Sivers Semiconductors AB (publ) (SIVE) Earnings Call Transcript & Summary

The '22. We have a very packed schedule for you today. And let's move on into the agenda. So we'll start off with me, Anders Storm, I am the Group CEO, and I've been working now for Sivers soon in 8 years and been in the telecom datacom industry for over 25 years. Then we will have our MD wireless, Mike Noonen. After that, we have 1 of our very exciting customers, all space with the CEO, John Finney. Then we're going to have a short break. After that, we will have our MD from Glasgow, Billy. And then we have Charlie from Ayar Labs, also a very exciting customer, we'll tell you more about. And then we have our Group CFO, Hakan, who is here as well. and then we do Q&A. We will also inject Q&A questions after the customer presentations because they might have to live in a certain time line. So if you're sending questions to this, please do that ahead of the questions from the customers. Also today, please note that we have a lot of customers right now, and people have asked me if we can talk about all customers, and so we don't really have time for that in that sense. So we'll focus on what we have in the presentation and try to answer sort of specific questions, if that's the case. But we cannot talk about all of them here today. So this is the people who will present today. I am especially happy to see that we have 2 very interesting customers, upcoming companies. Both companies are sort of start-ups in sort of a later phase C-round type of things, receiving hundreds of million dollars in funding and so forth. And it's going to be very interesting today to them sharing 2 very different areas, but very, very exciting technologies. So let's start with the video here that will explain a bit what Sivers Semiconductor is doing and give you a very high overview where we are in which space we're working in. [Presentation]

So that is a video who shows you a lot of the technology actually that Sivers is providing. And we are providing to be very clear sort of the technology between the sort of the digital world and the analog world. We're making the chipsets, both in the 5G world, in the SATCOM world and in the photonics word of lasers, the technology that sends out the signals in the world. And here, you can see some of the sort of in the high-speed broadband, wireless broadband stuff, we are providing them tens thousands chipset that sends that out in there. The same with the lasers. We provide them within these things and send these into the different fibers or within silicon photonics. It sent is optical I/O that we'll hear more about from Ayar labs as well as the car you saw that almost crashed here using, for example, liDARs or radars for autonomous driving. So we are in the physical interface to the reality basically. And what is it -- which areas are we working in? So we are working really hard in the areas where sort of some of these mega trends for the future is actually placed. So high-speed broadband, gigabit broadband and upwards. Even today, you will hear Ayar Labs talk about 2-terabit solutions inside computers. That's where we want to be. Autonomous driving with radars and LiDARs to create a way of secure travel with cars without anyone driving the car. Silicon Photonics merging the technology that has been Silicon and Photonics into one, which is a very new thing and we are the photonics in silicon photonics. Satellite communication, same there. We're making the solutions that ALL.SPACE will tell you about the specific chips that connect the world in that sense. Augmented reality, we can do sensors, high-speed broadband and everything to that. We can also make sense for health monitoring, measuring things in the air quality and all of those things. So we have a lot of different solutions that you now can use. For you, we haven't heard so much about us before, Sivers Semiconductors is then 2 different business areas. One is within wireless, where we have 5G Satcom and emerging markets, the other 1 is within photonics where we have lasers for all different things I just talked about. We have been building this company now over a 7, 8-year period from a company who was sort of small volumes and so forth into these mega trends and mega markets over the future. We already secured a heavy number of customers, we have 43 design wins in the wireless leg, everything ranging from companies who make tractor train solution kind of radars or satellite communication in the other markets like the photonics market, we have customers ranging from the largest Fortune 100 companies in the world making consumer electronics, all the way to LiDAR solutions for autonomic vehicles as and so forth. Today, we are about 140 people head office out of Stockholm listed on NASDAQ mid cap today, Stockholm. We also have offices -- main office of our Photonics business out of Glasgow, where we have our own fab, and we also now with the acquisition of MixComm, which was a very, very important acquisition for us. We have also created a foothold in the U.S. with the main office outside of New York. Of these 140 people, there are 42 PhDs. So making that's connected between the digital and analog world is a very difficult technology to do, and it's really hard to make the right type of technology. So it's really important to have these kind of things. Another thing is that we have been working now out of Sweden and out of Europe for quite some time. And we have a strong investor base here, but now we're also working a lot on getting a strong investor base in the U.S. where we recently acquired MixComm, which I think will be sort of a step in there. 70% our sales is in the U.S., so it's really important for us to be there. We had a cash position of SEK 108 million, about $11 million a few weeks ago when the dollar was lower. But that is sort of a really important piece of the puzzle as well to drive the company, of course. So if we look back a bit here, what has happened over the years since 2016 when we put in this new strategy and it created all of these things. So we actually acquired a photonics company for $23 million in 2017. And from that, we've been sort of building and reengineering that company and Billy, as the new CEO, have done a lot of work, especially in the Silicon Photonics business, which wasn't really there at that point at all. From that point, of course, we have got all these design wins, all these Fortune 100 customers and so forth. We also moved from Acitoria to NASDAQ First North and now to NASDAQ main list. We have been in different phases. But now I will say, with the last sort of acquisition with MixComm, we are sort of transforming the company into new business verticals like satellite communication and Tier 1 customers as well in that phase. But we're also now getting into a phase where we need to see sort of volume coming in the future from all of these design wins and so forth. So that's sort of the next phase getting there. And we have got the first volume orders. We got a SEK 20 million order here in January this year and so forth. So we are getting there, but it's going slowly and hunt gone a bit slowly due to the pandemic and semiconductor crunch and the economy in general, but we're getting closer and closer on that. So what had happened during this year so far? We have had the first half. We increased sales by 34%, quite okay under the circumstances in the market. The transformative acquisition I talked about with MixComm, has been finalized and integration is complete, which is really interesting. We have got multiple orders from our Fortune 100 customers who's been with us now for almost 4 years, SEK 34 million is a record this year. And in total, SEK 130 million, and this is just in development cost to get to a sensor for their future solutions. And I have never been more sort of positive in the way that we are getting closer and closer than I am today when I'm seeing these orders and what's happening with that customer. Also, this 5G order I mentioned, we also got our third Fortune 100 here in May, a very exciting, large technology company from the U.S. as well. and also working with the upcoming future winners that you will see here today, like Ayar Labs and all space, for example, but also other photonics winners in the radar and so forth. And SATCOM will be sort of a huge thing in the future, and I'm looking forward to hear what John will tell us about that. As well as moving away from only being infrastructure on the 5G side, we know also have partnerships from a company in South Korea, for example, who do antenna and displays that you can put on to any consumer electronic device. So in a few years, I hope that we'll be able to see us also in consumer devices on the 5G side, for example. And to dig in a little bit on what are we doing and how are we working? what Hakan will also talk about this a bit. But we have 2 different legs in the company. One is the photonics where we actually have our own fab, and we produce our own lasers and that's very important on that side. It's very hard to not have that and do good solutions. And that's why we are very strong in that area. On the other side of things, we are fabless, which is sort of another good thing where you can actually produce things without large capital investments in that sense. So we do all of these things and then it is our customers who build the technology, put it together and sell it to the end customer. So we are way back in the value chain, which sometimes is hard, but it's also very growth model to be used if you really want to grow heavily in the future. So as I said, our guests today, John, who will talk about satellite communication. Everybody has seen these dishes, you watch TV on and so forth. Now we get to flat panel arrays. And our technology with beamformers are perfect for that. And John will tell you more what they are doing in that area, which is very interesting. Then we have Ayar labs that will change the inside of the computers from normal electricity between the CPUs to light, and we provide the light sources for their solutions. And that is also a very exciting area, and Charles will tell you more about that in his presentation. I think this is 1 of the sort of game changers for the future, and this will be with us the changes in even pieces going way forward. So investment highlights. We are working in rapidly expanding markets with big growth. We have very little sales so far. So it doesn't really matter if it's $2 billion or $10 billion. It's a lot of market that we can address with these technologies. We have completed the acquisition of MixComm helping us securing even more superior technology in the 5G space as well as in the SATCOM space. We have a leading heritage from our old businesses as well with Fortune 100 companies in our Photonics business, we have continued next year, generation for the growth markets as well. We have a proven market strategy. We have brought in a lot of customers so far, and we are growing the company using that. Financial attractive and scalable. Yes, we have, in the future, 40% to 60% gross margin on hardware sales. That's the target. We have a large prefunded NRE projects where actually the customer, in many cases, fund all the work we're doing to get to these volumes in the future. And we have an efficient production with our own foundry, which you need to have in the Photonics business, but also being fabless in the 5G business is -- are we in a really good place with companies like GLOBALFOUNDRIES, which is 1 of the major players in this area and they're actually a shareholder as well. So with that said, I want to present Mike Noonen, who is our Interim Manager within wireless, and he will now take you through more details on the wireless side. Thank you.

Very good. Thank you, Anders. And today, I'm going to talk about Sivers millimeter wave innovations and how we're applying this to deliver what we think is the real 5G but to markets that well beyond 5G. Next slide first. And first, I'm going to start off with a wireless market overview. Next slide. A bit of a recap of the markets that we serve with our millimeter wave products and technology. In the 5G space, there's the license bands, and these are frequencies that go from 24 gigahertz so on up through 28, 29 as well as other bands such as 39 gigahertz. So but we also have solutions investment class solutions in unlicensed band. And this typically, you're 60 gigahertz. We have Satellite Communications, as Anders introduced, we'll hear more from John Finney, that was another market that we serve. But we're also starting to move into what we believe are some emerging opportunities and very exciting opportunities such as radar using our millimeter wave technologies. Next slide. First, when it comes to the overall 5G rollout, and this is across all frequencies, 5G is really you're rolling out worldwide with almost 80 countries, having commercialized 5G or undergoing 5G trials. The next slide. But we're still at the early stages of 5G milliter wave where the U.S., Japan and South Korea probably have the largest deployments, but still very early days with respect to the rollout of these networks that will deliver the 5G experience that many people expect. Next slide. And just to give you an indication on how this will roll out by the middle of this decade, about 50% of all new network deployments will be 5G and by the end of the decade, it will actually be the majority in almost all new deployments of the 5G networks will be millimeter wave. Next slide. And who are deploying these networks, well, the market share of the major wireless infrastructure vendors where Huawei you see there in the gold color you're having the largest market share. But worth noting that were almost entirely within Mainland China, with [indiscernible] for a variety of reasons, Huawei's market share has been trending downward. For the rest of the world, it's really Ericsson and Nokia providing about 50% of deployments with no key up starting to grow substantially. And we're worth noting some relatively new players when it comes to not only wireless infrastructure, but growth in Samsung and Fujitsu, are taking share and deploying networks. So for both your 5G in the lower bands as well as millimeter wave. Next slide. One of the major trends that we think is going to accelerate this deployment is really the development and the evolution of Open RAN and what RAN is radio access networks. And as you can see here in the chart on the upper right-hand side, traditionally, well all of the elements of a wireless infrastructure and network deployment would have been for 1 vendor. But with the emergence of Open RAN, you're starting to see that different vendors can participate and provide best-in-class product for different portions of the solution with companies like Intel and Dell being a major providers and suppliers there. And we think this is going to not only accelerate 5G, in particular, but also the deployment of millimeter wave. The next slide. And when it comes to the other side of 5G, and that's really the user equipment were about 50% of our products that have been released have been mobile phones. But what's interesting and quite exciting is the diversity of deployments of other applications and equipment such as fixed wireless access. We also believe that there's going to be new applications such as augmented reality and virtual reality glasses and goggles that really leverage the advantages of 5G with ultra-high bandwidth and ultra-low latency. Also, the low latency is very important in applications like gaming. The next slide. When it comes specifically to the portion of the markets that we serve and the category is RF front end market forecast. And when you look at the dramatic growth of 5G overall back prepandemic 2019 for 5G millimeter wave, the growth is quite a sound plan by the middle of this decade about [indiscernible]. Next slide. And then rounding out the market outlook, we believe that the satellite communications and in particularly, the flat panel arrays where CBS is focused on, is going to enjoy some dramatic growth and we actually think that it might be even more exciting than what's shown here. And then on the right-hand side, showing just 1 application for radar, now automotive radar, which already is a very large market that is expected to triple over the next 5 to 6 years. Next slide. So having covered an overview of the markets that we serve, let's talk a little bit about the technology that we're using to address these exciting network growth markets. Next slide. First, when you think about your 5G there's 3 bands that you need to think about. There's the low band, which is the sub-1 gigahertz where there's the band that you basically by its name, and you can tell what it is, sub-60-gigahertz and then millimeter wave. Next slide. But it's really the millimeter wave that is enabling what people really expect when it comes to a new G and what would 5G coming. And millimeter wave delivers the highest and with the greatest capacity and the lowest latency. And to give you an example of what this really means, let's go to the next slide. Here's a study that 1 analyst did comparing 5G millimeter wave versus other Wi-Fi that you might have in your office or perhaps at home, to 5G sub-6 gigahertz 4G and then the public Wi-Fi. And you can see that 5G millimeter wave delivers a downstream speed that's 30x faster than public WiFi and 20x faster than 5G sub-6 gigahertz. And we believe this is going to be 1 of the reasons why the acceleration millimeter wave is going to be deployed just because it delivers such a dramatically better experience. Next slide. We also believe that millimeter wave, which is started deployment with multiple networks is going to go basically everywhere. Next slide. It's going to go into the office enterprise, factory floor, defense applications and automotive. And why is this well, there's a general demand and then really an insatiable demand for more wireless capacity. And it turns out because of this capacity, millimeter wave is the lowest possible cost for a service provider to deliver a gigabyte of data. The ultra-low latency is important for applications such as factory floor to manage robotic arms or be able to augment to automotive and autonomous driving. But 1 of the other reasons that we believe is going to go across so many markets and well beyond just the mobile networks is because it's going to provide much better security than what WiFi and what can deliver into what this is going to become even more important as we move to the future where people move from their mobile network to home to enterprise and having a seamless security is going to be quite crucial. Next slide. But what it was needed is really a better millimeter wave radio. And you see here just some of the headlines as 5G was starting to roll out you're hard to find ran very hot, not very reliable, very expensive. Next slide. Well, we've identified our 3 major challenges to solve if we're really going to make the most of 5G and particularly millimeter wave. First scale being able to have a much larger range and getting well beyond the limited range of previous products. solving the power consumption and the excessive power consumption that not only makes operations and mobile networks expensive, but also undermines reliability. And then overall, you need to bring down the cost because if we can do that, this is also going to accelerate the deployment of 5G and millimeter wave. Next slide. So how does Sivers solve these challenges? Well, let's dive into that. Next slide, please. First, we're delivering an RF front end that really is addressing 2 critical aspects of these challenges. The first is output power per power [indiscernible]. And you see in this chart on the y-axis that Sivers solutions provide 6 to 12 dBm better output power than compared to other technologies that have been widely deployed. But in addition to having much better output power, it's much better power efficiency, 3 to 5x better. And then this allows you the best of both worlds, extended reach, and we have been doing it in a way that's much more efficient, energy efficient and much more economical to operate and it improves reliability in a tremendous sense. Next slide, please. And these superior performance of the higher output power and to a much better efficiency really have benefits and substantial benefits for our customers. The improved reach and the range of net level expenditure dramatically compared to other technologies such as CMOS just being able to boost output power by 10 dBm as you see in the chart on the left-hand side, can reduce the CapEx required by millions of dollars per square kilometer. The middle chart shows by having a higher upper power, we can increase the uplink, very important for applications like video conferencing that we're on here today, but also fixed wells access and to improve that 2.5x, again, compared to the solutions using CMOS arrays. And then because we require fewer elements to get the same output power the cost can be much lower because there's fewer devices needed, up to 75% we have smaller arrays and reduction in the cost of goods sold, again, compared to competitive solutions. So these are some of the ways that our technology dramatically impacts our customers as well as our customers, customers' outcomes when deploying 5G millimeter wave. The next slide. Another innovation that really is helping our customers deploy, especially in the higher frequencies, is being able to take all of the complex elements from the beamformer ICs, the power amplifiers, very expensive PCBs, heat sinks, a antenna arrays and put them all into an attendant package and Sivers in partnership with GLOBALFOUNDRIES is developed and is now starting to sample the world's first antenna package for infrastructure, and we've been able to optimize the antenna spacing, making over there are tested more reliable and a much, much less expensive compared to traditional solutions. Next slide. And we're quite cleverly designed it so that 1 of these intended package might be able to be used for customer premises equipment for Fixed Wireless Access. Next slide. But by titling them to get more output power, they can be used quite easily and scaled for a small cell application or [ Peter ] or for a full base station. And this is quite an exciting breakthrough to reduce the complexity and again reduce the cost of luminary deployments with our unique antenna and package. Next slide. And by having the fundamental technology, we really offer the broadest offering when it comes to 5 G millimeter wave. From the beamforming ICs for base stations to RFICs, for more customer process equipment, covering the full range of spectrum that there is milllimeter wave,both licensed and unlicensed bands repeaters, modules, up-down converters and the unique antenna package. You can see how Sivers compared to other very important and very successful companies where Sivers is the only 1 who covers all of 5G millimeter wave with these crucial technologies and products. Next slide. And we reinforced that with what we think is with the strongest ecosystem in the industry, ranging from our foundry partners as Anders mentioned and highlighted, we're partners like GLOBALFOUNDRIES to have very close partners such as [indiscernible] sports as well as baseband partners such as NXP and in AMD ILX. And this is quite important to you so that we can help our customers get to market much faster and do it with your best-in-class products. Next slide. And here's a couple of examples of customers who are using our technology and building on an ecosystem in a very exciting way. AirVine is a very exciting company in Silicon Valley in the U.S. that's using Sivers high output power for a 60-gig radio that can start to replace wiring inside an office building and being able to go actually through walls without having to pull a very expensive either cable or having to do construction to install networks. The AirVine wave tunnel using Sivers high up power 60 gig solutions makes that they're easy to deploy and do it and airline, we think is going to be you're doing great things as they start to ramp with their production. Next slide. Another very exciting customer and really a new market and opportunity, as Anders pointed out, we our partners KREEMO in South Korea. Where they've taken Sivers best-in-class efficiency and use it in a way to deliver unique products. One example is this 360-degree antenna system that not only solves the directional challenges that previous millimeter solution [indiscernible] have had by being able to blanket our conference room with millimeter wave, it does it in a very efficient deal manner that doesn't require very expensive new cooling technologies. We've also taken our best-in-class efficiency and used in a way to essentially turn the glass on perhaps the smartphone into an antenna, again, solving the issue of having your hand, you'll perhaps block and antenna by essentially making that not an issue because the display -- the glass is the antenna. So very exciting developments, again, leveraging our Sivers, unique capabilities and do it in a way that what we think is going to have a big impact and we're very soon and with these high-volume markets. Next slide. And so as you've seen Sivers has, we believe, and on what our customers tell us and our partners sell are the best products for 5G license for base stations, repeaters, hotspots, fixed loss access as well as 5G unlicensed, the backhaul, the transportation, your radar opportunities and the only 1 that has our complete solution for millimeter wave infrastructure. Next slide. But our offerings go beyond that, and we have and especially the very exciting market of satellite communications. Next slide. And we believe that the industry in telecommunications is transforming from the mechanical dish to the flat panel antenna. And now we're very, very excited to have -- we have John Finney, the CEO of ALL.SPACE the company, we believe, who is really leading this transformation and showing what can be done in the area of revolutionary, and we think you have quite innovative flat panel antenna solutions for select communications. So let me hand it over to John, and thank you so much for joining us.

Great. Thanks, Mike. Good to see you again, and good afternoon, everyone. So delighted to take this opportunity to present what we're doing in ALL.SPACE, but also put a finer point on why we've chosen to work with sites as closely as we have, not just up to this point. But I think if I look out to the future, it's a relationship that's going to grow exponentially in terms of the influence that the relationship has to both of our companies. So a little bit about ALL.SPACE, a little bit about the space industry to set the scene set the context. So ALL. SPACE is a C-round. We're in the stage of our C-round right now, pre-revenue deep tech mid-stage growth company. And our mission is very, very simple to say, quite hard to accomplish. It's connect everything to everyone. And to do that, we have set about pioneering a piece of technology, breakthrough technology that allows simultaneous access to all satellite networks in all orbits and all cellular networks concurrently. So whatever is there in terms of radio waves and opportunity to connect we have a single device that doesn't have any moving parts that can do exactly that and hold as many connections as we require to everything that's out there, and that is a radical step change for data communications globally. We really focus, first and foremost, in solving a big problem in space. As you -- I'm sure you realize there are major new entrants that have come into view. So Elon Musk, Bezos and they are essentially cash-rich investors that have an alternative business model aligned to the new satellite systems that they're placing in low earth orbit that's either dominating space tourism or it's ultimately commoditizing a launch vehicle in order to get to into planetary exploration and more. That ultimately has caused all of our incumbent satellite operator players to tip their hat in the ring, if it were to compete on their own terms and invest heavily in next-generation systems. In both MEO, LEO and GEO and also highly electrical orbits, whereas historically, most satellites, in fact, nearly all were just several years ago on the geosynchronous arc. So in other words, the satellites are moving in line with the earth rotation. As you have orbits that are lower to earth, they're effectively flying over the earth's horizon. So at medium earth orbit, they're spinning around the earth at 4 times a day, low earth orbit, it's 8 times a day. So that means there's a fundamental requirement to be able to track a satellite even if you're in a stationary position on earth because the satellites are moving. And in some cases, if you're in a mobile platform, you have to track satellites that are moving and fixed and stationary to the earth rotation. So there's right now, $50 billion of capital that's being invested worldwide in satellite factories around the world, if you add up all of those players and there is a real turning point for the industry, which is effectively spaces opening up, and that's really because of Elon Musk and the launch vehicle. Previous to the SpaceX launch vehicle, it was the equivalent of flying to Australia and then throwing away the plane. And you can imagine the per seat ticket charge and it's a is exactly analogous to that. So now getting into space and building new systems, there appears to be no end to it, not just these players, but the European Union's Constellation. I'm excluding Russia and China from the markets that we focus on. But there is a continuous stream of filings and next-generation capacity coming online. And so that means that the demand is a 3,000% increase guarantees to knowable fact within the next 7 years. So space is opening up, and yet there's a real challenge, which is every single antenna -- well, there's 2 challenges. Firstly, not 1 of these operators, despite being a specialist in [ global ] communications can actually talk to another network in space, network-to-network orbit to orbit. So therefore, if you wanted to converge those satellite systems, you'd have to do it from the ground, looking up to those satellites. There are 2 dominant technology platforms, 1 in which Mike mentioned, which is Phase A, which is inherently single link. And whereby the only way to get multiple links is to essentially copy the entire circuitry and duplicate the cost from a very high bar. It's totally impractical. A phased array, for example, would cost more than a coach or a bus so it wouldn't open up the land transport sector. On the other side, there are these clunky parabolic antennas. They've stood the test of time. But ultimately, they are, again, single link. So if you wanted to have the ability to access multiple orbits at the same time. You'd need multiple antennas, multiple real estate, you'd multiply your cost. And so in a moment where the industry is trying to open up, it is fundamentally the Achilles heel of the entire industry because accessing all of this capacity the way that we do, WiFi, Bluetooth, our ADSL jumping on to fiber, is ultimately the way that it should be. So solving that Achilles heel of existing antennas has been the mission that I've been on having exited a MEO system called O3b2SCS in 2016, have been on that mission to pioneer deep tech piece of innovation that will solve all --that was done in January. We've anybody that's seen the technology has entered into a supply contract with ALL.SPACE. We sold this problem by a pioneering approach called transformational optics. They're optical lenses, there -- you can't see through them, as you can see here, but they're invisible to microwave frequencies. It means that we can bend radio waves through this lens and create multiple beams going in multiple directions and by a process of feed selection, pick out the satellites that we want as many as we want track them continuously, bring down and aggregate all of that data into 1 place and send it on into the network. And we have a very special modular approach. This is a tri-lens module, which could fit in the palm of your hand. And that's important because we intend to access the entire data ecosystem. So in terms of our relationship with Sivers, think about volume, everything from IoT to hyper connectivity, connected cars, commercial maritime government land and air and defense, whereas every other current satellite technology on the ground today can only operate within a single niche, certain types for Arrow, certain types for IoT, certain types of commercial maritime. The intention from the outset that I had was to design a piece of technology that would scale to create a $1 billion revenue company. And that required us to go deep tech as the answers weren't in the industry back in 2016. And in that Trends module, the beating heart is Sivers. And that started with our initial relationship with MixComm, where the frequencies that we're starting out with the 24 to 28 gigahertz. So it's so close to the most popular filed 5G frequency that from our point of view, it doesn't matter which means Mixcomm as they were then prior to the Sivers acquisition had the generic building blocks, the inherent IP that allowed us to sort of ride the coattails of a lot of work that had already been completed and then build on from that, which is the project that we have underway currently, which is -- I'm pleased to report, is going very well. And ultimately, where that takes us as a market opportunity, both for us and for Sivers is that we're collapsing all of this if this were effectively an antenna system that we're having to links to 2 satellites with 1 as a spare with the necessary modems and mediation drives. We take all of that away, which is incredibly skilled, incredibly expensive and we just have 1 single device. And it will connect to all things in space, and it's field proven. And behind that, because of the work that we're doing with Sivers we have a very, very advanced digital architecture, which allows us to add software services that you must have our unique hardware for. A simple example of that is in defense Russia, as an example, in Ukraine is jamming GNSS receivers on the ground. Troops don't necessarily know where they are when that happens. It's GPS denial. If you can connect to 3 satellites or more, where you can reverse triangulate your position on earth. So even when our GPS is denied, we can take the known positions of those satellites, track them and then inform the end user, in this case, NATO is exactly where they are when they're GPS denied and that's software. It's software that relies on our unique hardware, and it's a digital architecture that's actually well enabled by Sivers. And that's part of the breakthrough, it's how the optics and the IC technology matches up. And very much relevant to this and what the future holds in our relationship with Sivers. This technology, that module, which encapsulates the service integrated circuits will transcend all of these verticals and hit economics and scale, which has not been seen by any 1 particular antenna company in the world historically. And so it's a huge step change. We integrate cellular connections with all of this. So it's multiple connections, not just in space, but also terrestrially. So that means things like land transport, rail, ubiquitous connectivity enterprise-class connectivity during your journey during your commute to work. It's opening up those markets. We're adding software into that hardware is the next level of convergence. We're extending that communications with software services such as PMT. We're delivering cloud access, which is also we have high-performance computing integrated into this module into this antenna as an option and a range of software services that offer operational intelligence. And a lot of that comes down to the sophistication of the beam formers, which the back end of that module I think we need to get these logos updated to Sivers, but the back end to this module tells you what you need to know, that Sivers is the beating heart of our technology behind the optical beamforming and has created a massive industry breakthrough. So in terms of why we chose servers, really, people count for a lot in my view, right? These are complex undertakings and the close working relationship with Sivers and formally MixComm. If anything has just motivated us to do more with Sivers, right? And we are in an advanced stage of a negotiation, which all being well, we'll have a meaningful impact on our business, but also Sivers. So going beyond the first project. But that demonstration which was a world first. We relied completely on Sivers' existing ICs. We hadn't made any adaptations to those beamformers. And so the skill set and the know-how that's been demonstrated from the team is outstanding in terms of design. This is a really important one. What we're doing right now for U.S. gov and NATO, where we have supply contracts in both cases, is resilient path communications. The moment that Russia fired the ASAP missile and took out 1 of their low earth orbit satellites, the U.S. recognized that its own satellite systems are now vulnerable. So as policy, they've now enforced mandated a requirement to have multi-orbit connectivity from as many endpoints as possible, Army, Navy, Air Force, and that's all managed within the space force and NATO is following suit. So if Russia, as an example, were to jam 1 of our links that were pointed off to a particular satellite, it won't matter. Firstly, we're already tracking them as an interferer. That's what we will do, and we'll be sending that information back into the NATO forces network. So they should think before they transmit because we're actually -- unlike other antennas, we actually go out and look for that -- what interference and localize it and send that information back. But we will, in the case that we're interrupted, just simply pass the traffic straight through onto another link, which is already active. And so resilient communications will stay within NATO forces regardless of the levels of frustration that [ NATO rivals ] are trying to take strategically important, and for obvious reasons. And therefore, working with Sivers has given us a road map that basically meets our obligation to make sure our supply chain sits within NATO countries. And that means continuous supply, and this is becoming a significant selling point for the company. Since Ukraine broke, the #1 question is where are your chips made? And increasingly, you don't want to say Taiwan, if you're talking about your core IP, your core chipset that you rely on. And that's been a key element for us. And then the technical capability that Sivers have is second to none. And some of the performance figures that we've seen most recently are ahead of anything that we've seen even in the defense sector. We are generating results that have exceeded our own expectations and long may it continue. So recap, only device in the world to have connected to a lower orbit simultaneously. It's an architecture that unlocks full access to all major data verticals. That means volume, that means a lot of health in the relationship that we have with Sivers, stacked with innovation. So we have lots of competitive moats that are built around our core IP that sets us up for a long-term relationship. And then as a point of note, our first-year production capacity, which starts at the end of this year, is already sold out. We have commercial and defense customers. So we will be buying lots of wafers and chips and [ mass ] from Sivers. We've raised SEK 116 million to date. We're right -- actually right now in the middle of C round funding, which is SEK 75 million plus [indiscernible] and well subscribed. So we're just closing out -- working towards closing out the C round over the next several weeks. But so far, given the level of subscription, I'm feeling pretty good, considering the market conditions. And that's it in a nutshell. Thanks. Any questions, happy to take them.

Thank you very much.

Thank you.

Thank you so much, John, and thank you for -- is this working? Good. Thank you for coming here.

Thank you.

Fantastic to see you traveling this far to see us. So I guess we have some questions here. I have some from the audience, and I have some of my own. Could you just tell us -- you seem to be so far ahead of your competition. Can you tell us about your competition and how far ahead do you think you are?

Yes. The -- well, touchwood, we think that our core IP is unchallenged, the ability to create multiple connections without driving up the cost of the real estate. It's what we call a single source of truth. But if that were ever encroached, the beauty of deep tech, if you think this way is, you have the time window to build competitive moats around the core IP, which is where the value-added software services, the cellular integration, and the way that we've -- modularity and the way that we've designed the architecture. As these projects rolled on, you think -- you start to think very clearly about revenue diversity, because if one thinks that COVID just alone has told us let alone the geopolitical environment is you never know what the next year looks like. So there'll always be a market that's in boom for different reasons. And so if you can have a company that does get across that ecosystem, you're able to average out the peaks and the troughs. So that's just, generally speaking, how we look at things. So I think that breadth, plus the way that we built competitive moats, does put us ahead. We are in the execution phase. We are scaling up into manufacturing. There's still work ahead. There's still -- but it's in the realm of execution risk, not down at the fundamentals. So I think we're in a strong position. And we've signed contracts with multiple NATO forces and big satellite operators to supply immediately off the production role. With 2 NATO forces, we're going immediately into an operational role. So that gives an indication of how far ahead we are.

Could you say something about any market share that you're aiming for in the future? Any year that you...?

Yes. We don't really sort of focus on market share in sort of percentage terms, but I can say the revenue mix for us, it really starts out with defense because, while it's a customer that pays retail, we're at the low volume of our production ramp. And so its margins that basically keep companies of ours in good condition in the early years of production. But then we moved to aero. We create incredibly high value there. And government and aero combined will be around 30% of our revenue mix overall. And then we move into the enterprise, so particularly land transport, commercial maritime. And then as the ecosystem matures, as these LEO and MEO systems are also fully up and in operation, there will be so many satellites to choose from that we intend then to go into the hyperscale markets where we don't have to scan as far, we don't have as much electronics. We can get to cost points that will enable things like IoT, [ AgriSat, ] so agricultural autonomous vehicles, connected car starting from media, but then going down into predictive maintenance, predictive analytics. So there's a sequence in our road map. But the main point is the module, the 1 that has the Sivers' beamformers in there. That is common across every single product in our road map.

And coming back to that, the Sivers' beamformer, so they want to be at the heart of innovation. They are really in the heart of your product. Did anyone else use come as far as you have come using Sivers? Or what is your relationship?

So the breakthrough is really in the optics as far as being able to connect to multiple satellites at the same time. Having Sivers alone won't allow for that to happen. However, what Sivers provides us is a significant increase on the per link performance versus any conventional phased array because they have the lowest noise figures, the lowest power figures, and they have leading-edge technology, which I think really comes -- a lot of that comes off the requirements for 5G that sort of seeds that. So we were really impressed with the capabilities that MixComm at the time had, and now we're working to expand that relationship with Sivers.

There is one question from the audience on the Internet. It's actually from 2 persons, and they're asking the same question, if what's happening in Russia has made interest for your products go higher. I guess we all understand it's a yes on that. Could you quantify it in sales or something? That is also a question.

It's probably best not to. We have the U.S. and U.K. government on our cap table. And we certainly wouldn't want to reveal the nature of the deployments that will be involved in or the suitability of our technology for some of the platforms that are being considered, which is everything from -- can be anything essentially, whether it's autonomous or whether it's crude. But just from the outset, if you look from the outside in, frankly, every other antenna that's out there right now that's using a dish, you know which way it's pointing. And that is an inherent risk to troops. Large bulky antennas pointing in a direction in the new world of Earth observation is like giving the enemy a map with saying not only we transmitting from here, but we're also transmitting there, and that is now vulnerable. So with ours, we're pointing in many different directions, connected to many satellites, but they don't know where, and they don't know to whom because there's no orientation to the terminal. We guarantee that the traffic gets through in the critical moments that matter because of that multi-link resiliency. And then we give them operational intelligence. So things like tracking jammers, [indiscernible] jammers, sampling the waveform and then passing that information back. There's a lot of PMT, as I mentioned before. So we're trying to ultimately create a lot of optionality, makes it a system within systems. And of course, new capabilities that outstrip the ones that China and Russia have ultimately, are of very, very, very high interest to NATO defense. China and Russia today has that original story that I mentioned, single link phased arrays or parabolics. And the U.S. government space force, in particular, isn't in the mood to match what they have. They're in the mood to protect their assets. And that means the troops on the ground and the traffic that needs to be passed, the data that needs to be passed even in a highly contested environment. And that's the first big impact that we'll make on the launch of our product at the end of this year.

Any questions from inside here. Please go ahead, no. So we have another perhaps a stupid question from the Internet, but just to clarify, is all space seeking primarily to replace backhaul and large-scale fiber networks essentially putting these into space? Or is it primarily to provide access points that can move around freely?

So everything that we're doing is on the ground, pointing up to space. So whether that's -- typically the first requirements are moving platforms because you can't put fiber optic onto a moving platform and you never will. So therefore, it creates a requirement to satellite. So obviously, maritime is a big example, but so is aero. But then in terms of backhaul, if we're talking about land, we're talking about these things, these commercial towers. What we're able to do is help operators get to the edge, so they don't have to manage and own microwave infrastructure that has many, many and lots, lots and lots of costs and lots of outages just to reach a village or a township that's far away in an emerging market. And the reason for that is not so much just because of our technology that lowers the cost of bandwidth by being able to pick out the cheapest ones. It is also because the new systems are adding so much satellite capacity worldwide that it's bringing down the cost of the megabit to levels which rival the alternative, which is building infrastructure, which -- whilst it's CapEx and it's bought and paid for medium, it has a high long-term operating costs. Whereas the lease cost for satellite bandwidth at the new rate, which is really down into the tens of dollars per megabit, they enable the backhaul of cell towers all around the world for the first time in a profitable way. And that means that rural communities will get 3G and 4G for the first time.

Okay. So when we invite you to the Capital Markets Day here in 5 years, how do you see that things have developed between you and Sivers, and how has it gone for you as a company?

Well, I think, all being well, we will have issued products across every single data vertical. We will be seeing the high volumes of the smaller antennas, I think IoT connected car. We will start -- we will be on the start of that curve. We will be a strategic enabler in defense, obviously, but also aero. With aero, you want the best of live TV, which is GEO. You want the best data, which could be Starlink or [ CSM power. ] And then you want private cockpit. Every antenna on every aircraft in the world today is single link only. There's 3 links just to get going. And by the way, with PMT, had our antenna been on MH370, I would tell you exactly where it was today. I would tell you within a number of kilometers where it would reside. So these are -- that's an important capability, and then on to the enterprise. But we should have gotten across the entire road map by then. And that's when aligned to the development of the space ecosystem, all of these satellites now going up in multiple orbits, then I think the satellite industry will be back to a new golden era and that will mean lots and lots of volume because we're opening up new markets with new economics for the first time. And that can only be a good thing for Sivers because that's lots of wafers, which is the business we're in.

This all sounds fantastic, almost too good to be true. You're now at yourself raising money. It's a tough climate. So can we please borrow some of the -- which are the toughest questions you get from investors about what is it going to break this for you? What...

Yes. I mean right now, for the stage -- previously, it's been the fundamentals, right? About the technology and proving that it's field proven. We've demonstrated this technology to 100, 3-star and 4-star generals through live tests as you saw there, big satellite operators. We're overseeing our developments, overseen by the European Space Agency, the U.K. Space Agency. We've had outside due diligence for many technical authorities in defense. So we're extremely [ well peer reviewed. ] For those have come behind, now it's about scale up and into production. And that means working back through to the supply chain. So I mentioned about Sivers being able to give us a way to be able to say our core ICs are developed in NATO countries. That's critical to our future plan for defense. But also we were able to work with MixComm at the time who had GlobalFoundries as an investor. And rather than [ niftily ] for a small company, we were able to find a partner that could help us get assured access to wafers. So tiny, tiny old space compared to those that are really driving the IC demand as a pre-revenue startup. You can well imagine that the investors want to know how do we get certainty that we can get the ICs that we need to ship the products beginning of next year. And that was a breakthrough for us, especially going into COVID when the IC supply chain issues kicked off. All other components are highly manufacturable in and around Europe. So I think we passed that first test. And then the rest is good old-fashioned execution, right? Scaling up your operations, doing it efficiently, making sure that you pick the right manufacturing partners, doing the right contract manufacturing. But I think that's the story of our lives for any hardware and software provider.

Well, we're wishing you luck on that journey. Any questions from the audience here? It's going to be a short break, and you can all talk to John if you want to, and then we're going to be back at 3:30 after that short break. Thank you. Thank you, John.

Thank you. Thank you. [Break]

Welcome back to Sivers Semiconductors Capital Markets Day. We now had a short break, and we are now doing the second part of the presentations, which will focus on our second leg within the company, the Photonics leg. And here to present this first piece here, is Billy, our Managing Director for Sivers Photonics. Take it away, Billy.

Thank you very much, Anders, and it's great to be here today to talk about the journey that we're on just now in the Sivers Photonics team as part of our bigger family Sivers Semiconductors. And also today, I'm going to present an update on silicon photonics. And 1 of our really exciting customers from our labs, Charlie, the CEO, will basically present that. So I'm really excited about that today also. So I've been in the industry for a long time, 30 years in the semiconductor industry, working mainly on scaling businesses up both in work for GlobalFoundries, Motorola and several start-ups. So I've got the background that's needed to develop this business further and really excited to be doing that. So next slide, [indiscernible] so let me give some background about the Sivers Photonics business. And we are based in Scotland, our manufacturing facility and the research and development. We've been in operation, developing III-V photonic devices for more than 20 years. And in the last 3 years, we basically changed our tag to become a product platform business. So we're still operating with the foundry model and working with customers like Ayar Labs, et cetera, to basically bring their products into our technology. We have a 100-millimeter, that's a 4-inch wafer fab, which is state-of-the-art and indium-phosphide. We have a facility which is 2,000 meters square. So we can basically produce excellent quality products on this current site. We offer full range of end-to-end chip solutions, where we design, create prototypes and then go into volume manufacturing on those products. Currently have about 75 staff on site, and we're growing rapidly. We also are ISO-9001 certified business. And we're also transitioning right now to ISO-16949, which is the automotive standard that we need for the LIDAR business. Now we are working with several Tier 1 big companies in the U.S. and also with several exciting Tier 2 startups. So we have a very nice broad range of exciting businesses that we're working with. Next slide. In terms of our outgoing locations, the group headquarters are in Kista, which is where the Swedish Wireless team are. We are based, as I said earlier on, in Glasgow, Scotland. We have a sales office in the U.S. in California. And we have our headquarters -- U.S. headquarters in New Jersey. So lots of -- geographically, we cover quite -- the whole globe. We have development operations in the U.K., and we have a business development in the U.S. From a technology expertise, we are integrated -- our designs are integrated, manufacturing service for a broad range of photonic devices, so SOAs, RSOAs, detectors, but primarily lasers and detectors. We are a key player also in the silicon photonic system, and I'll talk about that later on. And of course, all of this happens in our world class indium-phosphide 100 platform in facility. Next slide, please. We have a full range of [ inhouse ] design capabilities from design, right through to qualification and volume production. So we can basically take our customers' designs. We will then do design enablement on those designs, working at how to basically fabricate them in our facility. We then create prototypes of those designs. So based on everything that we're working on right now is planned to go into volume production. And then we offer a full range of kind of qualification vehicles [indiscernible] as well as [indiscernible] platforms for quality. We also offer a full range of reliability tests here, so we can do the full [ gamut ] from -- right through from design, right through to volume production. Within the facility, we have lithography edge, deposition capability as well as extensive testing capability. Okay. Now on to our product road map. So our product road map touches all 3 key verticals that the business is working on. And those are the 3 main verticals: optical communications, optical sensing and sensors and LIDAR, all of which are going through a significant growth, up to 30x from the current position into 2026. And Sivers Photonics are involved in all of these 3 verticals with a range of different customers, again, all going to volume manufacturing. Next slide. In terms of where did those 3 verticals, what are the kind of areas within them? So in optical comms, we supply DFB laser chips and arrays of chips to transceiver and then [indiscernible] through to the subscriber. So Sivers is at the heart of several applications within optical communications. And it's the same for optical sensing. Here, we're working with several Tier 1s, really, really exciting development that has came all planned for volume within the next year and some of them are even shorter than that. And that will [ go ] to a huge range of sort of exciting new applications in smart cities, smart factory and smart health. Then of course, LIDAR, which everyone knows about in autonomous vehicles. We supply the DFB laser chips that going to basically silicon photonics circuits and of course make their way eventually on to autonomous vehicles. So looking at the product road maps that we are developing, and I've not run any specifications down here, but basically, we're offering a different range of powers for both single and [indiscernible]. And we have a very, very extensive product road map that touches several of the markets I've just described several of those verticals and several Tier 1 and Tier 2 customers that are sitting behind those products. So we're really, really excited about that. The road maps here, we're going through several key qualifications over the next 6 months to a year, and the team are really excited about developing these products. On the optical sensing, which also includes LiDAR, again, we've got 5 key products that we're going to be launching within the next 1.5 years into this market. Again, working with Tier 1s and across all 3 verticals in that space. Okay. Next slide, please. So I've mentioned a few times about silicon photonics. And again, just to explain how important this is going to be for the semiconductor industry going forward. Traditionally, in the semiconductor world, we have limitations caused by the [indiscernible] data and then [indiscernible] check. And then the Photonics solutions that can be used for this really are a game changer. So what we're doing now is basically bringing data optically into the device rather than relying on copper. And Charlie from my lab is going to basically discuss this in a lot more detail later on. It really is a revolution that's taking place in the industry and Sivers are right at the heart of that. Traditionally, Optical has been for the kind of long-haul business, which people understand. And semiconductors has basically been all of the handling vast amounts of data digitally. However, as I say, the key issue with that is getting data in and out of the device itself. So silicon photonics, where we basically bring both of those verticals together helps solve that problem. And we're really, really excited. Everyone who is involved in the semiconductor industry is actually working on this right now. And if we go to the next slide to show the landscape, the landscape here, you can see the number of companies that are involved in this. Everyone who is working in semiconductors is involved in this right now. And as I said earlier, Sivers is providing a key solution in our photonics lasers into that market. So again, everything from optical comms, such as Ayar Labs[indiscernible] here. Biosensing, so this is where we could be measuring toxicity both in the air and in your body using this -- our lasers to detect that. And then in LIDAR, self-driving cars, our chips are going to be all over that. Again, this is all about silicon photonics. So I'll talk a little bit more about that technology. And we actually have a huge amount of IP covering key parts of how silicon photonics works. So basically a flip-chip integration of our lasers onto a silicon device and basically we can then use our integration technique, which we've developed that allows that to be seamless. Next slide. And to get an idea of where that will touch everything from AI to, again, self-driving cars, high-speed interconnects up to beyond 2 terabits per second, and Charlie is going to talk about that later. Biosensing, data center components as well. For those who are not aware, a huge amount of data is handled within these data centers [ with over us ] actually seeing that. So we only -- only 15% of that data comes out of the data centers. So the amount of data that's required right now in their modern life to support that comes from the solutions to companies like Sivers Photonics produce. And again, we're working with several Tier 1s to bring our lasers into that application. Talking more about the silicon photonics kind of landscape, and a key part of that was basically creating the standard to MSA and Sivers is one of the promoted members within the consortium that's putting together the MSA. And we're the pioneer and the first ones to actually working MSA with Ayar Labs to produce the first application that comes out of them. So really, really excited about that. And here's [indiscernible] Ayar Labs, it's called SuperNova. Charlie is going to speak about that in more detail. It's a multiwavelength optical source that provides greater than 2 terabit of modulation rates. So that's equivalent to having something [indiscernible] That's equivalent to [indiscernible] 1 chip supplying 20,000 houses. So this technology will significantly impact sort of data handling capability for silicon photonics. And we believe this is the first product based on the CW MSA that I spoke about earlier on. We also just recently completed the demo ECOC that was last week, and the interest was significant for that. So, again, we're expecting to see a lot more interest in this application based on those kind of demos. Okay. Next slide. So, in summary, Sivers Photonics has completed [ in-house ] capability for III-V design test qualification and high-volume manufacturing. We have the capability in the business to do everything from design right through to manufacturing. And in fact, over the next year, we're looking at new facilities, scaling up our business significantly to meet the volume requirements and that's happening with several Tier 1 businesses and Tier 2 businesses. We will be using our indium-phosphide platform to drive that and standardize how we do that, which will allow us to scale the business even faster. And again, Sivers Photonics forms a basal part of the silicon photonics ecosystem. We're already seeing huge traction in our technology. And with that, I thank you and ask if there's any questions.

I think we are holding the questions until Charlie have presented his piece. So we'll take that after Charlie's question. So I think we're happy to now introduce Charlie's presentation, and he is with us, please take over. Thank you so much, Billy, for your presentation.

Thanks, Anders.

Thank you. Can you see me here now. I'm just turning my camera on.

Yes, we see you well.

Okay.

Thank you.

It's early morning here in San Francisco. So everyone's still asleep. But I'm very honored to be here this morning or this afternoon, your time and thank you, Billy, for the nice comments. We've been working together with Sivers Photonics for over 1.5 years now, bringing our technology to life. And of course, as well as explain the technology without a laser or think of it as an optical power supply, there is no solution. So we're absolutely dependent on the technologies that Sivers Photonics has been developing with us. Billy mentioned design enablement that's the key function because we have got a very specific specification, and it is actually quite difficult for -- to deliver to those specifications, and so -- I am happy to say that really on the first try Sivers Photonics got it right and worked directly on 4 samples, and now we're working to scale up manufacturing. [indiscernible] do you have the presentation up on the slides but I can't see them here, but are you presenting my slides now?

We are on your second slide of your presentation. And so you can go there and start introducing the company from -- that's the 2015 and so forth.

Pretty good. Okay. All right. Now, [indiscernible] here and I'll just ask to advance the slides as we go. So a little bit about Ayar Labs and what I thought was to provide an overview of the company, technology, the market opportunity. And then some of the milestones we reached, and where we're going, I mean 1 thing is that this represents -- the work we're doing represents a large new TAM -- market TAM for, let's say, photonics, optics, fiber optic communication. And we've been working on this for some time. Just as an introduction, the company was founded in 2015, but actually, the core research started back in 2010 with a multidisciplinary research team [ out at MIT. ] So it's been some time in the making. And we like to say that it takes 10 years to be an overnight success, and we're on that road. We have locations, 2 locations in San Francisco area and now a new office in Boston. Today, we're at 110 employees, 85% have advanced degrees. We've got over 40 PhDs today. We've been very diligent about filing patents across the breadth of our solution space. And I'm happy to say that we just closed a substantial new round of financing that, I think, has really set us up to -- through the next 2 years. On the sort of investor side down below, just briefly, it's kind of -- on the left side is our financial investors and on the right is our strategic investors. And there's a reason we show this, we have built very, I think, thoughtful deep tech investors on the left, but then we've made a very conscious effort to tie ourselves more tightly to the major ecosystem players. Because as an embedded technology really, we need to have the support of the entire ecosystem to succeed, and we've got a nice cross-section. There're some more that will be coming on soon, but this is what we have today. Advance to the next slide, please. I'm sure you may have all seen or read of slides sort of like this. This actually came from an NVIDIA presentation earlier this year, but it really shows the explosive growth in computational requirements. I happen to show these artificial intelligence models, and without knowing too much about it, it wasn't too long ago that 1 million parameters was sort of the problem space. Now we're heading into the trillions. And according to [ Meta, ] these models have been growing at 750x annually. Really, though, the same thing is happening to a different degree with different measurements in telecom and radar. A lot of the work we've been doing has been sponsored by the U.S. government and DARPA. And there are use cases across AI, telecom, radar, cloud computing and defense. But really, it's how to solve these problems. And there are many different sort of techniques that people are using to try and sort of advance the computational science to address these growing needs. One of the fundamental problems that I think Billy referred to this is -- if you advance to the next slide, please, Slide 4. One of the fundamental problems that Billy referred to really is that the energy required to move data over copper will exceed the energy available to compute on the data. And we're already reaching that point today. But the challenge and opportunity for us is that, if we can break that bottleneck and move more data more quickly at higher data rates, then there're huge improvements in computing performance that are capable. One of our customers is building a system today, and of course, we're a core component, but the anticipated performance improvement is in the range of 1,000x over current state-of-the-art. That, by the way, is much greater performance gain than 1 might get from moving to a different semiconductor fab process that requires a $20 billion factory to manufacture. Let's go to the next slide, please, #5. So this is, I think, what I call the inevitability slide. I think it's well recognized across the industry that future innovations, really were going to require to break this bottleneck and do it with silicon and optics integration. And what the slide -- what the chart on the right really shows is that optical fiber communication has been replacing copper really for decades, first at long distance. I think of under ocean fiber optic cables, but as data rates increase, optics have been replacing copper at shorter and shorter distances. Our market opportunity is really in the circle, which is the short distance interconnects, which today are largely copper but will need to move to fiber optics here over the next 5 to 10 years. We've estimated the TAM at $40 billion by '26 or $7 billion [indiscernible] Of course, Sivers, as a core partner, shares a substantial portion of that TAM opportunity. If we go to the next slide, we call it optical IO, which sounds rather basic, but we design and sell optical IO. And that means we're both designing the solution and then selling the products. This is not just an IT development effort. And what I'm showing here in a couple of sort of photos is that it's really accomplished with 2 primary pieces of -- 2 primary products, let's say. One is the CMOS chiplet. You may have heard of chiplets now going into multichip packages for advanced semiconductor products. But I've got a -- the picture in the middle shows 4 of our optical IO chiplets, which we call TeraPHY or [indiscernible] stands for physical layer, connected to, in this case, an AI processor in the middle that was manufactured at TSMC. That's a very advanced packaging technology that you're looking at. But it's coupled with the SuperNova light source, which is the next picture in the middle on the right, and that's an external light source. And so you can imagine that -- think of that as an optical power supply, sending multiple wavelengths of light into this -- each of these chiplets. I don't show the cable -- the fiber connection in these pictures, but think of it as a remote power supply. The reason we disaggregate the light source from the package is for replaceability, reliability, performance reasons and also cost reasons. And so if we show this thing fully connected, you would have this optical source sitting somewhere on the motherboard solution feeding this in the package. But there's really these 2 parts that go into the solution. It's also important to note that this is an embedded technology. Those chiplets are actually installed inside 1 of our customer packages. So imagine that could be an Intel or an NVIDIA or an AMD or, in our case, for defense [indiscernible] computing solution with our embedded silicon in there. It provides a great ramp in terms of sales because you're basically selling or providing the technology to our customer, and they're selling it through their entire distribution chain out to the sort of many hundreds of thousands of customers around the world. We advance to the next slide, Slide 7. You might think why is -- what's the big deal? Why isn't that has been done before? And one of the reasons is that you really need to be able to pack a lot of data, a lot of ban, what we call bandwidth or data IO within a very, very small space. Today's technology wouldn't be able to fit in those packages either from a size perspective or a performance perspective. And so I show a representation here of sort of the equivalency of some of the common sort of fiber optic cable building blocks that are in use around the world today, and as a comparison. So our little chip here, which, of course, is accompanied by the laser, is delivering 5x the data rate, 8x more power efficient, 10x lower latency and a 90% cost reduction compared to current technologies. Now cost reduction is an important one because the -- in some sense, we're competing with copper, which is very inexpensive. But copper is getting much more expensive, and it's getting much more expensive when you factor in all the things and tricks that people are trying to do to extend the life of copper. And so this really is a game-changing technology. I joined the company from Intel when it was a mere while I was leading the supercomputing division. And this has been a problem that has plagued us for ages. And I joined the company, it was much, much smaller really on the promise of the technology. I haven't seen anything that had gotten even close to those capabilities. If I go to the next Slide 8. This actually maybe helps capture the essence of some of the benefits this technology provides. What I'm showing here is a series of computing solutions. And everybody, I think, knows of a semiconductor computing chip, which I show in the 2018 [ box ]. That actually was a product that I was responsible for at Intel. And a computing chip is really computational cores connected by a high-speed, low-energy fabric. And if you can do it all in a single piece of silicon, it's great. But that's been challenged as technologies advance. You can't really fit any more computational power in a single piece of silicon anymore. And so what you see in 2022 are these multichip packages, and I show AMD as an example. And you can see the dramatic movement in terms of 8 billion transistors on the first to now 40 billion transistors today. And part of the capability that's provided there is the ability to connect all those chiplets, let's call them, in a very low latency, high-bandwidth interconnect, but that's all on that substrate. Move to 2026, and this is where the industry is going and where our technology comes into play. It's actually an image of a project we're working with one of our customers. But using our technology, you can connect all of these -- you can now connect multiples of these multichip packages in a way that provides the same energy efficiency, data movement and cost, really, but now doing that at sort of rack scale. And it sort of redefined what is a computing socket, if you will, or a CPU. You can now imagine that in the future the CPU will be the entire rack, and we've estimated that you can now address -- put 100 trillion transistors in 1 computational solution through this technology. If we go to the next slide, just a few milestones and achievements and I'll kind of build on this in terms of what's here today. Up through 2018, a lot of the research and development work was on prototypes. And I show as an example, the -- one of the core devices in silicon. And that's an electron micrograph. But that little guy there, the circle, is called a microring resonator. And we're clearly the world leaders in developing that specific piece of technology. The important thing to know is that's about 100x smaller than the current state-of-the-art photonic devices. There are tricky things to learn in terms of manufacturability and scale and performance and durability, but those are all part of our patent portfolio. But that enables us to get the small size here. By 2020, we had started to do many public demonstrations of our technology, and we developed our first, let's call it, full chips, full solutions. We did a lot of this in the early days in concert with Intel. And we actually demonstrated full integrated solutions. You're seeing that board under 2022 shows really an Intel processor with our chips embedded in it. Kind of see the little cables coming out the left side there, but a full board demonstration. Where we are today is we now have many more customers. We've got really 20 in total that we're working with, and we've got another 40 behind that, that really starting to make first volume shipments. So turning our first engineering samples into true sort of hardened production-worthy product and working on the manufacturing and yield process and expanding our supply chain. Now that's actually part of where Sivers comes in, in terms of the work we're doing and ensuring that we're getting the right supplies of core technology. We believe that full -- I mean, while we're shipping in the sort of thousands of units today and tens of thousands in '23, the real production starts to ramp more in '24, '25 and even '26. Part of the trick is we have to time our technology insertion with our customers' product road maps. And so there's always a timing issue involved. And you may have to back up a few years typically as we are to get those design wins before you reach full production volumes. But the ramp after that can be very, very quick. And -- if we go to the next slide, just deep diving a little bit. If you went to our website, you'd see that we've announced some new strategic collaborations and investment with both Hewlett-Packard Enterprise and NVIDIA. I think it's kind of -- HPE, NVIDIA and Intel all have board observer rights which, for a small company like us, makes it very interesting board meetings, but it also creates a nice tension in the industry because it's well understood that this technology is coming. Another thing is recognition that Ayar Labs is the leader in the space. If you go to the next slide, please, just a couple of quick points on commercialization milestones. I think I mentioned we completed our product validation and now shipping units. We have a number now of what I would call high-volume strategic customer partners. We've expanded our supply chain partnerships and Sivers Photonics is clearly one of those core partnerships that we've been, I think, both working on diligently. And then Billy referred to the standards, the CW-WDM MSA. This is important because standards sort of underpin the ability for technologies like ours to really expand. And there really wasn't a set of standards for these short distance interconnects in terms of the number of wavelengths, what they should look like, the amplitude. And so establishing a standard that can bring the rest of the industry around it is an important feature because that will help create the ability for this to expand -- for the market to expand more quickly than it probably otherwise would have as a proprietary solution -- a proprietary [indiscernible] solution. If I go to Slide 12, please, I just want to show a picture and -- of kind of where Sivers comes in. So this is a rendering, but I showed the real module prior. This is a rendering of our external laser or light source. And what you can see is that we're embedding the Sivers Photonics DFB laser array inside this module. It's the first industry standard compliant laser solution that's hit the market. We actually have a number of customers now that we never expected who would like to try the laser [ only ] because they're working on different applications for that we're addressing. It delivers 8x the number of wavelengths compared to commercially available products today, and it has a wide temperature operating range. I could go into a lot of other really kind of neat features here, but it delivers more bandwidth and more power for its size than any other solution in the market. And it's not typical to have a laser DFB array as Sivers is providing us in an [ 8-wide ] fashion, which you're seeing here. Typically, they're provided as sort of single units or single laser wavelengths, and it's really quite tricky to deliver 8 of these in 1 unit for reasons of yield and reliability and consistency across all of those. And each one of those little boxes is a different discrete wavelength of light that we consume and use. So it's a pretty fancy package, and I think truly state-of-the-art. If I go to Slide 13, I think this kind of speaks to a strong ecosystem that's developing. And we [ show ] this in the sense that companies like Ayar Labs, as small as we are, I think, can make an outsized impact on the industry, and it's what excites me, I think what excites the team. And I think it's what excites our core supply chain partners as well. But you need to have an ecosystem to be successful and we've been diligent about sort of developing the right partnerships kind of in a circle. I can show many more -- I could show others kind of on this list, but between sort of the investor base, our technology partners, go-to-market partners, our supply chain partners, and then some of the sort of big emerging industry standards that underpin all of this, I think what really helps establish Ayar Labs, and through Ayar Labs, I think, Sivers Photonics solution, as a market-leading -- in a market leadership position. There are other sort of competitors out there. But nobody that's deemed to be within some years of achieving what we've achieved. And that's whether they're start-ups or actually some of the very largest companies who have been investing in the technology. And so it's our hope that this becomes the pervasive technology solution for the short-reach optical connections in the computing industry. If I go to Slide 14, I'll end with a comment from the Chief Platform Architect at NVIDIA, Bob Ober, but really, the promise is, and NVIDIA, as one, has been very public about this, is the next [indiscernible] will require advanced technologies like Optical I/O support future, AI and machine learning workloads. And I think it sums it up nicely. I mean, this is one of those must-have technologies for the future. It's going to be a big transition. And again, we think it's happening now, but the industry and society at large will start seeing the benefits around the '25, '26 time frame, really. So very excited about that. And I guess that's my last slide. Slide 15 is just my thank you. And I, again, appreciate the partnership that we've had with Sivers over the last 1.5 years and the opportunity to address it today.

Thank you very much, Charlie. I'm Charlotte, and I'm here to moderate some questions for you. Thank you for a very interesting presentation. So it's funny that you ended with that quote from one of your owners, and you talked about the ecosystem within Optical I/O. How certain are you that some of these, like NVIDIA or HPE or Intel, aren't developing their own in-house that you will then be competing with?

That's a great question. In fact, when I'm often asked what our -- what the competitive landscape is like, I'm probably more concerned with that very fact than with any other startup that exists in the industry today. And to a more or less degree, all of the large companies are starting to invest in silicon photonics and doing research in this area. One thing in particular is that I think the industry and the large consumers of those companies' technology, let's say, the cloud providers, want to have a solution that is truly sort of cross-platform, independent and cross-industry. And so while it is possible that we would see competing technologies, let's say, from NVIDIA that would be suitable for NVIDIA products, if they can inter-operate with anybody else, then they're really more of a proprietary solution. And I don't think it unlocks the true benefits of this technology that would be achieved through a cross-platform kind of implementation. It's also the case that I think we just have to stay ahead of the industry. And as I mentioned that it's going to take some years of effort to kind of catch up. Developing a laser solution like we have takes some years, just the turnaround times. Our silicon design has been, as I said, 10 years in the making. This is not something that you can just step into, throw 200 engineers at, and then hope to compete adequately. And the demand for the technology is there today. So I think there is probably a buy versus build analysis that's always being done. But we believe that right now the market is moving in such a direction that really makes more sense to work with Ayar Labs than to try and sort of independently build, but it's not out of the range. It's definitely something we think about.

Okay. And you talked about the ecosystem and Sivers being in that ecosystem. And you said that you were buying state-of-the-art DFB laser arrays from Sivers. What does the competition look like in that respect?

In terms of the -- how do I want to put it...

Could you use someone else except Sivers?

We can -- yes. We can use -- so I just want to -- I was trying to capture -- we could use someone else than Sivers, [indiscernible] way. And it's always important, I think, to have a multi-supplier arrangement. Sivers has been quite good to work with. And it's our only European customer. And I think that's important as our supplier, and that's important as well. And what I was really thinking about there is that based on the industry standard, the CW-WDM MSA that we referred to, you can build it with other technologies than DFB arrays. So it's conceivable that someone like Lumentum, for example, could use a different technology that's their -- that maybe they specialize in to develop an equivalent solution. Ours is all built around the DFB array solution, though. So you may see other industry compliant laser solutions emerge, but the one we're working on is really based on the DFB technology. And that's -- like I said, it's not the easiest thing to qualify a full array. And Billy might have more detail on why you have the technology that -- why your team can deliver this, and others have much more difficult time, but we think it's actually a fairly specialized scale that's not easily replicated...

Yes, I can maybe just add to that. I mean, it's not straightforward to produce [ an X-array ] to deliver that kind of performance. So the feedback that we got from -- certainly this -- an issue with Ayar Labs is pretty groundbreaking. Other photonics companies could certainly work hard and produce that. But while they are doing that, we're going to be working on our next platform that I can allude you to in the product roadmap. So -- this is just the first of many that we'll be launching over the next year and continue to develop Ayar Labs platform and the whole ecosystem around I/O input. So we're really excited about that.

Yes, Billy makes a great comment there, [ I should make is ] that while today's solution is an 8 array, an 8-wavelength array, if you look at our road map over the next decade, it really moves to 16 and then perhaps 32. And we've got -- I think the relationship we have is both one of manufacturing, but also co-design and co-development going forward. So while one is coming to market, the next one has to be sort of in development as we keep going. So very good point.

That is actually a question from the web. Are there any alternative or competitive technologies being developed that you see for your roadmap in the future?

There are, but the whole reason behind this industry standard was to enable multi-sourcing, whether it's -- whether -- and our business model presumes that eventually our customers may want to go directly to the manufacturer for that laser solution. So I think if we're ultimately successful as a platform technology, you'll see multiple laser solutions emerge into the market, but they have to be qualified, they have to be price competitive and so forth. I think we're still -- with what we have, kind of well ahead of the curve, but the idea is that there will be other solutions that emerge over time to sort of compete with. But I think that helps advance the -- advance industry adoption more quickly. So not always a bad thing.

Good. Do we have any questions from the audience? No. So I think we can thank you, Charlie, for being with us today. And now I welcome Sivers' CFO, please.

Okay. All right. Good morning or good afternoon or good evening. Wherever you are in the world and whatever time zone it is, you're probably surrounded by semiconductors at this very moment. The amount of semiconductors that we surround ourselves with is remarkable, and it's fast growing. So just take a simple coffee machine. Look under the hood, these days it's packed with semiconductors, not to mention your cell phone or your vehicle. And this all plays into the growth picture of this industry. So the semiconductor industry has grown -- outgrown the general economy consistently over the last decades, 2x the last decade and 4x if you look at over a 20-year period. And then remember, Sivers' products has just started to hit the market. But I'll tell you a little bit about how we play into the bigger picture of the semiconductor space from a revenue perspective and from a financial perspective. So I'll start by telling you a little bit of the business models that we apply within Sivers. So this is a picture over the semiconductor ecosystem and value chain. And as you know, there are several faces from design to fabrication to sales and distribution. And then you have variants of players in these ecosystems. And as we've already said, the Wireless business unit is the fabless business unit, which means the focus is on design and on distribution, whereas fabrication is outsourced. Photonics, however, comes from a foundry business model perspective, where the focus is on the fab, but it's also a very dynamic business, which is adding intellectual property to its offer and moving into what is referred to as an integrated device manufacturing business model or in our situation actually an integrated platform manufacturing model. And what this means is that we have our own intellectual property on which customer can add their IP and we take this product to market. So starting with Wireless. The Wireless business unit has essentially 2 revenue streams. It comes from the design phase and from the distribution phase. And it varies depending on if you're talking about custom products or standard products. So the standard products that we develop for a broader market, in the initial design phase, we put this on to the balance sheet and which amortizes over the lifetime of the product. However, custom products that we add development services for to our customers, that is a revenue stream for us, which is very important. And then obviously, as the products eventually hit market, we generate hardware revenue from both these type of products. Currently, within the Wireless business unit, this split is roughly 50-50. But in the short and midterm, we'll see the design revenue stream grow, and it will grow fast. Over time, however, as we mature as a company, the distribution part and the hardware revenue of the business and of the revenue will increase. For Photonics, it's sort of a similar revenue model within the sort of original foundry business, whereas we add design and development services to our customers in the early design phase. And then when we manufacture, we generate hardware revenue. And also for the sort of extended Photonics business model, whereas we have our own IP for the standard products, again, similar to the Wireless. When we develop standard products, we put the investment onto our balance sheet, which is being amortized over time. But when we distribute and sell and ship to our customers, we generate hardware revenue. For Photonics, which you will soon see is even sort of earlier in this stage, and again, the big hardware revenue uptick we have in front of us. So going into first half year financials for Sivers. As Anders Storm has stated, we had a good first half year with revenues of roughly SEK 54.6 million, which is a revenue growth of 34%. The growth driver for us was NRE sales, which grew with 70% over the first 6 months. And the hardware portion of the total is today some 30%, again, an indication of the early stage in which we're in. For Wireless, this trend was even more clear. We grew the business with 62% for the first 6 months. And again, the development phase revenues, NRE, nonrecurring revenue, were the driving force behind this with 4x the growth over the last year. Again, 50-50 split here. Going into Photonics, we had a slightly more moderate growth this first half year with 21%. Again, NRE driving the growth. And as you can see, Photonics hardware sales is only 60% of the total -- 16% of the total. Going into cost and profits. So Sivers today are not yet profitable. We had a controlled cost and profit development over the first 6 months. And for Wireless, that actually meant that we decreased our EBITDA, our profit. And the reason for that was that we added the MixComm acquisition to our business. So this is sort of according to plan. For Photonics, however, we improved the EBITDA. We improved the profit, and we are on a path to profitability and to positive cash flow. EBITDA and cash flow will vary over the quarters, but the trend is very clear. And for the margin for these 2 business units, we improved the margins with roughly 25% -- 20 percentage points for both of these business units. I'll now flip over, talk a few minutes about our shareholders. Okay. So we are, at Sivers, very, very happy for our shareholders and for the support that you guys provide us with. The largest shareholders, it is Erik Fallstrom. He has been supporting Sivers for many years, and he is also on the Board since many years. We also, since February, have Kairos Ventures as the second largest owner. Kairos used to be the majority owner of MixComm. And since the acquisition was a stock-for-stock deal primarily, Kairos now holds a significant amount of Sivers' shares. Kairos is also represented by Todd Thomson on the Board. Management and Board outside of those 2 shareholders represent roughly 9%. And together with Keith Halsey, which is a partner of Erik Fallstrom, there is sort of a 35% share which has more or less Board and management representation. We also have a set of significant institutional shareholders, which has supported us, [indiscernible], among others. And then in total, 21,000 shareholders adding up the other 50%. Again, thank you for your support. To summarize where we are as a company and from a financial perspective, so we do have 2 very sort of interesting and strong markets. Both for the Wireless and for the Photonics market, we see strong growth projections. We had positive effects from the MixComm acquisition. Clearly, as you've seen today, both with customers and management, we have clear synergies. A good start of the year, reduction in negative EBITDA, business unit on path to profitability and positive cash flow. And again, a very strong shareholder base that supports the long-term funding of the company. And I can add to that, we also have very good bank and financial relations that enables debt financing to the extent needed. With that, thank you. And again, thank you for your support. Questions?

Perfect. Thank you. So maybe we could start off.

Yes. I mean, I can summarize today a bit first and we go into the Q&A. So today, we've seen sort of everything from myself presenting the overview of the company as well as seeing that both business unit and the management for that and then also 2 very interesting customers. But we have to remember as well now in this sort of Capital Markets Day, we are looking a bit forward, and that's why we brought in ALL.SPACE with their very, very interesting technology as well as Ayar Labs also with interesting future technologies. On sort of the bottom of this or like the foundation of the company, we still, of course, have all the other customers and all the things we haven't had time to talk about today, all the 43 design wins we have in both 5G and SATCOM, which we are now sort of waiting for the explosive growth we're hoping for from all of those different customers, one by one, coming to finalize their products. We have talk to you before about everything from Cambium, who was here at the last Capital Markets Day. And the Capital Markets Day before that, we had CCS and ADTRAN here talking and so forth and so forth. There's a lot of those things happening in the future as well as all the Fortune 100 customers we haven't talked about. For example, we have the one that we've been working with now for 4 years, I mentioned before. All of that is still in the works, and we are trying to capitalize on that and getting those to the volume to move sort of away as much as possible from the -- only the development, but we also want to see sort of the hockey stick with the future in the hardware. So I would like to thank all speakers and also Hakan here in the end presenting how it looks like in the finance part. But it's been a very interesting day, I think, to see also what's happening in the future, and I want to thank John and Charlie, specifically, for giving us this really look into the future and very state-of-the-art technology, which I am extremely proud of that we are a part of as well on top of the foundation we also have built over these years. So that was how I wanted to summarize things. And now we open up for Q&A. And Charlotte, thank you for being here and keeping that going.

Thank you, Anders. So I'd like to start with -- you've talked about synergies especially now with MixComm coming in, and we've seen some of that. But can you be a bit more specific on how much do you travel between these? How much do you -- how much customer interaction do you have together? Can you give us some -- elaborate a bit on the synergies?

Yes. One of the things that I think is hard to see from the outside is, you might have seen it and you saw it also in Charlie's presentation, and you saw -- you heard it from John, they're all saying that the supply chain is important. And there is a small logo everywhere, GlobalFoundries. So why is this coming up, for example? And GlobalFoundries was actually an investor and owner of MixComm when we acquired them. And that is sort of our factory for the future when it comes to all the Wireless pieces and also for the Photonics piece. So if we look at the silicon photonics things that actually Ayar Labs is building off is actually GlobalFoundries. So they have a second leg there, which we also have. So -- that is one piece of all the exciting technology that comes out in the market is how GlobalFoundries will be sort of more and more important for us and GlobalFoundries have fabs in Dresden, in Germany, where they're going to have a big thing this week, actually, Wednesday, Thursday, with all customers. But they also have a lot of fabs in the U.S. just being recently listed on the NASDAQ Stock Exchange as well. You can read more about what they're doing on the web and so forth. Maybe we can bring them here next year and tell you a little bit about what exactly they are doing. But that is a very, very important piece of the overall working between Photonics and Wireless and all of those pieces. So that's one thing. Then we have the other thing of bringing in MixComm into this, and that is, of course, connected to the U.S. market in general, one thing GlobalFoundries, but also all the local things we can do now in the U.S. with people there, connecting into -- you also heard everybody talk about DARPA money or the Ship Act, where you can get funding for building up fabs and factories and all of that. And getting closer and closer to the sort of the U.S. and the Western side of things right now is more and more important and also from a sort of Lockheed Martin or other type of defense companies that needs this kind of very high-tech technology that they don't want to share with the Eastern part of things. So -- all of those things is very, very important for us. So it connects in a very good way right now, I think.

So Sivers is really happy about the MixComm acquisition. I think Mike is still on. Mike is now the interim CEO of Wireless, but he was the CEO of MixComm when you acquired MixComm. So I'd like to ask you, Mike, if you have any comments on your first impressions and the synergies Anders is talking about, but also how MixComm has developed as part of Sivers.

Great question. And I think the highlight is really what I pointed out in my presentation, where now that the combined portfolio of our technologies and products covers all of the requirements, not only for 5G, but really makes Sivers the only company that has the essential front-end solutions. The radio is necessary to not only enable 5G, licensed, unlicensed, but also make possible what John Finney talked about in the revolutionary platform for satellite communications. I would end this, combined your portfolio and really toolbox that the combination of MixComm and Sivers has, is going to allow us not only to make the most of the opportunities in 5G and SATCOM with great partners and customers like ALL.SPACE, but also start to look at other adjacent and emerging markets like radar. And so I think this combination really positions Sivers in a unique way to make the most of this transformation when it comes to wireless communications.

So John is obviously a fantastic customer within SATCOM. And that was actually -- when you talk about -- talking about 5G and millimeterwave and you have the breadth of the portfolio, that sounds really impressive, but how important is that for your clients that you have -- can be so wide and don't -- and that you don't have any competition that is as wide as you are?

Well, it is impressive and exciting. But most importantly, it really is crucial for our customers and partners. Because with all of these standards, it isn't just one frequency. And even your [ Ka-band ], your satellite that John talked about, that spans from [ '18 ] all the way through [ '28 ], and so you're having a very complete portfolio, but also the fundamental technology that can be not only addressing 5G, but then serve a dual purpose in this case by having specifications and best-in-class noise floor that John talked about. That's what -- this very complete and very -- we think the highest performance platform in the industry is going to allow us to do and also then make sure that wherever our customers need to go, we have the technologies and the products that are going to get them there and then all underpinned by the robust supply chain that Anders was just speaking about.

Yes. And if I might add to that. I mean, one of the main thing is the integration with our partners and customer solutions. So if we can have a very wide portfolio, they can integrate and don't have to spend a lot of time integrating with different solutions. They will have the same interfaces to all of our technologies. So that is one of the main things as well that helps us being wide in that perspective. And as John mentioned, different frequencies will come into his solution as well and he doesn't have to redo everything every time.

So we have a question from the web, and the questionnaire is -- it seems like Fixed Wireless Access is taking longer to get traction than what we would have expected previously. So what can you tell us about the market development and...?

Yes. So first of all, there's been a couple of things that has had effect on the overall rollout of the sort of Fixed Wireless Access stuff that we are talking about. First of all, we have had the pandemic who had its effect and the shortage in semiconductors in general that it hasn't been possible to build the networks that they wanted to. Another thing, if you look at the Mike presentation, we will look at sort of where in the world, have they built out the millimeterwave stuff. And U.S. was the earliest and was driving that from the beginning, then they got hold of sort of the mid-band coverage technology as well into the market and has some sort have had a focus on that and which have taken off a bit of the focus on the other frequencies for a shorter time. So -- and then on top of that, there's been something called the RDOF money, which has been a big funding thing in the U.S. where this has been driven anyway. And that money has been delayed for many, many customers. And there's been also things in -- went to court and so -- with -- and Starlink has been fighting for that kind of money to get them out -- so there has been a lot of things at the same time, who sort of have delayed things. But as [ Michael ] showed you, there is a lot of things that will happen, and we've already seen some of the volume orders, and we hope to see more of that in the coming -- end of this year and coming next year, of course.

You had a Tier 1 Fixed Wireless Access customer coming in with the MixComm acquisition. Can you comment specifically on that?

Yes. I mean we're -- as I mentioned in the quarterly report, we've got the prototype orders. We're building prototypes with that customer and hope to see volumes from that customer still, yes. So it's working well. MixComm has a fantastic technology that they like, and we're very happy to have them on board so far.

And we had ALL.SPACE here. So they are an important SATCOM customer. Are you seeing more collaborations with other SATCOM customers?

Yes. I mean, we -- with this technology, we have and so forth, there is some limitations of what we can do and not do, of course, based on what we've signed with the sort of ALL.SPACE, but there is a lot of other opportunities. And I think that's some of the larger development NRE opportunities where we will see here near term and in the future. And just to understand sort of how this business works. I mean, if you go back 5 years, that was sort of the time of winning a lot of design wins in 5G and so forth. Right now, it's a lot of time to win SATCOM deals and some of the 5G deals and so forth, which will then create the revenue going forward. So all of those things happen in different steps. So we are now in a phase where we see more and more things happening on the SATCOM things, but all the 5G things are sort of coming to fruition and getting into volume instead near term and other things happening sort of medium term instead. So...

Great. There is a question. I guess it might be for Hakan. How do the payment terms and agreements with customers look? Do you need to finance inventory levels before volume ramp-ups yourselves? And are you able to do that?

Well, as I think Anders already mentioned during the day here. So when it comes to the NRE part of the business, we are lucky enough to often have a prefunding by customers, meaning that we sort of have a positive cash flow out of that. But other than that, that is sort of normal payment terms we strive for 30 days. But as you know, sometimes we have to go for a longer period than that -- periods than that. That's very sort of natural for supply in our size. And when it comes to inventory, we don't really build a large inventory. Obviously, we will have to work sort of very smooth and just in time, so to speak, these days. And hopefully, the industry is working with us, and we look forward to delivery times being shorter as supply pick up here in the landscape. So -- yes.

I mean, there will always be some working capital in this kind of business when we build up things. So we are not getting prepaid in that sense, but we have...

For the hardware [indiscernible].

No -- for the hardware in the future, we need working capital in some way. But I think that's a very positive problem to have when that happens. So...

So a couple of years ago, there's a question from the web, Sivers was estimated to reach breakeven with a turnover of roughly around [ SEK 200 ] million. Now that you have increased costs and potential with the acquisition of MixComm, do you have any estimates for breakeven?

I mean, we don't share sort of that kind of estimate. But of course, we have kept on investing. And as you've seen today, in these markets where we're investing in things, I think Charlie talked about a $40 billion TAM and a $7 billion SAM. So of course, I think it is worth investing, and we have also acquired MixComm to even further build and broaden the semiconductor. Now if you want to build a semiconductor company, you cannot just have 1 vertical and 1 ship, you need to have multiple ships, multiple sources and multiple areas you work in, and that's what we're doing here. So -- but we are very positive in seeing that we can get to this sort of positive cash flow phase anyway in the sense of keeping on building on the company here. So...

Any questions? Yes, we have one here. Please wait for the microphone.

[indiscernible] Bank. I just have a question regarding the Photonics business. After hearing Ayar Labs and your presentation, I'm wondering about Sivers Photonics strategy with regards to wafer size, and if 4-inch wafers will be enough to meet those potential future volumes. And also how much it would affect the CapEx needs if you go to like 6-inch or perhaps also 8-inch manufacturing?

Very good questions, and Billy, you might answer that as well. But in -- 4-inch today in [ 3, 5 ] compound is quite good in that sense. If we look at things like the volumes we are at now and this very, very high-tech arrays that Ayar Labs is using, they are, of course, expensive and we can sell and use what we have today in the factory. And that will give us a very good sort of utility and usability of the fab we have. If we look at for the future for, as we mentioned, for the Fortune 100 customer, for example, when we get into that kind of huge volumes, we need to look at 6- and 8-inch type of fabs and make capital investments on that side. And again, I would say, in that sense, it's going to be a very nice problem to have when those volumes comes in and that kind of question comes in. And also in the current environment, I would say, when we see investments coming from the [indiscernible] coming from the European [indiscernible] and all of those things to be in that phase where you can sort of grow Photonics into 6 and 8-inch and be even more [ leading ], I think that will be something that we will see a very interesting development around. I don't know, Billy, if you want to add something?

Yes. So just to follow up on Anders' point, the state they are in Photonics is a [indiscernible] moment, and that's driven by basically the epitaxy capability, and exists for -- it's a very, very complex wafer substrate. So we're in discussions right now with our Tier 1 customers about what that -- what our new facilities will look like, what type of equipment we're putting in there and a lot of detail. And the equipment set that will go into that will be a 6-inch equipment set, which will be basically the first and then [indiscernible] equipment set that will go into a fab in the Photonics business. And we will then basic -- 4-inch process and we have to start with [indiscernible] 6-inch equipment set. Now you have to remember the die size or number of die on a photonics wafer is quite different from silicon. Typically, in silicon, you've got between 400 to 1,000 die depending on the die size. And whereas in Photonics, it's 1,000, up to 100,000 die [indiscernible] orders of magnitude different in [indiscernible]. So the investments required for Photonics in order to get into the -- with large volumes are actually not even in the same ballpark, between [ SEK 10 billion ] and [ SEK 14 billion ] for a new 300-millimeter line, whereas you're looking at [ SEK 100 million ] to [ SEK 150 million ] for a new Photonics line. So the CapEx investments regard are significantly smaller, even for a state-of-the-art facility. But as I said earlier on, we're in advance stages. And right now, we're in discussions with our Tier 1 partners.

Thank you. Any follow-up question?

Yes, 2 seconds. There is...

Can you discuss the opportunity on base stations, both, I mean, with your existing customer and also if there are potential to add other customers as well?

Yes. So we have a couple of customers today, both in unlicensed and licensed that make sort of base stations or sort of mesh nodes that you can see as base stations. And the best example is probably the Tier 1, which is among those that you saw Mike present here today, which is sort of the top system vendors within 5G. So I would say that the chance of winning market share and increasing SAM from almost nothing today into that business over the coming years is quite okay. And Cambium, you had them -- we had them here a year ago, presenting what they're going. And their products are now coming to market as well, more and more of them, so...

Any last questions from the audience? No. So I think we're done here. Thank you very much, Anders, and the whole team at Sivers. Do you want to add some last words?

No, I would like to thank everyone who's been here physical and everyone listening into this. It's been a pleasure having you all. And -- let's look out for the future, exciting technologies that we'll bring into the market here. And thank you so much for coming.