Vicor (VICR) 28th Annual Needham Growth Conference Virtual summary

Key business developments and licensing strategy

• Achieved major licensing milestones in 2025, including agreements with a hyperscaler and an OEM, and a $45M settlement.

• Initiated a second ITC case in early 2026, with additional district court filings in Texas, focusing on NBM technology.

• Customs has enforced exclusion orders against infringing imports, with attempted workarounds still deemed infringing.

• Licensing business is synergistic with the module business, driving increased product demand and fab utilization.

• Confident in doubling licensing and royalty business over the next few years, with VPD technology expected to further boost growth.

Technology and product innovation

• 2nd-gen Vertical Power Delivery (VPD) technology addresses high current density needs for advanced AI processors, overcoming prior thermal and mechanical challenges.

• Gen 5 VPD solution met lead customer specs, with production launch on track for Q1 2026 and broader market rollout expected in 2027.

• Demonstration systems for 2nd-gen VPD are being showcased to customers, with further design wins anticipated later in 2026.

• 800-volt high-density modular solutions are in development, with a 10 kW module nearing completion and mid-year release.

• Proprietary technology enables use of silicon FETs for high-frequency switching, offering advantages over wide-bandgap semiconductors.

Market opportunities and outlook

• Automotive market engagement is expanding, with two OEMs in production and broader revenue impact expected by 2029–2030.

• Industrial and aerospace/defense markets are growing, with new chipset launches and design wins supporting a doubling of business in five to seven years.

• Book-to-bill ratio is now well above one, indicating strong demand.

• Standard product margins are high and expected to rise further as fab utilization increases, with licensing set to lift gross margins to 65–70%.