Hi, welcome to ABG Sundal Collier's Investor Days. My name is Hanna Forssell, and I work as an equity research analyst. I am happy to welcome Anders Storm, Group CEO for Sivers Semiconductors. The stage is yours.
Thank you so much, Hanna. Happy to be here. My name is Anders Storm. I'm the Group CEO of Sivers. I've been with Sivers now for almost eight years. I have sort of almost three decades in the data telecom industry. I've been working on the sort of turnaround of Sivers now for a couple of years. To tell you a little bit about Sivers is a company who works with sort of very high-tech solutions. We have two business units. One is within wireless, where we have 5G and SATCOM products. The other one is within Photonics, where we have different lasers for sensors and datacom type of products. Today, we have about 43 design wins within 5G and SATCOM and about 19 customer engagement within the Photonics business. Today, we're about 132 people.
We have our head office here in Stockholm. We're listed at the main market, mid-cap at Nasdaq. We also have offices in Glasgow where we have our fab for the compound semiconductors, the photonic stuff, and we also have offices now in the U.S. after the acquisition of MixCom a bit of a year ago. What are we actually doing then? We are doing the technology that sends out sort of the data or the light or the radio waves into the air, we do that for high speed or silicon photonics, so autonomous driving or radar. It's actually the light or the sort of radio waves. That's our technology, how we take it from the digital world into the world of the analog world, basically.
We do that for a lot of extremely interesting mega trends that is up and coming and also here right now. High-speed broadband for fiber to the home or 5G, we have a lot of customers in that. We have customers now in autonomous driving for lidars. We have silicon photonics, where we do things with Ayar Labs that are doing really interesting things with our technology. SATCOM order, we got one on Friday. I'm gonna talk more about that. It's a really big one, our area. Augmented reality, we do lasers for that. We also have health monitoring type of things. Where is Sivers coming from? I mean, in 2016, we were on Spotlight Stock Market. We had a turnover about 18 million SEK. We've been sort of redoing the whole company with all new products since then.
We've been sort of acquiring companies over time. We started with the photonics business in 2017. We moved to Nasdaq First North at that point as well in November. We started to bring in more and more investors. I think we had about 800 investors from the beginning. Now we're about 20,000 investors in the company. We progressed over time and added design wins and up now over 40 design wins. We also listed on the main market, and we did another acquisition in M&A, and we're accelerating the revenue now as we stand. It's been a couple of sort of challenging years now over the pandemic, but now we really see an interesting future.
Just to look a little bit about sort of what kind of things have happened over the sort of 2022, where we've seen an acceleration. We always talked about the second half of 2022 being where we sort of will see a start of acceleration, sort of after the post-pandemic stuff. We've been growing this year, 23% so far over year-over-year. We have a sort of integrated a transformative acquisition of MixComm getting into completely new areas, especially SATCOM, where we just took this huge order on Friday, which is sort of very interesting, and we are actually now using the whole wireless company to deliver on this order. It's not just the people from MixComm, but also within the former Sivers wireless that can bring in these things.
We're seeing more things, and there's a lot of that kind of things that can happen in the future. We also got multiple orders this year from our sort of big Fortune 100 customer, a consumer electronics company, which we have been working with four years now. They have totally invested in development SEK 130 million. Now they're just the second-largest company when it comes to NRE with us. That's very interesting for the future volume production for sensors for consumer electronics. The SEK 170 million SATCOM order, I'm gonna go into that. We got our first sort of larger 5G order this year for SEK 20 million. We added another Fortune 100 U.S. customer this year as well. We working with sort of very future winners like within photonics with Ayar Labs, for example.
We have a new company in South Korea who's doing things for sort of transparent antenna for mobile phones where we can actually have sort of 5G into the metaverse. In total, actually now from the twelfth of September, we added SEK 210 million in order inflow in the company, and that's a absolute record for the company, which is a very good start on the growth journey that we see ahead. If we look at photonics, what is that? It's actually something completely new that hasn't been done really before. It's actually merging the sort of light sources with the standard silicon that we use today in all different applications, where you have a possibility to get light directly from the silicon, and you can and miniaturize this, and you can do really interesting things.
Most of our customers now are based on this kind of technology. We have some really interesting patents on the type of waveguides that you can do to get the light from the silicon into the light source and then send this out into a data center or into some kind of sensor in that type. This market is really an emerging market, and we do that in a, in a material called indium phosphide, and that's a material that needs to be used to actually do a good laser. You can't do that on silicon. This type of material is sort of driving this market and looking at Yole saying, "This is gonna be a huge growth going forward." Microwave Journal was even mentioning sort of indium phosphide is the holy grail of consumer electronics in the future.
We see a very, very interesting market. As I mentioned, we have one consumer electronic customer which has already invested SEK 130 million just in getting a sensor to the market, and that's before volume production. That's a heavy investment. Another project we're really proud of being part of is with one of the coolest companies in California right now called Ayar Labs. They're doing a solution to be able to send light between the CPUs within high-speed computers in the future instead of electricity on copper. This is a technology where you can see this array here, where we have 8 different frequencies in the lasers. We can send 2 terabit of data with 90% less energy consumption. It's very sustainable also for the future of the data centers.
This company has recently got investors like NVIDIA, Intel, HP. Everybody wants to be part of this, and we are a sub-supplier of these lasers to make this happen. This is an extremely interesting market. If you wanna know more about that, look at our Capital Markets Day, where their CEO is talking about that himself. He is saying that there is sort of a $7 billion SAM, serviceable addressable market, in the future for these kind of things in the future. We are starting sort of the first type of volume production next year, and we're working with them currently to get sort of into the qualification phase on this product. Talking a bit more about this sort of consumer electronic company. I mean, we've been getting orders.
The first order in 2018 was SEK 20 million . We got orders all the way to now. This year has been the biggest year for us so far. Feels really, really good. We cannot, of course, promise that this is gonna go to volume, but if it goes to volume, this is a huge opportunity for us. You usually say that you can get everything from, sort of 2-10x in the volumes per year in this when the volume comes. It's very, very interesting. This is another Fortune 100 customer that we signed in May. This was just sort of a SEK 7 million order. This is light sources for augmented reality type of things, also extremely interesting. We'll see if that comes to the next phase.
This is still early phase, but this is the kind of customers we're signing up now, thanks to all the work we've been doing also with the first Fortune 100. If you look at the wireless business, we already sort of have signed up a lot of design wins, as you call it. We have that ranging from everywhere in 5G sort of Fixed Wireless Access, which is sort of broadband solutions. We have track to train, where you can get it into the trains. We have a lot of different things. Here you can see the 11 sort of customers and 23 ready hardwares that is out there in the market already.
It's ranging from companies like ADTRAN and Cambium, which is sort of tier two listed Nasdaq companies in the U.S., all the way to smaller startup that does really cool things with backhaul and replacing wired technology in the building. Our technology, with just a few type of sort of chipsets, we can actually service a very, very large market. This market is sort of growing. It has been a bit delayed compared to what we saw from the beginning. As you can see, sort of the 5G millimeter wave here in 2019 was sort of a $53 million market. That's gonna go to a $2.7 billion market in 2026. It is coming, but it's been sort of delayed for a few different reasons.
In the U.S., for example, they've invested in some lower frequency while they were sort of doing these high-band frequencies as well. Looking at sort of what we're doing in the SATCOM industry, it's quite interesting. The sort of the ALL.SPACE customer who was on our Capital Markets Day, they are talking about a completely new type of satellite terminal where you can actually beam steer. Before we had these big dishes, and you had to point them in one direction, and sometime you have very slow mechanical movement to sort of point at the satellite that was geostationary, which is sort of standing still at one spot then following the Earth's rotation. Now we're using sort of Medium Earth satellites and Low Earth orbit satellites like the Starlink, where you can. They fly around, thousands of them, and you sort of mix and match between and connect.
This solution is the first solution who actually can connect to any stationary and have double number of connections at the same time, make-before-break, which is really interesting for military type of applications, for example, where ALL.SPACE is really strong right now and have done a lot of testing. As you know, right now, military applications are quite important at this current geopolitical situation. Talking about the big order and what that is all about. Looking at what we're doing now, when we acquired MixComm, we got what's called beamformers and which is part of the current generation of this customer we're talking about. With this order, we're also adding two other chipsets into that solution that's gonna be the next generation.
We're gonna have four type of chipsets in the, in the second generation ground station, and they are paying us SEK 170 million over a sort of a period until June. 75% of that is going to be revenue recognized over the coming year, which is sort of comparing to a SEK 100 million turnover today. It's sort of doubling the turnover just with this order from this specific customer. Also, I mean, looking at the chipset volumes and so forth, this is a SEK 50 billion total addressable market. If we can see this sort of growth here to 2030, if our customer becomes really successful, the volumes are going to come and be quite substantive. We're talking about sort of a multiple of what this is in sort of volume orders.
We already have volumes ordered for the current chipsets that are going to start from next year. Of those SEK 210 million we have now, there's about SEK 20 million for Q1 to Q3 next year that's going to be delivered, and that's just for small, very small volumes, as you can see in the beginning. We expect this to grow very quickly later on. Here is sort of part of that order that we released on, in 21st of October. Summarizing, I mean, we are now in a lot of different, very interesting areas. Please look at our capital markets day and hear what these CEOs are saying themselves about their solutions. They are saying that Sivers' technology is vital for our solution.
We are the technology that get the signals from what they're doing out into the air or out into the analog world. Without our technology, these things will not happen. Very important and I'm so happy to be sort of partnering with these guys, be part of these kind of things. There's a lot more other things. Also to understand sort of, okay, we are a semiconductor company, and you are all sort of way back in the bus, and there's other people who's going to sort of deliver these things. There's long, long lead times in some cases. Looking at Ayar Labs and ALL.SPACE here, for example, you can see that indirectly the customers we have is like NVIDIA, Intel, HP, and Lockheed Martin via ALL.SPACE or via Ayar Labs.
Via ALL.SPACE, we have US Army, SCS, which is SATCOM company, Boeing, Telesat, Inmarsat, all of those guys becomes our customers. If we look at the sort of 5G stuff, we can talk about rail operators like Evo-rail, who now is rolling out these sort of things in the U.K. We are more and more getting into the defense industry. You might have seen Dagens industri yesterday went out with sort of Sivers' just getting more and more into the defense industry, and we have US Army, Boeing, Lockheed Martin, and so forth via these things. On top of that, we have the photonic sensors within consumer electronics, and we have automotive things within LiDAR and so forth. It's a huge amount of opportunities that we are trying to address.
The total market for this is sort of a $10 billion market where we who is addressable for us. We're starting to see now going from these development contracts, which we also going into volume going forward, we're seeing some volume orders coming. To summarize, all of this, first nine months, still okay growth, 23%. We expect much more than that in the future, as you've seen from the order pipeline. Photonics received sort of more orders, within the Fortune 100 customers. Transformative acquisition of MixComm, which is going to change a lot of things. I don't think you've seen everything yet, what we're doing, but there's a lot of things happening and we're seeing a positive move with many customers due to that.
The SATCOM order, of course, on Friday, ground-changing and a very important for us to get into that market, and we're gonna see more satellite customers coming. We have a new one, Fortune 100. We have 5G orders as well, even if it's slower, but it's coming. To summarize, I mean, SEK 210 million in orders just from twelfth of September to today is way sort of good for us and moving us in the right direction here in the future. Thank you very much and I open up for questions.
Thank you very much, Anders. My first question is, could you please walk us through the economics of your business? What sort of maintainable margins can an investor expect in the longer run?
Yeah. If we look at. There are two parts of our sort of revenue coming from. One is part is the sort of development, where we have about 70% of what we call NRE, Non-Recurring Engineering, which is 7% of revenue right now, and then we go into volume. For that, we've been lying around 40%-60% in gross margins. When it comes to the hardware that we're selling, it's dependent on the volumes and so forth, but it's also gonna be similar. 40%-60% is sort of the standard gross margins for semiconductor companies. Of course, the better you do it, the closer to 60% you get. That's sort of where we are targeting to be.
Your technology has broad use cases: 5G, fiber optic, communication, and optical sensing. How do all these fit together in the larger scheme of things, and which use case is the most likely to dominate going forward?
It all connects via this, as I said, taking things from the digital to the analog world. We are the sort of people who can sort of translate the digital data into an analog data out in the world. I mean, that's the important thing here, that we are really good at that, and we can do that both for sort of light and radio waves. That connects, and that connects to how the customers are sort of doing their stuff and how they're developing their things. I think that sort of there's so many opportunities here, so it's almost impossible to say who's gonna be sort of the biggest ones. I still think that all of these silicon photonics going to be huge.
SATCOM is sort of obviously now moving very, very quickly. 5G is a bit delayed. Still gonna be a very large chunk of the revenue in the future. I think it's gonna be a mix of all three, actually.
All right. Recently you announced that you signed a strategic development agreement with a European satellite communication company. Could you please briefly explain the importance of this agreement?
It is sort of bringing us into a sort of a very strategic partnership with this customer. First of all, we got from MixComm these beamformers and got them into their SATCOM solution. We're going deeper and sort of increasing the value of what we are providing to this customer, we're becoming sort of one of their most important suppliers when it comes to sort of chipsets. That is, of course, very important. They put the trust in us to deliver these things. It is sort of also huge for us in the way, seeing that we can actually do not just sort of volume orders in the future, but also larger NRE projects and delivering them.
I think it's a substantial importance, and it also shows that in this environment where we're probably gonna see sort of the world going into a sort of, slowing down everything, we're seeing high interest rates and all of that. We are quite sure that now we can go straight against that market and grow independently what happens because all of these things we're working on, including military and everything, that's like electricity and water. People's just gonna need that. Now we can see that growth, and we passed the pandemic in that sense, so we can now relax in those ways.
Supply chains issues and high semiconductors demand were two important topics last years. Now it seems that large global semiconductors business are guiding for lower global semiconductor CapEx. How are you impacted by these macro trends, and what is your take on the present circumstances?
I see it that fairly positive actually, or very positive actually, because one thing has been that many of our customers so far who's been in volume production is smaller vendors who have maybe not the muscles to push the semiconductor industry to get the number of chipsets they want. There's been a chipset shortage for many of them and therefore delay the technology. Now, when sort of the demand from the automotive industry and everything goes down, they will have access to more chipsets. Since we are going against the market now, sort of, and growing with these type of technologies, it's gonna be very positive for us that we can actually now get the capacity we need and want. I think it's very good for us as a smaller player. I agree.
I mean, there's a lot of information. I think GlobalFoundries are now sort of drawing down the number of employees and see sort of a downturn, but that's positive for us.
All right. Earlier this year, you completed the acquisition of MixComm. What was the rationale behind this acquisition, and how has the integration process proceed?
There's so many things about MixComm. For example, MixComm was a deep partner, and it's very close to GlobalFoundries, which is one of our sort of main suppliers for chipsets, so they have the very deep sort of into that with them. That's where we are now as well with these developments that we're doing with the SATCOM, for example. We have a tier one customer that is our first tier one when it comes to 5G that we're still working with. We have the SATCOM stuff now that we are sort of open up a $5 billion TAM, where we're now getting in, and we can see the orders from that. We have 70% of our sales in the U.S. today, which we've had that without any sort of U.S. presence.
Now we have offices in the U.S. We get closer to that. We have sort of ties into to Columbia University and DARPA money and so forth for investment in the future, and possibilities to grow maybe our photonics business and fabs in the U.S. if we like, so we become sort of a U.S.-based company in that sense. There's five, six other more things I can talk about for hours, but it's so important for us. It's very, very transformative acquisition.
My next question is, what will be your main focus the coming year?
The main focus now is to make sure that we deliver on all these things, all the promises, all the orders we got in, and also keep on building and adding more and more customers to our customer base. That's what we're working on really, really hard right now.
You talked a bit about the macro situation going on, but could you please talk a bit more about how are you affected by the current macro situation?
If we start on the boring thing about the war and everything, that has changed the situation quite heavily between East and West and also the need for military technology and also people are stopping technology to go to China and the East and so forth. That has changed things a lot, and I think we started to turn that over a bit earlier already. We have 90% of our sales in Europe and the U.S., that macro situation is quite good for us right now because we have supply chains in the West, and we don't have supply chains in the East. That's a very important piece to have now when we're delivering to military like US Army or Lockheed Martin and all of those.
We are in a very good position for that. Overall, the backside, of course, is that there's large markets like China and so forth that we can't really sell into the same way right now and focus on that, even if we're trying to find ways of doing that. You can see large companies like NVIDIA is sort of doing sort of slower CPUs that they can still sell without sort of circumvent the Biden sort of recent regulations and so forth. There's a lot of things in this happening in the market that needs to be sort of understood and what you can do and so forth.
I think overall we're well-positioned to take advantage of this right now, and as we can see with all of these military applications that we're part of now, that we will be able to do that. Military is often high margins and very safe suppliers and that so forth.
Thank you very much, Anders. Thank you.
Thank you so much.