Good morning, welcome to the second day of the 51st annual TMC Conference. My name is Bill Peterson, I'm the clean tech analyst here at the firm. Really pleased to have Enovix, Raj Talluri, the CEO is here to, you know, join the fireside chat. We have a lot of prepared questions, certainly willing to take the questions from the audience as well. This is being webcast, please wait for the microphone. Raj, thanks for joining. Maybe perhaps you can just provide a, you know, brief introduction of yourself as well as the company, and we'll move on to the fireside.
Yeah, absolutely. Thank you, Bill. Good morning. Really great pleasure to be here in Boston. Quick introduction to me. I spent most of my career in semiconductors in. I spent 16 years at Texas Instruments, about nine years or so at Qualcomm, then I was there for about five years at Micron. My last job at Micron, I was running the mobile division, about a $7 billion division in 2022. Super exciting. We were making DRAM and NAND devices for mobile phones. Being in mobile and consumer electronics for a long time, really exciting space. I've been at Enovix for about four months now, a little over four months. Love the job. It's been a very exciting tech piece of technology.
Solves a much needed problem to be solved in consumer electronics, which is providing higher energy density batteries that really enable all the customers to take more advantage of, you know, the processors and the memories and cameras and displays that they already bought. Because, you know, battery has been throttling the performance of many of those things. Great team. A lot of strong validation from the customers, and super excited to be here and take any questions.
Great. You know, you kind of alluded to it, but, you know, you've worked in mobile and, you know, a couple different parts of your career. You know, I guess trying to get a feel for how, you know, after spending some time now at Enovix, presumably with a lot of the same customers, you know, what has been the feedback, you know, along your view of the opportunity, and I guess comparing and contrasting this opportunity with other products that you've been supporting?
Thank you for the question, Bill. I think, you know, one of the key things I find about this space and this company and this technology is the products are actually getting used in the exact same, you know, market spaces that I've been selling to for the last many years. IoT, which is a division that I started at Qualcomm, and I was there, got to be a really nice business and mobile phones and laptops and so on. One of the key advantages of Enovix is that the product is actually truly differentiated, in the sense that we are making batteries that are targeted to replace some of the existing battery technology that our customers are using. These are graphite cells.
The battery we have, you know, depending upon the application and, you know, whether it's a watch or a smartphone or a laptop, over two times the energy density in the exact same configuration, which is really phenomenal. It doesn't happen often in our industry to get that much of a step increase. Batteries traditionally have, you know, the lithium-ion batteries have grown, like, 4% or 5% a year over the last many, maybe couple of decades. Great to see that kind of innovation. I talked to many of my customers, they're all interested in this technology because it helps them take advantage of it and provide better user experience. That part has been very nice to see.
Great. You know, obviously before your time, the Enovix team talked about the addressable markets. It was kind of bucketed across different sectors. I guess, you know, how do you view the addressable market as you see it today, and how are you staging, you know, each of these, you know, market opportunities?
I mean, I, for most of us, you know, like, who use portable electronics in our day-to-day life, I mean, if you just take an inventory of all the products around your house, you'll find, you know, tens and dozens of products that use lithium-ion batteries. The addressable market is something that, you know, everyone can easily relate to. Given that the market is so big, I think $23 billion TAM is something that we looked at last time just in consumer electronics. We had to make sure that we staged it in a way that it is suited to our technology and ones that we can ramp to production fast and get good gross margin and revenue.
We kind of segmented the market, I would say, into probably three broad categories. I would say the first one is what we call, you know, Internet of Things or the IoT devices. These are things like smartwatches, you know, headsets, charging cases for, you know, headsets. You can think of medical devices, you know, AR/VR glasses, and many other products like that that you can quickly relate to. The other two markets are mobile phones. You know, again, 1,200 million mobile phones sold a year. Laptops and tablets, you know, 200 million-300 million a year.
The reason we chose the IoT devices as the first point of entry for our technology is because as a manufacturing company, as we build scale in manufacturing, these are markets that we can start off with tens of thousands and hundreds of thousands units per customer because they're broad markets, many customers. Each product may not sell very high volume like millions, and we do have the manufacturing capability to support them. The other one is the qualification timelines in these markets is shorter than qualification timelines, for examples, in laptops and mobile phones, so we can get to revenue faster. The third reason is in very high volume batteries, like in consumer, like smartwatches, like phones, the battery has to be a certain precise form factor to fit in the cavity that it's allocated to.
That means as a battery manufacturer, we have to have the capability to make cells of varying, slightly varying dimensions per the customer needs. In the IoT space, in some of the markets, you know, we can be the customers can be a little bit more forgiving on taking the sizes we have and adjust the form factor to make them fit. We make a large battery that big and a small battery today, and we are launching them into the IoT spaces. Now we are building machines that have the ability to customize the batteries to the right form factor, we'll get into the very high volume manufacture of things like laptops and tablets and smartphones.
Yep. Just tying the technology, you know, we're obviously at a tech conference. When you think about your customer interactions, you know, what kind of technology are you trying to enable? What are you trying to enable for your customers? You know, I think in the past you guys have talked about, you know, trying to have like semiconductor-like margins in a space that really hasn't seen that. I mean, what gives you confidence that, you know, these customers are gonna be willing to pay for that?
Yeah. If you, if you first, think about the technology that we are delivering and the value of the technology to our customer, and I'll spend a few minutes on that one. You know, my experience having launched and working with customers on many, many consumer electronic devices, you know, smartphones, notebooks, and so on, one thing I found is that as we made advances in processor technology, in memories, and in displays, and in cameras, and so on, there's a lot of high performance computing and storage in all these devices, you know, like phones and so on.
That technology, our customers are not really able to take full advantage of that, because if you actually run a smartphone, run the smartphone processors to its full capability, I mean, they're like, you know, eight cores or four cores at 2 GHz plus. If you run them at full speed, the battery is gonna go down really, really fast. If you run the GPUs or the camera engines at full speed, the battery goes down. If you have the display at full brightness, you know, the battery goes down really fast. What has happened in the industry is, our customers have paid for these expensive processors and memories and cameras and displays, but they're not able to fully take advantage of what they've paid for and deliver that user experience to the end user who ultimately really wants to have that great experience.
You know, case in point is, you know, we all have, you know, smartwatches, but most of the time the watch screen is off and only comes up when you actually wanna look at time. Otherwise, just a little black screen you put on your wrist, which, you know, for people who spend a lot of money on nice clothes, you cannot wear this watch that is black all the time. Many times people like to, you know, use the watch to measure their sleep patterns. And there's great technology in those watches to measure sleep, but you have to charge your watch in the night. Really it's a kind of well-kept secret that you have all these products that don't deliver the value that they're supposed to deliver.
When we're able to deliver a better battery that's, you know, almost two times better than existing batteries, suddenly our customers are like, "Now we can take advantage of everything else we have paid for, and also differentiate our product in the marketplace." That, there's a lot of value to that, and we are able to kind of translate that value into higher selling price for our product. We actually are able to, in some cases, get almost, you know, two times the selling price for watt-hour in our battery compared to an existing battery, because the value we deliver is something our customers can monetize and create value for themselves. That is something that's really compelling and a great advantage to our customers and to us.
Okay. We'll get to the, to the technology, you know, I guess the cost side later on. We have a question here, and I guess ultimately it's kind of related to competition, but it basically says, you know, what optionality you have, your customers may have to wait for one or two years to get your batteries. You know, why would a customer wait one or two years for a next gen device? Would a JV with maybe one of these big, you know, consumer electronics companies make for a quicker installation?
It's a great question. You know, I think ultimately though, whether it's a JV or not, the batteries have to be manufactured. Our batteries are manufactured in a certain way. We take advantage of the higher energy density silicon provides by able to hold more lithium, but we stop it from swelling by making these mechanical constraints that hold it. We are building factories as quickly as we can, and we will get to ramp as fast as we can. I'm not quite sure if a JV will actually accelerate the time to market, you know, in terms of getting the batteries to production. I think we will get it there as quickly as we can.
Your question on margins and comparison to semiconductors, there's a couple of comments I wanna make to contrast this business with the chip business that I've been in for a long time. You know, firstly, the question gets asked, how complex is manufacturing of batteries, you know, compared to manufacturing of chips? You know, the unique architecture that we have in the way we manufacture batteries at Enovix, it's really an architecture where we mechanically constrain the silicon anode and the cathode and the separator material that we cut into thin strips from swelling by putting mechanical constraint around it. There's a lot of other IP in that process and other things we do to make it possible. The machines that build this in the back end, we have to build these machines to roughly 50 micron tolerances.
That's kind of the mechanical tolerancing at which these machines may be built. In semiconductors, you know, in the back-end test, they're in the range of five microns. It's an order of magnitude simpler problem in mechanical tolerancing. Throughout my career, I worked on many, many complex semiconductor manufacturing products. This is a much simpler problem, so that's one reason we feel pretty confident we can do it. The other question you asked me is about, you know, gross margins and how does this compare to the chip business?
Yeah.
There's a couple of inherent advantages to this business. You know, first one, as I mentioned, is the ASP premium we can command because of the differentiation of the product and the value it unlocks for our customers. The second one is in semiconductor manufacturer, when you go from one process node to another process node, you know, you do a die shrink. When you do a die shrink, it involves, you know, deep submicron lithography, so you have to buy very expensive machines, you know, $100 million, like if you go from one process node to the other. Now there's things like UV, which are even more expensive. Every time you go one generation to the other, you spend a lot of money.
In this particular case, because we are a material-agnostic battery company, and what I mean by that is we work with our supply chain to come up with better anodes, better cathodes, better electrolytes, better separators that give us much higher energy density from generation to generation. The exact same factories we built can take advantage of that. The factories we built are actually cutting, you know, the anodes and the cathodes into thin strips and stacking them together. If they're higher energy density and better quality anodes and cathodes, we still use the same machines, which means that we can amortize our machine costs over a longer period of time. Once we build the factories, we can continue to produce better and better energy density. When we produce better energy density, we're able to margin up and get higher ASPs.
In that sense, it's actually a very scalable business in terms of revenue generation and margin generation, without adding a lot of incremental cost in manufacturing. That's why I feel confident that this is a business that will be a higher gross margin business, you know, generating a lot of profit in time as we get to producing millions of batteries and as we get to producing better and better energy densities through material innovation.
Great. Somewhat related to the prior question about, you know, manufacturing is gonna be maybe a few years before you're reaching high volume, how do you view the competitive landscape, you know, today and maybe how that evolves over the next few years, given that really, you know, your revenue ramp doesn't really occur in a big way.
Mm-hmm.
You know, maybe in a year, one and a half years, two years. What do you see on the horizon coming from the different, you know, whether it be solid state or silicon anode or graphite or whatever the case might be, there's still competition? How do you view that?
Yeah, absolutely. A couple of things. I think one of the... Right now, when we visit customers, pretty much almost all the time, our competition is the existing graphite suppliers. There's not any real volume or even, you know, reasonable number of samples, silicon anode batteries in the consumer electronic space that we are in. But what is happening in the graphite space is, as I said, traditionally, they haven't really improved a lot in time. We're now seeing a few batteries, makers add a little bit of silicon into the graphite, like, you know, some kind of a powder and so on to improve the energy density. But it's more in the range of 5%- 8% silicon. You know, we are 100% active silicon area.
We don't have any graphite in our battery at all. That gives us, you know, quite a high bit of advantage. Again, it is our first generation now. Like I said, we have other better materials coming in that will make it even higher. That's probably the main competition right now. We have to stay ahead on our material innovation, but we do have the advantage of being quite a bit ahead from other silicon anode competitors. We, you know, we are at a stage where to launch batteries in consumer electronics, you have to work very closely with the customers because the way a battery is charged and discharged and used in a smartphone versus a laptop, versus a wearable device, versus a camera is very different.
Because we are now able to sample a high volume, a high number of units to our customers, we are able to learn exactly how the battery is used in these different applications. You know, sometimes cycle life is more important, sometimes energy density is more important. Sometimes the voltage at which they charge and discharge is more important. Sometimes how long they store it is more important. We're able to make those different trade-offs to better suit our battery for each of these applications. That's an advantage we have over other silicon anode companies because we're a little bit farther ahead in our journey.
Great. Wanna move on to sort of manufacturing. First starting with, you know, Fab1, which is, you know, you're sampling out of this site. You talked about 180,000 units, you know, where could this be? Like, could it be higher, I guess? What are you assuming for the manufacturing strategy of that site? I'll just ask a second follow on, you know, the importance of the Agility Line. You know, how should we think about that in terms of its importance, you know, and also how that relates to Fab2?
Yeah, absolutely. Our current Fab1 in Fremont, we produced 4,400 batteries in fourth quarter last year. We guided that in first quarter, we'll make 9,000. We did mention that we want to be able to more than double every quarter. We made 12,500 batteries in the second quarter, and we guided to 18,000 in third quarter. I feel we are on track towards that. We also guided to 180,000 batteries for the end of the year. We absolutely have the ability to make those. We could even make more if we wanted. One thing is that the batteries we make in Fremont are very expensive.
We have machinery that was not operating at full speed and, you know, it's very expensive to manufacture batteries in California. As our Gen2 line in Malaysia comes up, we have the opportunity to... I would like to move as quickly as possible to that line because I think the cost of battery will be much better there. You asked about the Agility Line. The Agility Line is a line that, you know, has the capability to produce batteries at different sizes. That's actually very important in this market because if you think about it, the batteries that go into smartwatches are a different size than the batteries that go into phones, different size than the batteries that go into laptops.
Even in smartphones, smartwatches, different customers use slightly different shapes and slightly different dimensions. For us, it's very important that we are able to make batteries of the right dimension to qualify our customers. That's the Agility Line that we're building in Fremont this year. That will have the capability to produce different shape and size batteries. When we do that, we can qualify our customers quickly. When our factory in Malaysia comes up to production April 2025, I believe, we'll be able to then ramp the customers to production from there.
Yeah. Just clarifying, 18K, that's second quarter, right?
Yes, second quarter.
Okay.
Sorry. I misspoke, yeah.
You're still...
First quarter was.
Still targeting 180,000 units for the year.
Yeah. Thank you.
Okay.
$18,000 for second quarter, yeah.
Yeah, no worries. Let's move on to Fab2. You announced, you know, Malaysia. I think coming out of the last call, you know, I think you were commenting about trying to match supply and demand. I guess, what is your philosophy on capacity planning? You know, when can we see additional lines? How should we think about the rollout of these lines? I suppose it probably depends on the applications you're working on as well. Yeah. Tell me the capacity versus demand side, please.
Yeah, absolutely. You know, I think the key is, we are investing on the first line now, and that will start in April next year and start producing. Last time I mentioned about manufacturing supply and, you know, matching supply and demand, there are some questions about, "Hey, how is your demand?" The demand is really, really strong, and that was not a comment about demand at all. Because as I mentioned, you know, there's 100 customers that we sampled our batteries to, and the markets we are going after are huge. You know, look at IoT and smartphones and laptops. The demand is very strong, and we have a lot of opportunity to sell.
I think it's important in these markets to actually produce the right shape and right size battery to meet the right application. Because the gross margin that you make in different markets is different. Smaller sized batteries in wearables, you know, there's a higher gross margin because it's very difficult to pack that much energy density into a small cell, and so on. What we would like to do after the last fundraise, we now have the capability to, you know, build up to four lines. We want to build them in a way that it's correctly matched to where we want to sell in the demand. We want to optimize it to the places where we get best gross margin.
For example, the first line we're building is a universal line that can produce batteries that are very small to batteries that are that big and anything in between. When we make the subsequent lines, we wanna make them in a way that may be less flexibility, so they may only, you know, go from a battery that goes to a smartwatch, but you still have enough flexibility around it, but not all the way to battery that go into smartphone. We want to make a battery that goes into smartphone, but enough flexibility to go into multiple models of smartphones. When we reduce the flexibility but still keep the flexibility per segment, that line is more optimized for that end market. That line will cost us less, that line will produce much higher throughput, and hence the cost for battery will be lesser.
That is kind of the equation that we need to correctly manage in terms of when we bring on the right lines to maximize the revenue and the gross margin for the company. The good news is, you know, we have capitalized the company and we are able to, you know, fund those lines, but we wanna make sure we do them in the right sequence to make the, you know, most business sense.
Great. Couple questions online.
Yeah.
one of my own. It's, you know, related to YBS. Why work with that YBS? Like, how does the mechanics, you know, work with the, you know, Malaysia broadly on the funding for Gen2, line one? The two specific questions on the, on the line are can you provide an update on the closure? You know, when can we expect an announcement?
Absolutely. You know, YBS is a company in Malaysia that is a contract manufacturer, and they have contract manufacturing for multiple other companies. We, we got recommended to them through the Malaysian Investment Development Authority, and we really liked what we saw, and they're very capable. Our battery technology is really about making mechanical constraints and tying silicon and anodes and cathodes to produce these products. The kind of products they have done before, we felt their skill set was very well suited to that. That's the reason we picked them. The second one is that they have a facility that we are able to quickly use. You know, they have space available that we are able to put our lines there.
We have a letter of intent, you know, that we worked with them on, where, you know, they will be our sub, you know, kind of subcontractor to manufacture batteries. They would invest in the one of the lines to start with. Then, you know, through the manufacturing process, you know, as contract manufacturer, they will make some margin on the services they provide, and they're able to, you know, get return on that. It's not closed yet, that financing, and they're working on raising financing for that. Discussions are ongoing on exact terms, I expect that to be done in the next month or two.
Where are we in terms of, you know, the Gen2? You know, you've talked about factory acceptance. You probably have some tools delivered late this year, more in early next year. Where are we in the process, and are we on time for the, you said the launch, you know, around April next year?
Yeah. I'm super pleased with the way Gen2 is going. You know, for those of you who are probably not as familiar with the story, we looked at Gen1, and Gen1 was initially spec'd to produce much higher throughput, but it was not. You know, it's the first time making those machines, so the team didn't understand all the complexities of that. We've since spent a lot of time figuring out where exactly we were losing yield, or where exactly we're having problems with throughput, or where exactly we're having problems with the tool uptime. What we did then was to, you know, set up a bunch of, you know, what we call proof of concept experiments that kind of tailors toward each area that was problematic.
We said, "Okay, if we change this and we change this and we change this, how would it improve?" We were able to close, you know, majority of them. That's when we went to actually start, you know, ordering the Gen2 machines. We got the approval from the board once we were able to show the experiments and how the results were, and we followed a very strict approval process that's used in semiconductor manufacturing for a long time. Also we worked with the vendors. We chose a different set of vendors this time. These are actually the vendors that are very good at making semiconductor backend machines, so they're used to these kind of complexities, you know, much higher complex machines actually. Some of them actually also make batteries.
We have a different set of vendors that are making the Gen2 tools than the ones we used in Gen1. Our teams, you know, have been flying out there, talking to them, getting the machines. We keep getting periodic updates. We actually have videos of the Gen2 machines already working, and that shows stacking working like six times faster than before. The lasers are much more powerful. We are very pleased with the way it's going. The financial terms that we discussed with the vendors is also different. You know, we pay 10% upfront, which we did when we placed the orders, like in March. Then from then on, it's been steady repayments that we will make through the year. August is the next big milestone where we'll have factory acceptance.
That means the machines that we ordered, we will see them working and passing the checklist we have at the vendor site, not on our site. The next big milestone will be site acceptance, where we actually have to receive the machine and they're able to set it up and have it working in our site. You know, both in Fremont for the Agility Line and in Malaysia. That's when some more payment goes to them. Along all this process, we also have strict terms on yield and throughput and uptime that they have to pass. We, we feel pretty good as of today. I think things are on track and looking forward to the next milestone in August.
Okay. I wanna pause and see if there's any questions from the audience before moving on. Okay. Let's pivot to EV strategy. You know, we haven't really heard as much on that recently. You know, I've attended some of these battery.
Mm-hmm.
with your team that works on that.
Uh-huh.
Wanna get an update on your EV strategy, and there's kind of this, like, you know, is there any activity regarding licensing of your battery technology to an EV maker or a battery maker? Maybe just provide an update on where you stand, your thoughts on the EV market.
The EV market, very large market, you know, exciting space. A lot of people, you know, investing in that space. The energy density is of interest to some of the EV makers, but one of the other key care abouts for them is the heat generated when you charge the battery. You know, batteries, when you charge them fast, get very hot. Some people have talked about cooling the batteries using liquid cooling and so on, which are also very expensive solutions. We found that this architecture that we have of the silicon anode and cathode electrolyte constrained by this mechanical constraint with these thin strips of batteries, has a inherent advantage to getting rid of the heat very fast.
We've done a lot of thermal modeling, we've seen it compared to traditional architectures. They, you know, get rid of the heat very fast, which means you can charge them much faster. That has been of significant interest to the EV makers that we talk to. Where we are right now is the materials that are used in EVs are different from the materials we use, because it's not so much about energy density as much as about heat dissipation and cost and so on. We are working with those manufacturers on the different stack of materials that of interest to them. You know, our battery architecture is material agnostic. You know, as long as we're able to, you know, cut them with the lasers and put them in, we can use any kind of materials.
We are now in that process of actually making what I call proof of concept cells in our assembly line with the materials from of use in this EV space. Once we get them, we expect to have a kind of a joint development agreement with one of the EV makers, and I'm still hoping we'll try to get that done this year, if possible. Of course, it opens up the whole conversation about who makes these batteries? How do we make these batteries? Should we license them, you know, and they make it or we make it? That's still, you know, under negotiation, how that'll be done based on the results of the JDA.
Okay. Still a lot of questions coming in online.
Yeah.
Kind of this one sort of ties back to the prior one about Fab1. How many batteries will Enovix be manufacturing per month by the end of the year? When will Enovix announce a firm purchase order for its batteries?
Yeah. You know, the, the production varies, you know, month by month. You know, so that's why what we are only guiding now is every quarter, what we plan to produce and what we plan to produce by end of the year. 180,000 by end of the year and, you know, as I mentioned, 18,000 for second quarter is what we guided. Purchase order from customers, we actually have a couple of customers that we expect to be in the market, hopefully this year, with products that consumers can buy and break open and see the Enovix batteries inside. Typically, the purchase orders come in. You know, just, I would say a couple of months, you know, two to three months before mass production.
We do get purchase orders for samples. We have delivered, you know, many batteries to all these customers, many, as I said, over 100 customers. You know, some of them we charge samples, some of them we give them free. I would say to that question in the audience, probably two to three months before production, so probably towards the end of the year, third quarter, fourth quarter.
Another one's coming to just kind of the current competitive landscape, and they're saying, you know, maybe batteries today cost $1.50-$2. If you talk 100% premium that in for, like, $3-$4, but you guys have talked in the past maybe even, like, $5-$10. Basically have customers agreed to that sort of pricing that you guys have talked about? I mean, you just mentioned-
Yeah.
you have companies that are, you know.
Sure.
-maybe putting products in the market later this year, but just wanna confirm the pricing.
Yeah, I mean, the price of the battery really depends on the size. You know, again, a very small battery, maybe $1-$2, we are talking about batteries like that go into something this big. It's really related to the amount of energy density you have and the size of the battery.
Mm-hmm.
you know, we are comfortable with the pricing that I've mentioned.
Okay, great. This is something that actually I haven't seen before. It's an interesting question, but any plans for recycling used or spent batteries? I mean, I'm sure you're early on in the process, but in the broader scheme of things, as more of these are in the market, that probably becomes more important.
I mean, that is something that our customers have asked us to. We are looking at exactly how to do that and so on. That is. You know, as we start shipping more and more batteries, that is something we will need to consider. Absolutely we are looking at how to do that.
This one's talking about another competitor. I guess, without naming names, they're tend to be focused on, like, aviation opportunities in silicon anode. You know, basically they're saying they may be also a gigawatt scale in the middle of the decade, but essentially, are you engaged in other applications beyond what you mentioned? In particular, they're talking about aviation or eVTOL.
Yeah, I mean, I think, you know, when you look at things like aviation and so on, you know, it could be a market of interest to us in time, but we are squarely focused on consumer electronics because much bigger market. Also we have an advantage that I've seen some of our competitors talk about, you know, batteries that go into other applications like aviation where there's a higher energy density, but the cycle life is not as high because you don't have to charge them as fast. We are actually in consumer electronics, you have to hit minimum 500 cycles, and we are speccing our batteries to hit minimum 500 cycles, plus keep up the higher energy density. That's.
I mean, we could always, you know, reduce the cycle life and get more energy density, but, you know, we are more focused on the consumer markets where we want to hit both.
Okay. Getting close to the end, maybe you can just kind of update us on the technology development you alluded to earlier.
Yeah.
You know, 0.52, BrakeFlow. Where do these fit in, and when should we assume that they're gonna be available for customers to sample and so forth?
I'll talk about BrakeFlow first. You know, BrakeFlow is a very impressive and very important piece of technology that team has developed here. Particularly as you put higher and higher energy density into batteries, safety is a huge thing. Because then if you have some form of a mechanical short of the electrodes, you know, it just, you know, goes into very high temperatures and quickly melts. The technology we have is, you know, BrakeFlow technology, where we're able to put series resistors, you know, in line with our anodes and cathodes, and that is something that's unique to our architecture. We are actually doing very well on BrakeFlow. We've actually pulled in the schedules.
We expect that our Malaysia factory will produce batteries with BrakeFlow, that is something we are speccing into our manufacturing line now. I felt that was very important as we get into bigger batteries, that we absolutely have to have that. That's something that we're doing. EX-1.5 is our next technology node. That's super exciting. What is happening at Enovix is that as we start producing these batteries, we have, you know, thousands of batteries now, we are in customers' hands, we are learning about how these batteries work and what's done. We are able to give some of this feedback to the people who produce materials for us and able to get better silicon anodes, better cathodes, better electrolytes.
We are able to make innovations on all three of those. When you add percentage increase in all three of them, the total energy goes up much more.
Yeah.
We, you know, we are pretty excited by that. Again, we will use these exact same factories as we launch new technology.
Thanks.
Super fun times.
Well, we could cover a lot more, unfortunately we're out of time. Raj, appreciate your time supporting the conference.
Thank you.
This was, really insightful. Thank you.
Thank you, Bill. Yeah.
Yeah.