Topic: Product gross margins, new product ramp, end-market dynamics, and government contract pickup
Key points:
Product gross margins in Q2 2025 were "in line or a little bit lower" than last quarter, and "a bit lower" than prior trend; mgmt attributed this to products being "earlier in the life cycle" and ongoing yield improvement work.
Product gross margin target is "north of 50%"; near-term expectation is "solidly in that 45% to 50-ish percent margin range."
New products (xSPI family) saw "almost 20%" sequential growth vs Q1 2025; these are in the aerospace segment and ramping; mgmt said "some contribution" is in the Q3 2025 revenue projection and increasing into Q4.
Customer inventory depletion is occurring "almost all across the world, specifically in the Asian region"; orders are coming from automation and data center (RAID memory, general memory) customers like Dell, Supermicro, Broadcom.
A government contract (Amentum) awarded late last year is expected to see activity pickup in the back half, "particularly more toward Q4."
Mgmt stance: Neutral on margins (acknowledging lower levels but targeting improvement); bullish on product ramp and demand recovery (inventory depletion, 20% sequential growth); bullish on back-half contract pickup.
Q2 — Richard Cutts Shannon
Topic: QuickLogic contract and Lattice Semiconductor collaboration update
Key points:
Frontgrade project first phase completed in Q2 2025; next phase depends on renewal funded by AFRL.
QuickLogic contract: deliverables for Q2 2025 were met; total project duration is "almost another 2 years."
Lattice Semiconductor collaboration: co-package solution using MRAM xSPI (32 or 64 megabit) is ongoing; evaluation boards are available through distributors (DigiKey) and drivers on GitHub; mgmt expects "a couple of quarters before you see any significant traction."
Mgmt stance: Neutral on QuickLogic (no new milestones); cautiously optimistic on Lattice (evaluation ongoing, traction will take quarters).