GSI Technology, Inc.

2021 results conference call for the quarter ended December 31st, 2020. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. At that time, we'll provide instructions for those interested in entering the queue for the Q&A. Before we begin today's call, 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, January 28, 2021, at the request of GSI Technology. Hosting the call today is Li-Ling Chu, the company's chairman, president, and chief executive officer. With him are Douglas Shirley, chief financial officer, and Ndidi A. Lusher, vice president of sales. I would now like to turn the conference over to Mr. Chu. Please go ahead, sir.

Good afternoon, and thank you for joining the call today to review our third quarter 2021 financial results. As I look back at 2020 and where we were a year ago, I am pleased with our progress. GSI entered the first quarter of calendar year 2021 with the Gemini AVU launch in progress. Our team is building new relationships with customers in many sectors where the AVU can deliver radical performance improvement in search applications. We have engaged a PR firm to build awareness and improve our revolutionary technology's feasibility. Feedback has been good and we are encouraged by the reception to Gemini. The next step is to allow customers access to the system. This time last year, we had prepared a testing and training facility at our Sunnyvale, California headquarters. Unfortunately, COVID has made this option unavailable. And instead of bringing groups into our facilities, we have had to pivot. The result is a remote one-on-one approach. Our cloud-based APU testing servers are now up and running in both of our facilities in Israel and in Somerville. These servers allow customers to remotely load their database onto the APU and test the device performance with their proprietary data and applications. I am pleased that we can now interact with our prospective customers and give them access to evaluate Gemini. The remote process is less efficient than our original workshop setup, but it's the best option we have. under the circumstance. As I stated on our last earning call, our software capability makes APU highly adaptable to new applications. Software enhancements continue to improve the device's performance, and we have successfully doubled, in some cases, tripled the system performance on response time. Next month, we will release the compiler stack for Python, a critical stack for growing the APU ecosystem. We plan to follow with a compiler stack for C++ later this year. CSI has built an exceptional software team, as evidenced by their superlative work to win first place in the Israeli Ministry of Defense Marfa Challenge. The challenge goes was to explore the potential of advanced data science methods to improve the Israeli Ministry of Defense current data products. The challenge was to distinguish between humans and animals in radar signal segments with the greatest accuracy. This was a complex challenge for the GSIT who had no prior experience in radar systems or signals. When they initiated research from very few referable words, it was clear that this challenge required a unique solution. Leveraging the algorithms we have developed on other search projects, we developed an algorithm to train a CNN model to best predict the outcome. As a result of winning all the market challenges, MAFET has introduced GSI to key Israeli aerospace and defense companies for several defense projects, as well as providing opportunities to work with MAFET to explore several computation projects employing our APU. We are pursuing a new opportunity with the development of an Elasticsearch plugin Elasticsearch is a popular open source full-text search engine that can search many types of documents. Elasticsearch recently added a dense vector that determines the document's relevance. This new addition opens the door to semantic search. Semantic search allows for a better understanding of the searcher's intent and provides better quality search results. than traditional keyword search. However, the lack of scalable or or ANN solution in ElastiSearch that can leverage the field has created an opportunity for GSI. Since many companies already use ElastiSearch, supporting ANN in ElastiSearch could be valuable especially a high-performance Elasticsearch solution that scales to a billion scale vector similarity search. In response, we developed an Elastic AMM plugin, Elasticsearch plugin as a way to enhance the core Elasticsearch functionality in a customizable manner. This plugin paved the way for billion scale semantic vector similarity search using Elasticsearch. Continuous improvement is also occurring with our hardware. We will finalize the higher performance Gemini One APU and lead up all in qualifications in the second quarter of this calendar year. This will be the Gemini One system that we take to marketplace. Our ultimate goal in 2021 is to win design from new customers for Gemini 1 in our top search categories, aerospace and defense, big data and e-commerce, job discovery, and facial recognition. For the next generation APU, Gemini 2, we anticipate finishing the design in the second half of 2021 and taking out the master by year end. We plan to launch Gemini 2 in late calendar 2022, with orders of magnitude performance cause improvement over January 1. The go-to-market timeline has been extended due to the COVID-19 pandemic, but we continue to progress the technology and build awareness. Our team has done an outstanding job on many fronts, and I greatly appreciate their hard work. I want to thank you, our federal shareholder, for your continued support. Now I hand the call over to Didier, who will discuss our business performance in further detail. Please go ahead, Didier.

Thank you, Lillian. As Lillian just explained, in addition to a novel architecture, the APU has a strong software offering. GSI's software expertise combined with the high-performance APU hardware solution is a competitive advantage versus AI solutions that are typically siloed in either software or hardware. We plan to offer the compiler and the libraries with the device, and depending on the application, we may also sell the API and the algorithms. Our software allows us to improve device performance for various applications without altering the hardware. As a reminder, our software offerings include, one, applications which are integrations for specific market applications like Biobia for drug discovery, facial recognition, image processing, and Hashcap for password recovery. Two, machine learning algorithms, which allows users to develop neural network algorithms to enhance APU applications. Three, KPIs, which are application interfaces for specific application acceleration applications. by developers. And then lastly, our compiler stack, which is the stack for algorithm conversion, framework support, and simplified low level code generation. Our first compiler stack will focus on Python. Shifting to the sales breakdown for the third quarter of fiscal 2021, sales to Nokia were 2.8 million, or 42% of net revenues, compared to 2.6 million, or 26.3% of revenues in the same period a year ago, and 3.4 million, or 51.7% of net revenues in the prior quarter. Military defense sales were 26% of third quarter shipments, compared to 18.9% of shipments in the comparable period a year ago, and 26.9% of shipments in the prior quarter. Sigma quad sales were 62%, of third-quarter shipments compared to 62% in the third quarter of fiscal 2020 and 65.4% in the prior quarter. We are unsure in 2021 the business challenges related to COVID-19 restrictions when they will subside. As a result, we are not able to have the face-to-face meetings, which are critical to our military and defense sales for the radiation-hardened SRAMs. In addition, we are not able to offer our highly productive in-house training workshops, which slows the pace of the sales process for Gemini. That said, we are seeing progress with our target customers and are looking forward to allowing remote access to our APU data centers for customer testing. I'd now like to hand the call over to Doug. Doug, please go ahead.