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We continue to see increased demand for our wafer level burn-in products and remain confident about the future demand for our unique technology solutions and the multiple market opportunities they address. In just the last 60 days we've seen how the slowing of the growth rate of the electric vehicle market has had a negative impact on the timing of several current and new customer orders and capacity increases for silicon carbide devices used in them. For clarity, we do not see the silicon carbide market actually decreasing, only a slowing of the growth rate and we've seen delays in both current customer and new customer purchase orders for production ramps to meet those electric vehicle demand, compared to what we are expecting even within the last several weeks and days.

I'll discuss more detail on our new customer engagements, but a very large customer that we've been engaged with on a significant automotive benchmark, in particular, has modified their timing for taking multiple production systems, which we feel most likely pushes them out of this fiscal year and is reflected in our lowered revenue forecast for this fiscal year. Recent announcements from some automotive semiconductor suppliers of slowing growth due to their customers stockpiling parts suggests that the automotive semiconductor slowdown may be due in part to a temporary excess in inventory. But in addition to slowing sales of automotive worldwide -- automobiles worldwide related to overall caution by automotive buyers due to increased interest rates and its impact on new auto sales.

Multiple companies were engaged with our large suppliers of automotive semiconductors and they have put in place temporary cost control measures that have trickled down to even silicon carbide plans, which we have heard are the area least impacted due to the expected growth that is forecasted by their customers. As a result, we've seen delays in customer ramps and capacity expansion plans, which has resulted in delays in expected existing and new customer orders for our products. We're also experiencing the impact of shifts in our customers' product mix, which specifically includes an increase in WaferPak, Wafer Contactors for our largest customer. As our customers shift from one design to another, they will order additional WaferPaks from us to be able to test and burn-in those wafers.

In the case of a large shift in the customer mix, this can be a very large number of WaferPaks. Our largest customers' overall forecast for revenue with us has actually remained relatively flat for the year, but the revenue mix has shifted to fewer systems and more WaferPaks. Given the latest forecast from our customers and the uncertainty on the timing of their orders, we believe it makes sense to take a more conservative approach to our fiscal year forecast and have reduced our growth estimates for fiscal 2024 revenue. We're reducing our revenue expectations of at least $100 million this fiscal year by 15% to 25% to a range of $75 million to $85 million in revenue. This is still a growth rate of 15% to 30% year-over-year. Despite this uncertainty in timing of orders, we remain confident about the future demand of our unique semiconductor test solutions in the markets we address.

We have not reduced our revenue -- our growth expectations for the years ahead, where we continue to see tremendous opportunity. We continue to hear from our current customers as well as companies who are engaged in evaluations with that wafer level burn-in is critical to their product roadmaps to address multiple large and growing markets, including battery and hybrid electric vehicles, industrial and solar power conversion, data and telecommunications infrastructure and the new incoming optical IO and co-packaged optics semiconductor markets. Well, let me discuss our progress with silicon carbide and gallium nitride power semiconductor customers. As a reminder, silicon carbide is a compound semiconductor, their thermal conductivity that's three times better than that of silicon and the dielectric breakdown strength of SiC (ph) is around 10 times better than silicon, making this much better for high-voltage high-power applications.

Silicon carbide has become the semiconductor of choice for use in electric vehicle power conversion and chargers. And in particular, it is a key differentiator in the motor traction inverters due to the longer-range and faster charging the electric vehicles using silicon carbide C. Silicon carbide semiconductor devices have a very high relative early life failure rate compared to pure silicon, but these failures can be weeded out with special electrical and thermal stresses referred to as burn-in, such as those supplied by Aehr's family of FOX Wafer level test and burn-in systems and our proprietary WaferPak full Wafer Contactors. Our WaferPaks make electrical contact to the tiny electrical pads of the semiconductors while still in wafer form and are unique and specific to each customer device and wafer layout.

Customers are moving from package or module form of burn-in to save on the yield loss of the packages, in particular, for multi-die modules used in the new electric vehicles. Aehr has a unique solution for being able to test thousands of silicon carbide devices at a time on a single wafer and also up to 18 wafers at a time, so that our customers can remove extrinsic failures to get the quality and reliability critical to the electric vehicle suppliers in an extremely cost-effective way. We can do this testing and burn-in while ensuring that every single device is proven to be burned in before they're shipped to the end customer. This cost-effectiveness and assurance that 100% of the devices are burned in is critical to this market. Last month we announced our first order for our FOX Wafer level test and burn-in system to be used for gallium nitride devices.

This customer is a leading global supplier of semiconductor devices used in electric vehicles and power infrastructure and adds another major customer to the list of companies using Aehr's FOX products for Wafer level test and burn-in of wide-bandgap compound semiconductors. We were already able to ship this system within a few weeks to them to meet their needs. We're now working with two of the market leaders in gallium nitride, which positions us front and center in a market that we believe is another potential growth driver for our wafer level solutions. Gallium nitride is similar to silicon carbide and that both of these compounds semiconductors are considered wide bandgap semiconductors that are more efficient and higher voltage power conversion applications than pure silicon semiconductors.

We believe that gallium nitride market is another potential growth driver for our wafer level solutions, particularly for automotive and photovoltaic applications where burn-in appears to be critical for meeting the initial quality and reliability needs of those markets. We continue to make great progress with our previously announced benchmarks and engagements with prospective new customers, including the significant automotive qualification of wafer level burn-in we've been doing with one of the market leaders in silicon carbide. We believe we have a large opportunity with this potential new customer and feel confident they'll move forward with our FOX-XP multi-wafer solution for their high volume needs, but the timing is taking longer than anticipated.

We remain confident that we will receive initial purchase orders from them in fiscal 2024. However, it's not clear whether they will have infrastructure ready to take shipments from us within our fiscal year that ends May 31st. We’ve made significant progress in expanding our customer base for silicon carbide or SiC and gallium nitride or GaN wafer level burn-in for a wide variety of applications. We currently have a total of seven customers purchasing our solutions for SiC and GaN devices and are also actively engaged with more than two dozen SiC and GaN companies to address their needs for wafer level test and burn-in of these devices. Importantly, 10 of these additional companies have already engaged with Aehr for on-wafer benchmarks. We have never lost a full wafer level burn-in evaluation since introducing our FOX-NP and XP systems configured with silicon carbide and gallium nitride test resources.

And we believe we will have over 12 silicon carbide/gallium nitride customers buying our wafer level test and burn-in solutions by the end of this calendar year 2024. These companies are projecting revenue growth and the need for burn-in in their devices at the wafer level to weed out early failures that would otherwise show up in their devices or modules or worse in their customers' applications. We firmly believe that Aehr provides the most competitive solution to burn-in devices that will be used in power modules and have shown examples where our cost of test and burn-in is significantly cheaper to do in wafer form than in the historical package part form. Packaged part burn-in is an option for discrete devices and individual packages, but the yield placing multiple devices in a single package or in modules exceeds the cost of test significantly.

For example, at a loss of 1% per die during burn-in, a module containing 32 die experienced a 32% yield loss of the entire module, and all the die inside it are thrown away if they're burnt in at that module level. This is a real-life example that we've seen across every customer we talk to. In anticipation of both our current and new customers' forecasted needs, Aehr has put in place the inventory, infrastructure, and processes to increase our manufacturing and installation capacity, as well as significantly lower our lead times to meet growth in our customer capacity needs. This allows us to ship a large number of systems and WaferPaks within the same quarter that we received purchase orders, which is certainly the case in this current fiscal year.

While we've seen delays in orders from our automotive customers, we're actually seeing a pickup in opportunities for silicon carbide wafer level burn-in for applications outside of the electric vehicle market, which includes the industrial solar and commuter electric trains as the efficiency and value silicon carbide is being recognized for these additional markets. Even though the largest market opportunity for silicon carbide is still electric vehicles and charging infrastructure, industrial and other power conversion market segments represent significant additional opportunities for silicon carbide for Aehr's products. William Blair forecasted that the total silicon carbide market is growing at a CAGR of greater than 4% annually to $8.5 billion in 2025 and over 25% of that will be in industrial and energy power conversion applications.

As we noted on last quarter's call, we're also seeing a continued stream of new designs for our WaferPaks, as more and more electric vehicles are coming online with their own specific device designs for inverters and onboard chargers. Our proprietary WaferPak Contactors are needed with our FOX wafer level test and burn-in systems to contact with the individual die on the wafer and are designed specifically for a given device. As our customers win new designs from their customers, Aehr will eventually secure orders for new WaferPaks to fulfill these new wins. With each new design, our customers will need enough new WaferPaks to meet the volume production capacity needed for those new devices. Last quarter we mentioned that our new WaferPak and applications test program design volume has tripled over the past previous nine months and this quarter will be a new company record for new WaferPak designs for customers.

Each design can turn into a high volume production application driving 10s or even 100s of WaferPaks needed for production, highlighting the recurring revenue part of our business. We believe that for the semiconductor test markets we serve, our customers desire if not require short lead times for test and burn-in systems and particularly for the WaferPaks used with them. During this fiscal year, we've been able to increase our manufacturing capacity to enable us to ship up to 50 or more FOX test blades per month representing 50 or more wafers, a full wafer test and burn-in capacity each month. We have the supply chain infrastructure and process in place to increase this another 50% by the end of this fiscal year and heading into our fiscal 2025 that begins June 1st.

We've increased our WaferPak capacity to not only support WaferPaks for new systems, but also for our installed base of systems, so that customers can purchase and ship large quantities of WaferPaks within a few months. We believe the added inventory, increasing capacity, shorter lead times are creating an even larger competitive advantage for us, which in turn will result in continued market share expansion and growth in the markets we serve. So let me move on and talk a little bit about silicon photonics. We remain very enthusiastic about this market, which includes the current photonics transceiver market used in data and telecommunications and the upcoming application of silicon photonics integrated circuits for use in optical chip-to-chip communication, which we see as a major market opportunity.

These next-generation silicon photonics-based integrated circuits can require up to 2 times to 4 times as much power for full wafer test and burn-in and stabilization and our new high-power configuration of our FOX production system which can be used to test and burn-in these new optical IO devices expands the market opportunity for the FOX-XP system even further. We've been making good progress on our new volume production FOX-XP system for these very high-power silicon photonics device wafers and expect to ship this system by the end of our current fiscal third quarter to fulfill our first order from our current major silicon photonics customer that we received last May. The system is configured to enable cost-effective production test of up to 3500 Watts of power per wafer and up to nine full wafers in parallel and also includes our latest chamber configuration, which has a smaller overall footprint.

This new system is also Auto Aligner ready enabling our customers to easily doc this to our new FOX WaferPak Auto Aligner for hands-free operation of wafers from six to 12 inches using industry-standard wafer cassettes and FOUPs. This new FOX-XP configuration allows for the testing as many as 8000 high-power optical devices in parallel on each of nine wafers before they're singulated and placed into a photonic application such as fiber-optic transceiver modules or for replacement and co-packaged optics for optical chip-to-chip communication devices, such as those that have been announced on product roadmaps by companies including NVIDIA, Intel, AMD, TSMC and GlobalFoundries. These photonic ICs required an extra step in their manufacturing process referred to a stabilization or aging, where the devices experience varying degradation and then stabilize their optical output power as a function of the input power.

This is critical to stabilize before integration into a transceiver or optical chip-to-chip communication package. This process step takes many hours or even more than 24 hours for the stabilization and is critical to do before the die is integrated into the system. Aehr provides a unique solution for doing the stabilization of all devices while still in relatively easy and repeatable wafer form. One key challenge in doing this in massive parallelism up to and including all the devices in the single wafer is the power and power density of testing the devices in this form. The stabilization requires very high power and this not only requires a test system to deliver the high power to the wafer, but all the power to the wafer must be removed in the form of heat to keep it from literally destroying the devices.

Aehr can not only provide precise regulating calibrated voltage in current devices on a wafer up to 3500 Watts per wafer and nine wafers at a time, but we can also remove this power while maintaining a uniform temperature across all the wafers. At this time, we believe we're the only company providing -- both providing and removing this much power to silicon photonics wafers and are also doing it up to nine wafers at a time. This is a key differentiator in what we believe is an enabler for the capacity and scale needed to address the high-power photonic integrated circuits used in very high-speed optical transceivers, and also the up-and-coming, optical chip-to-chip communication devices market. As I noted on our last call, Aehr currently has six customers using our systems for production test of silicon photonics devices.

We're watching this market very closely and are working with some of the leaders in silicon photonics to ensure that they have the products and solutions available to meet their needs for this potentially significant market application. Let me conclude. We expect continued strong demand for our wafer-level burn-in solutions given the continued growth forecast for the markets we address and the expanded market opportunities we're seeing. While we reduced our growth estimates for fiscal '24 revenue given the uncertainty on the timing of customer orders, we believe we remain well-positioned to capitalize on the incredible growth of this industry and are poised for continued solid growth for years to come. With that let me turn it over to Chris, and then we'll open up the line for questions.

Chris Siu: Thank you, Gayn. Good afternoon, everyone. We're pleased to announce another solid quarter for Aehr Test Systems, with strong year-over-year growth in revenue and net income, both ahead of consensus estimates. Let me summarize our results for the fiscal second quarter. Second quarter revenue was $21.4 million, up 45% from $14.8 million in Q2 of last year. Strong demand in all revenue categories including systems, contactors, and services contributed to a significant year-over-year increase in revenue in the second quarter. WaferPak revenues were $9.2 million and accounted for 43% of our total revenue in the second quarter, which was consistent with 45% of our revenue in the prior year quarter. Customers typically buy WaferPaks from us, subsequent to purchasing our FOX systems.

We're seeing continued momentum for new WaferPak designs with existing and new customers to meet their customer and market requirements. As Gayn noted, we've seen how the slowing of growth in the electric vehicle market has had a negative impact on the timing of several current and new customer orders and capacity increases. As a result, bookings in the second quarter were $2.2 million and our backlog as of quarter-end was $3 million. We expect orders for systems, WaferPaks, Aligners and Services in this and next quarter in time to support our latest revenue forecast. GAAP gross margin for the second quarter came in at 51.1%, down from 53.4% in Q2 last year. The decrease in gross margin is primarily due to high inventory reserve and increased period costs.

Operating expenses in the second quarter were $5.5 million, up 24% from $4.4 million in Q2 last year. The year-over-year increase is primarily due to previously noted increased headcount-related expenses to support our worldwide sales and marketing efforts, along with our R&D programs. Our investments in sales and marketing staff continue to have a positive impact on expanding our customer engagements in the US, Asia, and Europe, and marketing reach to support revenue growth. The increase in R&D in Q2 from the same period last year was primarily due to costs associated with development programs for augmenting features and performance of our Automated Wafer Aligner and higher personnel expenses. The first order for our integrated Automated Aligner that was shipped in the fiscal first quarter of 2024, was accepted by our customer in the fiscal second quarter.

We continue to bring in R&D talent and invest in R&D programs to enhance our existing market-leading products and to introduce new products to maintain our competitive advantages and expand our applications and addressable markets. Non-GAAP net income, which excludes the impact of stock-based compensation was $6.7 million or $0.23 per diluted share for the second quarter. This is up from non-GAAP net income of $4.5 million or $0.16 per diluted share in the second quarter of fiscal '23. Turning to the balance sheet, we continued to maintain a strong cash position on our balance sheet. Our cash and cash equivalents were $50.5 million at the end of Q2, flat from our cash and cash equivalents balance of $51 million at the end of Q1. With a strong balance sheet, we can continue to invest in scaling our business.

Over the past six months, we have invested financial and human resources in improving our own infrastructure to support the continued growth of our business. We recently went live with a new human resources information system in Q4 and are implementing a new enterprise resource planning system that will provide more sophisticated functionalities and capabilities to support decision-making and compliance. We expanded our policies and procedures in various functions to provide more internal control and structure. We have made improvements in our supply chain and engaged with contract manufacturers that offer more value-added quality components and services to support our growth. We used $0.5 million in operating cash flows during the quarter to procure inventory components to support our revenue target in fiscal 2024.

Even though our book-to-bill ratio is less than one, we believe we have the necessary inventory components to build products quickly and ship them to our customers when we receive purchase orders from them. We have zero debt and continue investing our excess cash in money market funds. Interest income earned during this favorable interest rate environment was $631,000 in the second quarter, compared to $263,000 in the second quarter last year. In Q3 of last year, we announced an ATM offering of up to $25 million in shares of the company's common stock on the open market. We've received gross proceeds of $7.3 million on the sale of 209,000 shares in fiscal 2023. We did not sell any shares during our last three fiscal quarters. As of the end of the second fiscal of 2024, the remaining amount available under the ATM offering was $17.7 million.

It remains our plan to only sell shares against this ATM offering at times and prices that are most advantageous to our shareholders and to the company. Now turning to our outlook for the current fiscal 2024 year that ends on May 31st, 2024. As Gayn noted, we expect continued strong demand for our wafer-level burn-in solutions for the markets we currently address, as well as increased demand from the new market opportunities we're seeing. However, given the latest customer forecast and the uncertainty on the timing of their orders, we believe it makes sense to take a more conservative approach to our fiscal year forecast and reduce our growth estimates for fiscal 2024 revenue. For the fiscal year ending May 31st, 2024, Aehr is revising its expected full-year total revenue to be between $75 million and $85 million, representing growth of 15% to 30% year-over-year and GAAP net income of between 20% and 25% of revenue.

Even with this more conservative guidance, we expect solid year-over-year revenue growth and believe we are poised for continued strong growth for years to come. Lastly, looking at the Investor Relations calendar, Aehr Test will be meeting with investors next week at the Needham Growth Conference taking place in New York. We will be meeting with investors throughout the day on Wednesday, January 17, and until noon on Thursday, January 18, and hope to see some of you at this conference. This concludes our prepared remarks, we're now ready to take your questions. Operator, please go ahead.

Operator: Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] First question today is coming from Christian Schwab from Craig-Hallum. Christian, your line is live.

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