GSI TECHNOLOGY INC Q2 FY2025 earnings call

• SRAM business turnaround driven by existing customers depleting inventories and new SRAM design with growth potential.
• Phase 1 and 2 SBIR contracts on track to meet deadlines, with software algorithm delivery in Q1 2025.
• APU development on track for Gemini-II milestones, with software fixes for Gemini-II bugs and early hardware development of Plato APU for LLM.
• Two companies using APU for SAR applications, progressing well.
• Second quarter revenue $4.6 million, gross margin pressured by product mix and severance costs; strategic cost-cutting measures implemented to extend financial runway.

For the fiscal second quarter, GSI Technology reported revenue of $4.6 million, in line with guidance. Net loss was $5.4 million or $0.21 per diluted share. Sales to Nokia were $812,000 (17.8% of net revenues) in the second quarter of fiscal 2025. Military/defense sales were 40.2% of second quarter shipments. SigmaQuad sales were 38.6% of second quarter shipments.

• Second quarter revenue in line with guidance.
• Third quarter earnings call will provide detailed plan for Plato APU product and its applications.

• Gross margin under pressure due to product mix and nonrecurring severance costs related to workforce reductions.
• Risks associated with the company's strategic review process.

Q: Question on the SRAM opportunity, so are you saying that’s for semi equipment wafer fabrication equipment customer, or is there semi test equipment customer?

A: Along those lines, yes, we don’t want to give too much detail because right now, we don’t want to name our customer. I mean it’s been a customer we have had for many years, but they have never been a 10% customer. So, we haven’t identified them specifically. That will certainly change in the quarters coming up, because they will exceed that.

Q: But it’s associated with manufacturing. Okay. And then just on the various APUs now. So, there was a mention of something called Plato. Is that like a low-power version of Gemini-II, or what’s Plato and what’s the L that you referred to, the low-power Gemini-II?

A: Sure. So, we have – Gemini, as you know, Gemini-II L is a derivative of Gemini-II. It’s not a new design. It’s just a way that we can configure the die to make it work with 1 core or 2 core. If you recall, our Gemini-II, in fact, Gemini-I for that matter, have four cores. And so it’s a way for us to limit which – what’s working inside the chip. And so people can use kind of a smaller variable of the device, which in turn, gives them a very low power part. And so that’s – the Gemini-II L is just a derivative of our existing Gemini-II. Plato, however, is a new design. And it’s going after a different market. It’s going after the LLM market specifically on the edge. And so it will be very low power as well. If you are familiar with the LLM market today, some of the folks going after are going after with very, very large GPUs that require water cooling, what have you. And so in this case, this is more for edge LLMs and it will be a low-power solution.