Enovix Corporation (ENVX) Earnings Call Transcript & Summary

In the press release that we issued about a week ago about working with Group14, Enovix said that their material works well within our architecture. So what are you seeing?

We're seeing everything we would have expected from an advanced material like this. It gives us very, very high energy densities and really good cycle life, and we're able to control the expansion very nicely. Part of that comes from their engineered particle that helps and part of it comes from our architecture. And the combination of those two lets us pack a tremendous amount of their material into our cell to really achieve some really interesting performance capabilities within our Enovix architecture. So it's a pretty exciting combination of materials.

Are you working with other vendors beyond Group14?

We are. At Enovix, we like to say that we are material agnostic in our cell. And what we mean by that is we have this unique architecture that we've developed and we have the high-volume manufacturing techniques that we've been developing to build our unique cell. And so there's a tremendous amount of innovation around that. And it allows us to use all sorts of different cutting-edge materials in our cells. And that is really exciting for nerdy battery scientists like me and the other people here that you can do that kind of stuff. We can work with different cathode materials. We can work with all sorts of different anode materials, and we are doing so. There's a tremendous amount of innovation going on in this space right now, all sorts of fascinating startups developing new silicon anode materials, bigger companies working in the field, and there are a lot of materials out there right now, and we really enjoy testing them, and we keep an open mind about finding materials that were performed incredibly well in our cell and give us performance advantages in energy and things like that, so that we always have a compelling cutting-edge product that we hope will be ahead of our competition. So it's a very exciting time to be in the battery field with the developments that are going on with things like that.

Enovix architecture can work with all different types of materials. And based on our customer requirements and the best performing materials and cost, we will decide which material we ultimately use in a given [Technical Difficulty]

Exactly. We will base our decisions on materials and what we develop on customer-specific requirements, our own internal testing of what gives us performance advantages, all sorts of factors like that, but we can absolutely tune the cell with different materials quite easily. And we're enjoying that. And like I said, there's the innovation in the silicon field, I'm constantly fascinated by what's going on there.

How are you making sure that Enovix will have enough supply?

Well, that's why we do things like what we're doing with Group14. What you want to do there is you want to be working with these suppliers early, discuss what kind of expectations we're going to have about materials need going forward and look to enter into supply agreements that guarantee that we have access to the materials we need in the quantities we need and at a competitive cost that we find acceptable to use in our cells. So that's what we're trying to do is form these tight relationships with some of these advanced materials companies to get access.

So you've talked a lot about the anode and all the innovation going on there. What about cathode?

We are definitely actively working with cathode as well. It's something that I've been really involved in and actually have had a lot of fun doing. Because of our targeted effort in consumer electronics right now, our effort in cathode is really focused on LCO materials, Lithium Cobalt Oxide. Those are the higher voltage cathode materials that are typically used in your cell phone and other devices. We are working with the leading LCO companies in the world. We are using cutting-edge materials right now that, in many cases, are developmental and not even fully at the manufacturing scale yet to make sure we're testing things in advance of when they're even out there so that we are ahead of the game. And we've -- the LCOs we're using now are really, really fascinating and giving us very nice leaps in performance in our cells.

What about electrolytes, any innovation happening there?

Similar. We work with all sorts of companies. We have a very talented internal team of electrolyte scientists that help direct the work and the research. Electrolytes are another really interesting field for chemists like me because they consist of multiple components that do all sorts of things and give you different performance results in cell. You have things in there to help with cycle life and gassing and all sorts of different parts of the battery, and it's really a complex field. There are a lot of companies innovating in that area, too. So we're working with both the world-class largest electrolyte suppliers in the world, which really gives us confidence in their track records and their ability to deliver for a plant like ours in Penang, but also smaller startups that are developing unique additives and innovating in the area, so we have access to new materials. So we're really working with quite a variety of companies in that area, too.

I'm going to shift gears a little bit, and let's talk about the Routejade acquisition that brought coding in-house, what are those advantages? And how does that help you?

I think all of us at Enovix are thrilled with the Routejade acquisition. There's a wealth of talent and knowledge there that's a thrill to have. First of all, they make batteries and have customers for batteries. And so the fact that they do that and really know what it takes to get things to market and stuff for a company that's younger like the Enovix part of us, I think that's a really exciting thing to have in-house and to have their knowledge and experience in the field. Specifically on coding, coding has always been a real bottleneck for us. It slows down our research. When you take these anode or cathode materials, you have to make formulations of them with the other ingredients that are used for lack of a better word, the other components. And you slurry coat them onto these foils and use them to build your cells. And that has really slowed our research. Being able to do enough variation in that field is something we just haven't had the capability to do. And so having it in-house now allows us to really accelerate our R&D, look at new materials and electric compositions much more rapidly and test them in full cells, which lets us develop improved technology, specific cells for customer needs and customer requirements, things like that. So it's a really exciting development. It will really be a game changer for Enovix in terms of our speed of research in my opinion.

Excellent. So when you think about the materials landscape and you look out 5, 10 years, what are you most excited about?

Well, I think particularly in anode materials is to me is really, really exciting, looking what is done to push it more. And of course, as we've already talked about, the idea of really achieving the promise that like metallurgical silicon gives and how much capacity just pure silicon could give, people solving those problems. That's really exciting because it really will make batteries just leap forward. The cathode material work is really, really fascinating as well. There's all sorts of new materials being looked at. Because of the expense and the elements that are used in some of these cathode materials, finding less expensive, innovative cathode materials for cells is really fascinating. So I just love the fact that this field with the drive to electrification of the world and in terms of energy storage as well as vehicles and electronics is -- there's just so much in this field and there's going to be so much innovation in the next 10 years. And I can't wait to see what happens. I can't wait to see what cars are out there available to buy in 5 years, and I can't wait to see how well we can store energy in our homes and things like that. It's just -- it is a really cool time to be in the battery field.

It is. Me too. Well, thank you so much for walking through the company's material strategy. It is always a pleasure to talk to you, Dr. Rob Rosen.

Thank you, Kristin.

That concludes this episode of our Journey to Scale podcast. Thank you all for tuning in. Be sure to subscribe for alerts. We'll be releasing new episodes as we reach new milestones and scale up to high-volume manufacturing. Until then, thank you, and have a great day.