Silvaco Group (SVCO) 28th Annual Needham Growth Conference Virtual summary

Company overview and product lines

• Operates in three main segments: TCAD (core, ~50% of revenue), EDA, and IP, with TCAD being a highly specialized, sticky business.

• IP business, currently about 10% of revenue, is expected to be a significant growth engine in the near term.

• EDA and IP together make up the other half of the business, focusing on niche markets through product development and acquisitions.

AI and digital transformation strategy

• AI is central to long-term growth, especially in manufacturing, where digital twins and machine learning will replace traditional prototyping.

• Developed AI-driven Fab Technology Co-Optimization (FTCO) with Micron, now expanding to other customers, though adoption is gradual and resource-intensive.

• Transition to AI-based virtual manufacturing is seen as inevitable for the industry due to increasing process complexity and cost pressures.

Market positioning and competitive strategy

• Focuses on dominating niche segments where larger competitors have less interest, such as simulation for power devices and display manufacturing (over 80% market share in TCAD for displays).

• Recurring revenue from established customer base and targeted innovation in emerging areas like AI-driven process development.

• Emphasizes being number one in specialized markets rather than broad segments, leveraging unique capabilities.