Successful Testing Event with Leading
Datacenter Equipment and Cable Manufacturers Advances Hyper-Scale
Development Plans for 2024
SAN
JOSE, Calif., Dec. 27,
2023 /CNW/ -- (TSXV:SEV) (OTCQB:SPVNF) Spectra7
Microsystems Inc. ("Spectra7" or the "Company"), a
leading provider of high-performance analog semiconductor products
for broadband connectivity markets, today updated its business
outlook for the year ending December 31,
2023. Additionally, the Company announces that it has
demonstrated successful interoperability testing with key switch,
equipment and cable manufacturers for the expected 2024 hyperscaler
build-out at 800Gbps and 1600Gbps speeds. Unless otherwise
indicated, all dollar amounts in this press release are expressed
in US dollars.
Based on revised delivery timetables with customers, Spectra7
now expects fourth quarter revenue to be approximately $0.1 million1, and revenue for the
full year 2023 is expected to be approximately $9.7 million1.
While customer backlog remains strong in Q4, Spectra7 is
temporarily delaying order fulfillment in the quarter to manage
distributor inventories at optimal levels. Based on existing
customer orders placed in 2023 to date and these actions, Spectra7
expects volume and revenue to increase strongly in the first half
of 2024 as orders are fulfilled.2
The Company also reported successful validation of its latest
chips for 800/1600Gbps interconnects, with mass production and
deployment being accelerated for U.S. data centers. The Company
recently attended the Ethernet Alliance Interop Plug Fest where
industry leading data center equipment suppliers tested
interoperability among devices, including using Spectra7-based
cables with major switch and server configurations to be built
beginning in 2024. These new datacenter architectures are
performing well and provide important confirmatory data for
hyperscale buildout plans in the year ahead.
Also as a result of this event, key marketing and sales
activities will be advancing, including two leading cable partners
planning to demonstrate Spectra7 enabled Active Copper Cables
(ACCs) interoperating with equipment from several leading data
center infrastructure suppliers at a major industry trade show in
January 2024.2
"Recent industry events confirmed that cables enabled by the
latest Spectra7 chips interoperate well with top high performance
networking hardware designed for next generation AI and machine
learning environments. This has generated significant activity with
key partners and customers that are readying deployments of
800/1600Gbps installations. Our hyperscale customers remain focused
on using ACC interconnect technologies to secure critical
improvement to power and latency performance metrics as they move
toward leading edge 800Gbps and 1600Gbps data rate deployments.
With an increased focus on AI infrastructure buildout, we believe
the ACC connectivity market opportunity is growing
rapidly3," said Raouf
Halim, Chief Executive Officer of Spectra7.
"We also made the decision to hold certain Q4 shipments to align
with revised buildout schedules with our China-based datacenter users. This decision
keeps inventory better aligned to current deployment schedules as
these programs continue to move forward. We also anticipate an
additional distributor joining us in 20242, as the
market for our ACC solutions significantly expands in the years to
come3," said Halim.
Preliminary fourth quarter 2023 revenue
results1
The Company expects to report revenue of approximately
$0.1 million for the fourth quarter
of 2023, bringing revenue in the second half of 2023 to
$3.3 million. The Company previously
forecasted revenue for the second half of 2023 to be in the range
of $6.0 million to $6.8 million, which included $3.2 million in reported third quarter 2023
revenue.
The change in revenue outlook for Q4 and the second half of 2023
reflects slower buildout activity in China, which has caused distributor
inventories to grow, and would continue to do so if shipments were
maintained at the prior order pace. The Company has decided to
withhold a portion of the ordered shipments to the distributors in
Q4 2023, except for critical shipments based on end customer
demand, to better align to the timing and pace of the continued
buildout activity. The Company expects that revenues should
substantially increase in the first half of 20242.
NOTES:
1 All information herein is subject to change
based on the reported audited annual financial results, expected to
be reported no later than April 29,
2024.
2 This is forward-looking information and is based
on a number of assumptions which include the current and
anticipated customer purchase orders received, supply outlook and
anticipated operational expenditures. See "Cautionary Notes".
3 Spectra7 internally generated model based on
650Group silicon chipsets for Ethernet optical transceivers and
active cable alternatives posted July
2023. This is forward looking information. See "Cautionary
Notes."
ABOUT SPECTRA7 MICROSYSTEMS INC.
Spectra7 Microsystems Inc. is a high-performance analog
semiconductor company delivering unprecedented bandwidth, speed and
resolution to enable disruptive industrial design for leading
electronics manufacturers in virtual reality, augmented reality,
mixed reality, data centers and other connectivity markets.
Spectra7 is based in San Jose,
California with a design center in Cork, Ireland and a technical support location
in Dongguan, China. For more
information, please visit www.spectra7.com.
Neither the TSX Venture Exchange nor its regulation services
provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CAUTIONARY NOTES
Certain statements contained in this press release constitute
"forward-looking statements". All statements other than statements
of historical fact contained in this press release, including,
without limitation, the expected hyperscaler build-out in 2024, the
Company's expected Q4 revenue, expectation for revenue in the first
half of 2024, the Company's intention to accelerate mass production
and deployment of its latest chips, the Company's intention to
demonstrate ACCs at a trade show in January
2024, and the Company's strategy, plans, objectives, goals
and targets, and any statements preceded by, followed by or that
include the words "believe", "expect", "aim", "intend", "plan",
"continue", "will", "may", "would", "anticipate", "estimate",
"forecast", "predict", "project", "seek", "should" or similar
expressions or the negative thereof, are forward-looking
statements. These statements are not historical facts but instead
represent only the Company's expectations, estimates and
projections regarding future events. These statements are not
guarantees of future performance and involve assumptions, risks and
uncertainties that are difficult to predict. Therefore, actual
results may differ materially from what is expressed, implied or
forecasted in such forward-looking statements. Additional factors
that could cause actual results, performance or achievements to
differ materially include, but are not limited to, the risk factors
discussed in the Company's management's discussion and analysis for
the year ended December 31, 2022.
Management provides forward-looking statements because it believes
they provide useful information to investors when considering their
investment objectives and cautions investors not to place undue
reliance on forward-looking information. Consequently, all of the
forward-looking statements made in this press release are qualified
by these cautionary statements and other cautionary statements or
factors contained herein, and there can be no assurance that the
actual results or developments will be realized or, even if
substantially realized, that they will have the expected
consequences to, or effects on, the Company. These forward-looking
statements are made as of the date of this press release and the
Company assumes no obligation to update or revise them to reflect
subsequent information, events or circumstances or otherwise,
except as required by law.
For more information, please contact:
Matt Kreps, Managing Director
Darrow Associates Investor Relations
mkreps@darrowir.com
214-597-8200
Spectra7 Microsystems Inc.
Dave Mier
Interim Chief Financial Officer
925-858-7011
ir@spectra7.com
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SOURCE Spectra7 Microsystems Inc.
