Sivers Semiconductors AB (publ), Year-End Report January – December 2021

Fourth quarter 2021

• Revenue amounted to SEK 23.390 M (29.707), a decrease of 21%
• Profit before depreciation and amortization (EBITDA) amounted to SEK -23.422 M (3.108)
• Operating profit/loss (EBIT) for the quarter was SEK -33.223 M (-4.632)
• Profit/loss after tax was SEK -25.108 M (-0.563)
• Earnings per share before and after dilution was SEK -0.15 (0.00)
• Equity per share amounted to SEK 4.57 (3.41)
• Profit for the quarter was negatively affected by acquisition costs of SEK 4.186 M.

January- December 2021:

• Revenue amounted to SEK 90.652 M (96.170), a decrease of 6%
• Profit before depreciation and amortization (EBITDA) amounted to SEK -107.185 M (-55.661)
• Operating profit/loss (EBIT) for the period was SEK -140.941 M (-85.710)
• Profit/loss after tax was SEK -133.704 M (-195.782)
• Earnings per share before and after dilution was SEK -0.83 (-1.37)
• Equity per share amounted to SEK 4.57 (3.41)
• Profit for the period was negatively affected by acquisition costs of SEK 41.558 M.

Significant events in the fourth quarter:

• On October 14, Sivers Semiconductors announced that the Company had signed an agreement relating to the acquisition of all the shares in MixComm, Inc, a US challenger in the development of chips 5G millimeter wave technology.
• On October 14, Sivers Semiconductors completed a directed new issue of 17,021,277 ordinary shares, corresponding to SEK 400 M. The subscription price in the directed new issue was SEK 23.5 per share.
• Sivers Semiconductors AB held an Extraordinary General Meeting on November 11. The EGM resolved to authorize the Board to complete a non-cash issue of a maximum of 39,405,594 ordinary shares against settlement in the form of shares in MixComm and offset issue of a maximum 6,993,007 ordinary shares for payment of performance-based compensation in connection with the acquisition of MixComm. In addition, Todd Thomson was appointed to the Board of Sivers Semiconductors AB.
• On December 7, Sivers Semiconductors announced that MixComm, which the company is planning to acquire, signed an agreement with South Korean venture capitalist firm Kreemo relating to the development of the world's first 5G module optimized for metaverse.
• On December 9, Sivers Semiconductors announced that Sivers Wireless in partnership with Rohde & Schwarz, a market-leading supplier of test and measurement solutions for Radio Frequency (RF) components and the wireless industry, tested the performance of Sivers Semiconductors state-of-art Radio Frequency Integrated Circuit (RFIC) TRXBF01 with postive outcome.
• On December 10, Sivers Semiconductors announced that its subsidiary, Sivers Photonics, had received two new orders from a US based customer, for custom photonics devices. The total order value was SEK 5.3 M.

Significant events after the end of the period:

• On January 3, Sivers Semiconductors announced that Sivers Wireless had received an order for unlicensed 5G RF modules from the Lithuanian hi-tech company 8devices. The total order value amounts to USD 2.1 M. The order, which will be delivered in 2022, is designated for one of 8Device's customers, starting in the first quarter of 2022. The customer has the right, within some limitations and early warnings, to cancel or move parts of the order at no charge. The company estimates that the recognized revenue for 2022 will amount to approximately USD 1.5 M.
• On January 18, Sivers Semiconductors announced that MixComm entered a partnership with Advanced Microsystems Technologies, a division of Sanmina, to productize its 5G wireless infrastructure solutions.
• On February 10, Sivers Semiconductors announced the joint development between MaxLinear, Inc. and Sivers Wireless, of a V-Band RF/Modem solution that enables disruptive unlicensed point-to-point microwave radios in the 57-71 GHz band.

Key performance indicators

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CEO’s Statement

During the quarter, we signed an agreement relating to a transformative acquisition of the US 5G/mmWave company MixComm. The acquisition, which is expected to be completed shortly, involves the merger of two of the main challengers in mmWave technology, making us one of the leading suppliers in 5G/mmWave technology.

MixComm has made positive progress since the announcement of the acquisition, including signing a Memorandum of Understanding with South Korean venture capital firm Kreemo to develop the world’s first 5G-modul optimized for metaverse. In the period, MixComm also received a small order from a leading Tier 1 5G infrastructure customer.

Progress has been positive internally within MixComm and we also take a positive view of the new opportunities that the acquisition opens up for the entire company. Wireless is now seeing new types of US customers thanks to increased presence in the US. Alongside MixComm, we have now secured 44 design wins, including 16 that are expected to enter volume production within the coming 12 months.

Our new US network also means that Global Foundries, premiere semiconductor contract manufacturer in underlying advanced radio technology for 5G and SATCOM, becomes one of our new owners. We previously frequently sourced silicon wafers from Global Foundries through third parties; the acquisition now allows us to procure silicon wafers directly to ensure delivery and improve margins.

The pandemic continued to inhibit progress in the fourth quarter, although we are optimistic that it will start to loosen its grip from the second half year 2022 onwards. Net sales in the fourth quarter totaled SEK 23 million, down 21 percent year-on-year. In the short term, our biggest challenge is the effect of the pandemic in the form of general component shortages that restrict our customers’ access to the components needed to build planned volumes. In order to mitigate the component shortages, our customers have sought out alternative components which has led to redesigns throughout the ecosystem. This in turn has led to delays of an estimated 6–9 months including projects planned for 2023 and onwards. Furthermore, components shortages force our customers to shift their resources to older products. Virtually all our customers are experiencing similar challenges at the moment, which has a short-term impact on new design-wins as our customers have insufficient resources to start new projects. One example is provided by the volume order for unlicensed 5G RF modules we received from Lithuanian hi tech company 8devices.

Their order was delayed because of a shortage of standard clock buffers, which led to a delay of around six months for the entire product. However, it is pleasing that this situation has now been resolved and we won an order of USD 2.1 M in January 2022. Photonics received two new orders totaling SEK 5.3 M in the quarter, relating to customized sensors in a new application area from a US-based customer. We hope for strong order growth at a later stage as customers shift to volume production.

In connection with the acquisition of MixComm, in October we completed a directed new issue of some SEK 400 M to finance part of the acquisition and strengthen our cash position. I would like to take the opportunity to thank our existing and new shareholders for the confidence they have shown us.

I want to reiterate that we are looking to the future with great confidence as it is clear that many of our customers are heading for volume production, for example Fujikura which signed the previously communicated framework agreement. The pandemic and associated components shortages have had an extraordinary impact on our sector, which has led to delays to plans across the entire ecosystem. However, the underlying demand is there and we have not lost any customers. As soon as societies start to open up again, we anticipate considerable potential to capitalize on the hard work we have put into the company. Our competitive products and strong global network and the acquisition of MixComm enables us to be equipped for the future. We are in an excellent position and I remain optimistic about the future.

Anders Storm
President and CEO

This disclosure contains information that Sivers Semiconductors is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the contact person set out below, on 15 February 2022 at 08:00 CET.

For more information, please contact:
Anders Storm
CEO, Sivers Semiconductors
Email: anders.storm@sivers-semiconductors.com
Tel: +46 (0)70 262 63 90
 

Sivers Semiconductors AB is a leading and internationally recognized technology company that, through its two business areas Wireless and Photonics, supplies chips and integrated modules. Wireless develops RF chips and antennas for advanced 5G systems for data and telecommunications networks. Photonics develops and manufactures semiconductor-based optical products for optical fiber networks, sensors and optical fiber communications (Li-Fi). The company is listed on Nasdaq Stockholm under SIVE. The head office is located in Kista, Sweden. For more information visit: www.sivers-semiconductors.com