GSI Technology, Inc.

Welcome to GSI Technology's first quarter and fiscal year 2027 results conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will conduct a question and answer session. At that time, we will provide instructions for those interested in joining the Q&A queue. Before we begin today's call, GSI Technology 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, July 30, 2026, at the request of GSI Technology. Lee-Lean Shu, the company's chairman, president, and chief executive officer will be hosting the call today. 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.

Hello. Thank you for joining us. I would like to begin by talking about where GSI is today and where we are headed. Didier will get into the details, but let me start with my view of the business. Over the past several years, we have worked hard to move GSI from an excellent chip company into an AI platform company. to address a large and growing market for our technology. With the APU, we feel an important gap in the edge AI market. The additional GPU delivers strong AI performance but consumes too much power for many edge applications. Mobile processors offer lower power but cannot deliver the AI performance required. for many real-time workloads. The APU uses less power than traditional GPUs while delivering higher performance than today's mobile processors. We believe that our APU delivers the performance and low power usage we set out to achieve. Today, we have a Gemini 2 production chip ready for customers. We are now in the next phase of GSI, turning the APU technology into a business. The first quarter shows disciplined execution as we continue advancing our ongoing projects while pushing ahead with the plateau development. For the next 18 months, our priorities are clear. successfully completing our current proof of concept projects, expanding Gemini 2 into adjacent applications, and releasing our AI-assisted SDKs this fall. At the same time, we currently expect to keep pressure on schedule for table in March, 2027. With that, I turn the call over to Didier. who will provide further detail on this point.

Thank you, Lee-Lean. As Lee-Lean said, we've reached a pivotal point in the evolution of our APU business. We have a Gemini 2 solution for proof-of-concept projects across a variety of edge AI applications. Our focus has shifted from proving our technology to turning customers into proof-of-concept projects. Ultimately, our goal is to secure design wins that could lead to commercial deployments and meaningful APU revenue. Our near-term strategy is to work closely with a small number of customers and system integrators on proof of concept projects and applications that are well suited to the APU's advantages. Rather than developing a unique solution for every customer, we found that we can adapt the software and development tools created for one application to an adjacent one. This will allow us to expand into new Edge AI applications more quickly and efficiently. We've already demonstrated this by applying many of the capabilities developed for the Sentinel POC to our Smart City project, and we expect to build on that foundation as we pursue new opportunities in other Edge AI applications. During the first quarter, we made successful, meaningful, progress on our project POCs and SBIRs. Each of these position Gemini 2 for broader commercial adoption. I'll begin with Sentinel, which is a good example of our customer adoption strategy. GSI has successfully completed all of its deliverables for the first phase, including providing both the chip and the software. A laboratory test of the Sentinel POC was recently conducted in collaboration with G2 Tech and the participating defense agencies. Sentinel is an application where Gemini 2's performance per watt provide a clear advantage, and the platform's results in the lab test confirm this, with a time to first token, also known as TTFT, of 2.4 seconds. Preparation for the field demonstration continues under G2 Tech's leadership. We have completed all of GSI's deliverables for this next part of the POC as well. The timing of the field demonstration is now dependent on G2 Tech. Turning to our Smart City project in Shenzhou County, Taiwan, we continue to meet our Phase 1 deliverables, which means we will soon be shipping the Gemini 2 chips, servers, and software supporting the rollout for 20 cameras. We remain on track to complete the Phase 1 deployment in November. If selected for Phase 2, the project would expand to approximately 80 cameras and would add audio, to the video from phase one. This next phase would provide both additional hardware and software licensing revenue. The Smart City platform now includes a smart query capability that allows users to search surveillance footage using natural language. For example, an operator can simply ask, did you see a person matching this description yesterday? The system can quickly analyze recorded video, identify relevant events, and locate potential matches without requiring manual review of hours of footage. Pushing to our government-funded SBIRs, we're pleased to have launched our U.S. Army Phase II program with a formal kickoff meeting. We have begun preliminary work on developing a ruggedized Gemini II system for Army applications. In another SBIR for the Space Development Agency, we successfully completed radiation testing on a standard commercial Gemini 2 device with no device optimization for withstanding radiation. In the test, the off-the-shelf chip continued to be operational under radiation levels found in harsh space environments. The testing achieved the radiation-tolerant threshold typically required for radiation-hardened application and showed no single-event latchups, also known as SELs. The absence of SELs is important because that reduces technical risk for companies evaluating the device and shows that our standard chip may be suitable for some space and high altitude applications. Before I conclude, I'd like to briefly update you on an important software milestone this fiscal year. In the past, you've heard us mention plans to release an AI compiler. We have expanded on that vision and are developing an AI-assisted SDK, as Lee-Lean mentioned. This is expected to significantly accelerate AI model development and the deployment on Gemini 2. The alpha release is currently targeted for this fall. One big advantage found in early testing shows the AI-assisted SDK significantly reduces application development time. In one representative case, adapting an AI model to run on Gemini 2 previously took one engineer about a year. With the AI-assisted SDK, that work was completed in less than a month. This will help us support a broader range of customer applications while enabling us to work with more partners and system integrators. The AI-assisted SDK will also accelerate software development for PLATO by allowing algorithms and models to be ported more quickly, allowing us to bring final applications to the market sooner. To summarize, we're pleased with the progress made in the first quarter on our POCs and SBIRs. Our focus for the remainder of this fiscal year remains on executing our Gemini 2 strategy, specifically completing our current proof-of-concept projects, expanding to adjacent applications, and completing the software tools needed to support broader commercialization. Together, these initiatives will make Gemini 2 easier to deploy, enabling us to support more customers and, over time, scale our business through system integrators. In parallel, we are heads down on the Plato design and remain on track to tape out an early calendar 2027. With that, I'd like to hand the call over to Doug. Go ahead, Doug.