Hello, and welcome to the QuickLogic Third Quarter 2018 Earnings Conference Call. At this time, As a reminder, this conference is being recorded. And now I'd like to introduce your host for today's call, Mariah Schultz, you may begin.
Thank you, Towanda. Welcome everyone, and thank you for joining us today for QuickLogic's third quarter fiscal 2018 results conference call. With us today are Brian Faith, President and Chief Executive Officer and Doctor. Sue Chung, Chief Financial Officer. Before we begin, I will read a short Safe Harbor statement.
Some of the comments QuickLogic makes today are forward looking statements that involve risks and uncertainties, including but not limited to, stated expectations relating to revenue from new and mature products, statements pertaining to QuickLogic's future stock price and performance, design activity and its ability to convert new design opportunities into production shipments, timing and market acceptance of its customers' products, schedule changes and projected production start dates that could impact the timing of shipments, the company's future evaluation systems, broadening the company's ecosystem partners, expected results, and financial expectations for revenue, gross margin, operating expenses, profitability and cash. These statements should be considered in conjunction with the cautionary warnings that appear in QuickLogic's SEC filings. For additional information, please refer to the company's SEC filings posted on its website and the SEC's website. Investors are cautioned that all forward looking statements in this call involve risks and uncertainties and that future events may differ materially from the statements made. For more detail of these risks, uncertainties and assumptions, please refer to those discussed under the heading Risk Factors In the annual report on Form Ten K for the fiscal year ended December 31, 2017, the company filed with the SEC on March 9, 2018.
These forward looking statements are made as of today, the date of the conference call. And management undertakes no obligation to revise or publicly release any revision of the forward looking statements in light of any new information or future events. Please note, QuickLogic uses its website the company blog QuickLogic hotspot, its corporate Twitter account, Facebook page, and LinkedIn page, as channels of distribution of information about its products, its planned financial and other announcements, its attendance at upcoming investor and industry conferences and other matters. Such information may be deemed material information, and QuickLogic may use these channels to comply with its disclosure obligations under Regulation FD. This conference call is open to all and is being webcast live.
We will start today's call with the company's strategic update in QuickLogic's CEO, Brian Faith. And CFO, Sue Chung will provide financial results and guidance. Brian will deliver some closing remarks and then open the call up to questions. At this time, it is my pleasure to turn the call over to Brian Faith, President and CEO. Please go ahead, Brian.
Thank you, Mariah, and thank you all for joining our Q3 2018 conference call. I have quite a bit of exciting news to share with you today that bolsters our outlook for 2019 and beyond. We have broadened our involvement with the leading consumer electronics company we mentioned on our last conference call, that is designed in We have initiated a new EOS S3 engagement with a leading consumer goods company for a high volume AC powered always onalways listening application and yet another new market sector for QuickLogic. And I am very proud to announce we are forecasting material quick AI revenue for Q4 2018. An important point for QuickLogic that I want to highlight is the fact we are seeing mounting evidence of a broad industry shift from push to talk to always onalways listening voice interfaces.
Our recent design wins and engagement activities suggest this trend in the process of extending into a very wide range This shift to always on, always listening is important for QuickLogic, because there is a focus on minimizing the power consumption of the interface and that is where our multi core EOS S3 SOC has a clear competitive advantage. We are even seeing the focus to minimize power consumption AC powered products that are obviously not worried about battery life, but need to comply with new energy standards that limit standby or vampire power consumption. This was the driver for the leading consumer electronics company that selected our EOS S3 for new products that will be shown in a couple months at CES and it is also the driver for our engagement with the leading consumer goods company. The shift to always onalways listening is also punctuated by the release of Amazon's new close talk certification specification for always listing products. Prior to the release of this specification, all the Alexa compliant hearable and wearable devices in the market were pushed to talk.
There are a variety of good reasons why Amazon took time and care in drafting its new close talk specification. But they can be boiled down to ensuring the quality of the Alexa experience across a vast number of third party devices is consistent with the consumer expectations that Amazon has carefully fostered with its smart speakers. After implementing a software revision to accommodate a new requirement, We tested our EOS S3 against the close talk certification test with 1 mic and 2 mic configurations. Both configurations passed the test. With the specification released and the assurance of our internal test results, our hearable customers are implementing our latest software and modifying their designs as necessary to ensure compliance.
1 of our larger customers is close to completing this cycle and will submit a Terrible device to Amazon this month for certification. Our other customers are in various stages of internal testing and design modification. Based on what we know today, we expect the first of these products to move into production late this quarter and the balance during Q1 2019. While these delays impact our Q4 revenue outlook by more than $500,000, we now have a much clearer roadmap to revenue than we did 3 months ago. We have made solid progress on all fronts of our Arctic Pro Embedded FPGAIP Initiative.
On the foundry side of the equation, we completed our qualification for GLOBALFOUNDRI fabrication process that is marketed as 22 FDX. This means we have 3 process nodes qualified at GLOBALFOUNDRIES and that QuickLogic is the only source embedded FPGAIP that is qualified on an FDSOI process. This is important because the GLOBALFOUNDRIES 22 FDX process is optimized for low power and low cost and is being targeted by numerous semiconductor and systems companies for new SoC and ASIC designs. These include several of our ongoing Arctic Pro EFPGA engagements and the risk 5 parallel ultralow power or pulp IC from ETH Zurich, which some of our customer engagements intend to use as a platform to evaluate our Arctic Pro embedded FPGA IP. In addition to Global Foundries, we also have a fabrication process qualified at SMC and TSMC, and have completed the porting to support a second and more advanced fabrication node at TSMC.
On the customer side of the equation, the new go to market strategy we introduced earlier this year continues to break the Catch 22 loops that were stalling our engagements. The short story is semiconductor companies wanted to run test chip experiments with our embedded FPGA technology before committing a significant amount of money to acquire an IP license for a new SoC design. To accommodate this and move the engagements forward, we created a master technology license agreement or MTLA. This solved 2 problems. First, It enables Semiconductor Companies and OEMs to build test chips using our Arctic Pro embedded FPGIP from only a modest cash investment.
This provides them an opportunity to evaluate and quantify 2nd, the MTLA defines the terms and conditions of follow on IP licenses. This means the vast majority of the negotiations and legal work is accomplished within the MTLA and the follow on license agreements for targeted SoCs amounts to only a couple pages that can be executed quickly without disrupting design flow. This is often critical since an SLC Design group that wants to use EFPGA may otherwise decide it does not have the time our position with large semiconductor companies. With an MTLA in place and test chip in place, SoC Design Groups Throughout Large Semiconductor Companies are exposed to the availability of our solution and can realistically consider it just as they would other IP blocks that are typically included in SoC designs. We signed our first 2 MTLA's with ETH Zurich and C Sky, which was subsequently acquired by Alibaba.
In line with the outlook we shared last quarter, we are on pace to sign additional MTLA as a semiconductor companies this quarter. C Skye and the IC R and D team at Alibaba's Discovery, Adventure, Momentum and Outlook Academy, or Daimo. Are the cornerstones of Alibaba's new semiconductor initiative called Pingtoka Semiconductor. We believe our MTLA was Sky will drive multiple SoC licenses beginning in 2019. ETH Zurich selected our Arctic Pro embedded FPGA for use its risk 5 pulp platform that will be fabricated using GLOBALFOUNDRIES 22 FDX fabrication process.
ETH is currently targeting the tape out for its pulp platform later this quarter and stated it will develop a number of compelling use cases that highlight the benefits of our embedded FPGA IP. The Pulp platform will give our potential IP customers the ability to evaluate power savings and performance improvements that Arctic Pro embedded FPGA hardware implementations deliver relative to software solutions running on integrated risk 5 processor. This is critical for many use cases where designs must maintain the flexibility needed to adapt to new algorithms yet still be optimized for performance in ultralow power consumption. This is a very common use case for discrete FPGAs today. As we move now to EOS S3, I'm proud to announce we shipped record EOS S3 revenue in Q3 and continue to win some very impressive high volume designs.
However, we also continue to deal with 1 frustration. There was a shift in priorities at the Tier 1 smartphone customer that we've been working with for quite some time on 3 product designs. As I reported in our last conference call, our EOS S3 was 1 of 2 competing ICs for the high volume consumer wearable device the customer was targeting to have production ready by the end of 2018. However, due to a new wearable product that were recently introduced by our customers' competition, the consumer wearable design was pulled back for review and the customer has dedicated 100% of its resources to reevaluating the design. As it stands today, our EOS S3 remains 1 of 2 solutions in the running for this design.
Working in our favor is the fact EOS S3 has lower power consumption, a smaller package size, and is lower cost in our competition. While battery life, PCB space and costs are clearly important The customer is considering adding features that would require to use the competitive solution that has more on chip memory. Due to the customer's all hands on deck focus on the consumer wearable final qualification and testing for our design win and the other wearable device, and the EOS S3 evaluation for a new hearable device have not moved forward since our last conference call. Last May, They have released its first consumer product, the OCE Smartwatch, which uses our EOS S3 to enable its always on, always listening voice interface. Naver Labs recently received notice from a supplier that a key component used in hockey will be discontinued.
As a result, Neighbor Labs is faced with a choice of redesigning Aki, making a lifetime buy of the component or a combination of both options. We have not received notification from neighbor labs yet as to what it will do. Due to this, we are modeling only modest shipments to neighbor this quarter for Aki. While this is clearly an unexpected setback, we developed a close working relationship with Neuro Labs during the hockey development cycle that extends to its senior executives. Through this and the design experience and IP that Neighbor Labs have developed while working on AOCI, our EOS S3 SSE has been selected for a new design that is targeted for release 2 new educational tablets that use our ESS3 to enable easy and intuitive voice communications.
As is the case for U. S. Suppliers, Q3 is a seasonally strong quarter for educational products in China. Due to this, we are anticipating a seasonal decline in Q4 followed by a seasonally stronger demand for a new high volume product that is scheduled for release in 2019. Last quarter, I am we signed an MoU with a large Japanese smartphone company.
Since then, we have expanded the scope and value of the agreement significantly. With this expansion, the OEM has agreed to standardize on our EOS S3 SOC for all of its MCU applications in smartphones, feature phones and IoT products. The selection of EOS S3 is a standard to be used across a broad scope of products by a major OEM is a big and unprecedented deal for quick logic. Last quarter, I mentioned a very significant design win with a leading consumer electronics company. While we continue to operate under a strict NDA with this company, I can provide the additional color I committed to have this quarter.
The core platform, the core design of the platform that will be used by multiple OEMs. In total, There could be 10 or more models from various OEMs that use this platform design or an integrated version of the platform. The lead OEM is integrating the design into 4 initial models that we believe will be shown at CES. Higher volume models are expected to have values that range from We expect to initiate production shipments for with volume ramping in subsequent quarters. And we are in the early stages of a new design opportunity with this OEM that originated from the platform design.
In addition to our recent success in consumer electronics, We are in the early stages of an EOS S3 engagement with a leading consumer goods OEM. This application represents yet another totally new product category for QuickLogic and has low to mid 7 figure annual potential. If we are successful in winning the design, we expect it will company as it evaluates EOS S3 for a new platform design that targets a variety of high volume consumer products all of which would represent new product categories for quick logic. Before I turn the call over to Sue, I have some very exciting QuickAI news to share. I'm proud to announce that we anticipate reporting material QuickAI revenue in the fourth quarter.
And looking towards the future, we believe this first quick AI design win will drive low 7 figure revenue in 2019. In addition to this, we already have several other quick AI engagements that have the aggregate potential to drive low to mid 7 figure revenue in 2019 and have product life cycles that extend for years beyond that. We have opened a new engineering office in San Diego, to support these engagements and other quick AI development activities. I realized that given the very rapid move from introduction, to material revenue leaves you with many questions. And I'm as anxious to provide those answers as you are to hear them.
However, we are not quite ready to tip our hand to the competition. Our plan is to provide more color about QuickAI later this quarter And with that illustrate how our EOS S3 SOC plays a very important role in the high value integrated solution. I would now like to turn the call over to Sue for
Good afternoon, and thanks to everyone for joining us today. Please note, we're reporting our non GAAP results You may refer to the press release we issued today for a detailed reconciliation of our GAAP to non GAAP results and other financial statements. We have also posted an updated financial table on our IR webpage that provides current and historical non GAAP data. For the third quarter of 2018, total revenue was $3,500,000 and within our guidance range. Our new product revenue was $1,500,000 and the mature product revenue was $2,000,000.
New product revenue was below our expectations due to delays associated with the release of Amazon specification. And mature product revenue was above our expectations due to higher than usual seasonal demand. Due to our continued success in diversifying our customer base. We had 4 customers with a greater than 10% of total revenue in the third quarter. Our Q3 2018 gross margin was 50.5% and within our forecasted range.
Operating expenses for Q3 rounded up to $4,500,000 and were within our forecasted range. R and D expenses were $2,200,000 R and D expenses were lower than anticipated due to the timing of certain engineering projects. The net total for other income expense and taxes in Q3 2018 was a $33,000 charge, which was below our forecast due to foreign currency exchange and fluctuations. Net loss was $2,700,000 or $0.03 per share, which was within our forecasted range. Net cash usage during the third quarter was significantly below our expectations.
The lower than expected cash usage was driven mostly by a large decrease in accounts receivable, which was attributable to the timing of shipments in Q2 and Q3, the more than offset a decline in our accounts payable. Cash usage also benefited from a $120,000 decrease in inventory net of the reserves taken during the quarter. In September, we entered into a new loan agreement with Heritage Bank of Commerce for $9,000,000 revolving line of credit. This credit facility increased our access to working capital, expense the term for 2 years and replaces the prior $6,000,000 of credit facility with Silicon Valley Bank. As you notice on our balance sheet, We have a borrowed $9,000,000 from this new facility, which illustrates to our customers that we have the capital intend to support their orders.
We're confident that HerPage Bank is the right partner to support our future working capital needs as our revenue grows. Turning to the fourth quarter 2018 outlook. Our revenue guidance for Q4 is approximately $3,500,000, plus or minus 10%. Total revenue is expected to and $1,500,000 of mature product revenue. The sequential increase in new product revenue is expected to be driven a material revenue contribution from QuickAI that more than offset the anticipated decrease in display bridge revenue.
On a non GAAP basis, we expect our gross margin to be approximately 50%, plus or minus 3%. We're forecasting Non GAAP operating expenses at approximately $4,900,000, plus or minus $300,000. We expect our non GAAP R and D expenses to be approximately $2,600,000 and non GAAP SG and A expenses to be approximately 2,300,000. The sequential increase in R And D expenses is attributable to higher forecast costs associated with our embedded FPGA and a quick AI initiatives. We expect our other income expense and taxes will be a charge of approximately $60,000.
At the midpoint of our forecast, our non GAAP loss is expected to be approximately $3,000,000 or $0.03 per share. As was the case in prior quarters, the main difference between our GAAP to non GAAP results is our stock based compensation expense, which we expect to be approximately $480,000 for the fourth quarter. In Q4, we expect to use between $3,500,000 $4,000,000 in cash, The anticipated sequential increase in cash usage is mostly attributable to increased the R and D expense expenses and the timing of working capital requirements. With that, let me now turn the call back over Brian for any closing remarks.
Thank you, Sue.
Before opening the call for Q And A, want to take a moment to highlight to accelerate the adoption of our Arctic Pro embedded FPGIP is breaking the couch 22 loops that we're installing our license engagements. We signed 2 MTAs earlier this year and expect to sign several more this quarter. We believe it will start to see IP license agreements targeting specific SoCs beginning in Q1 twenty nineteen. We are seeing mounting evidence that major OEMs are moving away from push to talk technology and adopting always onalways listening voice interfaces. This trend has led to increased interest in our EOS S3 SOC from OEMs in a wide variety of end markets.
Amazon has released its new close talk certification for always on always listening products. We have numerous EOS S3 customers that have been waiting for this release and are now adapting to the new requirements that will enable them to brand their products as Alexa enabled. We expect the first of these products to move into production late this quarter and the balance during Q1 2019. We have significantly expanded the scope and value of our MOU The OEM has agreed to standardize on our EOS S3 SOC in all of its MCU designs in smartphones, feature phones, and IoT products. We expect the first smartphone to be released during the spring of 2019.
Beyond mobile applications where our EOS S3 is often selected to optimize battery life, we are winning designs in AC power products that target compliance with new standby power requirement. In these applications, the ultralow power and the ease of using our EOS S3 are obvious benefits. More subtle though is the multi core architecture that includes embedded FPGA. In these applications, the embedded FPGA provides the flexibility needed for platform designs that must interface with multiple end products and the ability to reduce the chip count of designs by absorbing functions in the eFPGA that would otherwise require external ICs. We have won a major EOS S3 platform design with a leading consumer electronics company that represents a totally new market category for QuickLogic.
We expect the first four products using an integrated version of the platform to be shown at CES in January. Following that we expect multiple OEMs to introduce a total of 10 or more new products using the platform design. The higher volume products for a high volume AC power design and another new market category for QuickLogic. If we are successful, we expect this design to go into production during the first half of twenty nineteen. We expect to report material quick AI revenue in Q4, which is several quarters ahead of our original forecast.
Quick AI is a high value integrated solution that brings EOS S3 into a vast number of new markets with product life cycles that typically run for many years. I am looking forward to providing more color about QuickAI later this quarter. And with that, I think you will appreciate its potential to deliver significant revenue 2019 beyond. At the bottom line, we believe our growth strategy for 2019 is sound and bolstered by our recent successes. We also believe we are and on products that require third party qualifications.
Our first question comes from Gary Mobley with Benchmark. Your line is open.
Wanted to start asking about QuickAI. And I know you're not going to share a lot of details with respect to the type of customer whatever you would give to the customer is. But, I'm wondering if the revenue that you're generating from this engagement really is just NREs and the low 7 digit 1,000,000 of dollars in revenue from Quick quick AI you expect in 2019. Is that in the bag, so to speak, and related to this early engagement
So firstly, it is not NRE. It is product revenue. And your second question, this particular company has a broad set of markets and applications that they're targeting. They've been exploring how they can use AI as a key element of these products for quite some time now. So I think there's a confluence of events for us where we we've come with a solution that has value and integration.
They've been looking at how they can deploy AI in an easy to use way. And they have end demand for their products. So that confluence of events has sort of led to today. And it will be for next year, it'll be diversified across several different with this company. When you say is it I think you said is it in the bag or in hand, it's we don't have POs that cover all of next year.
But we have a good relationship with this company and they have traction. And I think that the combination of that gives us the confidence to give that outlook for next year.
Okay. With respect to the R and D effort for this project, why, why San Diego?
That's a good question. There's a huge software component to our solution now as we've moved into processing, not just sensors, but microphones and AI is yet a different level of complexity. And when we looked at where a lot of the innovation is happening in AI in the world today, it's typically a lot of invested money in China and in the U. S. And there's a lot of companies that are developing Endpoint AI products in the U.
S. And so we wanted for this type of initiative to have an R and D team. It was strong in embedded software, strong in AI and very close to a lot of what we believe is going to be not just the R and D teams within QuickLogic, they're executing on this, but also our customers. And so if you look at San Diego, it's an hour flight from the Bay Area. They've got a lot of good software and embedded software engineers down there.
And the gentleman that we've hired to lead that office for us actually has a PhD and AI of all things. So when you look at that combination, it's kind of a no brainer.
Our next question comes from the line of Suji Desilva with Roth Capital. Your line is open.
Hi, Brian. Hi, Sue. So, thanks for guiding the guiding the fourth quarter including the cash usage. Do you think that cash usage level will be steady or will it increase as you have to build inventory for some of the customers you expect to ramp in the 2019 timeframe?
So as we ramp up inventory, the cash burn will increase, but we can't see that the average out that bought a $3,000,000 plus online at the current revenue level.
And Suji, let me just add on top of that because your question is related to inventory. And I think one of the things that we want to obviously manage here is the build of that inventory where we keep it in terms of WIP versus finished goods to make sure that we do not hinder the ramp that we're anticipating with our customers. You look at the inventory line that we have, a lot of that is actually kept in WIP, which takes care of the long lead time item going through foundry. The short lead time for us is a few weeks to go through assembly and that's where we can pick the package and how it actually goes to market. So in total, right now, I think our inventory is well positioned to cover probably the first $10,000,000 worth or so of the S revenue.
And it's where we're coming in a good position right now for that.
Thanks for that data point. That's helpful. And then also, quick AI obviously a lot of interest here. I'm just curious, I thought this would be a longer cycle product given sounds more complex, yet you seem to be turning it around pretty quickly. So I'm curious how that is happening with the engagements relative to traditional engagements and Also, is there a geographic customer interest, your pattern you're finding for QuickAI out of the gate?
Yes. So a few questions there to answer. Firstly, I do think there was a lot of pent up demand for bringing AI into a collection of customers that maybe don't have so much PCB design expertise, hardware design expertise and embedded software. So the fact that our product that we're bringing to market integrates a lot of that work for the customer makes it very easy for them to use. So the fact that we're already looking for some time on how to bring AI to market makes it a faster cycle for us.
I think we'll see other customers have fallen to that category as well in the near term. I do think that there's going to be a lot of the classic industrial IoT type customers that do have longer time to develop But we're trying to prioritize the ones that are already committed to some form of AI and are just looking for a solution to use. That's how we're prioritizing. Your question about geographies. We're being very purposeful about how we roll this out in terms of go to market.
So we are focusing on areas where there's a lot of sort of industrial IoT products being developed that want to deploy So Europe, North America, Japan and Korea first. After that, we'll start to spend more time rolling that out in geographies beyond what I just said.
Okay. Thanks, Brian. And then last question here, the licensing starting here, for the embedded FPGA, what's the flow of additional licensing revenue, how would you characterize or the milestones for the MTLA customers in the timeframe just to understand what would the progression be for these guys?
So from an MTLA, integration into a test chip and getting a test chip back and vetting those use cases is probably on the order of around 6 months because of the cycle times of the test chip. There are cases where I think we're compressing that cycle by doing things with ETH where their test chip is going to be back in early Q1. And so customers that are using that as an evaluation can use that to make a decision sooner without doing their own test chip. And then there's other folks that we've been engaged with in the funnel for months. And in some cases, quarters that I think may not necessarily have to go through that whole test chip in order to sign a deal, which is why we're talking about Q1 timeframe for doing actual licenses for revenue.
Okay. Thanks guys.
Our next question comes from the line of Richard Shannon with Craig Hallum. Your line is open.
Hi, let me, let me follow-up on the last topic here of MTLA's. I want to ask a question before following up on the last statements you just made, Brian. I think you said you expected a number of MTLA's to be signed in the fourth quarter. Did I catch that correctly? And can you us any more detail on the magnitude of those?
Yes, we do expect to sign in several this quarter. In terms of magnitude you're talking about number or dollar value?
Both of any way you can quantify either would be great.
So I'd say it's somewhere between 1 5. I don't know exactly based on the time frame of decision making for these companies, but it's in that if it's on one hand. In terms of dollar value, I'd say dollar value for the MTLA's is not going to be a huge driver We try to make that a very frictionless process for the company to get a hold of the technology and understands value. In terms of what we think those could translate in to an actual real license revenue. That's probably north of $1,000,000 in aggregate.
Just for those handful.
Okay. And did I understand correctly based on the question of the prior caller, that that those the full on license revenues could happen in the first quarter?
Yes. Some of them could.
Okay. Okay, perfect. That's very helpful. And sorry for the random sequence of questions here. I got a question on the 4th quarter guidance here.
I think, Sue, you talked about growth in new product sales. Did I hear you correctly that some of this is coming from QuickAI if you can characterize how the other remainder growth in the new product category specifically, S3 revenue from any of the Bluetooth customers who are going through Amazon certification. Okay.
So it is the managed driven by EOS S3. So QuickAI is a part of those EOS categories. Some of those. So that's the majority of part of it, QuickAI. In EOS S3 and the other part will be driven by Bluetooth the hearable thing that qualified for Amazon stacks.
Okay. Okay. That is helpful. Let's see a couple more questions. Actually, it was Sewell Gold, another one for you on the R and D.
I talked about it being in the level of I think $2,600,000 pro form a for the 4th quarter. How should we expect that to transition into 2019?
So expect that it's a range, I would say for R And D, it's a good stay at about $2,600,000 to $2,800,000 per quarter on average.
Okay, that's helpful. But I maybe a couple of questions for you. I think in your prepared remarks, I hope that I caught this correctly as I think I got call a bit late, but I think you're referring to the Tier 1 smartphone OEM with what you have, one you had one wearable design win and we're engaged in some others. Is that the OEM that you're talking about that has shifted to priorities and you're kind of on hold there? Is that accurate?
Yes. That same tier 1 smartphone OEM, correct.
Okay. So any visibility on when that could when that decision could be made? And or do you just kind of consider that on hold for the time being?
I'm hopeful that they'll make that this quarter because I know they had originally targeted to have the first consumer one done by the end of this quarter. I'm not sure what point you came in the call, but I also talked about the fact that there was another product in the market that sort of cause them to have pause and go back and look at their whole planning process. So, I'm hopeful to have the decision by the end of this quarter, but I don't know for sure.
Okay. That's fair enough. Let's see your 1 or 2 last questions. Brian, did I hear you say that you've got a second process at TSMC that you're qualified on it? So can you characterize it like the node or what applications it might target?
We did finish support for another process noted TSMC and we'll be coming out with the press release shortly that'll give the details about that. So I'd rather not do it on the call today and we'll make sure that those details are covered in ER.
Okay, perfect. We'll look forward to that. My last question for you if I were to jump online. Last quarter you talked about the hope and expectation of 50% sales growth for next year and I didn't hear anything on this call? Is that something you're still supporting or is it too difficult to support right now from your visibility?
No, I'm absolutely still supporting it. That's why I use the word bolstered in my opening and closing remarks. If you look at that, all of the diversification we've had in the sales funnel and the wins, the concrete wins with OEMs that are very large expansion of the MOU, all of those. And then now you layer in this sort of a sooner quick AI revenue than what we had originally anticipated. All that I think just gives us more confidence in that number for next year.
Okay. Just want to make sure because it sounds like you've got some great progress and particularly in these platform wins. It sounded like I just to make sure. That's all the questions for me. Thank you.
Great. Thanks, Richard.
Thank you. Our next question comes from the line of Rick Leighton with River Shore Investments. Your line is open.
Thank you. Hi, Brian. Hi, Sue. Can you provide any more can you provide any more color on the ASPs for QuickAI revenue that, you're expecting in the near term? Yes,
I think, well, stay tuned for later this quarter where we really start to articulate a lot more detail about this whole thing than trying to hold back a little bit for competitive reasons on this call. But just so that you're all aware it's for the quick AI, the ASP should be in the mid double digit range, which is significantly higher than just EOS S3 into a consumer product.
Okay, thank you. Last quarter, you stated that you had, actual license revenue opportunities at ETH Zurich for your work on the pulp platform there at the 22 FTFDx note, is that still the case today?
It is. And just to clarify, it's not with ETH, the self because they're a research university, but it's from other companies that have or intend to commercialize the developments that ETH does do. And from those, yes, we do anticipate license revenue from those entities that are watching and or working very closely with each user.
Okay. You told the prior analysts that you're still supporting, and you still feel confident in, greater than 50% revenue growth in 2019 versus this year. Is that being bolstered by the higher ASPs and the higher, opportunities in revenue from QuickAI?
Quig, it certainly helps it because of the, I think the value that we're bringing and the ASPs of that solution, that's one. The second is just if again, if you go back and you do a snapshot in time from a year ago to today and you talk about the wins that we actually have and the engagements we have It's a very different dynamic. Much bigger OEMs in control of their own products with launch plans, versus time last year where we had a much narrower set of OEMs and more ODMs and IDH. So you combine all that together. Yes, that's definitely what what bolsters our thoughts on that.
By the way, the other thing too is just this whole notion that voice is going everywhere from an always on point of view. If you asked me last year, would we be in a a consumer white goods product, will we be in a consumer electronics product that are line powered? I'd say, no, I don't think so. And yet here we are today. So all of these just add more evidence to me that next year is going to be that breakout year?
Speaking of the consumer electronics product, platform, you said that of OEMs involved in the manufacturing sale of this particular product. Did I hear that correct?
I think I did say multiple OEMs, yes.
Okay. And when you talk about four products being displayed at CES in January, Last quarter, you talked about 10 possible products coming out of this design win, are these 4 of those ten?
That's a complicated. Yes, I do understand your question. And it's a complicated answer given the NDA that we have with this one company. Yes, for our up to 10, but if you it would be more than 10 individual products if we look at it in the same way. Without giving out too much at this point.
Stay tuned for CES and I think it'll be more clear at that point.
Okay. Thanks, Brian. That's all.
Turn the call back over to Brian Faith for closing remarks.
All right. We'll be participating in the following investor and industry events this quarter. The 4th Annual Roth Technology Corporate Access Day being held at the Empire Steakhouse in New York on November 14th. The 19th annual Craig Hallum Capital Group Office Select Conference being held at the Sheraton New York Times Square Hotel in New York on November 15th So IACAD China 2018 conference in Zhuhai, China on November 29th 30th. The Benchmark Company being held at the Palmer House Hilton in Chicago on November 29th.
The RISC V Summit in Santa Clara, California on December 3 through 6 The LD Micro Microcap main event being held at the Lux Sunset Hotel in Los Angeles on December 4th. A wide range of OEM products showcasing various quick logic devices will be at our demo suite at CES 2019 in Las Vegas from January 8 to 11th. We will also demonstrate the quick AI module for predictive maintenance and audio applications. We look forward to seeing you at these events. Our next conference call is scheduled for Wednesday, February 13th at 2:30 pm Pacific Time.
Thank you for your participation and continued support and goodbye.
Ladies and gentlemen, thank you for participating in today's conference. That concludes the call. You may now disconnect. Everyone have a wonderful day.