GSI Technology, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to GSI Technologies' first quarter fiscal 2023 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 question-and-answer. 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've also been asked to advise you that this conference call is being recorded today, July 28th, 2022, at the request of GSI Technology. Hosting the call today is Li-Lin Chu, the company's chairman, president, and chief executive officer. With him are Douglas Sherrill, chief financial officer, and D-Day LaFerre, 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 us to review our physical 2023 first quarter financial results. Our legacy S&M business, with its stable revenue and cash generation, continues to fund our APU hardware and software R&D. In the first quarter of fiscal 2023, we delivered a year-over-year increase of 12% in gross profit or modest revenue growth. Our growth margin, retention to 60.2%, was related to the product mix in the quarter. As a result, we reduced our operating loss from the same quarter a year ago and narrowed our land loss for the first quarter. At the end of the quarter, we have cash, cash equivalents, and shorter investments. of $41.5 million. The foundation provided by our historical estuarine business supports the next phase of growth at GSI with the APU business. We have further growth opportunities from our radiation-hardened and radiation-tolerant estuarine products. We have expected to receive a radiation-hardened estuarine order from a prime contractor in the June quarter However, there has been a delay due to a request for additional specification review. We now expect this order to ship in the second quarter of fiscal year 2023. Didier will provide more detail on this announcement in his comments. The team continues to advance AP opportunities on several fronts. We expect to launch search and AI, all SaaS platform, to be available for alpha users this quarter to address a growing segment of customers interested in cloud only. The SaaS platform is delivered as a subscription service that runs on GSI servers without readable. Searching AI accelerates ElastiSearch and OpenSearch workflows. This approach provides an economic solution for business scaling to large capacity, including billion-factor datasets, without losing accuracy. Searching.ai also offers fast vector search, providing high-speed, accurate search of large vectorized text, image, video, and audio database. The platform uses simple API integration into a customer's workflow, enabling rapid deployment and use. The search market is rapidly growing, as evidenced by the success and the growth of Elastic.com. Database users need enhanced search capabilities with real-time log analysis and visualization, and support for high-volume queries. with the ability to run a million queries simultaneously. Working with a hundred or few in big data table, when speed is a crucial and growing need, our SaaS offering can provide increased speed and scalability without losing accuracy. We are excited about making Searching.ai generally available to all customers, which is currently scheduled to occur by the end of calendar 2022. In July, we released the first version of the full stack compiler for the APU product called the Copperhead. This release is a combination of 18 months of effort that created a high-efficiency L-Python compiler for development of code for host processor, embedded processor, and APU processing array. This breakthrough development brings L-Python which provide the familiarity and the programming environment benefit of Python with the speed of Sheet to the development of real-time big data AI applications supported by the APU. The CoverHead compiler currently supports low-level library cores and intermediate development for linear algebraic algorithm acceleration. It's available to select select the alpha customers and has shifted to external companies as well as being used internally to migrate previous C library within GSI for the APU. GSI will increase application library migration to Coverhead over the next courses. We currently expect to add convolution, keycam, image processing, SAR, and the general high-level application code development by mid-calendar 2023. Currently, we have numerous early-stage APU projects. They are in the initial discussion phases. Several of the large opportunities are with new contacts that arose from our first-place win in the MoSAC challenge. In that challenge, our software performed the fastest and most accurately at various distances and under diverse lighting conditions, using images from real-time HD video source from moving drone. This capability has many applications in the large global security market. Using our military and defense business contacts, we are leveraging the approach this accomplishment has brought to GSI. In addition, one of the most challenge sponsors was the Mirage Institute. an organization committed to promote economy growth between Israel and the U.S. One function of the institute is to facilitate business development. And as a result, we have made several valuable new connections and are engaging with new companies to discuss the Gemini platform. Another outcome of the Mosaic Challenge was the ependiscope of our existing SAR project. with the ELTA slash MAFET. This project is advancing, and we are preparing for the final integrations. The POC with ELTA is funding a SAR image processing system based on our APU technology. We're currently anticipating shipping three APU servers with up to 16 data exports in the server to ELTA by mid-calendar 2023. The NRE funds from ELTA have been used to develop an inclusive perpetual license of the fast stack projection algorithm. This agreement with ELTA will allow GSI to sell a SaaS system product containing the algorithm. We intend to pursue the entire SaaS market with this product. In fiscal year 2022, we increase customer engagement for the APU. and make contact in new market segments. We are in early stage of working with numerous POCs and expect to further our engagement. In fiscal year 2023, we start building the team we needed to initiate Gemini outreach and manage the process of moving customers through the pipeline from proof of concept to design wind and ship products. We have a roadmap for the APU and the next generation of Gemini is on track. The design of Gemini 2 has been finalized and we are at the final present law layoff stage. We are on target for tipping off at calendar year end. Gemini 2 is a highly integrated product that offers great improvement over Gemini 1. It will improve the speed performance by 8 times, has 8 times more internal embedded memory, reduce the cost to one quarter on the car level, and greatly expand our addressable market. We currently intend having the first city compacted unit for the Gemini 2 by calendar Q2 next year. GSI shareholder has been asking for accountability and transparency. I want to assure our shareholders that I understand your frustration, and as the largest car shareholder, I feel that myself. Many people on my team are also large shareholders, some of whom have worked with me for decades. I have a sense of urgency to deliver on all goals and create a market for the APU that I know is possible. I welcome open dialogue with all shareholders, and I value your input. My intention is to make fiscal year 2023 the turning point for this company. by building a meaningful pipeline for the APU and closing new business for our groundbreaking technology. Now, I will hand the call over to Didier, who will discuss our business performance for the fiscal year.

Thank you, Lilien. Let me start with an update on our radiation-hardened or rad-hard SRAM business. We shipped four prototypes to three separate rad-hard customers in the last fiscal year. All the customers are currently testing these systems that require chips to withstand harsh conditions. As Leline mentioned, we expected another red hard prototype order in the first fiscal quarter. The release of the purchase order from this prime contractor was delayed to this current quarter. We have the parts ready to ship, so once we have the order, the parts will ship. This prototype order could potentially be the same revenue magnitude of all of our radiation hardened orders in the last fiscal year. As a reminder, RadHard is a high growth profit product for us. And if a few of these prototypes move into production, it could add incrementally to fiscal years 2023 and 2024 revenues. Let me switch now to customer and product breakdowns for the quarter. In the first fiscal, I'm sorry, in the first quarter of fiscal 2023, sales to Nokia were 1.3 million or 14.7% of net revenues compared to 3.8 million or 42% of net revenues in the same period a year ago and 2.0 million or 23.1% of net revenues in the prior quarter. First quarter fiscal 2022 net revenues included orders for buffer stocks shipped to Nokia amounting to approximately 1.0 million that were made in anticipation of a continued market tightness. Military defense sales were 22.3% of first quarter shipments compared to 20.0% of shipments in the comparable period a year ago and 22.3% of shipments in the prior quarter. Semi-quad sales were 44.8% of first quarter shipments compared to 63.6% in the first quarter of fiscal 2022 and 47.6% for the previous quarter. Lastly, I want to comment on the current supply chain situation. We currently moved the majority of our chip substrate suppliers out of China last year to limit the potential delays by any COVID-related lockdowns in China could cause. We are actively addressing supply chain variances that could potentially impact our order fulfillment, but the situation remains fluid. Overall, most of the cost increases from our suppliers were successfully passed on to our customers in December of 2021. We are closely watching costs and evaluating if we need to change prices in the future. GSI and the industry as a whole are constrained by the availability of FPGAs. Since we use FPGAs on our leaderboards, we could potentially be constrained if we receive a large order for an APU platform. So we are still confident that we can fulfill orders that we have in hand and for the upcoming quarters for our SRAM customers and are optimistic that we have sufficient capacity to meet this demand. I'd now like to turn the call over to Doug. Go ahead, Doug.