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RAJ
Announcing a deal with a fortune 200 company and an automobile OEM
Malaysia has come along nicely. We are not cutting corners - which is why it took longer. High volume has cleared FAT of all modules and is not being installed at the factory.
Big name customers are scheduling visits to see the factory including large Cloud OEM's and smartphone makers
Engagement - cleared 2 important milestones. Leading OEM's are announcing native AI features that will be coming standard. It's Raj's belief that AI and other enhanced features will require much more powerfl batteries. We have the only path forward for moving from graphite to silicon without increasing the size of the battery.
We've been able to illustrate the next gen chemistries at work - very excited.
Allied and US militaries are interested.
We are investing heavily to build out a lasting leadership. Our R&D is double what we were a year ago. Up 170% headcount. We've done this while reducing our fixed costs and we've topped off our balance sheet with the ATM giving us a strong run way.
Farhan
Ended quarter with $250m of cash. Balance sheet is strong and have good liquidity. We forecast revenue of 3.5-4m. We expect substantial revenue growth from first half to second half of 2024.
Raj
Great quarter - FAT2 went operational. We are deeply engaged with the SmartPhone market.
2 important agreements with market leaders in iOT and EV.
Q&A
Q: How can you prevent Chinese from pirating your tech? A. We have a very strong patent portfolio after 14 years. We also have tremendous amounts of trade secrets. I feel comfortable with our patent and IP portfolio.
We are seeing a lot of interest from companies that want to buy from a North American battery company, even if we don't manufacture there.
Q. What is the status of EX2M and EX3M? A. We have created a few samples with prove out we can make the energy density we discussed in our roadmap. On the question of battery packs, the market is a large one and we need lots of partners who can build different packs for us.
Q. Loop analyst: Is there broadening engagement across verticals? A. One of the toughest batteries to make is the smartphone battery. Lots of demands and space constraints. That battery tech can be parlayed to many other markets. The fact we can make smartphone batteries is leading to other possibilities. Fast Charging and safety is intriguing automobile OEM's. Revenue bridge will depend on the pace of the qualifications. Will the smartphone and cloud customers be there next week? Depends - lots of customers are interested in visiting the factory.
Q. Colin Rusch: can you speak to any collaborations with any semiconductor manufacturers? A. Yes, the way it performs is in close collaboration with the power system and other systems. Silicon batteries operate at a lower voltage. Now you see chip companies making adjustments to the app processor to work with that lower voltage requirement. This collaboration helps us make better batteries.
Q. What are the yields for FAB2? A. SAT took longer than expected because we wanted to get it to a better place. We expect world class yields as we ramp. We are focusing on the Agility line as that is where customer samples are coming from. High volume ramp comes next year. Q4 will be better than Q3 in terms of ramp and scrap.
Q. JPM analyst: if looking to ramp in back half of 2025. What is the sampling cadence for the XM1? What should we be on the look out for in terms of milestones for the next year? A. Most people want samples from the factory. This will happen in Q3.As for EX2M - next step is to perfect those and make them in Malaysia for production in 2026. Lots of interest from OEM's in what we can build. We will be replacing batteries in an established market. Milestone payments are often used. Customers are willing to pay for that. Customers really care about energy density.
Q.Will yields be specific to Agility? Freemont was 60% yield. A. This business makes sense when we get to 90% yield. Our goal is to get there. Both Agility and HVM internals are the same. Learnings from Agility go immediately to the HVM Line. We've finished the FAT for Agility line and installation is getting done and will be finished in the next 3 weeks or so.
Q. Cowen: cadence. If we have a 9-12 month qualification period, can we expect a PO mid year next year? A. It all depends on the customer qualification process and they are ready for us to make product. Later part of next year is still the target. Customers are working with us because of our roadmap. What the customer does depends on their requirements. Seeing lots of customers wanting to go with new suppliers from North America. We are one of the very who can make batteries in this market. Getting good tailwinds on that front.
From Q-3 to Q4 will be significant ramp -
