Akoustis Technologies, Inc. (NASDAQ:AKTS) Q2 2023 Earnings Call Transcript

Akoustis Technologies, Inc. (NASDAQ:AKTS) Q2 2023 Earnings Call Transcript February 7, 2023

Operator: Good day, ladies and gentlemen, and welcome to the Akoustis Technologies Fiscal 2023 Second Quarter Conference Call. As a reminder, this conference call is being recorded. At the conclusion of the company presentation, Akoustis management will take questions. A replay of this call will be available on the Investor Relations section of the Akoustis website.

Tom Sepenzis: Thank you, operator, and good morning to everyone on the call. Welcome to Akoustis second quarter fiscal 2023 conference call. We are joined today by our Founder and CEO, Jeff Shealy; CFO, Ken Boller; and EVP of Business Development, Dave Aichele. Before we begin, please note that today’s presentation includes forward-looking statements about our business outlook. All statements other than statements of historical facts included in this conference call, such as expectations regarding our strategies, operations, costs, plans and objectives, including the timing and prospects of product development and customer orders, our expectations regarding achieving design wins from current and future customers, the possibility of entering into collaborative or partnering relationships, potential impacts of the COVID-19 pandemic, litigation matters, guidance regarding expected revenue, product orders and milestones for the current and future fiscal quarters and expectations regarding the integration of acquired business operations are forward-looking statements.

Such forward-looking statements are predictions based on the company’s expectations as of today and are subject to numerous risks and uncertainties. The company and our management team assume no obligations to update any forward-looking statements made on today’s call. Our SEC filings mention important factors that could cause actual results to differ materially. Please refer to our latest Form 10-K and Form 10-Q filed with the SEC to get a better understanding of those risks and uncertainties. In addition, our presentation today will also refer to certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measure is presented in our earnings call highlight release available in the Investors section of akoustis.com.

I would now like to turn the call over to Jeff Shealy, Founder and CEO of Akoustis.

Jeff Shealy: Thank you, Tom, and welcome everyone to our fiscal 2023 second quarter conference call. I am pleased to report that the December quarter was a transformative period for Akoustis. This transformation is centered around our entry into the 5G mobile handset market through the qualification of our new wafer level packages that were developed and manufactured in less than one year in our Upstate New York fab. The availability of this disruptive package technology facilitated our first design win along with a high volume order for the 5G mobile handset market, our largest addressable market by volume and revenue. In January, we completed the acquisition of privately held Grinding and Dicing Services, Inc. or GDSI, a strategic addition to our business model across multiple fronts.

GDSI has been a key part of our back-end supply chain over the past year, as we increase the usage of chip scale packaging or CSP and wafer level packaging or WLP in our XBAW RF filter product portfolio. Further, GDSI adds a critical piece to our strategy in 2023 to pursue CHIPS Act funding to reshore our back-end packaging supply chain on our existing campus in Upstate New York. Integrating and expanding GDSI into our New York operations will create an end-to-end domestic semiconductor manufacturing process supporting national security, while also creating many attractive high paying jobs in the Finger Lakes Region of New York State. Finally, for our current RF filter customers, we expect that the integration of GDSI will enable Akoustis to substantially speed up the prototype process and consequently reduce the time to market for our leading XBAW filters.

This acquisition could not have happened at a better time as demand is rapidly increasing for (ph) BAW filters that operate at frequencies in our sweet spot above 3 gigahertz in the 5G mobile, Wi-Fi, network infrastructure, defense, timing control and other markets. I am pleased to report another quarter of record revenue with 5% sequential growth over the September quarter. Our XBAW filter revenue grew sequentially in the December quarter and we expect continued growth on a quarterly basis moving forward. This revenue growth was achieved despite significant macro headwinds across most of our operating segments. Looking ahead to the March quarter, we are expecting 20% to 40% sequential growth across multiple products and services participating in multiple end markets.

The weakening demand in the tech sector along with several other macro challenges may impact the rate of growth of our business in the near term, which is consistent with recent commentary and guidance from other semiconductor companies. During the December quarter, we experienced broad weakness in our SAW filter business in end markets such as automotive, IoT, medical devices, and particularly in China and Europe. We expect strengthening in our SAW business in the current quarter, however, in our XBAW filter business, we expect to see growth increase in the second half of the calendar year as we ramp in mobile and our next generation Wi-Fi 6E products begin to ramp with multiple customers While we navigate near term challenges, we continue to expect incremental sequential growth each quarter throughout this calendar year.

Further, we remain focused on executing our entry into the 5G mobile device market with volume shipments beginning this quarter providing Akoustis with a significant opportunity to grow rapidly in both unit volume and revenue for the foreseeable future. I would now like to give a brief update regarding the CHIPS and Science Act of 2022 and how Akoustis hopes to benefit from the act. The CHIPS Act legislation was introduced and authored in part by Senate Majority Leader Chuck Schumer. Its goal was to boost U.S. competitiveness with China by allocating tens of billions of dollars to increase domestic semiconductor manufacturing and science research. As some of you may recall, Senator Schumer has personally visited and toured the Akoustis fab in Upstate New York twice once in June 2021 and again this past September.

He was pleased with the growth in manufacturing capacity and new jobs that we have delivered over the past year. Akoustis senior management is working closely with the local, regional and state government of New York along with Senator Schumer’s office to support implementation of CHIPS Act opportunities in Upstate New York, which we expect will present a significant opportunity for the revitalization of Upstate New York semiconductor presence and in particular, the Greater Rochester area where Akoustis RF filter chip manufacturing facility is located. Over the past five years, Akoustis has proudly manufactured its innovative RF filter chip products in the USA. We believe the chips funding is meaningful to Akoustis and its shareholders and that we perfectly fit Senator Schumer’s blueprint to make New York the global innovation and semiconductor hub.

We plan to apply for funding under CHIPS Act shortly after the submission window opens to add multiple new 8 inch silicon wafer manufacturing lines at our New York site. In addition, given the supply chain delays, energy shortages and constraints associated with our Asia packaging partners, we hope to secure CHIPS Act funding to leverage the back end expertise of our GDSI business to build a U.S.-based advanced packaging center for the purpose of reshoring our packaging supply chain to reduce product costs and deliver our filter products with shorter time to market. This U.S. packaging facility would support Akoustis XBAW filters as well as be offered to GDSI’s 250 plus customers requiring back-end services. With respect to the possible magnitude of the funding for Akoustis, we previously indicated the magnitude of our proposal could be a multiple of the current market cap of Akoustis.

Of course, there is no guarantee that we will receive the amount of funding in our proposal and it is noteworthy to say that the requirements and processes for submitting a proposal for funding under the CHIPS Act is yet to be published. The projects financed by such funding would position Akoustis to manufacture and deliver billions of XBAW filter chips annually and to serve both Tier 1 and Tier 2 mobile device companies for 5G smartphones, as well as other multi-billion dollar end market including 5G network infrastructure, high frequency Wi-Fi devices and other wireless markets. I would now like to provide a little more color on our primary target markets. We recently achieved one of the most important milestones in company history allowing us to participate in the 5G mobile market with the completion and qualification of our internally developed wafer level packages or WLP.

This new package technology is significantly smaller than our legacy technology and is the key that has allowed us to enter the 5G mobile device market, where miniature size is a gating factor. Our new packages are pin-for-pin (ph) compatible with rival BAW filter competitors and enable Akoustis to compete strictly on performance where we believe we can pair quite favorably. Bringing the WLP process in house enhances substantially our ability to control the quality, cost and customization of our advanced packages. The successful development and qualification of our new WLP Solutions facilitated our first 5G mobile design win and follow on high volume order both of which we announced in the last two months. This new filter solution will be incorporated in our customers’ multiplexer for 5G mobile handsets and other portable devices.

The multiplexer supports a major 5G mobile chipset reference design that is planned for introduction in the first half of calendar 2023. We expect to begin shipping to this first 5G mobile RF component company customer in the current quarter. And finally, during the December quarter, we delivered the first of two filters, one of which will be down selected after both have been completed and tested to a Tier 1 RF front end module customer that is targeting a production ramp in calendar 2025. The customer is leveraging our leading XBAW technology to develop a filter that can address difficult coexistence issues in 5G mobile and is expected to develop additional filters using our technology upon the successful completion of this initial design.

Next, I would like to discuss recent developments in our Wi-Fi business. During the December quarter, we announced three new design wins in Wi-Fi 6E for carrier class applications. We received two of the design wins from a leading European Wi-Fi OEM that will be using Akoustis’ 5.5 gigahertz and 6.5 gigahertz standard XBAW coexistence filter solutions, as well as our 5.6 gigahertz and 6.6 gigahertz standard XBAW coexistence filter solutions that allow for greater usage of the UNII-4 band. The first Wi-Fi 6E router entered production at the end of calendar 2022 and the second router is expected to begin ramping by the end of March 2023 quarter. The third design win is from a global network communication solutions provider that will be using Akoustis’ 5.6 gigahertz and 6.6 gigahertz standard XBAW coexistence solutions in a Wi-Fi 6E extender for its carrier partner with a production ramp expected by late summer 2023.

In October, we announced new next generation Wi-Fi 6E and Wi-Fi 7 filter solutions designed to meet the stringent rejection requirements enabling coexistence with the UNII-1 through 3 and UNII-5 through 8 frequency band. They offer what we believe is the best out of band rejection capability available today and at a significantly reduced size given our new chip scale packages. We expect to fully qualify these next generation Wi-Fi 6E and Wi-Fi 7 products and ramp production in the first half of the current calendar year. Switching from legacy packaging to our new advanced WLP and CSP products is expected to greatly improve our gross margins over the next 12 months to 24 months and supports our effort to achieve cash flow breakeven in the first half of calendar 2024.

The Wi-Fi market continues to experience significant disruption from the supply chain issues we have discussed previously as well as new headwinds in the retail market that have emerged with the impact of inflation on consumer spending. Overall, this market is characterized as performance driven, but competitive. Nonetheless, we continue to increase the number of design wins in high frequency advanced Wi-Fi given that we were an early entrant in Wi-Fi 6 Dixie and Wi-Fi 7 BAW filter solutions and today have one of the most extensive high frequency Wi-Fi portfolios that address the enormous challenges of difficult dual bank coexist, wide bandwidth operation within the 5 gigahertz to 7 gigahertz frequency spectrum. While near term macro supply chain issues remain, we are executing on design wins, new production ramps and new product development at a higher pace than ever before and we expect the outlook will improve quickly once the broader supply chain issues improve.

And now I would like to discuss our network infrastructure business highlights. During the December quarter, we received an order for the development of an ultra-high band demonstrator from a Tier 1 5G network infrastructure customer. If the demonstrator is successfully received, our customer plans to develop a 5G massive MIMO XBAW filter solution for a multi element array. Recently, we’ve engaged an additional Tier 1 OEM for the same frequency and end application. We continue to ramp production with three Citizens Broadband Radio Service or CBRS infrastructure companies in the December quarter. We expect these three customers to continue to ramp throughout calendar 2023 and beyond. We started to ramp our 3.5 gigahertz 5G network infrastructure filter with a new network infrastructure customer in the December quarter.

This is the second design win we have received for this filter. Our customer is targeting both Small Cell and MIMO applications with our XBAW filter in the European and Asian network infrastructure markets. We are sampling the first iteration of our 3.8 gigahertz XBAW infrastructure RF filter for the U.S. 5G C-band market with multiple OEMs and expect to see greater Small Cell adoption beginning in second half of calendar 2023. And now, I would like to provide an update on our other business segment. As mentioned at the beginning of this call, we concluded the acquisition of GDSI, which closed on January 1, 2023. The acquisition brings a new cash flow positive services business to Akoustis with 250 plus customers, significant technical expertise in back-end services and alignment with our strategy to leverage the CHIPS Act to create new jobs and reshore core packaging technology from Asia.

In our Defense contract business, we continue to progress on our existing multi-year, multi-million dollar contracts with DARPA to further enhance our XBAW PDK and scale our XBAW technology up to 18 gigahertz. We achieved a critical milestone during the December quarter and are making excellent progress towards scaling our technology to 18 gigahertz for our customer. The milestone achieved was enabled by our patented single crystal piezoelectric nanomaterials, which are unique to Akoustis in the BAW filter industry. During the December quarter, we completed and shared new XBAW resonator data targeting X band frequencies for a Tier 1 defense customer. Our next step is to simulate two XBAW filter designs utilizing the resonator model for this X band application and we expect to move toward product development upon successful completion of the design study.

Our RFMI business experienced challenges in the December quarter that we believe will be short term in nature. These include a decline in the automotive market in China due to COVID lockdowns, general softness in its European business, which was impacted by the economic realities associated with the Russia, Ukraine war and rising inflation and overall weaknesses in the medical market. While January will experience the expected seasonal headwinds associated with Chinese New Year, we do expect revenue from this segment to increase sequentially in the current March quarter and return to a more normal run rate as calendar 2023 progresses. We continue to make progress with our two XBAW timing control products and expect to complete the qualification of the first-two solutions in the first half of this calendar year.

The timing RF market represents a significant new opportunity for Akoustis in both unit volume and revenue. Our primary customers developing products that could be disruptive in the timing RF component market. Looking to displace older analog technologies with ultra-low jitter and phase noise devices. We are extremely excited that our leading XBAW resonators can offer our customers disruptive performance. And now, I would like to hand the call over to Ken to go through our financial highlights.

Ken Boller: Thank you, Jeff. For the second quarter ended December 31, 2022, the company reported revenue of $5.9 million, which is an increase of more than 5% over the prior quarter ended September 30, 2022, and representing an increase of 160% year-over-year. On a GAAP basis, operating loss was $12.9 million for the December quarter, mainly driven by revenue of $5.9 million offset by labor costs of $8 million, depreciation of $2.6 million and other operational costs totaling $8.2 million. As a result, GAAP net loss per share was $0.19. On a non-GAAP basis, operating loss was $10.6 million and non-GAAP net loss per share was $0.18. Reconciliation of these amounts to the corresponding GAAP measures is available in the press release issued this morning available on the Investors Section of our corporate website.

CapEx spend for Q2 was $3.2 million, a decline from $4.8 million in the prior quarter, reflecting the approaching completion of the capacity expansion and equipment redundancy project in the company’s New York fab. Cash used on operating activities was $11.2 million, down 25% from $15 million in the prior quarter. The company exited the December quarter with $46.6 million of cash and cash equivalents versus $60.7 million at the end of the previous quarter, primarily resulting from cash needed to fund operations and CapEx spending. Subsequent to the end of our fiscal second quarter, on January 24, we closed an underwritten public offering of approximately 12.5 shares of common stock at a price to the public of $2.75 per share, partially used to cover the acquisition of GDSI.

Net proceeds to Akoustis after deducting the underwriting discount and estimated offering expenses payable by Akoustis were approximately $32 million. In the current March quarter, we expect multiple new Wi-Fi 6E and network infrastructure customers to ramp production along with our recent GDSI acquisition. And therefore, we expect to see record revenue with revenue up between 20% and 40% sequentially from the December quarter. And based upon our growing backlog of design wins, we anticipate that top line growth will continue into our next fiscal year and beyond. I will now turn the call back over to Jeff to discuss our third fiscal 2023 quarter performance and future milestones.

Jeff Shealy: Thank you, Ken. We are expanding our market share in CBRS and now 5G infrastructure, experiencing strong demand for our next generation Wi-Fi 6E and 7 products that are expected to ramp production in the June quarter. The big news, however, is that we have developed and qualified new wafer level packages, which have led to our first design win in high volume order for 5G mobile filters from a Tier 1 customer, the customer’s module powered by our XBAW resonators is on a leading 5G mobile SoC chipset, reference design and we are excited to be positioned to penetrate what is our largest market by units and revenue for the first-time in calendar 2023. Looking ahead, our anticipated March 2023 milestones include: in our Wi-Fi segment, we expect to announce our first Tier 1 Wi-Fi 7 SoC reference design win, further we expect to ramp a recently announced Wi-Fi 6E win with a leading carrier class customer, and we expect to secure our first Wi-Fi 7 design win.

For our 5G mobile segment, we expect to begin shipping filters to our Tier 1 RF component company customer against our 5G mobile high volume order. In addition, we expect to deliver the second iteration of a XBAW filter solution to our third Tier 1 RF front-end module customer. And we expect to complete the second of two filters to our second Tier 1 RF module maker customer for testing and down selection. Next, in our 5G network infrastructure segment, we expect to receive an order for an n77 5G massive MIMO structure received filter solution. We expect to sample in the first half of calendar year 2023, a new band 41 (ph) 5G filter solution for Small Cell base stations targeting the U.S. market. And finally, in our other market segment, we plan to sample a new CV2X XBAW filter solution for the automotive market.

And finally, we expect to complete the qualification in the first half of calendar 2023 of two resonators for the timing market from our first customer. In conclusion, We believe the market opportunity for our patented high frequency XBAW filters is substantial. As of January 27, we now have 80 issue patents and 127 patents pending as we continue to build a substantial IP mode around our technology. We continue to work diligently to achieve each of our stated objectives and we will continue to provide updates on our accretion against these objectives going forward. Finally, I would like to thank our employees for their hard work, passion and dedication, which accounts for multiple design wins across the Wi-Fi, 5G network infrastructure and defense markets.

We have also experienced an exceptional momentum in the 5G mobile market driven by our leadership in filters that operate above 3 gigahertz and our new and expanding wafer level packaging capabilities. I also wish to thank our shareholders, who continue to support our company. And with that, I would like to open the call for questions from the investment community. Operator, please go ahead with the first question.

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Q&A Session

Operator: Thank you. At this time, we will be conducting a question-and-answer session. Our first question comes from the line of Harsh Kumar with Piper Sandler. Please proceed with your question. Again, Harsh Kumar, are you on the line? If Harsh Kumar is not on the line, we’ll proceed with the next…

Harsh Kumar: Yeah. I’m sorry. I apologize. I was muted. Jeff, congratulations to you and your team, some excellent news here on a lot of different fronts. The first question and I had Jeff was on the 20% to 40% sequential growth and kind of the drivers. I wanted to understand, if this is — I know there are a couple of areas you mentioned that are going to be stocked associated with macro in China. But are the core markets generally speaking on track or is this pretty broad-based revenue growth or is this coming from one or two specific areas? And then I had a follow-up as well.

Jeff Shealy: Okay. Good morning and appreciate your question. Let me get Dave to start in here and Ken may want to comment, but I’ll start in with some couple of comments as well. Dave?

David Aichele: Yeah. Good morning, Harsh. The growth is pretty much broad-based. We had good distribution of revenue across all sectors in last quarter with Wi-Fi base station. And the mobile picking up Defense and the contract government contract. So it’s pretty well spread. We are seeing this quarter the growth coming from those sectors as well as picking up more in the mobile as we start to you know, chip that high volume orders that was mentioned in the script.

Harsh Kumar: Great, guys. And then, yes.

Ken Boller: Just to add to that, this quarter, the March quarter will also include our current acquisition of GDSI’s revenue. So we have previously guided there about $1 million to $1.5 million in additional revenues for this quarter with the March quarter typically being the lowest quarter for them in the calendar year.

Harsh Kumar: Of course, great. And then Jeff, you also kind of went out and mentioned that this will be a Europe grow generally speaking that you don’t expect it down quarter as such. And I know there’s a lot of good stuff going on in the design win side, but maybe help us frame the cadence of the quarter or the linearity, if you will, do you expect a much better second half like all the other cellular companies are talking about or do you expect growth to be pretty evenly spread out?

Jeff Shealy: Harsh, yes. And another thing I’ll point to just on the revenue front is, we mentioned we had a significant dip in RFMI in the December quarter. So that business — we’re expecting that business to kind of get back to normal levels in the second half. But if you look at the kind of the core business of the company, we do expect ramping in the mobile. Dave talked — touched on that and we touched on that in the script that’s going to begin later this quarter. And we expect to continue adding orders to that — for that particular customer and continue following production on that throughout the year. In addition, we mentioned some other things in the script, which I want to point our investors too. We mentioned in Wi-Fi, significant activity.

If you look at the dominant activity in the design wins, it’s in 6E and Wi-Fi 7. For investors that may have been at the CES show significant activity and really connecting everything along that front. So we mentioned in the — adding some — a leading carrier class customer that’s we’re expecting that to begin ramping at the very end of this quarter and particularly beginning of next quarter. We continue to grow in the network infrastructure. We talked about activity increasing. We mentioned specifically two customers in the massive MIMO area that we’re currently working on solution. So we expect continued growth there. And then really in the other class, we’ve got activity really in all segments, but we mentioned the timing market we would expect that to complete disqualification and then began ramping in that market as well.

We continue to execute and also in the other segment’s market on our contract business with DARPA. I think this year could be a pretty significant year along the contract front, particularly in the second half, both not only we’ve mentioned in the script that our proposal with chips that’s particularly in the manufacturing area. I think it would be a pretty good assumption to believe there’s other assets in R&D that we’ll be applying for. And those can be certainly significant growth drivers on the R&D — contract R&D front. Hope that gives you some context.

Harsh Kumar: No, it does. Thanks, Jeff. And my last one, I’ll get back in queue is, typically when we hear of design wins on the mobile side, we hear of a platform, not just companies don’t — OEMs don’t give out just one phone. So I was curious, if you could provide some color, is this a whole platform that you’re winning or one, or is it bigger than that or smaller than that? Just any kind of color would be helpful and anything to the magnitude of ASPs would be great, if you can?

Jeff Shealy: Yeah. Dave, if you’d start there, I’ll certainly get some color as well.

David Aichele: Yeah. And we’ve commented on this in the press release with the design win. It is in a RF component manufacturer that’s doing a Tri-Flexor and they are designed into a Tier 1 major SoC provider. So it is a typical reference design that you would see go to multiple customers. So the pickup rate, we we’re working with our end customer to understand who the end — their end customers are going to be once it gets designed into the platforms. This is mainly targeting the China mobile market. So even though the China mobile market is depressed and we’ll hopefully pick up latter part of this year. It’s still a new opportunity for us going into new platforms. So it’s a pretty significant growth opportunity for Akoustis and it’s our first design win that will leverage to multiple opportunities in the future is the target. So that’s a short summary on. And Jeff, do you have any other additional color?

Jeff Shealy: Yeah. I just sound — obviously, give you some feel. As you kind of look out at the spectrum, you look at the high bands where you’ve got 5G bands in the 3 gigahertz to 5 gigahertz. We’ve been very vocal about the work we’ve been doing in the 5 gigahertz to 7 gigahertz and Wi-Fi 6, 6E and 7. So if you take a generation look back at 4G and where all the coexistence problems is where you get all these bands stacked up against one another. And I think, it’s — what our solution addresses is the coexistence challenges in the high band, particularly in the bands I just mentioned. So in addition to the reference design that Dave touched on focusing on China mobile. I think it also would be safe to assume not only that we believe the product is being marketed as on a reference design, but also to some large direct customers in the Tier 1 market.

So that gives you a little bit of color. I would also add that the one project that we publicly announced, there’s significant R&D that’s going on behind that product for a potential new business, which will keep investors updated on a move forward basis.

Harsh Kumar: Thanks, guys. Thank you.

Jeff Shealy: Thank you, Harsh.

Operator: Our next question comes from the line of Anthony Stoss with Craig-Hallum. Please proceed with your question.

Anthony Stoss: Good morning, guys. My congrats as well on the continued progress. Jeff, if you wouldn’t mind, I know and maybe I missed this on the call, you’re shipping to 15 different customers now. Maybe can you share your thoughts on where you think you’ll be exiting this year and maybe going forward? And then maybe a tougher question for you, but I like the fact that you highlight you expect to be cash flow breakeven in the first half of 2024 on a large uptick in gross margins. Maybe help us think about where gross margins could be in 2024, 2025 considering different revenue rates?

Jeff Shealy: Yeah. So on the customer front, let me bring in Dave and maybe I’ll add some color. But on the cash flow breakeven in gross margin front. I’ll pull Ken in for that. I’ll make some comments as well Dave. If you start on the customer, kind of how you see that expanding.

David Aichele: Yeah. Good morning, Tony. So the 15 customers, a large percentage of those right now are the Wi-Fi customers, Wi-Fi 6, Wi-Fi 6E. Some of the Wi-Fi 6 programs are going end of life and they’re getting replaced by new Wi-Fi 6E programs and then Wi-Fi 7. We have a handful of the base station designs that we’re also going to be picking up. That’s a longer secure rate than what we see in the Wi-Fi side and we’re pretty well spread across the Wi-Fi between enterprise and carrier and also retail. And we continue to engage with those customers and with our opening of the Taiwan sales office, it’s given us a greater visibility and opportunity to work closer with the ODMs as well. So I expect that we’re going to continue to pick up one to two customers every three to four months.

So by the end of the year, along with base station, we should be north of 25 — north of 15 somewhere around close to 20 customers. And we’ll continue to work on the other sectors as well with our RFMI acquisition, getting into IoT, also the medical and more activities happening right now around automotive, which is good, but that’s a little bit longer cycle time to get designed in as well. RFMI is doing what we had targeted by opening up doors with the automotive customers and we’re starting to introduce some of our BAW technology in for the CD2X and then looking closer at some of the telematics applications and having them as a unit that basically is qualified to automotive standards is helping us to accelerate some of that activity. So yeah, it’s robust.

The opportunity funnel is very large and we expect the activity to be pretty, pretty quick on moving these things forward.