GSI Technology, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the GSI Technologies second quarter fiscal 2020 results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. At that time, we will provide instructions for those interested in entering the queue for the Q&A. Before we begin today's call, the company has requested that I read the following Safe Harbor statement. The matters discussed in this conference call may include forward-looking statements regarding future events and the future performance of GSI technology that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties are described in the company's Form 10-K filed with the Securities and Exchange Commission. Additionally, I have also been asked to advise you that this conference call is being recorded today, October 24, 2019. at the request of GSI Technology. Hosting the call today is Lee-Lean Shu, the company's Chairman, President and Chief Executive Officer. With him are Douglas Schirle, Chief Financial Officer, and Didier Lasserre, Vice President of Sales. I would now like to turn the conference over to Mr. Shu. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining us to review our second quarter 2020 financial results. The revenue for the quarter was $11.7 million within the range of our guidance provided on the first quarter's call of $11.6 million to $12.6 million. Gross margin in the second quarter was 56%. At the high end of our guidance, 54% to 56% provided earlier last quarter. Dr. Schirle, our CFO, will provide additional comments on our financial results in his commentary. This is an exciting time for GSR Technology. In the second quarter, we successfully advanced our Gemini One chip on Luminous Front. We are on track for upcoming customer training section in similarity search applications at our U.S. headquarters. We have also begun benchmarking our device against industry standard benchmarks. We are currently testing our device against the one million item database benchmark and will soon be testing against benchmarks with larger database of 10 million, 100 million, and a billion items, all of which we expect to complete before calendar year end. We are also preparing to run the large database benchmark on the multiple card system early next calendar year to demonstrate the scalability of our device. The third silicon spring of Gemini One is expected by TSMC later in the third physical quarter. In addition, we are bringing out the production cards in preparation for customer demonstration and are expecting the balls to be ready early next calendar year. Our AI team continues to develop the software library and algorithm for our expected release of Gemini 1 in calendar 2020. We are very fortunate that our core business generates sufficient cash to support our new product roadmap and the funding of our ongoing R&D budget. The focus of our R&D spending and the work by our engineering team is the Gemini roadmap, which include Gemini 1 and Gemini 2. All of the preliminary work that we have done with our customers and our benchmarking shows that our device will increase data processing speed with very low operating power and a scalable architecture. The most distinct feature of Gemini is the memory circuit design combining GSIs, core capability, in memory chip design with our AI software expertise. Gemini has impressive capability including the programming interface that allow multiple labels of custom programming from assembly code up to TensorFlow Python. We have made tremendous progress on our path to launch our new product by sustaining solid financial performance in our core business. to fund this goal. There are numerous exciting new market opportunities ahead for the company, and we are making clear progress on attaining our goals. We are making clear progress on attaining our goals. I would like to thank my team for all their hard work and the commitment to our vision and performance in further detail. Please go ahead, Didier.

Thank you, Lee-Lean. Switching gears to our new product category, We have made significant progress on our radiation-hardened SRAM. The RADHARD device continues to track completion of our internal qualifications by the end of this year. RADHARD sales, however, have been delayed. The prime contractor awarded the program has made a decision to stay with the legacy design due to the aggressive time schedule of the program. On the radiation-tolerant family, we are currently tracking two programs that we anticipate to close in the next two quarters. Looking at our sales breakdown, in the second quarter of fiscal 2020, sales to Nokia were $5.3 million or 45.2% of revenue compared to $6.0 million or 46.6% of revenue a year ago and $6 million or 45.7% of revenue in the prior quarter. Military and defense sales were 23.4% of second quarter shipments compared to 16.4% a year ago and 21.0% in the prior quarter. Summit Quad continues to be our best performing product category with sales of 63.5% of second quarter shipments compared to 66.4% last year and 67.9% in the preceding quarter. I'd now like to hand the call over to Doug. Doug, go ahead, please. Thank you, Didier.