Akoustis Technologies Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
September 6, 2023

There are 10 speakers on the call.

Operator

Day, ladies and gentlemen, and welcome to the Akoustis Technologies Fiscal 2023 4th Quarter Conference Call. As a reminder, this conference call is being recorded. At the conclusion of the company's presentation, Akoustis management will take questions. A replay of the call will be available on the Investor Relations section of the Akoustis Web I would now like to turn the floor over to Tom Sippenzis.

Speaker 1

Thank you, operator, and good morning to everyone on the call. Welcome to Akoustis 4th quarter fiscal 2023 conference call. We are joined today by our Founder and CEO, Jeff Shealy CFO, Ken Boller and EVP of Business Development, Dave Eichle. Before we begin, please note that today's presentation includes forward looking statements about our business outlook. All statements other than statements of historical facts included in this conference call, such as expectations regarding our strategies and operations, Including the timing and prospects of product development and customer orders and design wins, possible collaborative or partnering relationships, Litigation matters and expected financial and operating results are forward looking statements.

Speaker 1

Such forward looking The company and our management team assume no obligation to update any forward looking statements made on today's call. Our SEC filings mention important factors that could cause actual results to differ materially. Please refer to our latest Form 10 ks and Form 10 Q filed with the SEC to get a better understanding of those risks and uncertainties. In addition, our presentation today will also refer to is presented in our earnings call highlight release available in the Investors section of akoustis.com. I would now like to turn the call over to Jeff Shealy, Founder and CEO of Akoustis.

Speaker 2

Thank you, Tom, and welcome everyone to our fiscal Q4 conference call. During the quarter, we were able to deliver our 7th consecutive quarter of record sales as revenue growth in the June quarter was within our guided range of up 10% to 20% sequentially. This was driven by a 41% sequential growth In filter product revenue, with continuing WiFi 6E ramps across the enterprise market, increased activity In service provider and consumer markets as well as shipments to our Tier 1 5 gs mobile RF component customer for broad sampling of its multiplexer for 5 gs mobile devices. Additionally, We experienced a rebound in our SAW filter, automotive and timing control business during the June quarter and expect this business During the June quarter, we had 2 customers that made up greater than 10% of our revenue. XBAW related sales accounted for The top 5 customers and 6 out of the top 10 customers.

Speaker 2

Our top 10 customers made up 63% of our revenue. Our top 25 customers made up 77% of revenue. In terms of regional sales, 3 out of our top 10 customers were Asia based. Finally, our top 2 customers in Q4 increased their sequential revenue with Akoustis by 18% and 3% Respectively, we are experiencing the same challenging end market environment that has been noted by many of our and industry peers over the past several weeks as high component inventory levels, weak consumer electronics demand, Particularly in mobile handsets and a slower return to office implementation have negatively impacted multiple segments of the consumer electronics This corresponds with a slower than expected rebound in the automotive, 5 gs mobile devices and network infrastructure and WiFi Markets with focus weakness in both consumer and service provider markets. As a result, We expect revenue for the September quarter to be down approximately 15%.

Speaker 2

Despite these macro challenges, We continue to receive new design wins and introduce new products that we expect will facilitate substantial revenue growth over the next 24 months. I would now like to take a moment to discuss the recent developments involving the Chips and Science Act of 2022. Regarding CHIPS Act funding, the domestic manufacturing program is being implemented by the Department of Commerce or DOC, R and D investments in Nanotechnology and the creation of regional high-tech hubs are being driven by the Department of Defense or DoD. Akoustis' current activity includes proposal activity with both the DOC and DoD related programs for domestic semiconductor manufacturing, R and D and the commercialization of leading edge nanotechnologies. As of today, we have submitted 1 DoD proposal with Akoustis as a lead contractor or hub focused on electronic warfare or EW for defense applications.

Speaker 2

The proposed 5 year contract if awarded has an initial program budget of over $150,000,000 We currently expect the DoD to announce their award selections by the end of September. Akoustis is seeking to expand its domestic manufacturing footprint, including both semiconductors and advanced packaging at our New York campus Under the DOC Chips for America program, we are currently awaiting feedback on our pre application from the DOC And we expect to file a final application by the end of the calendar year and expect a program In calendar year 2024, we continue to plan our chips application around multiple semiconductor partners, which intend to manufacture semiconductor materials, wafers and or packaging on our New York manufacturing campus. Next, I would like to discuss several compelling updates in our primary target markets beginning with WiFi. One of our milestones during the June quarter was to deliver 2 additional Wi Fi design wins and we received 4 new wins, all of which are expected to ramp over the next 12 months. These design wins include high frequency Wi Fi 6E and Wi Fi 7xBAW filter solutions, as well as 2.4 Gigahertz BAW filter solutions.

Speaker 2

During the June quarter, we began sampling our new 5.6 And 6.6 gigahertz WiFi 6E and WiFi 7 filter solutions to multiple customers. These new parts offer approximately 4 times size reduction compared to earlier generation parts and initial feedback has been positive. We have received our first design win for these new filter solutions for a consumer focused WiFi 6E platform With a multi user, multiple in, multiple out or MU MIMO architecture, we now have multiple catalog And customer WiFi 6E and WiFi 7 XBAW filter solutions that are currently selling in the market. While the overall Wi Fi market has been impacted over the past 12 months by excess inventory driven by component shortages in 2021 In 2022 and slowing WiFi AP demand post COVID, we do expect improvement in the next 6 months With normalized inventory levels returning in calendar 2024, with our continuing design win traction As evidenced by the 4 new design wins in the June quarter, we expect strong growth in our WiFi business to continue In calendar 2024 and beyond, this will be driven by our expanding portfolio of catalog Wi Fi products In the spectrum covering 2.4 gigahertz to 7.1 gigahertz combined with our ability to rapidly deliver customized solutions.

Speaker 2

Looking ahead, in the September quarter, we expect to receive a design win for next generation Wi Fi 7 hardware with a consumer focused OEM. Further, we also expect to receive a design win for a next generation Wi Fi 7 solution with a Tier 1 U. S.-based carrier. And finally, we plan to secure design wins for our Tier 1 enterprise class customers WiFi 7 suite of routers and access points. Next, I would like to discuss our recent developments in the 5 gs mobile market.

Speaker 2

We continue to ship our initial 5 gs mobile filter to our Tier 1 customer in the June quarter. The customer has been sampling its multiplexer that uses our filter and has been waiting for its chipset reference design partner to launch its baseband Into the China market, during the June quarter, our 5 gs mobile customer brought a Tier 1 smartphone tablet OEM to our Canandaigua, New York fab to perform its own quality audit of our facility and manufacturing process. We successfully passed the audit, including 2 offshore assembly and test locations, further validating We delivered 2 newly developed Wi Fi 7 filter samples to our Tier 2 mobile customer during the June quarter, And we continue to expect these filters to be qualified and ready for production in the first half of calendar twenty twenty four. These two new filters are being developed using our foundry process with the customer creating its own designs using our advanced Machine Learning Driven AI Product Development Kit or PDK, our customers decided it would like to make Minor changes to the first design and we expect to begin redesign later this year. Our anticipated milestones For the September quarter include, we expect to receive an order for a 2.4 gigahertz WiFi filter for our Tier 2 5 gs mobile RF front end module making customer.

Speaker 2

I will now discuss our progress in our network infrastructure business. During the June quarter, we continued XBAW filter shipments to our CBRS customers targeting the U. S. Market. We are seeing the 5 gs Open Radio Access Network or ORAN market slow along with the broader RAN market As operators take inventory of existing developments, we do expect the small cell market to improve in calendar 2024 As carriers throughout the U.

Speaker 2

S, Europe, the Middle East and Africa begin to deploy sub 5 gigahertz networks Due to increased data demands, we expect carriers to deploy small cells in greater numbers in 5 gs networks to expand capacity and improve service. We had several major developments in our network infrastructure business during the June quarter. First, we successfully delivered samples of 7 gigahertz XBAW filters to a Tier 1 European 5 gs network infrastructure OEM. We were also awarded a development order for a new high band massive MIMO filter design from the same Tier 1 OEM aimed at the new 7 gigahertz spectrum for 5 gs base station applications. For the September quarter, we expect to secure a 4th design win in 5 gs from a new massive MIMO customer.

Speaker 2

Furthermore, we are currently working to engineer new improved samples of our 5 gs Band 41 and 5 gs U. S. 3.8 Gigahertz Network Infrastructure Filter Solutions. We expect to finalize the design and provide samples in the December quarter. And now finally, I would like to provide an update on our defense and other businesses.

Speaker 2

During the June quarter, we achieved several milestones in our Defense and Other Markets segment. We successfully broadened the sampling of our new automotive CV2X XBAW filter solution to multiple customers, while we have been involved in the automotive market delivering RFMI, Soft filter and crystal components, the introduction of our new XBAW solution for CV2X should significantly expand our potential TAM for the automotive market. Our new CV2X filter operates between 5.855 and 5.925 gigahertz and allows for device to device and device to network connections for multiple applications aimed at providing safe and effective communication within vehicles. Our new patented filter delivers low loss performance and enables high power handling capabilities that established long range connectivity for CV2X applications. We also We are now working on qualifying this resonator and our customer is finalizing the development of its low jitter oscillator product that is aimed at multiple end markets.

Speaker 2

During the quarter, we were also able to secure a development order for a new millimeter wave XBAW filter for a Tier 1 defense customer. Our biggest success in the Defense and Other Market segment was the introduction of our new XP3F technology, which incorporates a new revolutionary multilayer nanomaterial that incorporates our patented single crystal piezoelectric material. This new nanomaterial was developed with funding from the Defense Advanced Research Projects Agency or DARPA To scale the XBAW technology to frequencies up to 18 gigahertz, the new piezoelectric material stack The accompanying manufacturing process enables HiQ microacoustic widebandwidth filter solutions that will provide improved coexistence compared to competing high frequency LTCC, IPD and PCB solutions. We believe the XP-3F technology could present Akoustis with significant opportunities in X band radar, SATCOM Ku band and upcoming 5 gs, 6 gs, FR3 spectrum and we are receiving significant customer interest in both defense For the September quarter, in the Defense and Other Markets segments, we are expecting To secure a design win of at least one of the following: crystal oscillator, BAW filter and or SAW filter used in automotive wireless battery Management Systems or WBMS solutions used in a Tier 1 IC reference design and We also expect to complete the qualification of the 2nd XBAW resonator for a timing control customer.

Speaker 2

And now, I would like to hand the call over to Ken to go through our financial highlights.

Speaker 3

Thank you, Jeff. For the Q4 ended June 30, 2023, the company reported revenue of $8,300,000 which is an of more than 13% over the prior quarter ended March 31, 2023 and represents an increase of 60% year over year. On a GAAP basis, operating loss was $17,900,000 for the June quarter, driven by revenue of $8,300,000 offset by labor costs of 8.6 depreciation and amortization of $3,300,000 and other operational costs totaling $14,300,000 As a result, GAAP net loss per share was $0.25 On a non GAAP basis, operating loss was $15,000,000 And non GAAP net loss per share was $15,200,000 Reconciliation of these amounts to the corresponding GAAP measures is available in the press release issued this morning available on the Investors section of our corporate website. CapEx spending for Q4 was $1,200,000 A decline from $2,100,000 in the prior quarter as you placed into service the last of our ordered equipment of the company's New York fab expansion. Cash used in operating activities was $8,700,000 which represents the 2nd quarter in a row of double digit improvement as operating cash spending is down another 12% from $9,900,000 in the prior quarter.

Speaker 3

The June quarter was $43,100,000 of cash and cash equivalents versus $52,700,000 at the end of the previous quarter. In the September quarter, we expect revenue to be down approximately 15% given the broader market weakness along with associated inventory correction. Despite these challenges, we continue to receive design wins and introduce new products that we expect will help us grow our revenue substantially moving forward. I will now turn the call back over to Jeff for his closing comments.

Speaker 2

Thank you, Ken. Before I wrap up the call, I would like to provide a brief update on pending litigation matters. With respect to the lawsuit Qorvo filed against Akoustis In Delaware, in 2021, work on the case continues. The company continues to develop its Turning to the patent infringement case filed by Akoustis against Qorvo in the Eastern District of Texas. Qorvo has filed a motion to dismiss the case as well as a motion to strike Akoustis' infringement contentions.

Speaker 2

These motions are typical tactics used by defendants at this early stage of litigation. For example, in its motion to strike, Qorvo argues that Akoustis should be required to provide individual claim charts for each of the 10 15 Qorvo products Accused of infringement in the case. One key takeaway from these updates is the complexity and evolving nature of Akoustis' disputes With Qorvo, although we can provide no assurance as to the outcome of the disputes with Qorvo, Akoustis remains focused on advancing the interests of the company and its shareholders in both cases to obtain the best possible outcome. And now I would like to finish by stating That notwithstanding a persistent challenging macro environment for the broader semiconductor industry, we are positioned to continue to deliver top line revenue and unit growth over the next 24 months and beyond driven by 5 gs mobile, WiFi, automotive, defense and other markets. During the June quarter, we sampled new products including our 5.6 gigahertz and 6.6 gigahertz WiFi 6E and 7 filters, as well as our new CV2X filter and introduced a new resonator for the timing control market.

Speaker 2

We successfully passed a major milestone with a successful audit at our New York fab facility from 1 of the largest handset and tablet manufacturers in the world, along with our OSAT provider. In conclusion, we believe the market opportunity for our patented high frequency XBAW and XP3F filters is substantial. As of August 25, 2023, We have 104 issued patents and 108 patents pending as we continue to build a substantial IP mode around our technology. We continue to work diligently to achieve each of our stated objectives and we will continue to provide updates on our execution against these objectives going forward. Finally, I would like to once again thank our employees for their hard work, passion and dedication, which account for multiple across the WiFi, 5 gs network infrastructure, automotive and defense markets.

Speaker 2

We have also experienced exceptional momentum In the 5 gs mobile market driven by our industry leading XBAW filters that operate above 3 gigahertz and our new and expanding wafer level Packaging capabilities. I also wish to thank our shareholders who continue to support the company. And with that, I would like to open the call for questions

Operator

Our first question today is from the line of Anthony Stoss with Craig Hallum. Please proceed with your question.

Speaker 1

Hi, Jeff.

Speaker 4

Congrats, I guess, on all the activity surrounding and the progress. Three questions I wanted to hear from you On the WiFi 7 side, just can you paint a picture when you expect kind of volume revenues? Similar question on the smartphone, tablet customer that just Past your audit of your facilities and I have a follow-up.

Speaker 5

Cody, good morning to you. So as we said, we've seen despite the Wi Fi slowdown That we're seeing in the Carrier and Enterprise, we've seen a significant pickup in the WiFi 7 activity, which is a real Bright spot. So in terms of the specific customer activity, let me let Dave kind of articulate what's going on there. And also kind of while we got him what he sees in the mobile space.

Speaker 6

Good morning, Tony. On the WiFi 7, where I see the activity of that picking up is Q2 of next year. We've got engagements both in the carrier sector and also in the enterprise sector, Active designs that are starting their development runs and then they'll start working through qualifications later this year. So I expect Wi Fi 7, both of those sectors to pick start in Q2 of next year. There's other activities well with other customers that may trail quarter after that.

Speaker 6

And these are 2 of our top tier customers that we deal with right now. On the smartphone and tablet, as we highlighted, successful major milestone of passing the audit. And we've had multiple Tier 1 audits from other market segments. This is the first one we had in the smartphone So huge accomplishment on the Akoustis side and also with our OSAT provider. So that one, it's an engagement that we're going to track and watch.

Speaker 6

We'll be able to give better guidance in later quarters as we see obviously

Speaker 5

And Tony, let me add to that. On the mobile front, that's an area where That's in the other segments, we actually engage directly with the OEM. This one is one where we engage with a third party. So as we previously stated that our part goes into a more complex module, which then Has to be sold into a reference design, which we previously stated that that's targeting the China market. That China market has limited visibility and also some pretty significant headwinds And as outlined by others in the space.

Speaker 1

Got it. And then

Speaker 4

lastly, probably a bigger question, Gross margins remain negative even while revenues have grown. Can you give us a sense of where you expect gross margins to pass over into being positive? Kind of metrics need to get them above 30%? And maybe if you can update us on when you now expect kind of cash flow breakeven on a quarterly basis?

Speaker 5

Good opportunity to bring Ken in. So Ken, why don't you start?

Speaker 7

Good morning, Tony. For operating margins, we are undertaking a number of initiatives To improve our margins to switch over, as you said, to positive, those are predominantly Increasing utilization of our New York fab being one of them as well as decreasing a lot of our back end costs. Our initial products We're larger sizes, mostly 3.5x3.5. Our laminate sizes are coming down in size, which Dramatically reduces the cost, as well as some cost savings with our providers, the OSATs, And our new products are also much smaller size and much lesser back end costs associated with those products as they come online. So we expect as we improve our laminate reductions and other measures and bring on new projects that those margins will come down and you'll start to see them become positive in the next few quarters.

Speaker 7

And then, as you mentioned, operating cash flow breakeven, We expect that to occur in the October 2024 quarter, still with the same Same guidance as before, where we get to about $15,000,000 to $18,000,000 of revenue per quarter. But also of note, I will say that We've seen operating cash flow decline 12% each quarter for the last two quarters and we've undertaken a number of To our current customer to our current business model, so I expect that operating cash flow to continue to decline and we're taking measures to make sure that happens And then margins will improve as we see new products come online. And Tony, this is Jeff.

Speaker 5

Just to add to I think Ken has previously stated and just to kind of complete the picture, as we transition those gross margins with these cost savings plans, We expect at the time of cash flow breakeven, the gross margins will be in the roughly the 30% range is what we're projecting and how we're modeling it.

Speaker 7

Very good guys. Thank you.

Speaker 5

Thank you, Tony.

Operator

Our next question is from the line of Craig Ellis with B. Riley Securities. Please proceed with your question.

Speaker 8

Yes, thanks for taking the question. And Jeff and Ken, congratulations on all the customer progress in the most recent quarter. I wanted to follow-up on the color For September revenues down 15% quarter on quarter, can you talk a little bit about the gives and takes by the different product groups For the September quarter. And then Jeff, can you talk about your confidence that the September

Speaker 5

quarter would be the bottom in

Speaker 8

quarterly revenues or the potential for there to be a So the potential for there to be a further decrease out in the fiscal second quarter timeframe ending in December?

Speaker 5

Craig, good morning. Thank you for the comments. So let me just outline just provide some contrast over What we're seeing relative to Q4. So we expect the September quarter or Q1 To experience the following, we're seeing some slowdown in mobile and what I mentioned particularly the carrier and enterprise class offset by the WiFi 7 activity pickup. So we see that softness in the WiFi for a period of 1 to 2 quarters.

Speaker 5

We are seeing and experiencing A seasonal slowdown in some of the foundry services. We have as some of as part of our foundry services, we also connect in Some of the R and D government contracts that we have, we're right in the middle of transitioning from a first We're a Phase 1 program to a Phase 2 program. So we're certainly seeing that hit in the September quarter As we make that transition, I will point to that DARPA program that I'm referring to. We were extremely successful and I think out of the 7 participants, we hit every milestone the customer put in front of us related to that P3F technology we were developing. So we're very bullish on that approach going forward.

Speaker 5

And then finally, also in the Q1 September quarter, we see some lead time and supply chain constraints, Particularly in the in one of our particular Asia OSATs. So those are that's really the kind of the puts and takes, But that's really the macro environment that we're navigating now. In terms of confidence to your second question, in terms of the confidence That September will be a bottom. What we're projecting is 1 to 2 quarters we're seeing, I think we mentioned in the script, particularly in WiFi, there has been some inventory Build up in the channel, which needs to clear and we're projecting 1 to 2 quarters. So I think internally if you look how We model it is I would say we're going to see some softness certainly in the December quarter.

Speaker 5

That's probably comparable to what we're seeing in the September quarter, but then March quarter Begin picking back up with the programs that we're currently delivering Products too, there's several in the WiFi space and we see those picking up and see some nice design wins already coming together For those quarters. So, I think I've addressed your question. Any follow-up, please go ahead.

Speaker 8

Yes, thanks for that and appreciate all the color, Jeff. The follow-up question may be for Dave and it's Digging into mobile and the potential for some of the successful activity with different customers to move into a production ramp. I'll just use the China market as an example. So if we look out at key China selling seasons where The leading players would be developing new product. We've got Golden Week early October, Singles Day November, Lunar New Year In the January, February timeframe and then May Day further out in mid 2Q, As you're engaging with your module partners and other players, when does it look like it would be reasonable for investors to expect More about volume production ramp, if we take those selling seasons as a proxy?

Speaker 8

Thanks, Dick.

Speaker 6

Yes. Thanks for your question, Craig. I think the and Jeff touched on this, our component Customer that we've engaged with that we made some shipments last quarter and it's into a multiplexer that's going To the China market, on a reference design. So we've seen limited activity. Right now, I think everybody is We're obviously the depression states that the China Mobile market is in.

Speaker 6

So we do not have direct On the pulse to the OEMs there, it's something that we have to go through our customer, obviously, to get those visibilities. And so we're getting updates quarterly on the take rate and the traction. So we'll watch that closely. It's hard to really give any strong guidance until we start seeing some positive trends in that mobile market in China. The other part is the other engagements we have with the RF front end module guys is mainly focused.

Speaker 6

I think we've guided in the past Focusing on later year models. And that is one that we've been validating the technology we've shipped as we've said in previous Quarterly calls that we've shipped solutions that have been validated by them, and it's Really navigating a strategy of implementing our technology into those modules. So that's still underway. So the guidance right now has been the outer years on when we would see that take rate. Obviously, as we have That visibility to the platforms would be integrated.

Speaker 6

We can provide more concrete updates.

Speaker 5

Yes. And Craig, let me just add to that. From the mobile segment, I just want to emphasize reemphasize the quality audit we passed. We actually We did continue making shipments to that customer during the June quarter. And also would add, our WLP was part of the supply chain.

Speaker 5

That's the packaging, critical packaging for that. That was part of the audit that we passed. And so we're prepared to ship The pieces from our end, there's been no delay on our end and that supply chain is working really well. So I just want to emphasize How we're positioned at least to service that market as we've already demonstrated with shipments the last two quarters? Yes.

Speaker 5

So,

Speaker 8

certainly, it seems like you're executing well on the things that you can control and it's been very well publicized that The Android market is unusually weak, especially in China. If I could sneak a last one in, Jeff, nice update on your specific Plans with both the CHIPS Act and DoD, and you mentioned some milestones. Are there any, intermediate Update points that investors could look to, as it relates to potential funding for either source. Thanks for taking all the questions, guys.

Speaker 5

Yes. Thank you, Craig. So if you look historically, when from the time that We've been notified of an award decision. We have to negotiate a contract and the company's position is until we're under contract, We don't make any public announcements because those have to be negotiated and some of the terms of those have to be worked through. So I think the we certainly will have an update.

Speaker 5

We'll provide another update. This being The year end for us, it's kind of a short cycle until we're back on with investors after the September quarter. So Certainly, we think in early October when we report again that excuse me, in the early November time When we report again, we'll have an update. And I would not anticipate we'd be under contract before then.

Speaker 8

Thanks, Jeff. Thanks, Dave. Thanks, Ken.

Speaker 5

Thank you. Thanks.

Operator

Our next question is from the line of Suji Desilva with Waltham proceed with your question. Hi,

Speaker 9

Jeff. Hi, Jeff. Hi, Dave. Congrats on the progress here. So, can you give us a sense of the WiFi 7 ramp that's coming?

Speaker 9

Maybe how to size that opportunity to think about it relative to prior Wi Fi ramps, perhaps attach rate, penetration metrics or Content per access point device or whatever way to think about it, that would be helpful. Thanks.

Speaker 5

So let me thanks for your comment, Suji, and good morning to you. So we did mention we delivered 2 newly developed WiFi filter samples to a Tier 1 Mobile customer during the quarter, but in terms of the some of the market dynamics, I'll let Dave comment on those for Wi Fi sub. Yes. Good morning, Suji, so

Speaker 6

I think a couple of comments there is, as Ken mentioned earlier that we're releasing a new family of WiFi WiFi 7 products that are better than previous generation and response, but also smaller in form factor. So making it more attractive, both from a size and also performance standpoint, particularly for these higher MIMO count architectures. So The dollar content per system is actually increasing in the WiFi 7, both with the enterprise sector that we're And also with the carrier side, and I expect the demand to be as Same or if not higher in system unit sales. So overall, the revenue should be increased for Akoustis In these Wi Fi 7 platforms, some examples is that the filter count can go up 50%, almost 100%, based on the architectures that we're seeing right now and how they're developing. So they are fairly complex to previous ones.

Speaker 6

I think you guys are all aware of the WiFi 7 advantages, particularly this high band selectivity or what they call MO, multi link operation, It's requiring high performance filters to be able to enable that in the Wi Fi seven. So this definitely plays in our favor, and we're keeping a lead As best as we can from a performance technology wise based on the XPEL technology. So we're very bullish about the Wi Fi 7 market and all the Activity is moving in the right direction as far as what we're seeing from customer deployments.

Speaker 9

All right. Thanks Dave for the color. And then my other question is on the auto market. You mentioned it in the prepared remarks. Just trying to get a sense of the number of Customers you may be engaged with kind of order of magnitude, is it a handful, is it more than that?

Speaker 9

And what is the are they semis companies, systems companies, Module companies Tier 1s or auto OEMs directly and what's the timing of revenue ramp opportunity there just to level set expectations for auto?

Speaker 6

Yes, Suji, I'll take the question. Yes, I've been actually on the road visiting with some of the automotive customers and Yes, pretty excited about the opportunity that is presenting to us. It will take several years before you see these platforms rolled out. But we're actually so example is the wireless battery management system. We've got 3 components on our reference design with a Tier 1 IC manufacturer.

Speaker 6

And so we've got good activity going on in Asia. And that is starting to move into Europe and Expect some of that pickup in North America. So we're pretty excited about the opportunities there. And I think we said that we'd be announcing some design wins. And then The CB2X, we've got greater than 5 customers that we've been sampling to.

Speaker 6

And CV2X is starting to pick up activity wise, including in Asia, the ETC, so toll collection. So those are the things that we're looking at closely. And then we've been working with recently some North America OEMs on the automotive side That are more traditional ways of going about building their systems, not using subcontractors, doing it more in house and See a lot of activity from discrete components, both from the RFMI on oscillators and soft filters to our BAW technology for TCUs and other spectrum that we're going after. So there's a lot of activity and we've got Greater than 5 customers that we're selling to into production and obviously in Tier 1s to Smaller companies, but these new opportunities won't really be panning out for another couple of years.

Speaker 5

All right.

Speaker 9

Thanks for the color, Dave. Thanks, team.

Speaker 2

Thanks, Suji.

Operator

Thank you. At this time, I'll hand the call back to Jeff Shealy for closing remarks.

Speaker 5

I want to take the opportunity to thank everyone for your time today. We look forward to speaking with you on our next update call to discuss the current quarter against our milestones and future expectations. And with that, I want to wish everybody a very pleasant day. Thank you for your time.

Operator

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

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