Sivers Semiconductors AB

STO:SIVE

Earnings Call Transcript

[Anders Storm, executive]

Good morning, and welcome to this first quarter 2022 webcast for Sivers Semiconductors. I am Anders Storm, I'm the Group CEO, and I'm going to take you through the quarter and a lot of information about the company stands currently.

So to give a summary of the quarter, we're growing quite well, almost 100% getting in on a net revenue of SEK 27.5 million, and we have also closed the very transformative acquisition of MixComm, which we think is developing really well and will tell you more about that. We also, in Q1, had our sort of largest order year-to-date and also in general for our 5G technologies or 2.1 million order from customer 8devices. We also started a partnership with Sanmina for development of 5G. We also started a partnership with MaxLinear, [indiscernible] U.S. blue ship company on point-to-point links and already have the first customer on that technology and also introduced 360 coverage metaverse module together with the South Korean company called Kreemo where we see a very good development together with them in general. .

So to summarize the quarter, as I said, 100% growth almost on revenue, the best quarter we had so far in revenue in the company. EBITDA also improving quite well, plus SEK 6 million compared to last year, much driven, of course, by sales. But also looking at adjusted EBITDA, and that is something new we've actually introduced from this quarter where we're looking at the numbers in a bit different way because of -- so share price is affecting share options and stock options and so forth. Hence, it's better to also have an adjusted EBITDA where we can see a positive note of SEK 2 million.

We look at the EBIT numbers, they are actually a bit lower. However, what we need to look at now is that since MixComm came in and also under IFRS, we actually have -- we have to write off the acquisition, that's going to be about SEK 45 million per year over a 15-year period. So that effect was actually about SEK 4 million now then part effect actually in this quarter, but we're seeing a very positive move here and adding MixComm to the company is extremely important for the company.

If we look at the segment reporting, wireless is growing quite heavily, 244%. Photonics is growing also with 54%, which is quite good. Notable is that both hardware and NRE sales is growing, a lot of the NRE sales is affected possibly by MixComm, and we're also seeing a very positive future in NRE for this year when things are easing up and customers are getting more and more interested in investing again after the pandemic, specifically in the West is now easing up quite a lot. We're still heavy in Americas, North America almost 70%, Europe 20% and Asia 11%. We've been around those numbers for quite some time. And of course, this is why it's so important to have feet on the ground now with MixComm in the U.S. market.

If we look at the significant events, the acquisition, of course, as I mentioned, the SEK 2.1 million order, I talked more about that. I'll talk more about Sanmina stuff. We also talk more about the MaxLinear and then negative information that came out with the New York Stock Exchange company that design win we lost and also that Kreemo -- but let me first start and reiterate why we think that Sivers and MixComm is such a good mix together and creating sort of the challenger in 5G and millimeter wave SATCOM and other applications.

So first of all, summarizing up the company now, we are 137 people as of Q1. And we have 42 PhDs. We increased a lot. Most of the employees in MixComm [indiscernible] PhDs. We still have very strong investors in this institutional side as well as private ones with Swedbank Robour new technology, AMF Pension fund, AP3, which is a large Swedish pension fund -- governmental pension fund. A cash position is still strong with $16 million in cash, ending the quarter. And with this, then we can see that we have the Swedish and we are 46 employees. And in the U.S., we are 20 approximately. And in Scotland, we were above 70. So that ends up in 137 employees. We're still at a very healthy 43 design wins within the wireless business and a lot of other design wins and so forth in the Photonics business, but now also adding SATCOM and radar into the mix on the wireless part. So reiterate again, we're getting some of the best technology in the world when it comes to 5G beamformers already customers on that as well. The Tier 1 customer we've been talking about, which is an important part there where MixComm has been working for a long time. We have a SATCOM customer that's putting orders already. We're seeing NRE from them. We're seeing a lot of movement in SATCOM in general. This is a very extremely good move for us when it comes to NRE in the future. We also are moving more and more forward in the repeaters, have very exciting things happening there as well as the algorithm that ties this together to make it sort of a more stickier application for [indiscernible] and other applications.

Then, of course, we have the servers offering still, which is really strong. We're probably one of the market leaders in the 60 gigahertz unlicensed 5G bands with most customers more than Qualcomm, I would say, in that area when it comes to infrastructure. Also on the antennas, we're really strong and adding that technology even if MixComm had a lot of attendance, which have more antenna knowledge and been working with that a long time. We also had the beamformers, but MixComm had a better solution on that side and then, of course, system platforms and so forth. All in all, this put together makes us sort of taking most boxes in these areas, including, of course, photonic, which is a very strong sort of offering in itself and looks really interesting for the future. So even Qualcomm and analog devices cannot really support all of these features and looking at our sort of more near competitors like Movandi and Anokiwave, they're covering parts of it, but not in the same way as we are doing. So this is giving us a very strong position. This is exactly where we want to be as a challenger below sort of the really large companies. And this gives us then a wide product portfolio where you can use our product. Even if we don't have sort of hundreds of different products in the wireless part, we still have a few products, but they can be used in many, many different applications. Everything from SATCOM terminals to satellites in the future, everything in the license band from base stations, home units like CPEs, hotspot, repeaters. We need to add here also the commercial consumer electronic type of devices now with the partnership with Kreemo and Metaverse.

On the unlicensed side, we are in everything from fixed wireless access, backhaul transportation, track-to-train applications and so forth. So there is a very wide part where we actually can address a lot of things. So this makes us a very, very good position for the future and seeing positive movement in these areas. Also strengthening our partnership network with adding a mix coming to the mix with companies like Sanmina. We also now recently added MaxLinear. MixComm is working with baseband vendors like Xilinx and transceiver companies like SiTune. GlobalFoundries is an owner or was an owner in MixComm, is now an owner receives extremely important for us. The open innovation lab and open RF parts with the handset parts is something that we're adding. And Richardson RFPD, with their very wide reach and will come with more information what's happening with Richardson quite soon.

If we go into some of the design wins then, so this gives us our sort of first 5G design wins with the major Tier 1 that has started sort of designing products and in the selection phase for that. This is really important, and we're seeing a good movement here and the first purchase for products has been done, and we are building prototyping in -- has been building prototypes in Q1. When it comes to repeaters, a really large NASDAQ company that is a sort of a communication company, have bought the repeaters then NRE projects. We've done testing in Q4 2021, went really well. We are now expecting getting to this sort of second phase of this. Here, we also see with the repeat there's possible future backhaul licensing unlicensed spectrum and more. So completing this with everything in our portfolio makes us very strong in this area, and this is where we want to go in the future.

Then we have a SATCOM customer, which we already -- or MixComm had a $2 million NRE with. We're going to see more coming from them in the future. I'm quite sure. These are very large sort of a race where we actually have 1,700 pieces of equipment in each and every terminal. So there are -- even at fairly low volumes, there are great volumes to be had in this market, and this is a very exciting partnership with this customer. And I hope to come with more information. They are a bit secretive, but come with more information, who they are and what we're doing with them in the future.

And then we have Kreemo, which is sort of -- we've launched a couple of solutions. And the next step, which we're working on now is to get into the antenna in display where they have very cool technology, where they're actually making the antenna on a display. And if we can get into that, we can also open up a completely new TAM in the sort of consumer electronics market, which is, of course, something that we have not calculated on whatsoever so before we had the acquisition of MixComm.

So the MixComm of integration project is going very well. We expect to share our new organization and set up and everything before summer vacations. There is a lot of work ongoing. We have 10 subprojects delivering things. And as you can see, new things is coming up on the series webpage about them. We are working more and more jointly. We will go to the IMS show and have the same booth and all of those things are now getting into place. But the more sort of formal statement on everything and how the new organization within wireless will look like is about to get ready for -- before the summer. And we also have a very good start with the U.S. focus here. I've actually been to the U.S. 3 times myself, just over the last 6 months, came back a couple of weeks ago. Things are really changing over there. There is much, much less sort of worries about the pandemic in itself. Actually, I could fly and be all over California, in a lot of customer meetings without any masks anywhere. If you go into the big companies without mask, you can go on to the flights and everything. So things are really changing, and we feel this is a very positive vibe. And specifically, companies starting to dare, investing again and getting out of the pandemic, which is good for future design wins, good for future NRE, which has been sort of very hampered over the last period.

And also, the partnership is sort of really important, as I said, with GlobalFoundries and RFPD and there will be more information about that in near term. And also adding Kairos ventures on to the Board has been a great addition. They are adding a lot of value into the company, and we were just over meeting all of their investor base in L.A. on a very big event that they had for all their companies. They are over 50 companies that they have. And Sivers was actually one of the first sort of exits that they did. So there was a big event and meeting all of that and getting into the institutional and investors in the U.S., understanding the semiconductor markets will really change the dynamics for Sivers as a company as well, and getting the understanding, for example, of our Photonics business and the potentials there is much higher, I would say, in the U.S. Mentioning, for example, the same week we were in L.A., our sort of customer AR labs just got $130 million from Intel, NVIDIA, HP for the future of optical I/O within computers. And of course, they understand these things much better in the U.S. and in the Silicon Valley then we actually do here. So this is a very important move for us.

So if we look at other significant events, our first order from 8devices came in. It has been sort of still hampered by technology around us sort of clock buffers, crystals and all of that, which makes it still that we are sort of not possible to sell too much beginning of first half this year, as we said before. But however, we're seeing -- expecting acceleration and customers are working really hard to replace components and these sort of very cheap small components that creating problems will make and help us. And I think actually, which is a bit strange, the overall slowdown in the economy might help us in the sense that if people are not buying so many cars and the automotive industry is slowing down and we're getting some sort of recession, which is good in that sense that the component issues will ease up, and that will help us in the sense that the technology -- we are selling like 5G and connectivity today is like water and electricity and even more important maybe. So even if there is a recession, people will still keep on building and getting connected and the lessons learned from the pandemic is that people want to be connected. People are still working more from home. So this is a trend that will keep on growing.

If we look at the MaxLinear partnership, really important for us MaxLinear is a great partner in this. We can, for the first time, sort of offer 10 gig links on these frequencies on licensed band. We have already an ongoing working customer. We're seeing first orders late this year on this, even if it's a very new product. We just recently delivered the first new sort of units for this kind of product to the customer a couple of weeks ago. So this is an interesting partnership that can develop in an interesting way forward.

And then going to the lost design win. And of course, this is not fun that it happened, but this kind of things happen. It was sort of a long-term for our next-generation products. And of course, pandemics and technology risk and everything delayed things and the customer's customer wanted the product early Q1 2023 and our customer could not deliver on that, and hence had to sort of redo and rethink the project. It is now on indefinite hold. But you never know if it's opened up, or we shouldn't count on that right now. But on the other hand, for us, when we won the order, I think we had about 16 customers in general. And now today, we have 43 customers. We have photonics on top of that. So I mean, the loss in itself is not so harsh as people might think in that sense. And -- but we keep on working. We have other customers, of course, on this technology and a big interest on the same technology, and we are driving forward to deliver that still in 2023. And again, there has been some discussions if this was sort of a lost order in itself. It was a lost design win. The order -- there was no order, it was an estimate of future revenue over a 3-year period that we talked about. So it's very important to understand that. It wasn't the order that they could cancel in that sense. It was sort of more of an NRE project that they could cancel in that.

And the partnership with Sanmina, they are a very big supplier to some of the largest Tier 1s in the world. So having this partnership is quite important, providing design, packaging, assembly, test services to sort of verify that Sivers is a company that can deliver. They sort of the integrated beamformers antenna package and the solution is sort of based on the MixComm sort of summit beamformers and eclipse antenna package and so forth. So this is a quite important partnership since Sanmina is so large in this area and it moves us into a new position with some of the Tier 1s we're working with.

The Kreemo metaverse module was actually shown in Barcelona. It's optimized sort of for to be able to send in all directions, which we haven't seen that kind of modules before using the Series [ 28 ] gigahertz beamformer, which come from MixComm. And the next step, of course, which is maybe even more exciting is to get into the antenna display technology we're talking about for mobile phones. So all of this is sort of on the path to that and working hard to also be included in that type of technology. So looking a bit on the photonics and customer update, but I also want to give you sort of a broader update what like the photonics is. And here with a deep focus on the Indium-phosphide 100 platform, which we now are sort of gaining ground on in many, many different aspects. We've been to different fairs, and we can see a very good pull and new customers coming in on the platform. So of course, you have the optical communication. And there, you have the subscriber who use the data center, the data center there, you have the data racks and you communicate between the racks with the transceiver, you also communicate within the racks with the sort of air labs and arrays in that. So you have the sort of optical communication in that sense. So there's a lot of -- quite a big market here has been around for quite some time, and we're really working now to get into volume production in the next-generation technologies here.

Then is the optical sensing where everything from smart [indiscernible], smart factory, smart health care, body environment and so forth, the sensors can be in phones or watches and so forth. And all of this is based on silicon photonics and integrated circuits where we now are really, really strong and were quite important. Same thing also for AR labs. There's also silicon photonics, which is important. Then you have everything about self-driving cars and LiDAR where you need autonomous vehicles, you need to have LiDAR systems and it's actually connected, of course, to other [indiscernible] radar, LiDAR or cameras and so forth. Then you build a LiDAR module. And in the LiDAR module, you have our laser chips, which we now see is -- of course, autonomous vehicles are a bit in the future, but we are going to see a quite interesting market, I think, going forward, and we're seeing a big interest for our indium-phosphide platform in that sense.

So to give you sort of an understanding of how large this market is, of course, optical communication is already a very large market with the current solutions. But getting into the next-generation solutions with the terabit speeds and that kind of stuff, that's where we're working with AR labs and we can see a really large total addressable market there, and that's going to be very important for us going forward. Another thing is the optical sensing and sensors where we have the Fortune 100 customers today. Also a quite large market, but I think that the overall market there is very new and use cases we are in is probably not included in the overall TAM yet. And we think that is sort of conservative as well as LiDAR, where we sort of at least calling development, like that's a very small market in TAM wise, but we can see over time and only from possibly one customer much larger TAM in the market than the TAM here for you. And just to be clear, this is actually the Indium-phosphide chips in itself, this is not a system market. So this is the first time we sort of have drill down and used dual development to get sort of good numbers on the Indium-phosphide lasers themselves in the applications.

And of course, as I mentioned, that is part of the telecom, datacom, 5G, optical IO and all of those things in the optical communication and in the sensing, you have the industrial sensors, smart factories, gas sensing. You have the variable healthcare, which is interesting and environment, smart cities and medical diagnostics and so forth. And this is a market where we have some customers. And then in the LiDAR market, we also have customers, and that's sort of the autonomous LiDARs, industrial LiDARs. We also see other type of LiDARs actually in consumer electronics closer to that at least.

So all of these things are dependent on sort of a growing standardization and CW WDMA MSA, a long acronym for sort of a very important standardization organ where Sivers actually has been invited, and we are among the top 10 promoter members for this, which has sort of put us in a quite good position with companies. And as you can see, we are slowly adding customers here from this group. You can see AR labs here. You can see other companies in this picture that we are working with like Imec and others as well. So this is really an important step for us. And of course, standardization brings two things: Number one, it eases up and makes it easy for a mass production market. It also brings in the possibilities of first source, second source and third source and that kind of thing. So when we're winning customers here, we should expect, but there is one first and second source and so forth and especially now with supply constraints in the world and people need to think about that. But at the same time, this is a really large TAM in these markets and we are going to address them, and of course, working and trying to be the best here to be the first source in these applications. But this is sort of both an opportunity, but also need to understand the dynamics in this. And we are, as I said, in the heart of the standardization.

If we look at the Fortune 100 customers, and we've been working with them now for quite some time. And as we said from the beginning, this is a 2- to 4-year project, invested $10 million, $12 million [indiscernible] first Fortune 100, which we've been working now over 3 years. And of course, I mean in the normal circumstances without the panel, this is the time it takes. So it's still hard to say exactly when we're getting there, but we have great progress and the customer is very happy with the technology. We are expecting more are to come in and before the possible volume phase, but still there are very good feelings and positive feelings. We're also seeing a first some positive movement in the second product now, but it's still in research phase and very early phase. But I hope we can come back on more on that, but now it's actually the first time we're seeing that they are sort of moving into next direction.

We're also progressing well with other Fortune 100 companies, and we hope and see it very likely now with the changes in the market that we might see new projects with Fortune 100s going forward. And then the no name customer, which had a [ $5.3 million ] order, and it's a U.S.-based one. We're seeing great progress. We're expecting more NREs, maybe smaller ones than this and so forth, might not be press released even. But we are moving ahead with this customer and it's a very exciting market where we hope to see volumes going forward in the future from something like 2023 and forward.

Yes. And then talking about Ayar Labs, as people have seen, there has been a partnership with Ayar labs, as I mentioned, first store, second source through a third source [indiscernible] as also supplier [indiscernible] there today. We are sure that there will be companies around this, but we really see that overall, this is going to be a huge market when it happens. We are very happy to be part of this. And the announcement now that Ayar Labs had on the 26th of April, where they got investment from NVIDIA, Intel, HP, I mean it's ridiculous actually, which a fantastic company, Ayar Labs is here. and they're creating and changing and moving more slower going from electricity to light in computers in the future. And we're really happy to be part of this, and we're really working hard to deliver on these things this year for every profit type and so forth.

Imec is part of these things. We are working with them as a partner. We're really happy with that is going well in that sense. And maybe sort of Imec is not our customer in that sense, but they are an important partner to be able to realizing in silicon photonics. And in general, the same thing goes with GlobalFoundries and that, which is the supplier to Ayar labs and GlobalFoundries is now an investor in Sivers. So all things tied together, and our strategy is moving in the right direction. So looking at these things to give an example, I already mentioned that. So optical communication. I mean, for example, we have Ayar labs there in the optical sensing. We have the Fortune 100 customers in the LiDAR. We have customer X already. So all of those things are covered. We are getting into a good position everywhere. In LiDAR, are we seeing more and more customer interest as well over time. So this is quite exciting times for our Indium-phosphide 100 platform.

Looking at the wireless business. The global supply constraints has, of course, been there. There's been shortages in these quarters, and we're seeing an ease up after the redesign. And from August time frame, we have positive feedback from customers where they can see that they're getting more components. And we also see a positive pull for new NRE products now within U.S., within Europe and especially in the SATCOM area where a lot of investment now goes in to the next-generation systems, and it was exactly the right time to acquire MixComm to be part of some really large possible projects here.

There are, however, also if we look at the sort of the war situation in Ukraine and Russia, there are two customers in Russia that we are not allowed to supply anything right now, not even product data sheets and so forth. So they are on hold. There were no sort of a larger revenue coming from them in any way right now, and we have to see what happens with this, but I'm hoping for a swift piece in that part of the world, of course.

So to reiterate a bit on the 5G side, we have sent 10 design win customers that now have 20 ready hardware products, and we hope to see more of these orders than in the second half of the year when things are easing up. And hopefully, like Blue Wireless now can start roll things out, for example, in the track-to-train industry when the pandemic is easing up. We have -- and as you've seen already, 8devices. We're seeing AirVine moving ahead with their products as well and so forth. So in general, we're very positive now. We have 43 design wins. We're working hard to bring them to market. Also, the sign wins from MixComm, like the SATCOM stuff, like the Tier 1 customer in 5G, we're also seeing that they will move into some sort of pre-production, volume production during the end of the year and early next year. So more and more design wins coming in. And as we said before, we're hoping to have sort of 16 customers ready by the end of the year and moving into volume going forward.

If we summarize things then, we had a great Q1, good growth. Things are moving in a positive direction, even if it's actually affected in some way by the shortage of components, even so. The transformatory acquisition of MixComm is going around really well. I'm very happy that we did this acquisition. It's going to change a lot what we do and how we work in the U.S. with technology partners, everything, very important step for us. First order showing that this is not Ayar. We are getting orders for 5G, 2.1 million. That's really good. Partnership with Sanmina, maybe more important that people understand, connecting to Tier 1s. MaxLinear, very important partnership. We can see other things with MaxLinear. We have a very little overlap with what MaxLinear doing, and I think we can do a lot of things with them in the future. Increased interest in NRE projects, increased willingness there to invest. This is what we're seeing and are very happy to see this now in the market. Kreemo metaverse will be some of interest, getting that into consumer electronics in the future on the 5G side would be a game changer. Nothing of that has been sort of in our plan before, and that's part of the strategy and opening up the TAM for more possibilities. We still have a good cash position, [ SEK 156 million ] in cash ending the quarter and feels like a good position currently in that as well. So thank you very much for listening. We are now moving into the question piece. And as usual, I have this little window here, but I'm going to try to answer questions, and I have hard stop at 11 because I need to go into the interviews with [indiscernible] and others this afternoon. So let's start.

[Anders Storm, executive]

[indiscernible] has slowed down a lot. How does it look in the front?

Yes. So as I said before we are really, really moving in a good direction there and we're seeing a change now in that definitely. Do you think you are still a CEO 3 to 5 years? Where do you think Sivers is in 3 to 5 years? I mean that's a question you should ask the Board, I think. I want to say, I want to build this company and sort of the target that we have mentioned is, of course, that we want to be a large cap company and that's where we want to go with Sivers. [indiscernible], your earlier presentation named SATCOM that will be mentioned. Yes, as I said, they are a bit secretive. I hope we can get information about it. But when it comes to these things, it's always difficult, but we are really, really trying to share the name.

To which date our MixComm fulfilling the earn-out? Yes. So as stated, it's up to a 9-month period from closing. So closing was in February. So there is still some time to reach that target. How does the Fortune 100 partnership look like? Yes, I think I've talked about that already and the pilot line and so forth, as I mentioned, we're probably looking at more NRE before that will happen. Okay. Now we have a very long question here. Let's see. Are you still going to buy stocks in the open market? Or are you satisfied with the upcoming share saving program? I mean, I am still going to add shares when I can. We are sometimes locked up, but I am looking to add shares definitely. Are there reasons why you haven't got a new bigger order from F100 because of the satisfied with your product? No, there is nothing. We have been working. They are satisfied with the product, but sometimes it takes time for technology to mature to get in and they need to do things. We are having pandemic. I think we're very satisfied about that.

You are signaling last summer, autumn that you hope for pilot during spring 2022. What are your time line now? How are you? I'm not sure that I mentioned any time line, but we are working on it. They are happy not much we can do until sort of we're moving past all what they need to do, but we are still on board. We're hoping to get more volumes from them in NRE as well. Would you very much like to have more about MixComm Tier 1 to your SATCOM customer? Yes. I think you already heard about that, and we will, of course, give you more on that as we go along. You see volume orders from Ayar labs this year? I don't think volume orders for this year, I think earliest next year in that sense, but it's, of course, hard to exactly say in these parts. Do you think Sivers will go to large cap? I mean I can't talk about that in general. The target is to get there, in my mind, but how I don't know when? Same question again about me buying stock or not. Nice to see positive development in NRE. Can you elaborate a little around what and who and what products is made up for? Yes. And as I mentioned, NRE is connected to the SATCOM customer mostly and also the [ repeaters ] part. So a lot of it is actually coming in from MixComm who have had a good pipeline on that lately. Customer set coming in is, can we expect actual sales revenue? Yes. I mean we are getting revenue from the SATCOM customer and we are expecting even possibly volume orders before the end of the year. Could you speak on the adjustment OpEx levels? Which quarter is there anything in particular that's driving this down versus first half 2022?

I mean, in a way, I think there has been over sort of estimate by research in the cost level, and we have been really good at having synergies. But I can't really go into all of that. I think the synergies MixComm and [ Sivers ] Wireless, we will share more about that in sort of an official press release and how we are driving down OpEx and also CapEx due to this. Personnel costs were down single versus Q4. Other external expenses were also down despite MixComm being completed in the quarter. So how could we bring that operational expenses? It could be to the onetime effect we have with some pension in Q4 you're looking at. So I think you should probably compare at Sivers and more on a year-to-year basis then on Q4, possibly. So that's my guess. That's what's sort of affecting that. And should we be thinking about operational expense in Q2 and onward versus Q1 given the consolidation of MixComm?

Yes. So we are seeing sort of that. And let me come back, as I said before, on the future of the OpEx and so forth within the -- with information of when we have done the full sort of merger in that sense. Could you shine a light on the progress with your Fortune 100 customer? Yes, I think so. I've done that. NRE every third quarter previous, but this has been fourth quarter since the last one part done or any other reason? No, there is no more reason the pandemics and investments are being delayed in general and people have been scared about that is some sense and technology needs to mature. So there is nothing strange about it. We expect to see more NRE coming in, in the future. Can you elaborate a little on how you have absorbed mix coming to Sivers. I think especially on the roles of MixComm [indiscernible] right now in the future sales. Yes, Jay and Mike is definitely part of Sivers in the future and let us come back on organizational things there. We're not very far away from sort of officially announcing that. Also on the NYC levels, would you expect to recapture part of outflow in Q2 NYC, nonworking capital. I'm not sure about that [indiscernible], sorry.

Okay. Moving. We have seen any large ramp-up in volumes in behalf from the bigger customer, namely [indiscernible] -- what can we expect in volumes, revenue and orders? Yes. I mean, we don't go out with sort of expectations. But as we have said, from second half '22, we hope that all of these customers will get into a new sort of level and not have the constraints that they have. How we see MixComm [indiscernible] is working with the new raw materials such as GaN and silicon carbide do you view these materials potential for the company?

No. We are not seeing GaN and silicon carbide in the millimeter wave area. There is more sub-6 gigahertz. There are some game applications, but we really think that [ RF SOI ] for the applications we are using is the path to go. Can you say about the need for capital in the company, if you don't see more sales during the next coming months, you need to write [indiscernible] as I said, we have SEK 156 million in the bank today. We don't see immediate need. We are a growth company, however, and with very exciting news and stuff happening in the future and push from investors, it might be that we will bring in more money to the company, but we are sort of not in any way needed or push to do it in any short term. What that integration do you have [indiscernible] MixComm? How do you plan on working together, et cetera? Yes. I will come to that, but MixComm will be highly integrated into Sivers wireless. How can -- how you received an interest in acquiring Sivers as a company? That is nothing I can comment on, unfortunately. Can you shine some light on the work with Ayar Labs? What is the potential business model for you regarding [indiscernible] technology? Yes. So the business model is that we are selling laser arrays, 32 to 64 array and that's quite expensive chip set that will be part of inside the computers in the future. Will Ayar Labs award design wins to the, for example, Sivers Photonics [indiscernible] computer product? Yes. I mean I would say we already have a design win in the sense that we are designing a solution for them, and they are paying us to do so. So we're already sort of in a way designed in and are working on that. Then of course, things can happen in the future. The potential in the market is quite large. Will Ayar Labs potential customers like, for example, Intel, decide which supply they will go with? No, I don't think Intel are the ones who are deciding. It's Ayar Lab to decide and they have decided to work. Currently, they're working with MACOM with a standard product. They are working with the sort of other products with us and momentum for the future. And I don't know about MACOM going in there. But that will be first, second and third sources, as I mentioned. Do you think a Swedish NATO member should bring new opportunities and clearness for Sivers in the tactical field Blue Wireless products, for example?

Yes. I mean we have made a clear statement now that we're leaning towards the best, and we are not working too much in China or like in Russia, in that sense. So I think that could be that sense. We're seeing a big interest in the Blue Wireless product for tactical vehicles, for example, and also MixComm receiving $98 million via sort of the Columbia University and Professor Harish over the years from DARPA. So that kind of investment is much more possible now with MixComm being part of Sivers. You are saying the understanding for Sivers is much big in the U.S. than here [indiscernible] are you thinking about putting the stock on the U.S. market? That is the potential in the future. However, it is high consuming, we already spent time moving up to the main market here in Stockholm now, and I think we need some time to stay there and work on the business and focus on the business, firstly and not sort of list the company. I don't think we need to list it in the U.S. per se, either to be able to have U.S. investors.

How does the inflation effect ever will you be able to transfer the higher cost to your customers? Yes. I mean we are doing that in a sense, electricity bills and inflation are always there as a factor, and we have to renegotiate product as anybody else do. And so far, I think the customers have accepted. We have increased pricing to the customers, and we already did that from Q4. New design wins have slowed down. How does it look in the front? Yes, as I said before, we are expecting now with a different kind of people are daring more and design wins will increase going forward as I see it. Any update regarding the pilot line. Yes, that was the same. What does progress for your Fortune 100 work mean? Yes. So in general, I mean, I mentioned that there are several Fortune 100s now. And the progress, as I already talked about, there are already two customers. We're also seeing progress in the data center, Fortune 100. We're also seeing other progress with Fortune 100. So we'll come back on that, but I think there is a lot of opportunities with our Indium-phosphide 100 platform. The new sort of fares we've been to as having a very positive effect on possible business and meeting those customers. So I think you have to wait and see what we deliver. If your cash flow statement, it seems that your working capital has increased a lot after having decreased your operating liabilities. Could you elaborate on that? Yes. I think -- I mean the working capital in the sense here, and I should have my CFO with me now to elaborate on these things. And -- but it is a lot of things that is happening now, of course, with the acquisition of MixComm, bringing that into the company. So that kind of changes our attributed to connecting these things together in everything.

Will you -- the 1, 2 or 3 source for Ayar Labs, that is not settled yet. We're working and wants to be first source, of course. Let me see the time now is 10 more minutes. Anything to share with us regarding the strategy, how to ramp up volumes, production for F100 customer. I mean the strategy is still -- the plan is still to build out capacity on the pilot line and then duplicate those into a new fab and then possibly, if the volumes are extremely large looking at sort of outsourcing maybe Taiwan or other type of things. Maybe Taiwan is not the right anymore depending on the global situation, of course, but that kind of things. According to [indiscernible] latest interim report webcast, they are giving forecast to their chip suppliers. Can you confirm this and is the case and they start similar forecast from your other customers. Yes, we are getting forecasts to our chip suppliers from [ Cambium absolutely. And we have -- there are a mix of things, and I can't talk about certain customers here, but there are a mix of customers who are not ready yet to give forecast.

Will we see real orders this year from Ayar Labs and Kreemo? Or do you expect [indiscernible] not real orders from any of them, I would say, prototype ordering only so far. Is there a competitive situation between ADTRAN's owned products and series product in the ADTRAN offering? No. ADTRAN is customer and work for CCS. So they are a system vendor, not at all a competitor. Things are following the plan and our customers start ramping up in H2 this year, are you ready to handle the volumes in all areas? If not, what is the current plan how to handle it. I mean we have built up working capital and chipsets to be able to deliver. But it's, of course, very hard to say, and we don't have the full forecast yet from everybody, that's what we expecting to see further growth in this area. So, its hard to say, but at least it's going to be a good problem to have if they ramp even more than we believe. On current unit is already stock in-house, that was same. We refer to the cash outflow related to operating liability. Okay, with big cash drain this quarter, Yes, of course. I mean we have had a big cash gain, of course, due to the acquisition due to cost of a lot of different costs in the sense when it comes to people around acquisition, operational costs for buying working capital, putting into new things and investments in that sense. So there has been a bit more. I think the swing back will both in the sense, of course, not that kind of cash flow out as we've seen in Q1 due to the acquisition and also looking at overall, growing topline reduces our cash flow, of course. So we are seeing, of course, a positive -- we have a positive view on less cash out over the coming quarters than definitely compared to Q1 due to the acquisition.

Let me see, would I make customers design [indiscernible] device using [indiscernible]. I'm not sure like making themselves are not sort of a silicon or the design win in the way, but they are sort of an enabler of getting design wins like Ayar Labs and others. So I hope that explains. Do you think that the Sivers revenue will grow quarter-by-quarter from now on? That's a good question, and I don't give forecast, but given the sort of aggressive future we have, that is sort of I think we, of course, want to aspire to in general then the company are seasonally affected in that in some sense. So year-on-year, measurements are still more fair to look at, I would say. Do you think this would be sort of a share issue or a direct share issue in that sense? I mean I don't think we will do any sort of direct share issues or do any share issues directly to the shareholders. In that sense, we haven't done that for quite some time. We don't have a reason to do it either. In that sense, we have a good cash position. If we do any share issues in general, it's all about connecting it to a very positive news and that we have people that really want to get into the share new owners or something like that. It might happen, but we don't -- we're not forced to do that currently. Are your first source with Ayar Labs? No, we don't know who's going to be that yet.

Do you have any relationship with Apple today? And would that be -- would they be interested in your products? I can't really comment on customers or noncustomers we haven't. But I would say, in general, for sure, our technology would be suiting Apple very well in many different aspects. So that's a possibility. Will we see a large revenue from the photonics [indiscernible]. Yes, so I think that we've sort of been working on sort of changing the product portfolio, changing out. I think the -- when it comes to growing revenue for the Photonics business, I think 2023 and forward is sort of when we will start seeing that we can sort of reap the fruits of all the work we've done in the silicon photonics part. Technically, when to use RFIC and when to use beamformer IC separate converters? Yes, so RFICs are more highly integrated and usually will be sort of used in applications where you don't need so much output power or applications where you are like in the CPE or a smaller microcell or whatever. Beamformers, actually, then you can actually use them all the way from in a handset, which where you actually want to have a separation between the beamformer and the converters. And also on the larger base stations like the Tier 1 we're talking about. So it is a bit of different places where you actually will be using that.

So actually, questions out now. We have 3 minutes left, but I think by that, we have actually finalized the webinar for today. Thank you so much, everyone, for connecting and listening into the webinar today, and there will be more interviews on stuff today coming out from [indiscernible] so forth. So we look out for those and thank you so much for tuning in today. Bye-bye.