Hello, and welcome to the Vicor Corporation's Annual Stockholders Meeting. Please note today's meeting is being recorded. Also note, all parties will be in a listen only mode for the entirety of the meeting. During the meeting, we'll have 2 question and answer sessions, one after the formal business meeting and a second at the conclusion of management's presentation. Stockholders who have earlier registered with Computershare may ask questions at any time by clicking the meeting by clicking on the message icon shown on the screen.
Management reserves the right to consolidate certain questions and its sole discretion if those questions cover similar or overlapping topics. Management also reserves the right to not respond to questions it considers. Also in its sole discretion is appropriate for the purposes of the annual stockholders meeting. Is now my pleasure to turn today's meeting over to James A. Sims, Chief Financial Officer of Vicor Corporation.
Mr. Sims, the floor is yours.
Thank you. Good morning, everyone. The Board of Directors of Vicor Corporation welcomes you to the 2020 annual stockholders meeting. In response to continued public health precautions associated with the COVID-nineteen pandemic, This year's meeting is being conducted over the internet as a webcast of our presentation material accompanied by an audio feed there will be no live video feed. FICO expects to hold future stockholder meetings in person absent extenuating circumstances including the ongoing impact of COVID-nineteen.
As said, I'm Jamie Sims, Chief Financial Officer Bicor Corporation. I'm also a member of the Board of Directors of the Corporation. As provided for, under Article 1, 8 of the corporation's bylaws, I will serve as Chairman of this meeting as well as the recording secretary. Proxy materials and invitations to attend today's meeting in person were mailed to stockholders of record as of April 30, 2020. On June 4, 2020, Vicor announced through a press release by a global newswire that this meeting would be held in virtual format only.
As set forth in that press release, a stockholder, whether a direct holder of record or a beneficial holder through his or her broker, who intends to vote his or her shares, change a previously submitted vote, review the stockholder list and or ask questions should have followed the instructions therein to register with Computershare for full access to the meeting via the Internet. Any stockholder proposals to be considered at this meeting should have been submitted earlier following the procedure set forth in our bylaws, At this time, I have The first opportunity will occur at the conclusion of the formal business meeting. Questions at that time should be limited to addressing topics related to the formal business meeting. The second opportunity solution. To identify themselves when submitting a question and will identify the stock and I will identify the stockholder when reading the questions received so that my colleagues may to our proxy materials On the screen is the comprehensive safe harbor statement comparable to the language we include in our other public statements regarding the company's financial or operational performance, such as our filings, press releases and our quarterly earnings call.
I will not recite the full text, but I remind you various remarks we may make today may constitute forward looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Also note, shown on the screen Vicor is in its quiet period for the second quarter of 2020 and as such, we will not comment on specific elements of financial or operational performance earnings call, which we anticipate will be taking place on Thursday, July 23. On the screen is the agenda for today's webcast. As shown, we'll conduct a formal business meeting reviewing the 2 proposals before stockholders. After we take care of formal business, Phil Davies will deliver remarks and slides summarizing management's long term strategic view Patrick Wyden, who leads our automotive initiative, will address our progress in pursuing that market and Mike McNamara will briefly comment on the expansion now underway of our Andover manufacturing facilities.
After that, management will take your questions regarding the company's business and products. Again, we cannot answer questions regarding our financial or operational performance for the second quarter of 2020 As has been the case in the past, we will be posting the audio portion of today's meeting on the Investor Relations page of our website. The slides also will be posted separately on that page. I'll now introduce my 7 fellow members of Corporation's Board of Directors. Our independent directors are in alphabetical order, Sam Anderson, who is the CEO of Ismos Technology, a supplier of high quality thick film bonded silicone on wafer, silicone on insulator wafers based in Belfast, Northern Ireland.
Jason Carlson is CEO of Cognitec AG headquartered in Degendorf, Germany. Cognitec she joined in 2015 is a leader in industrial embedded computing. SDIACON is an original investor in the company and has been since 1989 as senior scientist at Fermi National Accelerator Lab in Batavia, Illinois. Based on the assumed results of the stockholder vote, To occur at this meeting, who has served as our Corporate Vice President, Global Sales And Marketing since February 2011. He was appointed to the board in 2019.
Mike McNamara, who has served as our Corporate Vice President, General Manager Operations since 2015. He was also appointed to the board in 2019. Myself, I joined Vicor in 2008 and have been a director since that time. Claudia Tazzolo, who has been with Vicor since 2001, serves in a leadership role spanning R&D And Sales And Marketing. Claudio has been a director since 2007.
And Patricio Vinciarelli, Chairman of the Board, President and CEO, who founded the company in 19 81. We're joined today by our outside counsel, Gabor Goray, who chairs Foley and Lardner's private equity and venture capital practices. Also on the been appointed to act as Inspector of Election, also known as the teller for the formal business portion of this meeting. Also, attending by telephone is Ed Sullivan, our audit partner from KPMG, our independent registered public accounting firm. So thanks to everyone for attending.
Turning to the formal portion of the agenda, I now call the 2020 annual meeting of stockholders to order. On the screen is the agenda for the official business portion of today's meeting. As stated, proxy materials and an invitation to the meeting sent to all stockholders recorded as of the close of business on April 30, the record date. Only stockholders of record on that date are entitled to vote at this meeting, either by proxy or by in person ballot, subject to the computer share registration process discussed earlier. The affidavit of mailing, the notice of meeting has been delivered by the teller to me and will be filed with the minutes and records of today's meeting.
Our proxy statement was filed with the SEC on April 30, 2020, and mailed to stockholders shortly thereafter. It sets forth the 2 proposals for stockholder vote here today. The board recommends stockholders vote in favor of both proposals. While Rule 14A8 under the Exchange Act provides for the inclusion in our proxy statement of appropriately submitted proposals from eligible stockholders. In my capacity as corporate secretary, I confirm we have not received any such proposals This slide sets forth the number of shares of common stock and shares of Class B stock as of the prior 2 year ends excuse me, the record date and the prior year end.
The figures are presented on a basic basis, reflecting only the shares outstanding eligible to vote. Said another way, the dilutive impact of any options exercisable within 60 days date shown has been included, excuse me. As shown as of the record date, April 30, 2020, Our outstanding shares consisted of 28,935,952 shares of common stock, and 11,758,218 shares of Class B stock. I remind you our common our outstanding Class B shares possess 10 votes per share, although they are exchangeable only on a one for one basis for shares of common stock. As shown, holders of our Class B shares, of which there are 13, possess as of the record date 80.3 percent of the cumulative voting power of the 146,000,00518 1132 votes eligible as of the record date.
Also as of the record date on a basic share basis, Doctor. Vincarelli owns 34.1 percent of common stock shares outstanding and 93.8 percent of Class B shares out standing, representing 82% of total voting power, giving him control over all governance matters. Assuming full conversion of Doctor. Vincarelli's Class B shares on a 1 for 1 basis, as of the record date, His holdings represented 52.3 percent of share ownership on a basic share basis. Cause of Doctor.
Vinciarelli's voting control under the corporate governance requirements of NASDAQ rule 5600 we are considered a controlled company, which is defined as a listed entity for which more than 50% of the voting power for the election of directors is held by an individual or an identified group. As such, we rely on certain exemptions under Rule of 5600 and do not have a board consisting of a majority of independent directors nor ours is excuse me, nor are, nor is the nominating process, the sole responsibility of independent directors. We do not utilize the available exemption from independent director oversight of executive compensation, but instead maintain a compensation committee comprised solely of independent directors. Of course, there is no exemption from maintaining an audit committee comprised solely of independent directors, which we do. Directors Anderson Carlson and ICON will be the sole members of the board's compensation and audit committees for the 2020 term.
For completeness, I have included on the far right of this slide a column setting forth outstanding shares as of June 17, 2020, the date on which the underwriters of our June 15th public offering of primary shares exercised their customary 15% over a lot option, thereby bringing the total number of new shares issued in the offering to $1,769,002.31. The gross proceeds of the offering at an offering price of $65 per share totaled $115,000,000. Net proceeds to the company after the underwriting account and certain transaction related expenses was approximately $110,000,000. As of May 31, 2020, the last formal determination 18,657 shares of common stock outstanding. In addition to the 11,800,000 outstanding shares of the Class B stock shown on this slide.
As such, the offering was dilutive to May 31st shareholders by approximately 4.1% without taking into consideration exercisable stock options, and our total shares outstanding totaled $42,947,100 6, also without taking into consideration exercisable stock options. Returning to procedure, our first order of business shall be to determine whether the shares represented at the meeting, either by proxy or by those held by stockholders who have electronically indicated their intent to vote for the first time or to change a previously submitted vote are sufficient to constitute a quorum for the purpose of transacting business. I earlier introduced Computershares Harold Murphy, who has been appointed to serve as Inspector of Election having pledged to perform those duties under Delaware law to support me in the conduct of this meeting His pledge will be filed with the minutes and records of this meeting. According to information I see on the Computershare website at the present time, and confirmed by Harold Murphy in his capacity as Inspector of Elections. It appears there are no stockholders seeking to submit a vote or change an existing vote.
As such, I now ask the Inspector of Elections to inform us whether a quorum is present. Harold?
Mr. Chairman, I can report as of the record date, April 30, 2020, 28,935 19502 shares of common stock and 11,758,2018218 shares of Class B stock were outstanding representing eligible total of 146,518,132 possible votes as shown. Given our receipt of Doctor. Vince Cirelli's proxy, representing 82% of eligible votes, far more than the simple majority of eligible votes. Required for Quorum are represented here today.
As you have just indicated, we have received no new ballots nor any instruction to withdraw or change an existing proxy, so the numbers previously reported and shown on your slide are accurate. A complete list of stockholders as of the record date compiled and certified by Computershare is open for examination at this meeting by a registered stockholder clicks on the designated hyperlink on the page by which registered stockholders access this meeting.
Thank you, Harold. I therefore declare a quorum. The polls are now open and will remain open until the matters for the meeting have been presented and the Inspector of Elections confirms no additional votes have been capped electronically. We will now proceed with the discussion and voting on the 2 proposals set forth in the proxy statement. Since the two proposals were addressed in detail in the proxy statement, And since 92.7 percent of shares eligible to vote are represented by proxy at this meeting, we will dispense with the formal motions and balloting for the proposals.
Further, as mentioned, Doctor. Vincirelli's proxy, representing 82% of eligible votes has been received and voted in favor of each of the nominees and fixing the number of directors at 8. Therefore, the proposed proposal received prior to today's meeting more has more than enough votes for approval. Each stockholder was entitled to vote for a maximum of 8 nominees cumulative voting was not permitted. I'll now offer submit a question regarding the size seeing no questions and have been submitted regarding the first proposal.
I will now turn to the second proposal, which asks for stockholder approval of named executive officers pursuant to the say on paid provisions of Section 951 of the Dodd Frank Wall Street Reform and Consumer Protection of 2011. As set forth in the proxy statement, the board has voted to recommend stockholder approval of the compensation paid to our named executive officers. Because this vote is advisory, its outcome will not be binding upon the corporate the compensation committee or the corporation. However, the compensation committee does consider these votes when making future decisions regarding executive compensation. ICNO questions regarding the say on pay proposal have been submitted by registered stockholders via the Computershare website.
Accordingly, I now formally close the polls. Based on the totals previously provided by computer share and seeing no additional votes reported by the Inspector of Elections, this slide sets forth the voting results indicating the passage of both proposals. As shown, all eight directors outstanding for reelection received an affirmative vote of at least 97.6 percent of the total amount of votes cast, representing at least 90.5 percent of shares entitled to vote. Therefore, all eight nominees are hereby elected. The say on pay proposal was approved by 99.5% of the total amounts.
Excuse me, the total amount of votes cast. The final results of today's ballot will be reported in detail on or before Wednesday, July 1, via filing of a Form 8 K with the SEC. There being no other business to come before the formal business meeting, I will entertain a motion to adjourn.
So moved.
Thank you, Linda. Given the virtual nature of this meeting, the fiscality of an electronic voice vote of all registered stockholders listening and the presence of Doctor. Grinciarelli who holds 82% of voting control I will ask him if he is in favor of adjournment.
Bam. Vote
is in favor of adjournment. This concludes the formal portion of our meeting turn the virtual podium over to Phil Davies, who will offer his remarks on strategy.
Thank you, Jamie. Good morning, everyone, and thank you for joining us today. As Jamie said, my name is Phil Davies, and I lead Worldwide Sales And Core marketing for Vicor. For the next 20 to 30 minutes or so, we would like to share an update with you on the implementation of our corporate strategy which has made excellent progress since our update at last year's annual meeting. So today, we would like to cover the following subjects.
I'm going to begin by quickly going over the why change and why Vico message that customers in a number of markets are reacting very positively to. I will then cover our technology leadership which is driving the why change and why Vico message and reaction. I will briefly discuss our progress in the data center high performance compute and AI markets. It's going to be briefer than last year as we wanted to give more time to our automotive update, Warton Automotive Vice President of Worldwide Business Development, who's leading the charge for us here. Patrick will then hand off to Mike, McDemara, let's give you an update on our factory expansion.
After that, we will open up the Q and A. So let's start with the wide change and wide bicorp. So every electrical and electronic piece of equipment has a power delivery network made up of power sources, cables, wires, connectors, circuit awards. And most importantly, for Vicor, the power converters and regulators. Our systems engineers have to carefully architect and design these networks to maximize their systems performance.
So here is the why change and why Vico message captured in a flowchart image. So going from left to right, the first two circles are the white change and the last 2 are the white Vicor. So on the wide change side, we have several industries going through a dislocation with our power delivery architecture because their traditional 12 volt base network cannot meet new power requirements needed to stay relevant and competitive in their end markets. By moving their PDN voltage up They solve the power delivery problem, but create new challenges, which is where the WiFi Gore comes in. We have been innovating modular power solutions for many years with early adopters of our technology in advance of the sea change that is now occurring.
This innovation in high density modular power has gone through many advances, cycles of learning and increasing IP protection because we were the first to recognize and react dedication to innovation and almost $500,000,000 worth of investment, we are ahead of our competitors in offering customers the solutions they need to keep their competitive advantage. So VICO has 4 pillars to our innovation. You can see them here. Each one is continually advanced to enable the highest performance that can be delivered to our customers. Performance that they measure in terms of power density, current density, scalability, flexibility, and Of course, we cannot leave out the high volume manufacturing capability and capacity to meet their production needs.
So if we look at the lead that we have for power density and current density, You can see here that our power density lead is clear. And for high power front end systems in data center and automotive, markets, this is a major advantage. For current density, which is mainly required at the point of load. We have a similar lead. This current density capability has been a major reason for us success with companies such as Google and Nvidia who because of their increasing power requirements, performance needs and even in the case of Google at TCO Advantage moved to 48 volts and to Vicor's factorized power architecture ahead of the pack.
So where is the rest of the market with regards to 48 volts? Well, we believe and the evidence is mounting that 48 volts has crossed the CASM. And over the next 2 to 3 years, we will see 48 volts become the new 12 volts in cloud computing high performance computing
and
further, but a major change is occurring with 48 volt power delivery in the automotive market. And we're now seeing the same thing happen in LED lighting, robotics, 5 and in various industrial and aerospace applications. So whether it's landing a high voltage front end power source at 48 volts, or taking off from 48 volts to the point of load. All of our 4 pillars of innovation scale up when they scale out to steal our term used by NVIDIA's CEO to provide solutions to world class customers in high growth markets. So let's take a quick worth stating that FICO is focused on 48 Volt Modular Power delivery solutions for cloud computing, high performance computing and advanced AI processes and accelerated costs.
These application segments breakdown into various sub segments, and I'd like to cover that in a little more detail. So looking at power delivery opportunity for LICO. We have addressable markets at the front end from 3 phase AC or high voltage DC to 48 volts. And then from 48 volts within the racks on the blades or with AI subsystems and accelerator cards. Now, the key and the solutions that we provide.
So looking at this from a solutions perspective, here are the 3 power delivery networks that we have focused on shown in the power delivery diagram on the left. Conversion is about providing scalable, high power, high density solutions, and you'll see the same value proposition when Patrick gets into his automotive presentation that handled a high power front end conversion to 48 volt back planes in the rack. Our solutions are easily cooling technologies because of our planer firmly adapt chip packaging. Bridging is about providing high density solutions for new 48 volt rack back planes to legacy 12 volt multiphase point of load regulators and legacy 12 volt rack back planes to new 48 volt AI based loads. And finally, current multiplication, The best way to show that is with a real solution and here that is.
This is our new Hydro 2 solution. The A100 card here from Nvidia, which is a lateral power delivery current multiplier solution. You can see in the new architecture, the 2 hour modules on the north and south side of the A 100 GPU. On the right side, you see the supporting regulator and driver And in this card, we expanded our power content over the V100 on the left with a 48 volt direct to memory rail DC to DC converter. The reason why Vicor, for maximum processor performance, you need the highest performance power delivery solution.
It's as simple as that. The YVico message is now resonating with many other customers, and the opportunity is very large. Here, I have taken a midpoint in market size estimations for the 3, we will have a market opportunity of about $750,000,000. With this addressable market expanding, by 2025 as new AI processor companies come to market and ASIC developed by the hyperscalers themselves, a launch for their unique workloads. So let's look at a little history in the future for VICO in this large and rapidly growing market.
So our journey started in 2010 with IBM, who was the innovator and early adopter for 48 volts, We then moved quickly to Google in 2012 as our first hyperscaler customer. Cray was a major HPC customer for us early on. Now of course, a subsidiary of Hewlett Packard Enterprises. We then landed NVIDIA as our first GPU customer. And since that time, we've added new GPU customers and new hyperscalers that will ramped to production later this year and into 2021.
We are also engaged with many ASIC and FPGA accounts designing their own AI ASIC solutions and also with hyperscalers who are developing their own own internal chips as well, as I've mentioned earlier. So it's a very exciting time at the company. And I'll now hand over to Patrick for an insight into our automotive opportunity. Patrick?
Thank you, Phil. Good morning and welcome. My name is Patrick Wyden, and I head up the Worldwide Automotive Business Development for Vicor. Today, I plan to show some trends and developments that are happening in the automotive industry and how Vicor is well positioned to address them. We have an exciting time ahead of us in automotive and has great potential for us in solving some of the biggest challenges OEMs and Tier 1s are facing.
Power delivery is increasing and the space available for the power electronics is reducing and weight is becoming a big issue. Bicore's high density scalable power module approach is gaining traction at OEMs and Tier 1s across the globe Let's take a look at what's electrification is happening experiencing very similar challenges. Vehicle OEMs must meet lower CO2 emission standards, while increasing vehicle features and performance to remain competitive. This significant challenge is being met with within pure electric vehicles, hybrid electric vehicles and plug in hybrid. The addition of higher voltage batteries such as 48 volt, 400 volt and 800 volt to meet the increased power requirements has turned as in turn increased the complexity of power delivery architectures and place new demands on the size and weight of the vehicle's power converters and regulators for battery charging, power conversion and power delivery.
Electric vehicles are needing faster charging, lower range driving and smaller, lighter and higher efficiency power electronics to handle the increasing power levels faster and lighter, there is a passionate need for speed. And as these vehicles progress through the electrification transition, Smaller lighter power systems are essential to stay competitive among the ranks of some of the highest performing cars in the world Fluggen hybrids are making great strides and becoming a very practical approach and convenient means of transportation. But still having the need for smaller lighter weight power electronics. We've also seen a strong interest from the motorcycle OEMs in Japan, needing lighter weight solutions, battery driven motorcycles, battery electric driven motorcycles will also need 100 volt electric vehicle systems that are smaller and lighter due to the space constraints although very different in size and shapes have a lot of similar requirements needing smaller solutions, high efficiency, high density, which can be satisfied with a modular approach truly scalable and flexible to fit various architectures. Electrification is accelerating to be one of the biggest areas for R And D spend at OEM And Tier 1s Worldwide.
The 3 electrified powertrain types we're targeting are hybrid or mild hybrid, plug in hybrid and electric vehicle platforms, they will all experience some of the most significant changes in the automotive industry with significant architectural changes to occur in development phases and optimization phases of the to increase from 8% global content to 35%, which is about 5x the amount in the number of vehicles produced annually. Vicor's value proposition and path forward for these OEMs to achieve high power levels efficiently will provide an addressable market opportunity depending on the vehicle type and the power levels. Our module content per vehicle ranges from $80 the right technology and scalable solutions to enable the OEMs The electrified market and opportunity for Vicor has a lot of runway. I'll be talking about our product strategy and customer engagements in the following slides. To give you a feel for where with OEMs and Tier 1s.
They come to understand that we not only have solutions for them today, but as the requirements change, and power levels double, we have the scalable, flexible solutions to help them. The higher the power, the better. As we look at the automotive market over the next 10 years, the 3 vehicle powertrain types we're targeting are expected to grow from 8 million vehicles per year to 40,000,000 vehicles per year with an increase of Vicor's addressable market from just under 3000000000 to over $16,000,000,000 some of the advanced automotive solutions we bring to the automotive industry. Vicor's product offering covers the entire power delivery network, from the source to the point of load. Our strategy is to provide solutions to the OEM, which start at the charging stage or from the grid All the way through the vehicle to the delivery of the 12 or the 48 volt loads.
I'll talk about these three areas in more detail but wanted to point out the wide range of solutions we're providing OEMs to handle the hard or the difficult power designs at the vehicle level. Most of our engagements today are at the OEM level where they experience the benefits in using Vicor products. And are able to reduce overall cost of ownership, downsize on cabling and connectors and harnesses and reduce weight and size. The 4 devices you see on this page are capable of all handle capable of handling all of the power requirements for a vehicle starting with the charging, converting high voltage to low voltage, and providing power delivery to key areas of the vehicle in a centralized or decentralized
architecture.
Battery charging is coming at the OEMs at a very fast pace and without a lot of time to figure out some of these challenges. There are still differences between charging stations and vehicle battery voltage, oftentimes causing anxiety and frustration with which chargers will work with which vehicles. Typically, electric vehicles will have either 400 volt or 800 volt batteries. Some of the charging stations are designed for 400 volt or 800 volt vehicles. Vicor is working with OEMs to help alleviate these challenges with a 400 to 800 volt converter which either converts the voltage up or steps the voltage down providing compatibility between vehicles and roadside chargers.
The soon to be available NBM-six thousand one hundred and twenty three as shown in this picture is rated for 6.4 kilowatt output power and can be parallel has a 99.3% peak efficiency and can be paralleled and configured in 6 12, 18, 24 kilowatt onboard chargers and up to as high as 50 kilowatt, which is the highest level we've seen so far. The more power, the better. In 400 volt charging stations, it can boost the voltage from 400 to 800 volt shortening the overall charge time and aiding The conversion of high voltage trend seen in electrified vehicles. OEMs are working around the clock to develop smaller lighter conversion systems to meet the increased power levels coming with Traditionally, high voltage to low voltage converters are very bulky and cumbersome and usually lack the efficiency needed at the 10 to 20 kilowatt solutions are smaller in size, scalable, and flexible for creating arrays and providing huge power savings with higher efficiency. Oftentimes, OEMs are able to save on cooling methods and eliminate the battery completely creating a virtual battery We shipped our first eight hundred volt to 48 volt samples to a customer this past May with very favorable results These devices rated at 2.5 kilowatt can be scaled and parallel to create very high power delivery at approximately 98% efficiency, reducing overall weight, size and complexity.
My experience in working with the OEMs has included both 400 volt and 800 volt battery conversions, which is why we have solutions for both. On the delivery side, Vicor is well positioned to support the fast changing needs seen across all of the The new 48 delivery network has truly become the new 12 volt and as history would have it, higher voltage levels are making it easier for automotive companies to reduce current, downsize on wiring and connectors and reduce size and weight. The original car battery right around 1955. The same trend is happening evolving to 48 volt architectures in order to account for higher power vehicles lower CO2 emissions in lighter cars. The opportunities we see in this area range from power hungry powertrain applications like active stabilization, electronic power steering and braking.
Some of the more obvious options in a vehicle would include heated windshields or start stop features, or electric or heated seats. Typically, these comfort load in cabin was supported by a 12 volt network and as the 12 volt network became oversaturated, 48 volt battery and power delivery networks were implemented to offload and create higher efficiencies at the vehicle level. Most of the OEMs today estimate the electronic content in a vehicle to rise from about 35% to over 50% by 2030. I suggest these are the types of systems that will be driving that shift, reducing complexity and moving to a more modular type solution in the vehicle, The heated windscreen, for example, allows OEMs to replace fans, blowers and mechanical hardware with a small flexible Bicore module the size of a sugar cube delivering 1 to 2 kilowatt of power on each corner of the windscreen to provide a blanket of warmth to the passengers and defrost the glass. It not only reduces the weight of the car, but simplifies the mechanical complexity into one small, easy to use electronic solution.
The start stop feature, which has been around for years, uses the same 48 full topology and can be easily simplified with a scalable, flexible, high density approach. I suspect we will see 12 volt legacy systems for many years to come and a slow adopting use of the 48 volts overtime Vicor's advanced automotive products have a bidirectional feature that allows OEMs to step the voltage up or step step the voltage down at unprecedented efficiency levels and parallel these in any configuration to meet their needs today or as power levels continue to rise in the future. Key customer engagements, we have made great progress in the past 18 months, working closely with OEMs and Tier 1s, across the globe to identify exactly what they need in all of the regions around the world. We've identified and validated the need and challenges automakers are experiencing in powertrain and chassis systems and leveraged Vicor's strengths to modify our core products to solve the tough automotive challenges and solve electrification problems. We are developing a world class automotive quality management system and building a top notch team to help us build on the revenue stream over the next few years.
The customer engagements shown on this slide are not all customers yet shows the key customers we're engaged with We have 3 collaboration agreements in place today very exciting year to expand with teaching customers and continue Thank you very much.
I'll now introduce Mike McNamara for some remarks on facilities expansion.
Thank you, Jamie. So today, I'm going to give an update in regards to our expansion of our existing factory at 400 federal in Andover. So as previously discussed, we are on our way of constructing additional 90,000 square feet dedicated for manufacturing. The site prep has started. Interior work is undergoing, in order keep our employees safe in our operational systems up and running during this construction period.
We target the completion of weather type installation of the factory by the end of the year. That will allow us to start to install certain critical equipment in once that is weather tight. To allow us to complete the construction around certain critical pieces of equipment Within this facility, we will be enabling vertical integration of critical processes currently relying on outside contractors. This will help us reduce our manufacturing cycle times. It will help us scale to meet the ramping demands that fill in Patrick talked about in regards to these exciting new Advanced Products.
On top of that, we actually leveraged the existing operational overhead and infrastructure in the support system at 400 April. The final chart is just where we stand. As of last year, we reported that we had successfully Re engineered and lean manufactured our existing factory to support $500,000,000 of revenue out of our existing factory. The next step, of course, is to meet the $750,000,000 revenues, and we are able to do that once the completion of the additional expansion of 90,000 square feet. And then we're constantly evaluating the next steps to ensure that we're ready for the growth that we foresee.
Thanks, Mike. At this time, management will take your questions. Period. And accordingly, we will not be commenting on current operational or financial performance. Please keep in mind Vicor is targeting Thursday, July 23, releasing Q2 results and holding our quarterly conference call with investors.
During the Q and A portion of that call, investors will have direct access to management for asking questions. As stated by the operator at the beginning of the meeting, management reserves the right to consolidate certain questions in its sole discretion if those questions cover similar or overlapping topics. Management also reserves the right to not respond to questions or comment comments it considers also in its sole discretion inappropriate for the purposes of the annual stockholders meeting. We've already received several questions, so I'll proceed with reading these questions to my colleagues, while we monitor the Computershare website for others as they are submitted. And the question reads.
Nvidia announced on Tuesday an expanded lineup of A100 based solutions, including a PCI Express version positioned for less demanding applications and offering less efficiency. Given the power limitations of a PCI Express design, it is assumed this is a 12 volt accelerator card. As such, do you have any insight into whether a 48 volt card using your Hydro 2 solution or a twelve volt solution using competitors multi phase approach will be used in the 3rd party servers reference in the NVIDIA announcement. Also, do you have a similar insight into the implications of the 12 volt card on your OAM expectations.
So, Phil? Sure. So I mentioned in my presentation that there are many, many workloads within the data center and of course, Nvidia reacts to that with different types of products at different power levels, performance levels, And you're right that, that PCIe card in particular, that the PCIe is still a 12 volt standard. Although they are working on a 48 volt standard because the 12 volt is really being pushed in some of these applications today. That one card, I think, is a 400 watt card and the connector is very hot, preferred a lot about that.
And So the move to 48 volts there is going to come. We'll be ready for it with our solutions. But today, we are not participating in the 12 volt section of the market. Other than, as I mentioned, converting, 48 to 12 volt systems or using 12 to 48 volt converters for legacy 12 or back planes in the data center market. So again, we focus on the high performance workloads and the high power racks because that's where our solutions perform the best and where our customers really need the types of technologies and capabilities that FICO provides.
Okay.
The next question is from Richard Shannon of Craig Hallum. You've recently raised equity based on a new manufacturing approach, which includes greater vertical integration. Please describe the changes specifically in packaging. Does this packaging process require new expertise that hasn't previously been inside the company, What are the risks involved with this change and how do you mitigate them? So Tricia?
Yes, I'll take that.
So the packaging technology, as Phil mentioned in his remarks, is one of the 4 basic pillars of our strategy. It is something that we've been developing for many years. And something which has led to considerable amount of innovation and intellectual property production. What we're currently undergoing in terms of a transition to vertical integration which before too long will be in the expanded FELSIIT facility, a percent low risk because of all of the cycles of learning that we've already gone through, working in partnership with a supplier, which is also the provider of a good deal of capital equipment for a new factory. So I think that both the experience we gained over the last 10 years on packaging technology that is quite unique and enabling when it comes to a true power component methodology.
That experience, in general, the specific experience with respect to the processes that are about to be vertigo integrated The fact that today, Vico personnel actually operates that equipment in the partner's facility. All of these, elements of strategy for a smooth transition make it in my mind, very predictable. Mike, would you like to add any comments to that? No, I think that's complete.
We will have when we bring on the equipment, we will have to train employees to run that process.
Okay. Turning back to a question segment in computing are claiming the power efficiency of their 2 stage multi phase solutions are approaching the efficiency of Vicor's single stage solutions. Are these claims accurate? And if so, how do you intend to defend the beachhead you have established in 48 Volt against commoditization pressures, whether in the AI acceleration space or the broader data center infrastructure opportunity.
Well, competitors are trying to play catch up. I think we've been told by industry observers, the customers in particular that that technology is somewhere between 5 10 years behind us. And importantly, our technology is not standing sale. We're working on further and further advances. We don't rest We believe in the principle of, pedaling a bike and continuing to pedal it are to say comfortably ahead of the competition.
So you encounter the fact that, our technology continues to get better. There is a big gap today and that gap is not getting any smaller. So I'll give you some quantitative metric. On DCDC converter functionality, specifically 48 to 12v DCDC conversion, we have a 9x advantage in power density. In other words, we have provided solution in about one tenth of the space of the closest competitor in terms of performance.
So that's something that will keep me up at night in terms of worrying about competitors catching up. As referenced in field's remarks, at the point of load, we have achieved a couple of amps per square millimeter current density. The competition is typically at about a quarter of an half square millimeter. Yes, the competition is trying to play catch up. But the gaps today are very substantial.
We're not talking about minor differences. We're talking about the kinds of differences that enable customers to achieve much higher performance. And again, importantly, we keep on moving and raising the bar with respect to performance. A couple of additional comments on this question, which I regard as quite important. On the work commoditization, one should not think and customers nowadays should not think of Vicor as the company, they got to know about 20 or 30 years ago.
In that timeframe, we were a supplier of specialty modules for niche markets. Without a strategy for manufacturing the most cost effective solutions. In other words, We started out and retained today a market share by virtue of power density leadership in particular. But once upon a time, we did not have a cost advantage. Today, we do.
The packaging technology that was referenced in the earlier questions is truly enabling in terms of giving us a significant and before too long, even more significant cost advantages relative to a competition that is handicapped in terms of performance. So I fully expect that we're going to have remarkably the combination of best performance and lowest cost curve.
The next question is from John Dillon. John, it says, I have focused on the Vicor power on package point of load solutions lately, but I've noticed that you won a memory slot on the new NVIDIA A100 card. Are you seeing additional memory slot wins along with other slots? Can you give us some color on Vicor's wins with additional rails? Phil?
Sure. So the NVIDIA architecture is, of course, unique to them. Other customers that we are working with, with lateral power delivery solutions, either use the the same DCDC converter or actually use a what we call a ZVS SIP regulator that we also provide to the market for the 48 volt memory conversion that's also then done by a multi phase. So it's 48 to 12 and then 12 down to the memory. Rail and some of these other applications.
So we have a 48 to 12 volt socket there. But as we move forward with vertical power delivery, that's where we're entering in sort of, if you like, integrating not just the main power rails, but the memory rail into solution single chip solutions, going forward. So we will be powering not just memory rail, main rails, but also memory rails in some of these advanced AI processes where we provide vertical power delivery right underneath the process of socket. So yes, we'll be moving forward with Power Solutions for that.
Okay. Another question from Richard Shannon. Regarding Automotive, how are your potential customers viewing Vicor as a single source? And are they asking for another source? If so, what is your approach?
This is Patrick Gordon. Thank you, Jamie. We've seen that for many, many years in the automotive industry And obviously, OEMs and Tier 1s would love to have as many suppliers as they can to drive the price down. There's there's quite a bit of content in a vehicle today, anywhere from a $0.25 pressure sensor to a very expensive, a very complex power module that are sole source. Is a tremendous amount of sole source content in a vehicle today.
And so I think that I think that automotive company we'll continue to ask and they'll continue to push for that. And we see that. And then that's been a very common trend. Not only to drive the price down, but obviously with automotive, the name of the game is the supply chain. I do want to comment on second sourcing sometime in the future.
We are experiencing some licensing and we're having we're having discussions. We don't have any immediate plans for anything in that area, but it would be nice in years to come. To have some kind of genistically and would consider that if it were a benefit to our strategy.
Thanks, Patrick. Follow on from Richard Shannon regarding the data center space. Google appears to be your only major win in the data center space where power efficiency is the driving factor as opposed to power density.
Do you expect to
customers whether cloud OEM or chip suppliers.
So that is actually the application is really changing. We talked about this in more detail, in last year's presentation where the efficiency question because of the current levels, the power levels of some of these AI processes and even advance CPUs are getting to the point where the efficiency of the converter is important, but also or itself through the motherboard. And that's why we have got a very, very strong advantage with our current multipliers and the density of our current players in placing those very, very close. You can see with the lateral power delivery solution on the NVIDIA card, they're very close to the to the GPU. But the next advanced is vertical power delivery that cuts that impedance by an order of magnitude between the current multiplier on the processor.
And there are significant losses in the board as this current goes up. If you don't do placements like that. And that's really the driving factor now is that the efficiency has moved from what's the efficiency of your converted to what's the overall efficiency that you can achieve between the 48 volts and the point at which you take current into the processor. It's much more expanded now than it ever was. So that's how the market's moving forward and we've advanced that with our lateral and now vertical power delivery solutions.
Yes, I would add to that that while efficiency has remains, it will continue to be an important driver. Functionality, meaning the ability to provide a solution, compute capability that without an adapt power system cannot be delivered is an even stronger driving factor because competitively, in DI space in Partica, being able to raise the bar on functionality on performance of the process is obviously in the minds of competitors a spine competitors line for that market, the key network. So adding a power system ability that allows, let's say GPU or faster process to drill 1000 or 1500 amps to raise the bar on compute capability. Even with efficiency that may not be stellar is either itself the key network. So all of these factors are applied, density, efficiency, but as we see more and more, up our systems in Naval Solutions that are wise not possible.
And competitively, that's obviously a key differentiator.
Something of a follow on question, to the last question that this is from John Dillon. John asked, you showed that new hyperscalers in your chart for revenue this year, will be contributors. Is that a single hyperscaler converting to 48 volt like a Google or is this the introduction of AI into the data center or a combination of both?
It's mainly the introduction of AI into the data center. This is where the NVIDIA GPU accelerated cards are being used. In in rack based system. And the hyperscaler is a 12 volt infrastructure needs to convert the 48 volts and they're using FICO 12 to 48 volt modules to do that. And there are also OEM cards coming out of the open compute project where companies have put 48 to 12 volt, convert is actually on the OEM cards.
Because of our density, we have a unique value proposition there. We can go right on the OEM card and those are being populated by hyperscalers as well as
Quinn Bolton asked a question of Patrick regarding battery charging. You highlighted battery charging, bridging and voltage conversion applications in electric vehicle. However, is Vicor developing inverter solutions to drive the electric motors. In EVs.
We are not developing inverter solutions. We are primarily focused on the on the onboard charger at the OEM. And we're doing that because we think there's great potential with with some of the some of the roadside charges that are coming. What triggered some of this was some work that we're doing with with a particular OEM who was looking to take a U. S.
Car and have it be compatible with some of the electrify America chargers that are being installed around the country. The Electrify America charges was a result of the old, the Volkswagen diesel gate. It was a it was a court order to build those and to put those around the country And what they're finding out is that these chargers are 800 volts. And they don't really work or they're not really compatible with a lot of the OEM with the U. S.
OEM batteries. So that's how we first got engaged in this area, but But to answer your question, specifically, we're not looking at necessarily, we're not looking at inverter applications.
Okay. It looks like our last question is, again, from John Dillon. Can you give us some examples of how your technology enables a higher performance computer? How does the Vicor technology enable HPC
film?
So again, it comes down to the performance of the processor is about current delivery. Not just the amount of current delivery, but the speed of the current delivery, the transient performance during overclocking of the processor, for example. So our solution is inherently very, very fast. And we've already talked about the density and the ability to deliver very high levels of current to processes from very, very close proximity. So that's the critical defining feature is, and you can see it from Nvidia.
I mean, they could have chosen maybe many other suppliers, but they didn't, right? Because they want to maximize the performance of their processor. And the only way you do that is having the best power delivery solution. And that's why Vicor, and that's why you see us on their A 100 card. And it's the same for other people developing their own AIA 6, whether it's new chip companies or hyperscale is developing their own chips.
They're coming to Vicor for the same reason. Processor performance needs superior power delivery and that's what we offer.
The operative words are high current density, fast sensitive spots, the ability to respond to changes in load, the visual instantaneous both of which are features that fell already to a moment ago. I would add a third one, which is low noise. So our technology is as fast as it is as dense as it is because it is soft switching, meaning its unique counties, engines have soft switching attributes allow it to operate losslessly at very high frequencies. Well, guess what, they virtue of debt soft switching, we can also provide a solution with very, very low noise. And that lonar is also a key differentiator.
So we are we've had 1 GPU CASTE, as an example, remarked to us that a transition from an early generation solution based on multi phase to our solution based on current multiplications. They saw their GPU being able to operate better because of reduced noise environment created by the power system. I. E. The area of our system is one that takes up no space.
It's 100% efficient. It's got 0 noise. And our current multipliers are by far the closest thing to that.
So I see no further questions on the computer share site. So I will adjourn the 2020 Annual Stockholders Meeting. Thank you very much for attending.
This concludes the 2020 Bancorp Corporation annual stockholders meeting. You may now disconnect.