管理層發言
Thank you for standing by, and welcome to the Enovix Corporation Second Quarter 2026 Earnings Conference Call. As a reminder, today's program will be recorded. And now I'd like to introduce your host for today's program, Monica Gould, Investor Relations for Enovix. Please go ahead.
Thank you, operator. I would like to welcome everyone to Enovix Corporation's Second Quarter 2026 Financial Results Conference Call. Joining me today are President and Chief Executive Officer, Dr. Raj Talluri; and Chief Financial Officer, Ryan Benton. Raj and Ryan will be speaking to the slide presentation displayed on today's webcast, which will also be posted along with our press release on our Investor Relations website at ir.enovix.com. They will provide prepared remarks, and we will then open the call for questions. Before we begin, please note that today's call contains forward-looking statements that are subject to risks and uncertainties. These statements are based on current expectations and may differ materially from actual future results due to a number of factors. For a discussion of these risks, please refer to the disclosures in today's press release and our filings with the Securities and Exchange Commission. You can also find these materials on our IR website. All statements made on this call are as of today, August 12, 2026, and we undertake no obligation to update them, except as required by law. During the call, we may also reference non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are included in the materials posted on our IR website. And with that, I will turn the call over to Raj.
Good afternoon, everyone, and thank you for joining us. The second quarter showed momentum across all three of our primary target markets. In smartphones, we reached an important qualification milestone. Our lead customer confirmed that our cells passed more than 1,000 cycles on the 0.2C discharge cycle test. We have one final cycle life test, and it's already well underway. We expect to finish remaining testing by the end of 2026 with customer acceptance and smartphone field testing to follow. In smart eyewear, the production ramp of our lead customer has begun. We shipped approximately 2,100 batteries to a Tier 1 customer, recorded our first smart eyewear product revenue from this customer and expect to deliver roughly nine times that volume in the third quarter. In drones, defense and industrial, we grew the pipeline by 41% from the first quarter. Drones led the way. We advanced product development and the drone pipeline alone now exceeds $100 million. Revenue for the quarter came in at the high end of our guidance, and we expect continued sequential growth in the third quarter. What is increasingly clear is that Enovix has multiple paths for growth that reinforce one another. Our 100% silicon anode AI platform is progressing towards smartphone deployment, while smart eyewear has entered commercial production. That sequencing is by design. From the start, my strategy has been to go after the hardest market first—smartphones—because meeting the most demanding energy density requirements forces us to build the best product. Everything we prove at the smartphone level then flows naturally into adjacent categories. Smart eyewear is the clearest example where the same platform is now shipping commercially. Meanwhile, our MX platform takes that same silicon know-how and manufacturing discipline and aims it at defense, a big, fast-growing high-value market. Our established South Korea operations are serving defense and industrial customers today and their extensive experience with drones in particular is opening substantially larger opportunities. Briefly on the two platforms. The AI platform uses our proprietary 100% silicon anode architecture for space-constrained applications where volumetric energy density and cycle life are most critical, while the MX platform blends silicon with graphite for greater gravimetric energy density and high-power performance manufactured at our proven facility in South Korea. These are not isolated businesses. They are mutually reinforcing. And we're seeing this convergence translate into new areas for growth today. We are working on silicon-blended opportunities beyond our traditional drone, defense and industrial markets. Drilling down a bit further, first, on smartphones, we moved materially closer to completing qualification with our lead customer. The customer has now confirmed the cells passed more than 1,000 cycles under the 0.2C discharge cycle test. This is the same test our internal testing indicated when we shared it with you in February. The customer's own data has now borne it out. Fundamentally, this is customer-confirmed evidence that the silicon anode batteries can perform at high levels. Remaining work to be done is an accelerated cycle life test built around a hybrid protocol we defined in close collaboration with our customer to replace the traditional 0.7C testing approach used for legacy graphite batteries. Testing is now live across several combinations of charge and discharge conditions as well as with an enhanced cell design. The enhanced cells are now showing stronger capacity retention in internal work and the data is now with our lead customer's team for evaluation along with multiple variants of the hybrid protocol. We anticipate completing this final test in 2026. Our second smartphone OEM is also moving towards a similar qualification framework, and we expect to begin sample deliveries in the fourth quarter. As we look towards 2027, we see the pattern repeating and expanding: our lead customer moving into commercial introduction with our second OEM advancing through qualification and additional leading OEMs with whom we are in active dialogue entering the qualification pipeline behind them. We pioneered the qualification testing pathway for silicon batteries and smartphones, so every customer after the first gets a faster, clearer path to execution and deployment. I'm especially proud of our progress in smart eyewear, which has now moved from initial production into early commercial revenue with a Tier 1 customer. Recently, we completed a key international safety certification of our cells and battery packs as well as a full suite of customer reliability tests. We shipped approximately 2,100 AI1 batteries in Q2 and recognized our first smart eyewear product revenue. We have delivery orders in hand for approximately 19,000 packs, which we are planning to deliver in the third quarter, a roughly ninefold increase from Q2. Those delivery orders are part of the customer's 50,000-unit pack order; we expect to ship the remaining balance in the fourth quarter. Beyond 2026, we expect shipment volumes to grow as our customers' downstream deployments expand. Turning to our defense sector, I'm proud of the team's execution from initial product launch in the first quarter to a substantial increase in our drone pipeline in the second quarter to customer sampling beginning now in the third quarter. The pipeline for products manufactured in South Korea increased 41% to approximately $183 million from $130 million at the end of the first quarter. As a reminder, this figure represents the estimated peak annual production value; the lifetime opportunities are often many multiples more. More than half of the growth came from growing opportunities, which now exceed $100 million on their own. Let me walk through what's inside that number. In the funnel you see on the slide, more than $40 million of this pipeline is at stages where customers are actively evaluating, testing, or designing our cells into products. The breadth is striking, including some of the most recognized names in defense technology and consumer electronics. We also introduced MX-1 to a broader set of customers and industry events in the United States and Europe. At approximately 360 watt-hours per kilogram while supporting high continuous and pulse discharge, MX1-B01 is designed to improve mission execution, flight time, range and payload capability. We've already ordered additional production equipment for the MX1-B01, and we expect it to be operational by mid-2027 with initial commercial shipments and revenue expected to follow as that capacity comes online and customer programs complete qualification. This pipeline growth is also a commercial execution story. For the past two quarters, we've been deliberately building out our commercial organization, adding application engineers and product management talent, and we then brought in Steve Bakos, a seasoned sales veteran with more than 35 years in the global semiconductor industry who most recently ran large global accounts at Infineon, to lead our sales and application engineering teams under Samira Naragh, our Chief Business Officer. We are seeing the early results in that funnel. Our South Korea operation is a meaningful advantage in pursuing these programs. It combines an established history serving defense customers with in-house manufacturing, quality and supply chain capabilities in a TAA-designated country. Our South Korea supply is TAA compliant today and ready for the expected mid-2027 capacity ramp, and we expect NDAA compliance across multiple product SKUs. In July, our drone battery completed UN 38.3 transportation testing, creating an important step for commercial shipment, and we are commencing sampling with numerous customers in the third quarter. The next phase of Korea capacity is expected to come online in mid-2027, a very capital-efficient expansion, utilizing existing land and buildings we own and using readily available equipment. The economics are attractive as well. ASPs are healthy. And because we own our own manufacturing, we believe the scaled volume can support solid margins. Beyond the current product, MX-2 remains targeted for 2027 with the goal of reaching 400 watt-hours per kilogram. Let me now come back to the AI technology platform. We produced the first AI-2 engineering samples in the first quarter. AI-2 is expected to provide approximately 20% higher volumetric energy density than AI-1 by combining thinner materials, better packaging efficiency and higher cathode voltage through our EX-3M technology node. We sampled cells to one Tier 1 smart eyewear customer in Q2. Many of the same EX-3M innovations are expected to carry into future smartphone batteries and support another meaningful step forward in performance in that area as well. I want to give you some insight into how our pace of innovation is also accelerating as it is something I'm particularly focused on. In batteries, the grading factor on development speed is cycle life testing. A full cycle life test has historically taken four to five months and that sets the tempo of learning in the entire industry. We are developing AI models that can predict cycle life outcomes much earlier in the cycle life test than has historically been the case. Our models for eyewear cells are getting close, and we're making very good progress on smartphone cell modeling as well. To be clear, customer qualification will always be the physical test, but this is about how fast we can learn and iterate internally. If we get this right, every design generation ramps faster and that speed itself becomes a durable competitive advantage. Turning to manufacturing, the second quarter showed continued improvements across Fab2 with particularly strong results through most of the smart eyewear production flow. In fact, our smart eyewear cell output came in well ahead of our internal plan for the quarter, and our integral yield, the cumulative yield across the entire production line, has now improved for three consecutive quarters. Outside Zone 1, all but one process step operate at yields of at least 95% with individual steps as high as 99.6%. Zone 1 dicing remains our primary throughput bottleneck and a top focus, but the yield has improved to approximately 84% from 80% in the first quarter. Zone 1 has been a stubborn constraint for a long time. This is exactly why we changed the approach rather than simply tuning it. The hybrid dicing configuration uses laser and mechanical processes where each is most effective and is designed to lift Zone 1 throughput to multiples of today's rate. This is the step change we need to support the production volumes we are planning for 2027. Several of the key mechanical dicing steps are expected to come online around year-end. Supporting all of this execution is our growing team in India. That team, in addition to conducting advanced research, directly supports manufacturing execution at both our Malaysia and South Korea factories. Finally, I want to spend a moment on leadership because I'm thrilled to have Michael Vyvoda on board as the Chief Operating Officer. Michael brings decades of operations experience, including at Apple. He has a full-scope mandate across manufacturing, supply chain, quality and customer delivery. His immediate priorities are increasing smart eyewear output, preparing manufacturing for smartphone field test builds and driving the cost, yield and delivery improvements underway. Adding Michael gives me even more confidence that we have the right team for the next phase of scale. With that, I will turn the call over to Ryan to review our financial results and outlook.
Thanks, Raj. We delivered another quarter of revenue growth and positive gross profit. We came in better than our operating loss guidance, and we ended the quarter with over $550 million in cash on the balance sheet, all while continuing to invest in the customer programs and manufacturing work that support the next phase of commercialization. Second quarter revenue was $9 million, up 21% year-over-year and 19% sequentially at the high end of our guidance, our fifth consecutive quarter of year-over-year revenue growth. Defense shipments from South Korea remained the largest contributor, while smart eyewear generated its first product revenue—modest in amount, but an early proof point of contribution from AI-powered wearable devices. GAAP gross profit was $1.3 million and non-GAAP gross profit was $1.8 million, representing GAAP and non-GAAP gross margins of 14.4% and 19.9%, respectively. The year-over-year decline in quarterly margin primarily reflected the mix of battery products sold through our South Korea operation rather than a change in underlying execution. Even with that change in mix, this was our seventh consecutive quarter of positive gross profit on both a GAAP and non-GAAP basis. The first half non-GAAP gross margin was up year-over-year to 22.8% from 21.3%. Non-GAAP operating expenses were $30.6 million compared with $28.8 million a year ago. The increase reflects continued spending on smartphone qualification, product development and manufacturing readiness, including support for the smart eyewear ramp. Non-GAAP loss from operations came in at $28.8 million, better than our guidance range of a loss of $29 million to $32 million. Adjusted EBITDA was negative $18.9 million compared with negative $20.1 million in the second quarter of 2025. Non-GAAP net loss per share was $0.13 at the favorable end of our guidance range of a loss of $0.13 to $0.17 and unchanged year-over-year. Turning to cash flow. Net cash used in operating activities was $21.8 million, down from $25.9 million in the second quarter of 2025. Free cash flow was an outflow of $31.4 million versus $33.8 million a year ago, both better year-over-year despite higher capital expenditures supporting our manufacturing scale-up. The operating improvement primarily reflected favorable working capital changes. Capital expenditures were $9.6 million, principally supporting manufacturing readiness and capacity expansion. We ended the quarter with approximately $552.1 million in cash, cash equivalents and marketable securities, including restricted cash. That liquidity allows us to fund the qualification and commercialization milestones already underway while preserving flexibility for selective strategic investments. We did not repurchase any shares during the quarter. Our capital deployment priorities remain unchanged: product qualification completion, disciplined manufacturing investment and commercial execution. For the third quarter, we expect revenue between $9 million and $10 million, up approximately 13% to 25% year-over-year. The range assumes continued defense and industrial shipments from South Korea and a significant sequential increase in smart eyewear deliveries. We expect non-GAAP loss from operations between $29 million and $32 million and non-GAAP net loss per share between $0.13 and $0.17. We expect capital expenditures between $8 million and $12 million, primarily for Fab2 initiatives and South Korea capacity expansion Raj discussed. As always, quarter-to-quarter revenue and gross margin can vary based on product mix, customer delivery timing and the pace of qualification and commercial program ramps. For the third quarter specifically, two factors will shape gross margin: product mix in our South Korea business and the early cost of the smart eyewear ramp before volumes reach scale. We will continue to manage spending with discipline and align our investments with measurable customer product and manufacturing milestones. And with that, let me turn the call back over to Raj for some closing thoughts before we open the call up for questions.
Thank you, Ryan. This quarter, all three of our markets moved forward at the same time. Smartphone silicon batteries passed a critical milestone; smart eyewear entered its revenue generation stage; and our drone and defense pipeline is growing rapidly. The milestones to watch from here are just as clear: completing the final accelerated smartphone qualification test, initial sample deliveries to a second smartphone OEM, the smart eyewear ramp, converting drone and defense opportunities into design wins and continued improvement in manufacturing, throughput and cost. With that, operator, we're ready to take questions.
分析師問答
Our first question will come from Colin Rusch with Oppenheimer.
I just want to get a sense of volumes as you start to ramp the eyewear business line. How do we want to think about total volumes to get to that optimal margin level? And how many quarters do you think it will take to get there?
Yes. Thank you, Colin. I can take a shot at it, and then Ryan will add some more commentary on margins and so on. Firstly, we're actually very pleased with the progress in manufacturing on the small cells, going from a few thousand packs to now roughly 19,000 next quarter and on the way to fulfilling a 50,000-pack order. This shows our confidence in manufacturing of the cell on our technology platform in our Penang fab. I'm really proud of what the team has done there. The market itself is multiple millions of units and expected to grow year after year. We are sampling now to different customers who are in various stages of building the products. Exactly how much we'll ship will depend upon how successful their products are and what share we win. The feedback we've got from customers is the cell has been very strong, mainly driven by the energy density we provide in the small form factor. And it's translating into much longer battery life, particularly with AI running on these glasses. Ryan, would you like to take margins?
Yes. Not to be repetitive, but we shipped 2,100 units in the quarter. The absolute revenue from that is nominal, of course. On pricing specifically, I'm not going to quote a number there, particularly because we're dealing with one single important customer, so I can't go into those economics. What matters for us is that we build scale and we get into a position of incumbency in the growing market. We want to be the default battery supplier of choice for smart eyewear. Finishing on margins, even at the 50,000-unit level for the year, that can absorb the overhead burden that it will face as those costs start to move from operating expenses up above the gross margin line. So we expect it to be negative margin for the balance of the year. Ultimately, as we ramp and get to some version of scale, and I'm not going to quote a specific breakeven point, we do expect to have healthy gross margins.
Okay. Excellent. And then in the drone market, obviously there are a lot of different applications. I want to get a sense of how you're positioned within that opportunity and which applications you're competing well in. What are the key drivers—what products are really driving some of the progress you're making in that end market?
On the drone market, we are seeing tremendous interest from many customers. One of the main reasons is we now have an extremely competitive cell where the main metric is watt-hours per kilogram. That cell is manufactured fully in our own factories in a TAA-compliant country, South Korea, and we expect to reach NDAA-compliant status across multiple SKUs in 2027. The South Korea facility has more than a decade of production history on site for military applications. The main markets we are serving are those that require a few hundred cycles, such as flight-time-optimized drones, public safety, interceptor drones, ISR and similar applications. These markets have a good margin profile and strong demand. We expect demand to outstrip supply quickly with many customers wanting this product. We are adding capacity there and expect it to come online in mid-2027.
As we review the pipeline, these are some of the best companies in the world. Drones are a big portion and the majority of the funnel that's building now. We expect that to be strong for many years to come. There's also other technologies that will build on top of this, such as robotics, which we think will be a big market over the next few years.
Your next question will come from Ruplu Bhattacharya with Bank of America.
Can you guys hear me now?
Yes, sir.
I had two questions. Raj, now that both the lead smartphone customer as well as the second smartphone OEM have moved to a silicon-specific qualification framework, how standardized do you think this will become in the industry? What steps are you taking to enable that? Does the second OEM now have essentially the same qualification path as the lead customer? And when do you expect purchase orders from the first customer as well as the second customer?
Good question. Over the last few quarters, we've convinced customers that when you move from graphite anodes to 100% silicon anodes, some of the legacy tests are not very representative of how the battery will perform in real life. That's a big step forward. As we discussed in February, our internal 0.2C cycle life test showed we should be able to go past 1,000 cycles; the customer has now confirmed that on their own test. The remaining test is the accelerated cycle life test because a 0.2C normal cycle life test takes a long time. We've worked with the customers to define a hybrid protocol combining different rates of discharge. Our lead customer is running these tests now across two or three protocols we worked on, and our expectation is one of them will meet their requirements in the fourth quarter. Then we expect a small build where they'll put the battery inside their phone to see how it performs, and then we start getting into volume production in 2027. We continue to talk to other customers and have good engineering relationships with them. I expect over time the market will adapt to these kinds of protocols because silicon behaves differently than graphite in accelerated tests.
Okay. As a follow-up, you've made many manufacturing improvements in Fab2. What is the manufacturing capacity now as it stands today of HVM-1 as well as the agility line? Can you give us a sense for how many maximum units of smartphones and eyewear each of these lines can support?
When we first stated the line capacities, the nameplate capacity was 1,350 UPH (units per hour). We haven't staffed to full nameplate because we are managing the ramp in line with customer qualification timelines so that when demand is there, we are ready. It's more a question of pacing the line with the right number of people, working on yields and aligning the ramp with customer qualifications. That's where we are today.
Your next question will come from Mark Shooter with William Blair.
You can hear me, right?
Yes, sir.
Awesome. Raj, congrats on passing the 1,000 cycles. That's a big accomplishment. I do think that we thought that this would be the last milestone stage gate, though. Can you walk us through what the last test is trying to prove? I know it's a hybrid approach, but did your lead smartphone customer see something that required more digging? Any color there would be helpful.
The last test is essentially an accelerated test. They would like to discharge at a faster rate, but not only at a high rate; they want a combination of faster and slower rates that better represent real-world phone usage. We're working with them on the protocol they want to use and they have a pass/fail number that we need to meet. After that, the next stage is to test the battery inside a phone; the current tests are bench tests on the battery itself. The main gating item right now is the accelerated cycle life test so they can complete it in time. We have multiple protocols underway jointly with the customer and expect to see results by the fourth quarter.
To add, in February we discussed that we passed the 0.2C test internally and were waiting for the customer to run it. We have independent verification from the customer now, which we're proud of. We also discussed the 0.7C traditional graphite test and the need to define a proxy for silicon. We now have cells running under several variant protocols and expect one or more to pass by the end of the year.
Got it. Switching to the drone opportunity, which is increasing here with a $100 million pipeline, can you walk us through some of the time frames from pipeline opportunity to downstream steps? Is it 9 to 18 months? When do you see decent conversion from the pipeline into backlog?
The pipeline has grown significantly. The $5 million figure is design wins awarded so far; a better metric is that about $40 million is already in active evaluation or testing with customers designing our cells into their products. Defense qualification cycles are shorter than smartphones, so production can come faster. The revenue and scale align with our Korea capacity coming online in mid-2027, and we expect to start seeing ramp from this pipeline in mid-2027. The capital expansion is capital-efficient because it uses land and buildings we already own.
There's a split within the pipeline. Drone companies themselves tend to move quickly—on the order of six to nine months—and we're sampling those customers now. Defense primes and larger programs typically take longer, and 18 months is a reasonable average for production on some of those. These represent enormous opportunities, and the equipment we've ordered is in flight to add capacity.
Your next question will come from Derek Soderberg with Cantor Fitzgerald.
Just a clarifying question first, Raj. You were talking about the testing earlier. I wanted to confirm whether the second smartphone OEM is accepting the 0.2C testing standard? I think you mentioned there are a few different options, but can you confirm that the second smartphone customer is accepting 0.2C?
We're focused on the first customer first. When that customer gets to the right stage, we will sample the second one. We've talked to all of them about silicon behaving differently and they understand that; some have already launched some amount of silicon batteries. My expectation is the market will move towards this type of testing framework over time.
And it's fair to say each one should be easier and easier. We are not planning to fail; once the first customer completes qualification, the path for others is faster.
Got it. That's helpful. On Zone 1 yields, those improved quite a bit since Q1. Was that mostly due to the dicing configuration? And at a high level, where do you feel you need to get yields before you can really ramp up production? Maybe a yield number that gives you the confidence to invest in additional capacity assuming demand is not the issue?
I'll take a stab at that. We've been making steady progress and focusing on disciplined yield wins. The four-percentage-point increase reflects many tactical changes: mechanical changes, process changes and a lot of focused work by the team in Malaysia. Michael, our new COO, is adding to the momentum and is in Malaysia this week reporting positive results. We are starting commercial ramp with smart eyewear and feel good about the glide path on yields. We believe we have a path to the gross margins we need, and the target margins to support a high-volume ramp are consistent with typical manufacturing concerns.
It's continuous improvement. The hybrid dicing approach plays a role, but it's the combination of the process, mechanical and operational changes across the line that's delivering yield gains.
Your next question will come from William Peterson with JPMorgan.
Maybe picking up on that last topic, with the new COO Michael, where do you expect he will be most focused—Malaysia improving yields, Korea, or somewhere in the supply chain? Any tangible areas where you think he can drive the most continuous improvement?
Michael has a full mandate across both factories, manufacturing, supply chain, quality and customer delivery. KH is responsible for manufacturing across both factories as well, so Michael will lead the overall operational side. Our Malaysia factory is benefiting from learnings in Korea and vice versa. The India R&D team is helping both. It's a cross-pollination of battery know-how across all sites rather than a strict Malaysia-versus-Korea split.
The gross margin stepped down in the second quarter and you called out mix from South Korea. Can you provide more color? It also sounds like the small volumes of eyewear might have an impact. How should we think about gross margin trajectory given eyewear ramp and mix effects from South Korea?
Caution against reading one quarter as a trend. On a first-half basis, non-GAAP gross margin was up year-over-year to 22.8% versus 21.3% last year. Q2 specifically reflected product mix, principally in the Korea business, which can be lumpy and where some SKUs carry better margins than others. Looking forward, smart eyewear as we ramp will be a drag on margins early because overhead moves into the gross margin line before volumes scale, though from an operating income and cash flow perspective, it's largely geography moving. As we scale into 2027 and beyond, we expect this to rationalize and margins to improve.
Your next question will come from Ananda Baruah with Loop Capital.
I apologize if this has been asked already. Raj, memory availability—does that have any impact because of the prolonged tightness on any of the SKUs you're targeting for smartphones or PCs? Also, are low-end phones exiting the market potentially impacting you and where are you positioned on that SKU heat map?
Not much impact for us yet. We're not in high volume; we're in the qualification stage, so we haven't seen major effects from component tightness. Customers are concerned, but it hasn't impacted us materially. Regarding SKUs, we're being qualified on leadership products where our technology offers the most differentiation. Over time, the technology will waterfall down to other SKUs, but at this stage, SKU mix is not significantly impacting us.
If you think about revenue mix three to five years out across product segments, how should we envision revenue contribution to the company? Any anecdotal percentages across smartphones, eyewear, drones and defense would be helpful?
We can't quote specific percentages, but it's fair to say there's a competitive race across these segments. A year ago, we might have said smartphones would dominate, but the drone and defense markets have developed faster and could become a large business fast given product development progress and commercial traction. Smart eyewear also has the potential to grow significantly. All three markets are attractive and where our technology provides clear customer benefit.
Your next question will come from Jeff Osborne with TD Cowen.
Just a quick one, Ryan. Could you update us on where annual production capacity is at the South Korea facility now? Raj mentioned an expansion up and running by mid-2027. Where is it now, where are you headed, and how much will it cost?
In terms of capacity, we're not operating at full nameplate today; there's headroom. Different equipment lines have different utilization levels. For the drone business specifically, current capacity is minimal. We've placed orders for new equipment designed for our product SKUs that will add significant material capacity in the summer. The capacity of that equipment is roughly one million units. The equipment and associated payments are embedded in our CapEx forecast. You see our third-quarter guidance of $8 million to $12 million in CapEx; the Korea expansion is capital-efficient and we have additional buildings and land there for incremental capacity beyond this initial expansion.
Our goal is to ensure as Samira and her team convert the pipeline into design wins, we don't get capacity-limited. We are staging capacity additions so we can add quickly as design wins come in. We have the space and buildings in Korea, and up to one million units per year is on track as Ryan mentioned.
There are no further questions at this time. With that, I'd like to turn the call over to Dr. Raj Talluri for closing remarks.
Yes. Thank you all. Really great quarter. We're happy with all the progress we've made and look forward to seeing you next quarter.