PI at Oppenheimer notes - 8/10/21
Fireside chat with Cary, CFO.
- The 2022 budget for 300mm post processing was all moved into 2021 after they saw the inflection in demand in Q4.
- While they usually refer to foundry partners(plural), Cary said TSMC is their foundry partner for ICs. He also mentioned Avery Dennison is one of their largest inlay partners.
- Impinj is the technology leader across their product line - endpoint ICs, reader ICs, and readers. They have a 2x advantage in dies/wafer against their closest competitor, who is also on 300mm. The R700 has 10x the memory and 10x the processing power of its nearest competitor.
- He expects the M700 to give them a cost advantage over their competitors which they plan to exploit via pricing, while still allowing for GM improvement.
- The M700 Version 1 introduced protective mode, which enables loss prevention and self checkout. They expect the next version, not yet announced, to introduce cryptography, which amongst other things would enable authentication. They also have other ideas for enhancements in the design phase.
- The R700 enabled the conveyor belt opportunity, and together with the M700 enabled the loss prevention system in place at the European retailer. It targets use cases involving fixed readers.
- Together with NXP they have 90% of the IC market. I was able to send a question via the Oppenheimer guy about whether they see Alien in the market any more. Cary said not much, certainly less than in the past, although they heard Alien may have received some new funding.
- A couple pricing answers. A handheld reader costs about $100. They have the inlay cost down to between 3 and 3 1/2 cents and believe this is the reason retail adoption is accelerating(along with omnichannel).
- A retailer not adopting a RAIN RFID solution has about 60% inventory visibility, with RAIN it goes over 99%.
- The Asian retailer deploying self checkout is a major retailer deploying across multiple locations. They are deploying without loss prevention, which is unique, and they would hope to add it in the future.
- Wafer allocation discussions for 2022 will take place in Q4, although they are already talking. They'll know more about 2022 supply constraints after those discussions.
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