reliability standard, AEC plus, is expected to be announced, which exceeds automotive AEC standards [10] Q&A Session Summary Question: Visibility into the second half and design wins - Management indicated that the $450 million in design wins is expected to convert into production orders, with revenue expected to ramp up significantly in 2026 [25][26] Question: Profitability and operating expenses - Management confirmed that operating expenses are expected to remain at $15.5 million, with a target to reach EBITDA breakeven in the high $30 million range by 2026 [28][29] Question: Breakdown of design wins between silicon carbide and GaN - Management stated that the design wins are well balanced between silicon carbide and GaN, with a strong pipeline across various applications [33][34] Question: Exposure to China and tariff impacts - Management noted that the company has a strong China for China strategy and does not see immediate tariff impacts, but is monitoring the situation closely [40][41] Question: Traction in the data center vertical - Management highlighted significant progress in data center designs, with the introduction of higher power levels being crucial for future growth [47][50] Question: Solar market ramp expectations - Management expects solar microinverters to ramp in the second half of the year, with significant growth anticipated next year [58][60] Question: Dollar growth contributions from various markets - Management indicated that while all markets are contributing, mobile, EV, and AI data centers are expected to be the biggest drivers of growth [62][64] Question: At-the-market offering status - Management confirmed that the ATM offering has not been executed yet and is available for strategic purposes [69][70] Question: Revenue potential for bidirectional GaN - Management estimated the revenue potential for bidirectional GaN to be north of $10 million for the next year [71][72] Question: Inventory levels and market normalization - Management noted that while inventory levels are declining, they are not yet at a healthy state, with expectations for normalization in the coming quarters [82][83]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $14 million, in line with guidance, with a gross margin of 38% [6][16] - Gross margin decreased sequentially from 40.2% in Q4 2024 to 38.1% in Q1 2025 due to a less favorable market mix [17] - Operating expenses were reduced to $17.2 million, ahead of scheduled cost reductions, with a loss from operations improving sequentially to $11.8 million from $12.7 million [18][19] Business Line Data and Key Metrics Changes - The company announced the first production release of a bidirectional GaN IC, which is expected to enable significant improvements in power electronics [6][7] - GaN Safe technology has been automotive qualified and is being adopted in EV onboard charger designs, with production expected in early 2026 [8][9] - The commercial EV market is seeing significant adoption of silicon carbide technology, with two major wins expected to impact revenue in 2026 [11] Market Data and Key Metrics Changes - The EV and solar markets experienced lower revenues, contributing to the overall revenue decline compared to the previous year [16] - The company anticipates growth to resume in the second half of the year, driven by design wins across AI data centers, solar, EV, and mobile sectors [19][24] - The company has a strong pipeline of design wins totaling $450 million, with expectations for revenue to ramp up significantly in 2026 [28][64] Company Strategy and Development Direction - The company is focusing on converting design wins into production orders, with a strong outlook for growth in 2026 [28] - Strategic governance changes were made, including the separation of the Chair and CEO roles to enhance governance and support growth [13] - The company is exploring options to expand its foundry base to mitigate potential tariff impacts [43] Management's Comments on Operating Environment and Future Outlook - Management acknowledged near-term headwinds due to inventory corrections in the EV, solar, and industrial markets but expressed optimism for recovery in 2026 [6][24] - The company is monitoring tariff impacts, particularly concerning silicon carbide products sold in China, but expects limited direct impact on GaN products [19][22] - Management emphasized the importance of design wins and technology advancements in driving future growth [24][64] Other Important Information - The company maintains a strong balance sheet with $75 million in cash and no debt, providing a solid runway for future operations [19][71] - The company is committed to maintaining a balanced investment in R&D and SG&A, with expectations for a 55% R&D to 45% SG&A split moving forward [35] Q&A Session Summary Question: Visibility into the second half and design wins - Management indicated that the $450 million in design wins is expected to convert into production orders, with revenue anticipated to ramp up significantly in 2026 [28] Question: Profitability and operating expenses - Management confirmed plans to maintain operating expenses at $15.5 million and expects to reach EBITDA breakeven in the high $30 million range in 2026 [29] Question: Breakdown of design wins between silicon carbide and GaN - Management noted a balanced pipeline between silicon carbide and GaN, with both technologies being utilized in various applications [33] Question: Exposure to China and tariff impacts - Management clarified that GaN products are less exposed to tariffs, while silicon carbide products have a majority of their revenue coming from China [38][39] Question: Traction in the data center vertical - Management highlighted significant progress in data center designs, with new power levels being introduced, indicating strong future growth potential [46] Question: Solar market ramp-up - Management expects solar microinverters to ramp in the second half of the year, with significant growth anticipated next year [56][60] Question: Customer outlook for the smartphone market - Management noted stable growth in the mobile sector, with increasing adoption of GaN technology among major smartphone manufacturers [90]