Silvaco Group (SVCO) FY Conference Transcript

Summary of Silvaco Group (SVCO) FY Conference Call - August 18, 2025 Company Overview - Company: Silvaco Group (SVCO) - Industry: Electronic Design Automation (EDA) and Technology Computer-Aided Design (TCAD) software - Market Position: Competes with major players like Synopsys, Cadence, Siemens, and Enter Graphics - Recent Developments: IPO in May 2024, with bookings of $65.8 million and revenue of approximately $60 million, reflecting a 10% growth in revenue and 13% growth in bookings in 2024 [2][3] Core Business Units - Business Units: - Traditional EDA tools for chip design - TCAD software for new material analysis and device simulation - Semiconductor IP company - Market Size: Addressing a Serviceable Available Market (SAM) of $3.8 billion, with an additional $710 million added through recent acquisitions [3][4] Technology and Competitive Positioning - TCAD Software: Fundamental for simulating complex chip designs and new materials, essential for advancements in semiconductor technology [6][9] - Market Leadership: Positioned as the second-largest provider of TCAD solutions globally, with a focus on power electronics, photonics, and memory markets [10][11] - Fab Technology Co-Optimization (FTCO): Introduced to enhance manufacturing processes using AI, allowing for faster simulations and reduced costs associated with wafer runs [12][15] Customer Engagement and Market Strategy - Initial Customers: Micron as the first FTCO customer, with ongoing R&D collaborations with advanced CMOS fabs and power electronics companies [15][16] - Market Penetration Goals: Aim to capture 10-15% of the newly added SAM within three to five years of FTCO introduction [25] Recent Acquisitions - Acquisitions: Three acquisitions completed within three months, enhancing capabilities in design, wafer fabrication, and photonics [28][29] - Mixel: Added $110 million in market share, focusing on automotive IP [35] - TechX: Enhances digital twin modeling and wafer etching capabilities [36] - Proximity Correction Technology from Cadence: Addresses mask-making challenges in manufacturing [41] Market Trends and Opportunities - China Market: Historically 15-20% of revenue, with potential for growth due to reduced restrictions and increasing demand in TCAD, automotive, and photonics sectors [58][59] - Quantum Computing: Engaged with two customers in quantum computing, providing TCAD and IC design modeling services [62][64] - AI Integration: Exploring AI applications in design assistance, automation of IP block creation, and advanced manufacturing processes [80][82] Financial Metrics and Future Outlook - Revenue Growth: Expected double-digit growth for the current year, with a focus on profitability neutrality [5] - Integration of Acquisitions: Anticipated completion by September, with a focus on tracking return on invested capital (ROIC) from acquisitions [45] Conclusion - Strategic Focus: Silvaco aims to expand its market presence through innovative technologies, strategic acquisitions, and a strong emphasis on customer collaboration in the evolving semiconductor landscape [70][71]