SkyWater Technology, Inc.
Q1 2021 Earnings Call Transcript

Published: 19 May 2021

[Operator:]

Ladies and gentlemen, thank you for standing by and welcome to the SkyWater Technology First Quarter Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. I would now like to hand the conference over to your first speaker today Heather Davis. Please go ahead.

[Heather Davis:]

Good morning everyone and welcome to SkyWater's conference call for the first quarter of fiscal 2021. With me on the call today from SkyWater are Thomas Sonderman, President and Chief Executive Officer; and Steve Manko, Chief Financial Officer. I'd like to remind you that our call is being webcast live on SkyWater’s Investor Relations website at ir.SkyWatertechnology.com. The webcast will be available for replay shortly after the call concludes and will remain available for one year.

[Thomas Sonderman:]

Thank you, Heather. Good morning to everyone joining our first earnings call at SkyWater Technology. We appreciate your interest. It's been an incredible journey from the formation of our company in March of 2017 to the successful completion of our IPO last month. Today, I'll briefly cover last quarter's financial highlights and reinforce why we're optimistic about the growth opportunities ahead. Steve will then go into further detail on our financials. In the first quarter, net sales grew 30% to $48.1 million driven by an acceleration in our advanced technology services, or ATS business. ATS sales were $38.1 million, an increase of 61% over Q1 of 2020. We believe this record revenue is a testament that our strategy is working. Gross margin improved 170 basis points to 19.1%. Our net loss attributable to the shareholders was $2.8 million and adjusted EBITDA was $5.6 million. Our vision at SkyWater is to improve the world by revolutionizing technology realization because we're impatient waiting for the promise of tomorrow, o we're focused on making it happen faster today. Our industry transforming technology as a service, our TaaS business model allows us to co-create next-generation technologies with our customers, accelerating their time to market with the confidence of automotive quality manufacturing and extensive IP protection. Since our inception, SkyWater has been committed to accelerating the development of next-wave technologies in partnership with our customers. I am proud to announce one of those today, Rockley Photonics. After a multi-year technology and product development collaboration, we are now aggressively moving their photonics first platform to volume production. This is an exciting milestone for both companies and we are proud to have reset together.

[Steve Manko:]

Thank you, Tom. I am excited to share the financial results on our first earnings call as a public company. SkyWater has built a team to execute on the growth opportunities for disruptive technologies that customers need. Net sales for the first quarter were $48.1 million, an increase of 30% versus the first quarter of 2020. ATS sales grew 61% to $38.1 million. And Wafer Services revenue decreased 25% to $10 million. ATS’ growth was driven by $15 million in tool related revenue we recognized from customer funded tool purchases. As part of our SaaS model, we offer our ATS customers services to procure facilities and qualify the tools needed for their technology development and capacity requirements. We recognize these services related to customer funded tools at sales. Q1 tool related revenue is higher than usual. The decline in Wafer Services sales is primarily attributable to lapping our original foundry supply agreement in Q1 2020.

[Heather Davis:]

Thank you, Steve. SkyWater will be presenting at the Needham Technology & Media Conference on Thursday, May 20 at 1

[Operator:]

Your first question today comes from the line of Mark Lipacis with Jefferies. Please proceed with your question.

[Mark Lipacis:]

Hi. Thanks for taking my questions. You started running your rad-hard 90 process for copper interconnects. I think that was a little bit earlier than we were expecting. Did you recognize revenues from this in the March quarter? And then going forward, do you plan on breaking out Advanced Packaging revenue separate from ATS and Wafer Services?

[Thomas Sonderman:]

Yes. Thanks for joining the call, Mark. Good to hear your voice. As far as the rad-hard technology development, it is proceeding as planned. We're still doing what we call technology qualification. That's being done on the front end of the process, which is the fully depleted SOI with MIT Lincoln Labs. And then in parallel, we're starting up our copper interconnect backend. So right now it's all technology qualification, no revenue generation really until we get into 2022. As far as the question on the AP, we will not be breaking it out. I think of AP is again, another capability that we're offering. It will have both ATS type engagements that ultimately evolve into Wafer Services and alignment with our technology as a service model.

[Mark Lipacis:]

Got you. And I had a couple of follow-ups. And then on the – in the Florida facility, can you help us understand what level of revenues the facility could support today based on the equipment that you have there. And what's the arrangement with the – with Osceola County regarding capital equipment. And I think you also mentioned you took on 20 new employees. This was that just as part of the kind of acquisition of those operations or is this 20 new employees added additional to kind of taking on that operation?

[Thomas Sonderman:]

Yes. Again good questions, Mark. As far as you know the start with the last question and work backwards, the employees that we hired were essentially new employees for SkyWater. Some of them carried over from the University of Central Florida, which had been the partner with Osceola County before SkyWater took over. So we did offer a few of those employees to transfer over to SkyWater. They're all actively engaged with starting up the facility. As far as the revenue projections, I would say it's really too early to start projecting revenues out of the facility. It's currently in qualification. We are restarting the existing DOD programs. There was three programs that had already been awarded to the facility when we took it over. Those have been restarted. And then we're qualifying the equipment to be able to actively start generating revenues from those programs, while working with our existing customers to bring in additional capabilities for our advanced packaging. So this was essentially an expansion of the supply chain, as well as talking with multiple new customers as well. The other thing I like to mention is that we do have and have positioned that facility as it relates to the chips act the U.S. government wants a domestic source for advanced packaging, and we believe we're the fastest path to do that in the industry. And we fully expect to take advantage of that is the chip funding becomes a reality.

[Mark Lipacis:]

Got you. Okay. Last question if I may. Can you give us some color on the announcement around the Google-sponsored open-source 130 nanometer multi-project wafer shuttle? What is that program and what are the implications for you guys? And that's all I had. Thank you.

[Thomas Sonderman:]

Okay. Thanks, Mark. So yeah, Google has partnered with SkyWater to create a disruptive approach using an open-source platform on our 130 nanometer offering to really develop applications specific markets for the IoT and advanced computing markets. The immediate result of this for SkyWater was 40 new customer engagements. The first shuttle has again 40 unique customer designs on it. It was oversubscribed. It is running through the fab as we speak. It has a variety of different IC designs open process or course using risks five which is another open-source platform. It's got multiple system on a chip. It's got a cryptocurrency miner and several other unique capabilities. The other thing I'll mention is that not only is leveraging existing IC circuit designers, but also software developers. So it's a disruptive program. We're excited about the potential I'll say the data still out and in terms of what the benefit will be if this particular open-source approach works, but we're really excited about the opportunity it can provide not only the SkyWater, but the industry as a whole.

[Mark Lipacis:]

That's it. Thank you very much.

[Operator:]

Your next question comes from the line of Krish Sankar with Cowen and Company. Please proceed with your question.

[Krish Sankar:]

Yes. Hi, thanks for taking my question. And Tom and Steve congrats on the first earnings call of the gate. I had a few questions. First one is, the gross margins came in stronger than we expected. Can you give some color on what the gross margin split between ATS and wafer solutions during the quarter?

[Thomas Sonderman:]

Yes. Good morning, and thanks for joining us. Yes, we don't break at the margin between Wafer Services and ATS, but it's our plan to grow and expand our gross margins in 2021 as and beyond. Our ATS business, as we communicate is our higher margin business, we can expect to expand gross margin as we're successful in growing our top line revenue from an ATS perspective.

[Krish Sankar:]

Got it. Got it. And then I just have two other follow-ups. One is, can you just say, what is the utilization data per minute for the factory today? Or and then what is the capacity in terms of the wafer stocks for today?

[Thomas Sonderman:]

Yes. Thanks, Krish. I'm glad you actually brought this up. It's important to recognize that, and SkyWater is not atypical foundry. What we focus on is margin per activity which we optimize based on the mix. Again this is ATS mix as well as our Wafer Services mix. Our goal is to optimize that to obviously maximize the margin per activity. This is done by focusing on what we need to do to meet customer development milestones, as well as production delivery commitments. And so what I'll say is that we are running above our target utilization. As Steve said in his opening remarks, we were underutilized last quarter – last year, because we specifically focused on accelerating ATS. But in general, our real focus is on margin per activity. And we're very confident and excited about the direction that that's moving in.

[Krish Sankar:]

Got it, got it, Tom. That's kind of helpful. And then one last question from the end, you kind of mentioned about how you're going to grow your gross margin from your onward and I understand ATS, increasing ATS increasing customers is a big driver for that. I'm just kind of curious, can you just like kind of give us the list of big levers that you have to improve the gross margin from let's say 19% today to 40% down the road.

[Steve Manko:]

Yes, sure. Happy to do so. I really want to make sure if you understand what our plans are. And there's really simple levers that we're focusing on to do that. As I already mentioned, we expect to grow gross margins as we drive higher ATS revenues. Another lever that we can pull is obviously covering our fixed costs within our manufacturing facility. So having a high number of activities that Tom alluded to coming through the manufacturing facility and keeping that running efficiently will be another lever. And as Tom mentioned, we're excited about moving some of our customers from ATS into high volume Wafer Services, as we continue to be successful in doing that, we believe we can expand margin there as we have a healthier richer margin mix from our high volume Wafer Services production.

[Krish Sankar:]

Got it. Super helpful. Just one last housekeeping. What do you feel was the tool revenue in the quarter?

[Steve Manko:]

The tool revenue in the quarter was $15 million and that's clearly higher than the typical run rate for tool revenue on a quarterly basis.

[Krish Sankar:]

Thanks, Tom. Thanks, Steve.

[Thomas Sonderman:]

Thanks.

[Operator:]

Your next question comes from the line of Harsh Kumar with Piper Sandler. Please proceed with your question.

[Harsh Kumar:]

Yes. Hey, Steve and Tom. Congratulations on two things, first, first call as a public company, and then secondly, solid results. So we as investors really appreciate the second one for sure. I had a couple of questions, one, several times in the call, Tom you noted, do you have a lot of confidence and growth for ATS business? Maybe you could talk about, qualitatively, where that confidence is coming from. Any numbers you can help us with backlog or activity, anything like that. And how you see the growth in the ATS business processing for the – progression for the rest of the year.

[Thomas Sonderman:]

Again, good question. Yes, ATS, obviously is very exciting parts, because it allows us to innovate with our customers. I think there’s a growing appetite for innovation as it relates to many of the emerging platforms. This is what I refer to as tying to some of the mega trends that are going on, whether it’s MEMS devices, which of course we’re getting a lot of traction. We have some very unique capabilities in that space. Obviously, we’re excited about the traction we’re getting in with our rad-hard early adopter program. The ability to get some of our S130 capabilities beyond our partnership with Infineon is also progressing well. Some of those actually do start out as ATS, because we do offer a degree of customization prior to going into production. And then the other, I would just say, as far as your question about book-to-bill, we have a very healthy backlog. We’re confident that a lot of the customers that we’re working with are going to expand their engagements with us. So that’s really important. We don’t have to just get new customers to grow the business. We can expand our relationships with existing customers. That said, I think as we continue to get more traction, our business model – technologies of service is really resonating in the industry. And so we’re – I would say very selective about the customers that we bring on, but when we do – we’re committed to bringing them not just through our ATS capability, but ultimately wrapping them to volume production. And we feel really good about how all that’s come together.

[Harsh Kumar:]

Hey, thanks, Tom. And then another one for you on that topic. I think Steve mentioned that one of the drivers for gross margin is conversion of ATS to Wafer Services. Could you help us with maybe what you saw in the quarter this quarter? How many of your ATS customers expanded engagement to Wafer Services or any kind of metric you can give us around that?

[Thomas Sonderman:]

Yes. Again, great question. And it’s really – by paths are so excited about this year. It’s really the first year, where we have multiple customers moving out of ATS and Wafer Services. Three of those customers transition last quarter. And then as I mentioned in my opening remarks, Rockley Photonics is another long-term partner of ours. They’re also moving into Wafer Services this year – I mean this quarter, sorry. And we have multiple other customers, 10 in total for the year that will be transitioning as the year unfolds.

[Harsh Kumar:]

Okay, great. And the last one, you came off as a set of a spin from Cypress and then Cypress has got taken out by Infineon. So you had a sort of an abnormal customer concentration there. But curious and you’ve done great job of bringing that number down each year, each quarter. Curious, if you could just give us some update on where your top – how many, 10% plus customers you’ve had this quarter and maybe a scale up your largest customer.

[Steve Manko:]

Yes, sure. I’ll take that question. And you’ll see this broken out when we file our Form 10-Q. From a customer concentration standpoint for looking at our Q1 2021 revenue, we had three customers that were above 10% of our overall revenues. One customer was significantly higher given the concentration of the tool revenue that we talked about earlier in the call. So that’s not indicative of the concentration going forward, but we had three customers that were 10% or more of our Q1 2021 revenues.

[Harsh Kumar:]

I appreciate it. Thank you.

[Thomas Sonderman:]

Thanks, Harsh.

[Operator:]

Your next question comes from the line of Mark Lipacis with Jefferies. Please proceed with your question.

[Mark Lipacis:]

Hi, thanks for working me back into the queue. So I saw a lot of times we’re hearing is about the passive and supply constraints in the industry. Can you talk about – are you experiencing any raw material or supply constraints or maybe on the second order impact, are your customer staying at anywhere else that’s impacting how they’re thinking about layering into your Wafer Services business?

[Thomas Sonderman:]

Yes. Thanks, Mark. Good question. At this current time, we’re not experiencing any challenges in terms of supply constraints whether it’s raw silicon wafers or chemicals, gases really we believe that we have good supply chain transparency. We’re actively watching it, but as of now, we’re not seeing any issues that concern us.

[Mark Lipacis:]

Got you. And then you called out the ramping automotive and IoT related production activities. Do you guys – can you provide us a sense of how your revenues are breaking down by vertical market?

[Steve Manko:]

Yes. Thanks for the question, Mark. Given the sensitivity of what we’re doing with our customers, we don’t give a lot of breakdown from vertical market on how we’re generating our revenues. We can give you the information like we talked about with what we’re doing primarily with the Wafer Services, which we’re going to automotive and IoT right now. And then also what some of the announcements we’ve been making in the past, clearly with the funding and partnerships we have with the DoD, we’re generating revenue in the aerospace and defense market as well.

[Mark Lipacis:]

Got you. And then Tom, you had mentioned the chips act, where – like, how do you expect to benefit from this? How does this manifest choose SkyWater? To what extent is this? You expect this to be tax credits versus direct funding. Can you give us a sense of how you think this plays out for SkyWater?

[Thomas Sonderman:]

Yes. Again, another great question. Very timely, there’s a lot of dialogue going on. Obviously, President Biden had the chip summit a few weeks back. There’s actually a follow on meeting tomorrow with Secretary Raimondo from the Department of Commerce. And they’re gathering information about where investment needs to occur. But I’ll say and certainly the message I’ve been amplifying is we can’t just focus on advance node leading edge technologies, which is the TSMC, Samsung, Intel. There’s a whole lot of other semiconductors that are required across the entire value chain. And I believe that a lot of the innovation that we’re driving is going to displace, eventually a lot of the Moore’s law related activities, which we all know is going to come to an end just based on physics. So we're excited that, that message is resonating. It's analogous to when our nation created fracking technology as a way to reestablish independence within the petrochemical industry. And I believe a lot of the things we're doing is going to basically result in the same type of transformation. And certainly I believe that will allow us to reestablish leadership, not only in R&D but in manufacturing as well and that's really got to be the focus. That's why we're in patient waiting for some of these more traditional approaches and are really focused on differentiating through our disruptive technologies.

[Mark Lipacis:]

Got it. And then a couple of questions for Steve, I think there's the non-controlling interest line item of about $760,000 in the income statement. What is that attributed to, how should we think about modeling that going forward?

[Steve Manko:]

Yeah, sure. Good question. So you'll see more information on that in the footnotes of the financial statements and Form 10-Q when those are issued. But we're what that relates to as a variable interest entity that we have related to the sale and leaseback transaction of our primary facility in Bloomington, Minnesota, with that we triggered the VIE accounting guidance, and that's the amount that you're seeing for through. That's a good approximation of what you'll see likely for the remainder of 2021. We are not stuck with the VIE accounting forever there is a point in time when that could go away, but that is not likely to take place in the near-term.

[Mark Lipacis:]

Got it. And is that – is there a – from an accounting standpoint is there a cash flow implication of that on a non-controlling interest line item?

[Steve Manko:]

There's not a significant cash flow related to that now.

[Mark Lipacis:]

Okay, got it. And then the depreciation amortization, it was $6.5 million in the quarter. How do we think about that for the rest of this year? And then as we go into 2022 is to expect that to drop down a bit?

[Steve Manko:]

Sure. Yes. So you'll see increased depreciation and amortization, primarily it's going to be depreciation and that's really related to putting our facilities online and the investment we're making in our Minnesota facility for the rad-hard technology. And we will see that basically coming through depreciation and that will be another as we communicate a drag on our gross margins that's coming through cost of goods sold. What we're really targeting is a range of approximately $29 million to $31 million in depreciation from before the year of 2021.

[Mark Lipacis:]

Got it. And then last question, do you have an estimate for the share count in the June quarter?

[Steve Manko:]

Yes. The share count for the June quarter, just go back to what was communicated and that’s one that was filed of around 39 million shares outstanding.

[Mark Lipacis:]

Got it. All right. That's all I had. Thank you.

[Operator:]

Our next question comes from the line of Raji Gill with Needham & Company. Please proceed with your question.

[Raji Gill:]

Yes. Thank you. And congratulations on the IPO and great results as well. Steve and Thomas, I was wondering if you could talk about your strategy in power management. In the past, you talked about your focus on developing your own power management capability MOSFETs and IGBTs. That seems to be a strong area of demand and growth, particularly with the needs for U.S. sourcing. So I want to get your thoughts on that as part of kind of your long-term growth strategy.

[Thomas Sonderman:]

Yes, great question, thanks for joining the call Raji. The real strategy for us in MOSFET is differentiation. So we have been working on several different platforms using our expertise and CMOS ironically, and translating that into kind of a grounds-up design for our MOSFET technology. So we're not going to be bringing a typical MOSFET design. We are leveraging things like film-based technologies to again drive differentiation. Obviously, domestic sourcing is also important. The real long-term objective actually is to move not just into silicon based solutions, but also GaN based solutions. So I think our strategy is really to innovate, create unique solutions with our customers and then eventually evolve into GaN based technologies, which we believe there's a strong demand for domestic capabilities in that space. So it's definitely a new area of focus for us, and we're excited to be bringing two of those programs to buying production in the second half of this year, as I mentioned in my opening remarks.

[Raji Gill:]

Yes. Very good. In terms of adding additional capacity, I think in the past, you mentioned adding additional capacity both on 130 nanometer and 90 nanometer, the 90 nanometer kind of rad-hard is lower volume, but more profitable. So I wanted to get a sense in terms of how you're balancing the mix of capacity that you intend to add as it relates to – or margin per activity, as well as just overall process flows?

[Thomas Sonderman:]

Yes. So again you have to kind of think of our path as being three paths in one, we have 90 and below technologies today. That's very focused on rad-hard also read-out ICS and our carbon nanotube program. The 130 offering is our mixed signal platform. We're always looking at how we get more out of the existing install base that we have. So we're very focused on using automation and other operational excellence activities to drive more without having to actually add equipment. That said, we do have an existing test floor that Cypress used to run in the facility. And we plan on converting that to more traditional, clean room capabilities, and that'll draw further expansion in capacity. And that'll again be targeted not around, not just around 130 and 90, but specifically our copper interconnect platform that we'll be expanding beyond just what we have for rad-hard.

[Raji Gill:]

Very good. And maybe a point of clarification, Steve, and correct me if I'm wrong on this, but the wafer services margins are lower than your ATS revenue. You had mentioned that you expect, Wafer Services sales to grow significantly as kind of utilization is pruning and kind of transitioning some customers over. How does that fit in terms of the overall strategy to expand gross margins, if the Wafer Services has lower margin?

[Steve Manko:]

Right. So the way that would fit into lever would be as we would expect to get gross margin expansion, as we bring newer technologies into production that will solve for an average higher sale price and also drive enhanced margins in Wafer Services.

[Raji Gill:]

Okay. So it's expanding the inherent growth margins in Wafer Services,

[Steve Manko:]

Right. As we bring new things into production.

[Raji Gill:]

Got it. Okay, great. And just last question, just broadly, the innovative business model that you're kind of providing in conjunction with the push to have domestic semiconductor manufacturing operation, the U.S. seems to be kind of a good timing. I'm wondering kind of the – what the feedback has been from customers on your new business model, controlling basically the whole process for them wafer fab to advanced packaging, nano assembly and test. What's been the advantages that these customers are getting and I would expect that as more customers learn about the value proposition that they will start to move to this more innovative business model? Thank you.

[Thomas Sonderman:]

Yes. Again, great question. And thanks for asking. I think it's an important message. The way I like to think of it's a virtual IDM. We engage with our customers during the product creation process that obviously gives them the opportunity to optimize their product while we're working on the process that gets optimized together, that creates a more robust design. And then we – because we're doing it on the same facility, have the ability to accelerate their time to volume. And we get to do all that again on the same equipment, but the same engineering team, the same production team. And so there's a time to market advantage. They get the assurance of automotive level of quality, because that is a core business of ours and has been for literally decades. Going back to when Cypress owned the facility and the other is trusted IP. We protect IP as it relates to our U.S. government relationship and all of our commercial customers get to enjoy that same benefit. So it's all about time to market, the ability to optimize their product along with the process simultaneously, and the ability to have the assurance of domestic sourcing and IP protection along the way. I think there's a real reluctance to do things, especially on innovative new products where IP protection is in question. And that's the beauty of this renaissance in domestic manufacturing going on, especially at times a lot of the R&D that's happening here at Skywater.

[Raji Gill:]

Yes. Thank you very much. Appreciate it.

[Thomas Sonderman:]

Thanks.

[Operator:]

Your next question comes from the line of Harsh Kumar with Piper Sandler. Please proceed with your question.

[Harsh Kumar:]

Hey guys. Thank you for the opportunity to ask a follow-up. So Tom, there are two powerful forces going on at a macro level. There's the geopolitical problems, and then there's a push by the U.S. to make things here in the U.S., and Europe kind of fit the center play for both of those. I'm curious at this point, if you have seen customer activity, customer conversations, or kind of any color around that pointing to that and wanting to work with you at a higher level?

[Thomas Sonderman:]

Yes, again, great question. And again, very timely. There's definitely an appetite before our sourcing out of the United States. And a lot of this has to do again that the repositioning of supply chains out of China that started back when the tariff wars were going on and then when COVID hit. And so I think we're certainly in a unique position to take advantage of that. Our relationship with Infineon is a great example where they're getting us concentrated around some technologies we've made for many years with sourcing out of the U.S. as well as some of our other customers who are expanding their value chain with us. We have customers that are doing AP overseas that now want to do that here at our Florida facility. And so we believe the momentum is already underway. I think this is going to be decades in the making this recalibration of the supply chains and Skywater is certainly right at the center of that. And that's what really gets us excited about the future.

[Harsh Kumar:]

Thanks guys.

[Operator:]

Your next question comes from the line of Krish Sankar with Cowen and Company. Please proceed with your question.

[Krish Sankar:]

Yes. Thanks for taking my follow-up. I just have two quick ones for you, Tom. One is you mentioned about the 90 nanometer copper I haven't seen this kind of solidating out in Q1. Do you think at some point your IoT auto customers start migrating to copper 90? Or do you think we're going to stay at 130 for a while and then I have a follow-up?

[Thomas Sonderman:]

Yes. We certainly expect at some point to be evolving our 130 and 90 nanometer platforms to include copper interconnects. Obviously, it's all aluminum today. But it's not unexpected that we would evolve to those capabilities. Copper offers a lot of advantages over aluminum. So we expect to have both offerings for both platforms as time evolves. Of course, our focus right now is standing it up for a rad-hard platform, but once that capability can play as I alluded to, we expect to be adding capacity for our copper interconnects to complement our aluminum backend.

[Krish Sankar:]

Got it. And then my final question Tom is the Florida facility for advanced packaging. Are you doing any traditional while bonding or bumping there, or is it all truly 100% advanced packaging?

[Thomas Sonderman:]

Yes. I would say today it's all traditional advanced packaging. So you're talking to interposers, et cetera. That said, we do have partners here in the U.S. that we are leveraging to provide more traditional capabilities. And that's part of our vision is to provide a comprehensive supply chain, not just wafer fabrication, but AP final assembly and test to within the United States and whether it's done directly with Skywater or through our partnerships. Now that's certainly our strategy. And we believe there's a very strong appetite for that from the customer base.

[Krish Sankar:]

Terrific. Thanks, Tom. Thanks, Steve.

[Thomas Sonderman:]

Thank you.

[Operator:]

There are no further questions in queue at this time. I’d turn the call back to the presenters for closing remarks.

[Thomas Sonderman:]

I just want to thank everyone for joining us on our inaugural call today. We're very excited about the future at Skywater. Obviously, we're at a unique time in our country's recognition of the importance of semiconductor manufacturing, and we believe that Skywater has proven public, private partnerships work, and we expect to continue to exploit our technologies as a service model while enjoying, again, this recognition of the importance of domestic sourcing. And we expect to continue to be a leader in the transformation in the industry. Thank you again for joining us.

[Operator:]

And this concludes today's conference call. Thank you for your participation. You may now disconnect.