Vicor(US:VICR)2026-01-16 17:02Summary of Vicor FY Conference Call - January 16, 2026 Company Overview - Company: Vicor (NasdaqGS:VICR) - Industry: Semiconductor, specifically focusing on high-performance power components and systems Key Points Licensing Business - In 2025, Vicor achieved several milestones in its licensing business, including: - Secured a license agreement with a large hyperscaler in Q1 - Announced a $45 million settlement in Q2 - Signed a second license agreement with an OEM in Q3 [5][6] - Confidence in expanding the base of licensees is high due to successful ITC actions and a strong IP portfolio [6][16] - The company has initiated a second ITC case early in January 2026, focusing on NBM technology [7][9] - Vicor is actively protecting its IP and plans to enforce rights under its vertical power delivery patents [12][16] Product Development - The second-generation vertical power delivery (VPD) technology is being developed to meet rising current density requirements for advanced AI processes [20][21] - The Gen 5 VPD solution is on track for production launch in Q1 2026, with significant progress reported [22] - Engagements with hyperscalers and OEMs are ongoing, with expectations for product shipments into the second half of 2026 [23][26] Market Opportunities - Vicor is positioning itself for the 800-volt and 400-plus-minus high-voltage DC rack opportunities, with proprietary engines and methodologies already in production [30][31] - The automotive market is seen as a long-term opportunity, with expectations for significant contributions to revenue starting around 2029-2030 [38] - The industrial and aerospace sectors are projected to double in revenue contribution over the next several years, driven by automation and new chipsets [41] Manufacturing and Capacity - The first chip fab in Andover is expected to be filled substantially this year, with plans for a second facility being explored [43] - The second fab may support high-volume AI data center markets, but it is too early to determine if it will require dedicated manufacturing for automotive [44] - Current utilization rates in the Andover fab are under scrutiny, with expectations for margin improvements as capacity utilization increases [49] Financial Outlook - The book-to-bill ratio has improved and is now well above one, indicating a positive trend in order intake [47] - Margins are expected to increase from 65% to 70% as licensing practices strengthen and product gross margins improve with higher utilization [49] Strategic Priorities - Key priorities for 2026 include maximizing capacity in the first fab and laying groundwork for a second fab, potentially by mid to late 2027 [50] Additional Insights - The licensing model has proven effective in increasing demand for Vicor's products, with licensees motivated to use Vicor modules [14] - The company is focused on a logical sequence of protecting its IP while exploring new licensing opportunities [12][16] - Vicor's technology is positioned to address the evolving needs of the AI market, particularly in power delivery systems [20][21] This summary encapsulates the critical insights and developments discussed during the Vicor FY Conference Call, highlighting the company's strategic direction, market opportunities, and financial outlook.