GSI Technology, Inc.

Welcome to GSI Technologies' third quarter fiscal 2025 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, followed with the Securities and Exchange Commission. Additionally, I have also been asked to advise you that this conference call is being recorded today, January 30, 2025, at the request of GSI Technologies. Li-Lin Xu, the company's chairman, President and Chief Executive Officer, will be hosting the call today. With him are Douglas Shirley, Chief Financial Officer, and Didier Le Serre, Vice President of Sales. I would now like to turn the conference over to Mr. Hsu. Please go ahead, sir.

Good afternoon, and thank you for joining us to review our third quarter, fiscal 2025 financial results. And I am pleased to report that our third quarter demonstrated meaningful progress in our financial performance and the ongoing initiative with the APU. Let me start with our financial highlights before diving into our product development. In the third quarter, we generated revenue of $5.4 million, representing a 2% increase year-over-year and a 19% sequential growth from the previous quarter. More importantly, our cost reduction initiative has begun to bear fruit, resulting in a reduction in operating and debt losses compared to the third quarter of fiscal 2024. Looking at our excellent business, I am encouraged by the continued momentum in our core excellent segment. Revenue growth this quarter in excellent came from existing customers, resuming over at their inventory level overnight, and the growing demand from the customer for our 144-meg S1, whose systems are equal to manufacturing-leading AI chips. We anticipate this customer becoming our largest S1 customer in fiscal year 2025. Let me share a few key developments on the APU front. So far, our APU technology is progressing steadily. We made good progress using the Gemini 2 first silicon, which had a manual bug. Fortunately, software work-along made the chip sufficiently functional to put on the board for testing and software and library development. We will be able to deliver new known network models for our Gemini 2 SBIR program with the Air Force in the March quarter based on this first silicon. We are now preparing for a second spin of Gemini 2 for mass production. EDL will provide additional details on Gemini 2 in his prepared comments. In parallel, we have begun work on a new chip, PLATO will be designed to address the growing market for large language models in AI applications as a solution with its low-power features. The chip architecture will be built on Gemini 2's architecture. We are pursuing multiple funding pathways to support this $50 million development program, including discussions with strategic and financial partners. Our government business continues to expand to multiple SBIR programs. We recently announced a phase one contract with the U.S. Army, securing $250,000. In this phase, we will explore and identify best fit applications to develop specialized edge computing AI solutions with Gemini 2. This will strengthen our relationship with agencies within the Department of Defense. GDL will share more details on this new win and the status of our sub-projects. In summary, while we are encouraged by our progress, we remain dedicated to disciplined execution across all areas. Our improved operating efficiency, growing S&S sales, and strategic initiatives in commercial and government market positions as well for sustainable growth as we continue to create strategic alternatives. With that, I'll hand it over to Didier to provide more details on our APU business opportunities and cover the third quarter sales breakdown.

Thank you, Lilien. As Leline mentioned, Gemini 2 is on track for a February tapeout and availability in May and will have a new leaderboard in June. This aligns with the milestone for the Air Force's SBIR. Gemini 2 enhances AI capabilities with neural network models together with SAR imaging capability to target high-value applications in the defense and aerospace markets. Meeting these milestones should put us in a good shape to complete algorithm development and library building for delivery by third quarter of calendar 2025. Leveraging Gemini 2's architecture, we can accelerate the development of our next generation chip, PLATO, with a cost-effective, faster-to-market strategy. PLATO's ultra-low power design will target rapidly growing markets for the edge and large language model solutions. PLATO is a strategic pivot from our previous plan for developing a new next generation version of Gemini with a more economical and faster development path than the previously proposed 3D Gemini 3. The distinguishing feature of PLATO targeted for LLM market is that it can deliver data center performance levels using very low power, making it suitable for use at the edge. As Eileen mentioned, we are in discussions with potential customers who could be initial users and may also be funding sources with an expected development timeline of 12 to 18 months. I am pleased to say that our ongoing SBIR projects are on track and meeting our milestones. As a reminder, we are currently working on Phase II contracts with Space Development Agency and Air Force Research Labs and most recently announced a Phase I contract with the U.S. Army. We are preparing to deliver a YOLO algorithm for the Air Force Research Labs in the current quarter, including the benchmarks for a real-time object detection application. As a reminder, YOLO, which stands for You Only Look Once, are algorithms that immediately determine the exact placement of objects in an image by drawing boxes around them and identifying the types of object. Our second SBIR with the Space Development Agency is waiting for the delivery of a Gemini 2 board. As I mentioned earlier, we are on track to deliver this within the required timeframe. Today, we have received 45% of the $1.25 million contract and will receive the balance upon the board's delivery. We are now executing the phase one for our latest win, the U.S. Army contract. to determine which of their ongoing projects would benefit from Gemini 2's capabilities. After phase one, we will have the opportunity to compete for phase two, which could be worth up to $2 million. The focus will be on edge computing AI solutions using Gemini 2. Our key objectives are integration, feasibility assessment, and AI algorithm validation for military applications. The Army is the largest of the five branches of the Department of Defense, and with this SBIR, we are gaining exposure to this branch. Lastly, regarding our SAR projects, there has been ongoing progress in fiscal Q3. The Asian Defense and R&D organization that we have mentioned in the past is evaluating Gemini 2 for low power in-flight applications. We are advancing with a few more deliverables to prepare them to purchase a Gemini 2 board. This organization is also a potential funding partner for PLATO. Also, two other aerospace companies are evaluating our technology for image creation and onboard satellite applications for SAR. Now I'll move to the customer and product breakdowns for the third quarter. In the third quarter of fiscal 2025, sales to Nokia were 239,000, or 4.4% of net revenues, compared to 807,000 or 15.2% of net revenues in the same period a year ago and 812,000 or 17.8% of net revenues in the prior quarter. Military defense sales were 25% of our third quarter shipments compared to 28.2% of shipments in the comparable period a year ago and 40.2% of shipments in the prior quarter. Sigma quad sales were 39.1% of third quarter shipments compared to 46.9% in the third quarter of fiscal 2024 and 38.6% in the prior quarter. Now I'd like to hand the call over to Doug. Go ahead, Doug.