Enovix Corp Q3 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Derek Soderberg - Colliers Securities LLC - Analyst : Thanks for taking my questions, and congrats on continuing to execute against the strategy. So Harrold, now that you're starting to see more batteries come off the first production line at Fab-1, curious how throughput yield are tracking against your internal expectations. Are you guys have sort of been talking about 45 million battery sales annually from Fab-1? I'm just looking at sort of that first line that's installed. Obviously, you are on track to hit that level of throughput for Fab-1. And then just generally, how are you feeling about the performance of the equipment installed?

Question: Derek Soderberg - Colliers Securities LLC - Analyst : Got it. And then sort of related to that, in the shareholder letter, you guys were talking about investing in the next generation of manufacturing equipment. I was wondering if you could share some more detail on that. It sounds like you guys are finding ways to optimize the production process. But I guess I'm wondering, is the next generation a pretty substantial change from the equipment installed in Fab-1 today? Where does that new equipment could be installed? Just any color on the next generation will be great.

Question: Gus Richard - Northland Capital Markets - Analyst : Yes. Thanks for taking my question. I'm just curious, when you look at your pipeline, can you give us a sense as to how much was coming from mobile, compute, and you know, what they're calling metaverse these days? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2021 / 10:00PM, ENVX.OQ - Q3 2021 Enovix Corp Earnings Call

Question: Gus Richard - Northland Capital Markets - Analyst : Got it. And then I've been talking to other battery manufacturers. I'm just curious in your perspective. I know you're doing some custom cell designs and packs for some of your customers. And I'm just wondering, when you think of the value you bring to the customers, how much of it is in the energy density? And how much is in the customization?

Question: Gus Richard - Northland Capital Markets - Analyst : And then, the last one for me, just in the competitive landscape. Are you seeing anybody else -- the silicon anode [pop up] in terms of just anything, even in the ballpark of what you guys are doing?

Question: Colin Rusch - Oppenheimer & Co. - Analyst : So in this active designs, some design wins market, can you give us a sense of how that breaks out, and how many customers are in that, both on the active design and full design wins?

Question: Colin Rusch - Oppenheimer & Co. - Analyst : Excellent. And in terms of the incremental capacity, you guys have been looking at this for a little bit of time, but as you've gotten deeper into that process of evaluating locations, can you give us a sense of how far down the road you are in terms of diligence on those potential facilities? And how many options you may have later if you're looking at right now?

Question: Colin Rusch - Oppenheimer & Co. - Analyst : Okay, that's super helpful. And then, just in terms of the qualification process, it's great to see you sending out samples already. But as you're qualifying any tools and looking at going from operating to operating at the speed that you need them to, I guess, can you talk about any sort of surprises that you're seeing in that process? Or are you progressing according to plan? Or are you ahead of plan with the qualification and the throughput on balancing the factory?

Question: Gabe Daoud - Cowen and Company, LLC - Analyst : Thanks for taking my questions. Harrold, maybe I was just curious. In the shareholder letter under the market expansion section, you mentioned continued progress on electric vehicle progress and evaluating the use of materials of your architecture. Could you maybe just give us a little more color on that? And what you're seeing and just where you are currently with the technology and scaling that for EV application?

Question: Gabe Daoud - Cowen and Company, LLC - Analyst : Got it. Thanks, Harrold. That's helpful. And then maybe to follow up, just back to Fab-2 and as you get closer to maybe nailing down location, could you just talk about what your initial expectations were in terms of initial size? I know Fab-1 is 45,000 cells annually, but what was your initial thoughts around capacity coming out of Fab-2? And then just give me quicker qualification times for consumer electronics and wearables, et cetera. Is there a potential to accelerate and even increase potentially the size of Fab-2 versus initial expectations, just given the strong demand that you're seeing?

Question: Gabe Daoud - Cowen and Company, LLC - Analyst : Got it. Got it. Thanks. Just one -- last one. Friday, the bipartisan infrastructure bill was passed and should be signed shortly. Could you maybe just talk about Enovix's ability to maybe continue to win some grants for cell manufacturing here in the US?

Question: Sean Milligan - Williams Trading LLC - Analyst : Thanks for taking my question. When you look at the design wins and potential awards coming, can you talk a little bit about whether that's from new potential customers or you're expanding the opportunity set with existing customers that you have now, or existing customers in the pipeline?

Question: Sean Milligan - Williams Trading LLC - Analyst : Okay, great. And we've seen, I guess, especially on the EV side, there are moves to more kind of localized battery production. And just curious what you're seeing from your customer base on the consumer technology side, if you're also seeing that want to move to more localized production?

Question: Sean Milligan - Williams Trading LLC - Analyst : Great. And one last question, kind of more of a, I guess clarification type of question. So when you share the revenue funnel in active design, design wins, and you share the 355 million for design wins, that's a potential run rate revenue case for those design wins. Is that correct?

Question: Sean Milligan - Williams Trading LLC - Analyst : Okay. And is there a way to think about -- I haven't seen you put this out there. But relative to the revenue forecasts, can you publicly [just track] what years that 355 would kind of slot into?