Valens Semiconductor Ltd (VLN) 2022 Q1 法說會逐字稿

Good morning. My name is Yoni, and I will be your conference operator today. At this time, I would like to welcome everyone to Valens Semiconductor's First Quarter 2022 Earnings Conference Call and Webcast. All participant lines have been placed in a listen-only mode. Opening remarks by Valens Semiconductor management will be followed by a question-and-answer session.

I will now turn the call over to Daphna Golden, Vice President of Investor Relations for Valens Semiconductor. Please go ahead.

Thank you, and welcome, everyone, to Valens Semiconductor's First Quarter 2022 Earnings Call. With me today are Gideon Ben-Zvi, Chief Executive Officer; and Dror Heldenberg, Chief Financial Officer.

Earlier today, we issued a press release that is available on the Investor Relations section of our website under investors.valens.com. As a reminder, today's earnings call may include forward-looking statements and projections, which do not guarantee future events or performance. These statements are subject to the safe harbor language in today's press release.

Please refer to our annual report on Form 20-F filed with the SEC on March 2, 2022, for a discussion of the factors that could cause actual results to differ materially from those expressed or implied. We do not undertake any duty to revise or update such statements to reflect new information, subsequent events or changes in strategy.

We will be discussing certain non-GAAP measures on this call, which we believe are relevant in assessing the financial performance of the business, and you can find reconciliations of these metrics within our earnings release. We will be in Boston, New York, Tel Aviv, San Francisco and London later this month and in June for investor conferences and meetings. If you're interested in meeting with us, please e-mail me at investors@valens.com. With that, I will now turn the call over to Gideon.

Thanks, Daphna, and thank you, everyone, for joining our call today. Q1 was a record quarter for Valens Semiconductor and a very strong start to 2022. Revenue and profitability exceeded our guidance with sales driven by continued solid demand for our core audio-video solutions as well as exceptionally strong demand for our emerging automotive products. We reported the company's highest ever quarterly revenues of $21.6 million, 62% higher from Q1 2021.

I am proud to say that we continue to successfully meet customer demand even in today's challenging supply chain environment and will continue to do so, taking proactive measures, working closely with our customers and suppliers. As a result of the better-than-anticipated start to the year and our outlook for the rest of 2022, we are raising our full year guidance. Most of this revenue increase is attributed to audio-video, while also essentially doubling the automotive revenue from the full year 2021. Dror will elaborate in our guidance in his part.

Valens is well positioned to benefit from significant growth trends in both the automotive and audio-video markets. Starting with audio-video, the demand for our audio-video solutions continues to build across all geographic regions and is expanding into new applications within multiple verticals, corporate, education, government, industrial and medical. Companies recognize the potential of our cost-effective, high-performance and easy to install audio-video solutions that can be used in conference rooms, boardrooms and training facilities in both hybrid and remote settings. We see a growing number of customers rolling out the next-generation products that embed our newest member of the audio-video products, the VS3000.

As a reminder, the VS3000 transfers uncompressed signals to deliver the most crisp picture possible in HDMI. It's versatile, supports full 4K HDMI video and can transfer audio-video, 1 gigabit Ethernet in USB format, all over a simple off-the-shelf single cable. Last quarter, I discussed the role we believe Valens' technology will play in what's called the next normal for hybrid environments such as work, education, medical and others. In education, we are seeing more schools and universities upgrading their classroom infrastructure to enable more advanced in-classroom and remote learning. This trend is supported by the fact that the U.S. federal government recognizes the important role technology will play in keeping schools operating most effectively and enabling students ongoing studies even under the scenario that would have previously put schooling on hold.

U.S. Congress has allocated to date a budget of approximately $190 billion in elementary and secondary school emergency relief, ESSER funding for kindergarten through 12th grade, K-12 schools, which includes funds for educational technology, including hardware, software and connectivity that enables remote and hybrid learning. We believe the use of advanced technology will expand to education systems worldwide, which is an opportunity for Valens to further enhance its business in the larger education market segment. By implementing our solution, we enable the schools to stay open even in extreme scenarios, such as severe weather and pandemic outbreaks.

To that point, last month, we announced that we joined the Logitech Collaboration Program to develop a solution using our technology and products in Logitech's USB peripherals suite to products for hybrid setup. Another interesting use case in education is University in Japan that was looking to build a modern classroom where students could easily see professor on video screens from anywhere in the large classroom. The university also required true 4K video quality, as well as remote control of the in-class camera. Our audio-video solutions met all these requirements, while extending HDMI, USB control and power between PC and camera sources, projectors and displays, over a single, off-the-shelf, low-cost category cable.

We also continue to see demand for our audio-video connectivity solutions from leading equipment vendors in the industrial and medical equipment markets. The medical equipment space is undergoing significant transformation due to remote and hybrid health care, robotic surgery and deep artificial intelligence AI diagnostics. These applications require uncompressed, high-resolution video connectivity that is medical-grade and patient-isolated to ensure patient safety.

For example, the U.S.-based center for special surgery requires real-time, uncompressed audio-video connectivity in surgery rooms. They recently completed updating the center's video signal-transport infrastructure using Valens audio-video solution. Using the VS3000 simple cabling was all that was needed to enable control and signal distribution, easy installation and increased flexibility. Now, this medical center can retrieve videos from any of the surgical rooms in real time as well as imaging such as X-ray on multiple displays.

I'm also encouraged to see that our VA7000 that was originally developed as a high-speed camera productivity solution for automotive, is also gaining traction in the medical industry. It perfectly fits medical equipment targeted for use in critical procedures that require long reach, reliable uncompressed high-resolution video. And recently, several prospective customers in medical imaging have begun evaluating the VA7000s. While the sales cycle in medical is typically long, we are off to a very encouraging start and expect the medical market to become a meaningful business for Valens. We are proud of the role our technology will play in improving patient care.

Turning to automotive: In the first quarter of 2022, we increased the number of OEMs, Tier 1s and Tier 2s looking to integrate our newest VA7000 chipset into the platform from the 25 reported previously to more than 30 to date. In fact, since December 2021, we have doubled the number of OEMs that are evaluating our MIPI A-PHY compliance VA7000 chips. To date, we have 8 OEMs evaluating this solution. Furthermore, we have also been receiving positive feedback on our engineering samples from prospective customers and partners who have already started to evaluate the VA7000 samples. This is a clear testament to the positive momentum and traction we see for the adoption of the A-PHY standard in the market.

We expect the next step with the OEMs requiring MIPI A-PHY standard compliant high speed connectivity technology as part of their RFIs and RFQs. We believe we will begin to see these requests towards the beginning of 2023, resulting in new design wins by midyear 2023, which will translate into mass production starting in 2025. In parallel, the larger A-PHY ecosystem also continues to grow. Earlier this week, we announced an important partnership with OMNIVISION, a leading Tier 2 supplier for in-vehicle camera sensors, on a MIPI A-PHY compliant sensor solution for Advanced Driver-Assistant System application ADAS. OMNIVISION will embed our VA7000 A-PHY compliant chipsets in their automotive reference design system camera modules. The initial camera module will also include an image sensor from OMNIVISION.

As we speak, we are demonstrating this A-PHY reference design at OMNIVISION's booth at the AutoSens Detroit exhibition. Also at AutoSens, we are leading a session on turning sensor fusion into reality for ADAS. It is clear that the fusion of data from various types of sensors, RADAR, LiDAR, and cameras, and the integration of data in the compute unit will play an essential role in reliable ADAS systems and autonomous driving. This concept of sensor fusion will require a reliable, high-bandwidth video connectivity solution that can aggregate the data from the various sensors to the compute unit.

We believe that our A-PHY compliant solutions will play a vital role in the realization of this important trend. We are also advancing with our joint project with Stoneridge and continue to expect ramping revenue from this project in 2023 and beyond. As a reminder, Stoneridge is incorporating our VA6000 chipsets into a connectivity solution to enhance vision and safety systems in tractor trailers to address critical safety issues in the trucking industry. The trucking industry TAM is quite extensive with more than 2 million new heavy trucks sold each year globally in addition to a significant aftermarket opportunity.

With our automotive product portfolio currently comprised of the nonsymmetric VA7000 chipset and the symmetric VA6000 chipset families, Valens is a one-stop shop for the in-vehicle wired high-speed connectivity required by OEMs. Why is this important? For today's infotainment and telematics data flows cars mostly over symmetric links. In parallel, to enable tomorrow's automotive applications such as ADAS and autonomous vehicle, manufacturers require video connectivity over nonsymmetric links.

The automotive market is looking to deploy standard-based products for high-speed video connectivity, for ADAS and autonomous vehicle applications, rather than today's legacy solutions, which are proprietary and require dependency on specific vendors. All told, our end-to-end symmetric and nonsymmetric offerings, and primarily the MIPI A-PHY standards compliance chipset, the VA7000 provide huge advantage to automotive OEMs looking for comprehensive sets of solutions addressing their high bandwidth connectivity needs. I'll now turn it over to Dror Heldenberg, our CFO, to review our Q1 2022 financial results and provide our financial outlook.

Thank you, Gideon. I'll start with our first quarter 2022 results and then provide our outlook for the second quarter and updated full year 2022 guidance. Beginning with our first quarter 2022 results: we topped our revenue guidance, achieving record total revenues of $21.6 million, an increase of 61.8% from the first quarter of 2021. Q1 2022 gross profit grew to a record of $15.4 million from $9.5 million in Q1 2021, an increase of 62%. First quarter 2022 gross margin was 71.4%, similar to last year's 71.3%. Non-GAAP gross margin increased to 72.1%, up from 71.8% in Q1 2021. The better-than-anticipated gross margins were driven by a favorable product mix in audio-video, as well as the increase in automotive gross margins from prior quarters as this business begins to scale.

In addition, in Q1, we enjoyed the benefit from sales based on today's [ASPs] (corrected by the company after the call), while a portion of the cost of goods was still based on previous lower pricing. Operating expenses in Q1 2022 were $22.6 million, up from $15.7 million in Q1 last year. The $6.9 million increase was mainly due to an additional $3.7 million in research and development expenses, representing 54% of the total year-over-year increase in OpEx. This demonstrates our continued investment in expanding our product offerings to address the business opportunities ahead of us.

Sales and marketing expenses increased $1.1 million due to higher levels of promotion of our new audio-video and automotive products, and G&A expenses were up by $2.1 million, primarily due to public company expenses, such as costs related to D&O insurance and professional services. We also exceeded our adjusted EBITDA guidance. With our first quarter 2022 adjusted EBITDA loss coming in at $4.1 million compared to the loss of $4.3 million in the first quarter of 2021. Our Q1 2022 adjusted EBITDA was $6.1 million better than the midpoint of our guidance of a $10.2 million loss due to our higher-than-expected revenues and gross margins as well as the fact that most of the better than internally projected operating expenses were related to certain R&D expenses that were deferred from Q1 into subsequent quarters in 2022.

Loss per share for Q1 2022 was $0.05, 91.6% lower than Q1 2021, which was $0.93 per share. Q1 2022 is calculated as a net loss of $5.1 million, which includes an income of $2.6 million related to fair value of our future shares divided by 97.2 million shares. Q1 2021 is calculated at a loss of $10.1 million divided by 10.8 million shares. The non-GAAP loss per share for Q1 2022 was $0.02 based on the net loss, excluding $3.1 million of stock-based compensation and depreciation expenses divided by the 97.2 million shares. The higher number of shares outstanding is the result of the conversion of our preferred shares into ordinary shares, the shares issued as part of the transactions related to our listing and options exercised into shares during the period.

Turning to the balance sheet. We entered Q1 2022 with a strong balance sheet with cash, cash equivalents and short-term deposits of $166 million and no debt. As we stated in the past, we intend to use our strong balance sheet to fund the development and commercialization of Valens next-generation products. As a reminder, for new products, the time from design initiation and manufacturing until we generate revenue can be lengthy, typically within 3 years in the audio-video market and up to 5 years in the automotive space.

Inventory increased by $3 million from the end of 2021, driven by 2 main factors. First, the anticipated increase in the number of chipsets we intend to sell this year. And second, the constrained supply chain environment resulted in higher-cost raw materials and services from our supply chain, as well as the need to place longer-term purchase orders and accrue more inventory to serve our customers' needs on a timely basis. Considering our strong backlog, we believe the $12.5 million in inventories will be consumed during 2022.

Now I would like to provide our guidance. For the second quarter of 2022, we expect revenues in the range of $21.6 million to $22 million. We expect gross margins to be in the range of 66.3% to 67.3% and adjusted EBITDA to be a loss in the range of $9.8 million to $8.8 million. For modeling purposes, please note that as of today, we have 97.2 million outstanding shares. As Gideon said earlier, we are raising our guidance for the full year 2022. We now expect revenues to range between $86.5 million and $88 million, up from $83 million to $85 million provided in March. Further increasing demand in audio-video and the continued expansion of our automotive revenues, which we expect to essentially double from 2021, drove our higher 2022 projections.

We expect gross margins to be in the range of 66% to 67.3%. This new gross margin range is up from the previously guided range of 65.5% to 67.2%. We are also improving our projected adjusted EBITDA loss to be between $37.2 million and $35.5 million, up from a range of $38.4 million to $37.8 million. We will continue to invest in enhancing our current product offering and developing and commercializing Valens next-generation products. In summary, Q1 was a strong start to the year, positioning us for a better-than-anticipated 2022. As we look further out, we are seeing growing demand and adoption of our next-generation connectivity solutions, in multiple industries. Together with our robust balance sheet, this should fund our business through breakeven and beyond. I'll now turn the call back to Gideon for his closing remarks before opening the call for Q&A.

Thank you, Dror. Our continued success demonstrates once again why we believe Valens is well positioned to create value for our stakeholders. First, Valens operates in 2 large and fast-growing addressable market, automotive and audio/video. Second, Valens enjoys a first-mover advantage for its wired high-speed connectivity solutions over a simple and low-cost infrastructure by setting industry standards. We first did it in the audio-video market having established our leadership position in audio-video. And, we are now replicating this success in the automotive market. Third, our business model offers compelling financial metrics.

As a fabless semiconductor company, we are driving environmentally responsible growth. I would also like to take this opportunity to thank our incredible and talented team of employees around the world for their exceptional dedication and execution. They made this very impressive start of 2022 possible, and I'm confident that they will drive Valens' continued success. Operator, I would now like to open the call for questions.

(Operator Instructions) The first question is from Atif Malik of Citi.

Good job in raising the full year guidance. I have 2 questions for Dror. Dror, that $2 million to $3 million increase incrementally for the annual guidance, can you break that out between audio-video and auto?

Sure. Thank you very much, Atif, for the question. So indeed, we raised the guidance for the full year. And I would say that the major contribution for this increase is mainly come from the audio-video space while we still see that we're going to double the automotive revenue compared to 2021. If you remember, last year in 2021, we did $8 million in automotive. We assume that we are going to double it this year, but the main change in the guidance for the revenue for this year is supposed to come from the audio-video business.

Great. And then you commented that the gross margins on the auto side are benefiting from higher ASPs. And I also understand what is the assumption you're making on the pricing for the full year as you continue to hear foundries raising pricing even into next year. How are you thinking about ASPs in your full year guidance?

Okay. So it's a question that involves both the price adjustment or the price increase that we see from our supply chain vendors and the price adjustment that we made shortly after to our customers. So let's start with the supply chain of price adjustment or price increase. I would say that unlike what we have seen last year in 2021 and primarily in Q2 in the third quarter of 2021, today we see more kind of an ad hoc price increases from our supply chain vendors. It's not in the same order of magnitude that we have seen last year.

If you remember, starting from this year, January 1 this year, we implemented the price adjustment, the price increase to our customers to compensate on what we've seen with respect to our supply chain. And part of this price increase also referred to the automotive customers. I must admit that in the current circumstances, we don't believe that the price will go down in the foreseeable future. It doesn't seem like that. So I believe that we reach to some kind of a status quo that I believe that will be with us at least through the end of 2022.

Yes. And one last one for Gideon. Gideon, some of your auto peers have talked about an inflection in second half in auto for ADAS, whether the NVIDIA or Qualcomm.. I understand you guys you have an incubation time for your chip. How are you looking at the auto market? Do you also see some type of inflection happening in second half into next year?

Well, can you please elaborate the question? I'm not sure I did understand the question.

Yes. I'm just trying to understand the trajectory of your auto sales. Are you seeing second half meaningfully higher for auto sales over first half into next year?

Actually, yes. Let me explain it. First, thanks for the questions. I think it's very important to elaborate here. We see the Valens solution for this market is something that it doesn't matter whether it's NVIDIA or others that they will need to transfer data from sensors to the ECU. So whatever the ecosystem you mentioned with the one who wins, we believe that most of them would need us to complete the solution.

Now, as you know in our market, the times are not fast. And in automotive, it's lower than the audio-video. And the time it takes between the design win to when you see the big numbers, the ramp-up is longer. So if you're looking at whether in the second half of 2023, we will see a ramp up from those numbers then the answer from the MIPI A-PHY, the answer is no. If you looking for whether we are going to continue with the ramp-up with the existing, we think the answer is yes. I hope I answered you.

Maybe just to add to what Gideon said that if we take 2022 as the reference here, so I just mentioned that we do believe that we are going to double the revenues from automotive in 2022 compared to 2021. In this year, by the way, 2022, still most, or I would say all of the revenues that we anticipate will come mainly from the business that we have with Mercedes-Benz. We continue to see the deployment of our chipsets in more and more models within this OEM.

And as we mentioned in the past, we also have the projects that we run together with the trucking company called Stoneridge. We mentioned that we anticipate the production ramp-up at the beginning of next year. So I can say that everything is progressing according to the plan. It's on track with respect to be in mass production. And currently, these are the 2 main projects that contribute to our 2022 too much revenues.

The next question is from Rick Schafer of Oppenheimer.

My congratulations. And maybe my first question, if I could, Gideon, and congratulations on the OMNIVISION partnership that you highlighted on the call. I mean I believe you only began sampling there last quarter in 1Q, but I could be wrong. Was that a longer-standing relationship? Or is this an indication of how fast future API design wins could happen?

Well, I think the answer is both. We know those companies for a while, but the time it takes once they see the cheap and once they see that it's working, then it was really, really fast. And I would say, the convincing stage looks shorter and shorter. And people, when they see the concrete of how these chips sold the real problem of FMC and sold their future problem of how to deliver data from their sensors to the computer, the convincing time looks shrinking from a customer to customer. As you know, that's not the first one who has committed to us on the MIPI A-PHY, but definitely, the OMNIVISION was very encouraging, and we're very happy about it.

And maybe for Dror, I believe you came into this year with $78 million or so in backlog. I'm curious if you could kind of update us on where backlog is now. Maybe give a sense of how that splits between AV and auto? And how much of that -- I don't know if you see how much you can share, but how much of that would be shippable let's say, this year.

So I would say that we continue to see strong bookings and backlog that are better than our internal projections. I would say that our backlog remains robust, contributing to our increased forecast for this year 2022. This is part of the reason that we raised the guidance to date.

We see the progress in the booking and the backlog in both audio-video and automotive. It's very encouraging and it's a very positive trend. And I would just say that we are already starting to see backlog that is scheduled for shipment in 2023 that further increase our confidence in our revenue growth trends. So we feel very confident with respect to 2022, and we start to see more and more activities for the first half of 2023.

And maybe if I could sneak one more in. Again, I'll revisit the gross margin question as it pertains specifically to auto. I know you talked about that improving the scale. And I know you also mentioned that you think prices are pretty stable here, pretty firm. So does this change your long-term target for auto for gross margin for that segment over time?

So I would say that, in a way, it changed a bit the revenue projection that we see. Part of it is reflected in the guidance that we provided today. And we are now trying to understand and analyzing what will be the long-term impact of this increase in prices. With respect to gross margin, I think that what we see today in automotive, and we see some improvement in the margin gross margin as well. It's also part of the fact that we see a ramp-up in the volume and we see that the business is scale, and that's one of the outcome of this increase in volume is the improvement of gross margin, the semiconductor business.

Having said that, if you remember the basic of our business, you remember that we are dealing with audio-video and automotive. Both of them are growing very fast. But still, we anticipate that automotive business will grow faster than the audio-video. And given the fact that our gross margin in audio-video are higher than the automotive, I would say that fair to say that the weighted average gross margin that we anticipate going forward is expected to decline a bit as tomato will contribute more to our top line. Having said that, I think that in overall, the steady-state gross margin of the company will still be above the number that we traditionally convey to you, which will be not to 60%.

The next question is from Suji Desilva of ROTH Capital.

Congratulations on the progress here. Quick question for any impact from the supply chain in terms of under shipping your demand in the first quarter or second quarter guide? Or is that not an issue?

So thanks for the question. That's ready to talk again. I would say that despite the very challenging supply chain environment, we still managed to fulfill on a timely basis, all our customer demand, and we're very proud about it. So we have not seen any negative impact of the current circumstances in the semi business on our business. We do not, by the way, see any negative impact on our second quarter. And to be honest, we believe that we will also be able to fulfill the guidance, the revenue guidance that we provided to you today. I think that we navigate successfully with our vendors. So we managed our inventory levels in the right way.

Having said that, it comes with some issues that we've mentioned in the past. Today, we see longer or extended lead times from our supply chain vendors. Obviously, we had to extend our lead time to customers. And right now, we don't see any improvement in this space. We talked about the price adjustment or the price increases that we received from our vendors that we pass on to our customers.

And more than this, you see that we had to increase our inventory level. We just reported that we increased the inventory by $3 million compared to the end of last year. Part of it is obviously the fact that we intend to sell more this year, but part of it is because our vendors or suppliers are telling us that they don't see any recovery in delay time. Therefore, they recommend that we will place longer purchase solar and will commit to capacity. And again, it's part of the penalties that we pay today.

May be here a sentence. Thank you, Dror, and I would like to add your sentence. This also created a kind of an opportunity because in order to be on time in order that our customers would not suffer from what happens in the world, we had to tighten the relationship in the sense of discipline of giving the forecast and giving the orders. And at the end of the day, you have to see some benefits even in things and actually, we did. And I think this also created some, I would say, increase in the intimacy between the company as the supplier and them as a customer.

Okay. Well, that sounds like really good execution through a tough environment. On the VAV business, can you talk about what the content opportunities for you in a system pre and post-COVID? I'd imagine the hybrid systems that are coming out post-COVID have many more peripherals, attached, displays, like and so forth. Maybe you can give us some order of magnitude of how much the content per system has increased in the designs that are coming out post-COVID.

Yes. Well, as I said, I guess one of the previous -- first, I think it's a great question, and thank you for the question. I want to actually give you the opportunity to elaborate a little bit. The COVID created new phenomena, that some of them will not expire after the COVID. I believe, for instance, that working from home will not expire. The hybrid education is just increasing after the COVID.

The phenomena of what's called a hurdle room that creates for us great opportunities for USB extension and other extension, all of them are post-COVID phenomenal that creates also some new products and some of those products require new chips from us that were not in our plan. Actually, we did give some information in the past about future development of future products. And we see, especially in extension -- actually, all of them require extension.

And another thing which happened after post-COVID is that we see more and more opportunity for automotive chips to find the way to the audio-video world. And some of the extensions that will be needed, the automotive solutions are very suitable to give solutions for audio-video world. So yes, the post-COVID has effect of something that started in the COVID would not expire. And something which gave a new thinking and in I believe we will never change back. I hope I answered you.

That's great. Yes. And last question, if I can fit it in. I presume trucking is included in auto, correct me if I'm wrong. And I'm curious when the timing of that revenue is if it's already contributing. And more importantly, as you do the asymmetric application, which is very abundantly clear how valuable you are in terms of the backup camera, does the symmetric product gets swept in there because the customer wants a single platform across the 2?

Maybe I'll take it. So with respect to the revenue, maybe to give you how we build our revenue today. So as of today, the product that we sell to the market is the VA6000. This is the symmetric solution. Right now, this is the product that we sell into Mercedes Benz. We talked about the numbers. And this, by the way, the same product that will operate will be deployed as part of the overall solution, the system that will be deployed in the trucks with Stoneridge for the connectivity of the rear camera to display the dashboard.

And I believe that this product will be the main contributor of the high runner of our automotive business, at least in the next 2, 3 years. Thereafter, we assume that the VA7000, which provides the nonsymmetric solution, this is the solution for the sensor to ECU connectivity, only then we'll start to see significant ramp-up of revenue coming from this product.

The next question is from Brian Dobson of Chardan.

So maybe we could just touch on your partnership with Sumitomo. I guess, could you elaborate on some of the opportunities of that relationship should for moving forward?

So first of all, thank you for the question, Brian. Sumitomo, it's another good example of the way that -- or the momentum that we see for A-PHY in the market. This new standard of A-PHY, we see that more and more players from different disciplines are joining this journey. Sumitomo Electric being the leader, the world leader provider of cables on in-vehicle ones also realize that they need to be part of this ecosystem. So this is the basis for the collaboration between Sumitomo and Valens. We announced it in the previous quarter.

And by the way, Sumitomo is one name that we mentioned in the past. OMNIVISION joined this party this week. But I also want to mention other companies like Mobileye, LG Innotek, Sony, all of them are good evidence to the very strong momentum that we see for EVA in the market.

Great. Excellent. And then just following up on the trucking market. As it pertains to retrofitting existing trucks, do you think you can give us a picture of how large that market opportunities?

Yes. Well, the market opportunity isn't -- First, thanks for the question, actually, and truck is very important, and we see as a real opportunity for us, and I will elaborate in a second why it's a big opportunity, but I will answer first the question. There are 20 million trucks that are in the world and more than 2 million new trucks every year. And one of the phenomenons of truck and licensed car that when someone has a truck, it keeps improving it even when it old because it's safety things and because of other reasons.

So actually, unlike other markets where people would put money in their car only in the first 1 or 2 years, in trucks it's different. And the second thing is that we are touching here a safety thing which costs money from a point of view of insurance and the kind of cost of accidents in truck, which is very, very expensive. So we're speaking about a market of more than 2 million new trucks a year plus aftermarket of over 20 million moving trucks at the moment.

(Operator Instructions) There are no further questions at this time. Mr. Ben-Zvi, would you like to make your concluding statement?

Yes. Thank you very much for all the questions and for all your attention to Valens, and we hope to hear from you again in the next quarter, and we hope to keep surprising you with good news all the time. And all the best for all. Thank you.

Thank you. This concludes the Valens Semiconductor First Quarter 2022 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.