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Akoustis Technologies, Inc.  (NASDAQ:AKTS)
Q2 2020 Earnings Call
Feb. 03, 2020, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Akoustis Technologies Business Update Conference Call. As a reminder, this conference call is being recorded. [Operator Instructions] I'll now turn the call over to Tom Sepenzis.

Tom Sepenzis -- Vice President of Corporate Development and Investor Relations

Thank you, operator, and good morning to everyone on the call. Welcome to Akoustis Second Quarter Fiscal 2020 Business Update Conference Call. We are joined today by our Founder and CEO, Jeff Shealy; Interim CFO, Ken Boller; and Executive Vice President of Business Development; Dave Aichele.

Before we begin, please note that today's presentation includes forward-looking statements about our business outlook. All statements other than statements of historical facts included during this conference call, including statements regarding our strategies, operations, costs, plans and objectives, including the timing and prospect of product development and customer orders, our expectations regarding achieving design wins from current and future customers, the possibility of entering into collaborative or partnering relationships and guidance regarding expected revenue for the current fiscal quarter are forward-looking statements. Such forward-looking statements are predictions based on the Company's expectations as of today and are subject to numerous risks and uncertainties. The Company and our management team assume no obligations to update any forward-looking statements made on today's call.

Our SEC filings mention important factors that could cause actual results to differ materially. Please refer to our latest Form 10-K filed with the SEC to get a better understanding of those risks and uncertainties. In addition, our presentation today will also refer to certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measure is presented in our earnings call highlight release available on the Investors section of akoustis.com.

I would now like to turn the call over to Jeff Shealy, Founder and CEO of Akoustis.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Thank you, Tom, and welcome, everyone, to our 2020 second fiscal quarter business update call. I'm happy to report that this morning, we announced our first commercial volume order from a tier 1 customer for 5G network infrastructure in the sub-6 gigahertz spectrum for small cell base station application. We are starting preproduction shipments this quarter and expect to initiate commercial ramp for this filter beginning in the June quarter.

Today's announcement marks an enormous milestone and commercial achievement for Akoustis. I think it is worth noting that we were able to progress from design kickoff to a commercial order inside of six months, truly a testament to the extent of how far we've progressed in our IDM business model leveraging our patented XBAW filter technology.

I'm also pleased to report that we achieved every critical milestone we previously laid out for the December 2019 calendar quarter. We have organized today's call to give you both the progress report and targeted milestones on each of our four main filter market segments. Those being 5G network infrastructure, 5 gigahertz high-band WiFi, defense and 5G mobile handsets. In addition, our interim CFO, Ken Boller, will provide an update on our financial results, and finally I will highlight our expectations and milestones beyond the December quarter.

First, I would like to start with our achievements in the 5G network infrastructure segment, where high-power handling capability, low insertion loss and high out-of-band rejection are critical product performance features. Such high-performance delivered in a small form factor as well as our existing RF filter portfolio above 3 gigahertz, where 5G is being deployed worldwide, ideally positions Akoustis to be an early leader in high-performance BAW filters for the 5G network.

Today, we have multiple customers in multiple segments of 5G network infrastructure, including two tier 1 customers. As I previously mentioned, today, we announced our first volume commercial quarter for 5G small cell network infrastructure filter application. Today's announcement is a significant achievement for Akoustis as it marks the first volume commercial order the Company has received for its proprietary and patented XBAW RF filters in the infrastructure market.

The orders from our second tier 1 network infrastructure customer for high-frequency BAW filters, targeting the 5G network band n77 in the Asian market. We expect to begin shipping preproduction RF filters this quarter, ramp commercial production in the 2020 June quarter and see a multiyear runway with significant revenue. In addition to the 5G network band n77 filter, we also have developed and sampled a 5G network filter for band n79 for the same tier 1 customer. Importantly, we expect a second volume order from this customer for 5G network filters by the end of June 2020.

With respect to our first tier 1 5G network customer, we recently received a second development order for high-performance, high-frequency XBAW filters for the 5G network. Akoustis was chosen to develop micro acoustic XBAW filters for this customer, given our ability to provide an ultra-small form factor solution, while satisfying the challenges of difficult RF specifications and delivering high-power handling.

At this stage, these filters are expected to ramp into production beginning around mid-calendar 2020. This customer continues to evolve its platform, and we believe we are now more closely aligned with performance characteristics that can work within its 5G architecture. Another 5G network infrastructure opportunity that we did not discuss in the December quarter milestones is the Citizens Broadband Radio Service or CBRS infrastructure market. Last week, we announced we have completed development and design lock of our first 3.6 gigahertz CBRS infrastructure filter.

This coming June, the FCC will begin to auction new CBRS spectrum known as Priority Access Licenses or PAL that operate between 3.55 gigahertz and 3.7 gigahertz. The CBRS bands will provide cellular carriers, new and additional sub-6 gigahertz spectrum and can be a key enabler for making 5G deployments possible by providing last-mile data service and improved coverage of individual networks.

The good news for Akoustis is that the utilization of CBRS bands within the 5G network will likely require a significant amount of high-frequency filters to deal with a multitude of coexistence issues. To our knowledge, Akoustis is the only supplier providing BAW filters for this application and we are receiving positive feedback on the performance and size of our XBAW filters.

Given the current lack of micro filter solutions that can target this high-frequency spectrum, CBRS represents another new first-to-market greenfield RF BAW filter opportunity for Akoustis. In December, we sampled filters to three potential CBRS customers and expect that number to double over the course of calendar 2020.

In conclusion, the number of opportunities we are seeing in 5G network infrastructure are expanding, and we expect many carriers will begin deploying sub-6 gigahertz networks throughout calendar 2020. We believe that 5G network infrastructure filtering needs play right into our sweet spot, and that our current 5G infrastructure customers will deliver Akoustis significant revenue growth over the next 12 months.

I would now like to discuss our opportunities emerging in our WiFi business. Today, Akoustis continues to have the first and only tandem 5 gigahertz WiFi BAW micro coexistence filter solution. Specifically, we now offer both a 5.2 gigahertz and 5.6 gigahertz micro filter solution for the tri-band WiFi CPE market, which we expect will grow into a high-volume market with the goal of delivering significant revenue growth over the next 12 months and beyond.

In the first half of calendar 2019, we introduced the world's first 5.2 gigahertz BAW WiFi coexistence filter operating in the UNII 1+2A band. By June of 2019, we had sampled our 5.2 gigahertz filter to over 15 potential customers, including SoC makers, RF front-end makers, OEMs, ODMs and distributors. In July of last year, we introduced the world's first 5.6 gigahertz WiFi coexistence filter with wide bandwidth covering the entire 345 megahertz, UNII 2C+3 band. This 5.6 gigahertz filter specification is extremely challenging, as it simultaneously requires high-frequency operation, wide bandwidth and high rejection performance enabling simultaneous 5 gigahertz dual-band operation. Our ability to meet this difficult specification is a testament to our patented XBAW technology.

From a supply chain standpoint, we have been able to significantly reduce the time to market for our 5.6 gigahertz, as it leverages the same high-volume packaging as our 5.2 gigahertz filter solution. In the December quarter, we delivered on several important milestones. We were able to complete the internal qualification of our 5.2 gigahertz filter product and lock in the design and process for the 5.6 gigahertz filter, enabling us to accelerate shipments of preproduction 5.2 gigahertz and 5.6 gigahertz WiFi coexistence filter solutions to multiple customers.

We are now shipping preproduction filters and tracking multiple active engagements with OEMs, ODMs, including tier 1 enterprise-class WiFi OEMs, two reference design partners/SoC makers, two distribution partners and one channel partner. Our team has done an excellent job filling our sales funnel, and we are now in the advanced stages of the sales cycle with several customers and expect one or more production design wins over the coming months. We remain on track to commence commercial production for WiFi customers in the second half of 2020.

Moving on to the Defense segment. The transition to high-volume packaging in our defense products in early calendar 2019 led to the successful ramp of our 3.8 gigahertz filter for the defense market during the June quarter. We filled three open orders in the June quarter for our 3.8 gigahertz filters, receiving positive feedback from our customer. We have received additional orders and expect our customer to utilize the filter in multiple new designs over the coming quarters.

Since the successful delivery of our 3.8 gigahertz filter, our customer awarded Akoustis with a follow-on order to develop five additional S-Band filters for new phased array radar systems. Each of these five new filters operate within the 2 gigahertz to 4 gigahertz spectrum. Our team did an excellent job, and as we announced in early January, delivered all five of the new S-Band filters on time and in under six months. We still expect to enter production with our customer with these new S-Band filters in calendar 2020.

Finally, in the handset market, we secured our first 5G mobile customer engagement in June of 2019 with a tier 1 customer who contracted us to develop an XBAW filter in the sub-6 gigahertz frequency band for 5G mobile handsets. We delivered our first 5G mobile filter sample to the customer in just two months. And, given the performance of that filter, our customer responded early in the September quarter with a new order to develop two additional 5G filters in the ultra-high-band frequency spectrum. For clarity, all three filters target the performance and form factor necessary for 5G handsets.

We successfully delivered the two additional 5G filters to the customer in the December quarter. That customer is currently evaluating our filters for use in future 5G platforms. The dialogue remains active with this customer, and we look forward to discussing our progress in the coming months. The mobile handset market is our largest potential BAW filter market opportunity by both unit volume and revenue.

It is worth noting that our XBAW filters have already been evaluated by several select top tier 1 and tier 2 mobile handset OEMs, but as I have stated previously many times, Akoustis does not intend to enter the tier 1 handset market without a partner, at least in the foreseeable future. However, we believe with the ongoing 500% capacity expansion of our New York fab that we will have the wherewithal to enter the handset market servicing a tier 2 handset OEM without a partner. We recently had another very important achievement as we completed our first wafer-level packaging, or WLP demonstrator and in December shipped WLP samples to a multibillion-dollar tier 1 mobile device OEM.

This initial demonstrator leverages Akoustis' existing 5.2 gigahertz WiFi filter technology, that is approximately 260 times smaller than the existing dielectric resonator filters used primarily in infrastructure application. Once completed, this new package will enable us to deliver filters with the form factor required for mobile wireless devices, giving the Company the opportunity to compete in several large markets, including mobile 5G handsets, tablets and laptops, among other devices.

Now, I would like to turn the call over to Ken to go through select financial highlights.

Kenneth Boller -- Interim Chief Financial Officer

Thank you, Jeff. For the December quarter, we reported revenue of $518,000, in line with prior guidance. As anticipated, total revenue was flat quarter-over-quarter despite rapid filter revenue growth, as we experienced the expected falloff in non-core MEMS-related revenue. Importantly, XBAW filter-related revenue grew sequentially 83% quarter-over-quarter. Currently, we have concluded nearly all non-core MEMS foundry-related business to allow our future capacity to be dedicated to our XBAW filter product line at our fab in Canandaigua, New York.

I am happy to report that during Q2, we successfully raised over $32 million net in cash from the issuance of common stock, which will be used to fund operations and capacity expansion. Having a healthy balance sheet gives our customers greater comfort that we can support their needs now and into the future. On a GAAP basis, operating loss was $7.9 million for the December quarter, mainly driven by labor costs of $4.8 million, depreciation of $0.7 million and other one-time GAAP expenses and operational costs totaling $2.4 million. As a result, our GAAP net loss per share was $0.30.

On a non-GAAP basis, operating loss was $6.3 million and non-GAAP net loss per share was $0.21. Our capex spend for Q2 was $2.6 million compared to $1.6 million for the prior quarter, primarily related to the targeted 500% expansion in our New York fab. Cash used in operating activities and capex in Q2 was $8.8 million. We exited the quarter with $46.4 million of cash on the balance sheet after successfully raising the net $32.2 million mentioned earlier.

Now, I will provide guidance for the March quarter. We believe revenue will remain relatively flat on a sequential basis as we continue to grow our product portfolio ahead of production ramps we expect in the second half of calendar year 2020 in 5G network infrastructure, WiFi CPE and defense filters. Foundry revenue will have no impact on the model going forward, as we have reached end of life with our former customers in preparation for internal growth in our facility.

I will now turn the call back over to Jeff to discuss our forward outlook.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Thank you, Ken. We continue to have success achieving our target milestones across each of our market segments. I will begin with our new target milestones for the 5G network infrastructure market. Our target milestones for the March quarter include receiving our first volume order for small cell base station filters, which we announced this morning. Additionally, we expect this same customer to deliver a second volume infrastructure order by the end of the June quarter. And finally, we expect to deliver a design lock XBAW filter to our first tier 1 infrastructure customer by the end of the June quarter to support a volume ramp in the second half of calendar 2020.

I will now move on to the WiFi market. In our WiFi business, we expect to receive our first design win by the end of the June quarter. We also expect to deliver our first WiFi 6E filter sample by the end of June. WiFi 6E is a new developing standard, which utilizes wider spectrum up to 7.1 gigahertz and aligns well with our wideband XBAW performance at high frequency. We believe that we have the opportunity to extend our early lead in high-frequency BAW filtering for WiFi by becoming one of the first companies to deliver WiFi 6E micro filters.

Moving now to our defense business. We shipped samples of 5 new S-Band filters in the 2 gigahertz to 4 gigahertz spectrum to our customer in the December quarter. Our customer is currently evaluating the filters, and we expect that will go into production in the current calendar year. Our December 2019 target milestones include winning a purchase order for filters that address a new market opportunity, which we were unable to complete by the end of the December quarter. However, we expect to announce that order during the current quarter.

And finally, in the 5G mobile market, we continue to march toward entry into our largest potential market by unit volume and revenue. We will continue to refine our new WLP demonstrator as well as work toward a partnership that could help us enter the tier 1 handset market. We do expect to receive a follow-on order from our current customer in the first half of calendar 2020, as the relationship continues to progress.

In conclusion, we are working diligently to achieve each of our stated objective, and we will update you on our execution against these objectives each quarter going forward. As we discussed in our previous conference call, in order to support our current engagements and emerging sales opportunities, we continue investing to increase manufacturing capacity by 500% over the next 12 months to produce hundreds of millions of XBAW filters per year. Beyond our current expansion, the company will be positioned to scale our current New York wafer fab to produce up to 5 billion XBAW filters per year when fully equipped by working with a tier 1 partner or through longer-term organic growth.

I would like to thank those who have joined us today on this call. We continue to build the company on the philosophy of four solid pillars, including strong management and technical staff, strong intellectual property, which currently includes 29 issued and license patents and 54 patents pending, large and growing markets with limited historical competition in the high-band and ultra-high-band spectrum and our qualified manufacturing operation, which is expanding to address high-growth opportunities in our target end-markets.

We are now positioned favorably to penetrate the WiFi market with the world's first tandem 5.2 and 5.6 gigahertz ultra-high-band BAW filter solution. Additionally, we continue to progress on our 5G engagements with global leaders in both network infrastructure and mobile handset markets, providing our company with strong growth opportunities in high-performance coexistence BAW RF filters.

Today's announcement of our first volume order for a key 5G infrastructure filter is supporting evidence that we are positioned to benefit from 5G growth. Before ending my remarks, I would like to take the opportunity to congratulate David Aichele on his recent promotion to Executive Vice President. Dave is an important voice across our organization and I look forward to continuing our partnership, aligned with the rest of our senior management to grow our company.

Finally, I am thankful to our employees for their hard work and dedication in calendar 2019 and our shareholders, who continue to support the Company. And with that, I would like to open the call for questions from the investment community. Operator, please go ahead with the first question.

Questions and Answers:

Operator

Your first question comes from the line of Cody Acree with Loop Capital.

Cody Acree -- Loop Capital -- Analyst

Thanks for taking my questions and congrats on the progress. And Dave, specifically, congrats on the promotion. I know, Jeff, you've run through these things all kind of as you've tried to segment it best you can, but can you walk us through just a summary of your expected time line to revenue production throughout 2020 across the various segments? I know there's a lot of preproduction, shipments of lot of samples, but just can you remove all of that and just say, here is what we expect to [Indecipherable] revenue during these quarters?

Jeffrey B. Shealy -- Director and Chief Executive Officer

Okay. Good morning, Cody, and thank you for the comments. And specifically, in terms of, as you stated in your comments, we do have a lot of -- there's a lot of samples going out. There's a lot of preproduction units going out. We announced this volume order, specifically, in terms of how we see production ramping, I'll make a few comments and I'll let Dave to kind of fill in anything I may have missed. But I think I'd be looking at it in the current quarter, we're going to be continuing to ship preproduction units. We've got -- we announced this morning an open order in the small cell infrastructure. There'll be shipments of small cell infrastructure going out this quarter, and we continue with supporting WiFi opportunities. We mentioned in the prepared comments of what that funnel looks like in a wide range.

In terms of production, specifically, I would be looking for Q2 ramp in infrastructure and I would be looking for Q3 ramp in the WiFi CPE market. Those would be -- that's how we see those ramps starting to come on.

David M. Aichele -- Vice President of Business Development

And Cody, it's Dave. I guess, just commenting on that to what Jeff said, we've got good line of sight of more than five programs in the WiFi market, and we're actually starting to see forecast. And, as you know, that we really start shipping a product at the end of the -- in the middle of the Q4 time frame that they could start designing in, so that transition is from design activity to production release, we're starting to see line of sight of that, so we're going to track that. And, I agree with Jeff's comment with the WiFi side. It's probably going to start ramping into the Q3 time frame.

With regard to infrastructure, that activity would continue to get pulled into that. And, the expectation is that the adoption and the qualification, design win and production ramp with the infrastructure, primarily in the China market, will happen fairly quickly. And we're positioned to support that. We've been able to do these design spins rapidly based on the models and the fab cycle time through our factory and the supply chain that we've established, so we're well positioned to support that.

Cody Acree -- Loop Capital -- Analyst

All right. Thank you for the details. And just -- can you just touch on the WiFi announcement? Does this now put you in the sampling position or preproduction position with all of the major consumer and enterprise WiFi OEMs? Or are there still targets out there you're looking for?

Jeffrey B. Shealy -- Director and Chief Executive Officer

Yes. Specifically, I'm not sure which announcement you're referring to, but we did add a fifth opportunity in WiFi that was with a new enterprise-class customers. And, what I would characterize the activity now is we're taking in additional opportunities in the sales funnel. I think maybe more importantly, the share is that we're currently building inventory to support ramps to make sure we've got plenty of products on hand.

We did not -- we mentioned briefly in the prepared comments, we've got a channel partner that also has inventory and has qualified their product for their customers, so we see a secondary effect, a one-to-many effect with that customer through their relationships. So, I think WiFi, we're ready to go. We're building inventory and supporting applications needs with customers as they come up. So please follow-up if you have a further question on that.

Cody Acree -- Loop Capital -- Analyst

Thank you, guys.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Okay.

David M. Aichele -- Vice President of Business Development

Thanks, Cody.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Thank you, Cody.

Operator

Our next question is from the line of Anthony Stoss with Craig-Hallum. Please proceed with your question.

Anthony Stoss -- Craig-Hallum -- Analyst

Good morning, guys. My congrats as well as to today's press release. Can you maybe give us a range after both filters are in volume production, the size of the opportunity do you think it is with this customer? And then, also, piggybacking on that, your other 5G massive MIMO infrastructure customer, Jeff, I think you'd mentioned volume production in the second half of 2020. Can you also kind of size that opportunity and what you think how that's going to play out here?

And then lastly, maybe for Dave, how many different customers do you think you'll be live by the end of 2020 with volume production?

Jeffrey B. Shealy -- Director and Chief Executive Officer

Okay. So with -- so I'll first touch on small cell infrastructure, which I think that was the first part of your question. The -- we have a primary customer that is currently working with us on two bands. These are two frequencies in the ultra-high-band spectrum. The types of volumes that we expect in that market would start. If you look on the early months would be on the order of 10,000 filters per month in kind of the preproduction phase that we've been describing. And then, that would ramp into the 50,000 to 100,000 filters per month with that customer, and that is per band.

There are two bands. We've actually shipped to that particular customer both bands, and they are moving forward more aggressively with one of the two bands versus the other, but we see activity on both fronts supporting their deployment. With regard to the tier 1 customer, we're going to be extremely cautious, given customer sensitivities and competitive sensitivities with details. I do think that what we indicated in the prepared comments is that we expect that tier 1 customer to begin ramping production in the second half of the calendar year. And we're -- our objectives internally here is to have the product, the final product, ready and be prepared to ramp for that, and that's what we're internally supporting.

In terms of number of customers going forward, I'm going to let Dave touch on that one.

David M. Aichele -- Vice President of Business Development

Hi, Tony, so with respect to 5G on the different customers, number of customers, our strategy has been, at least in the infrastructure side with the small cell to focus on one tier 1 customer who is a dominant player in that market. And then, the intent is that once they get their architecture defined that we will start sampling to a number of smaller customers. So we are right at that phase right now. These other smaller customers are tier 2 players that support that market network deployment.

So, I would say within the next two quarters that we should have up to about five customers with those two bands, because they're all supporting that same market. In addition to, we're starting to sample these bands to other markets as well in Europe that uses the same 3.5 gigahertz bands, they don't use the n79 4.9 gigahertz band. That one is primarily supporting the China market. So we should have multiple number of customers that are engaged at different levels from preproduction, production over the next six to nine months. And I think the volumes that Jeff mentioned may not be as large with those other customers, but they will aggregate on top of each one.

Anthony Stoss -- Craig-Hallum -- Analyst

Okay. Then as a follow-up, Dave, you mentioned you have line of sight or a little bit more clarity in terms of design wins on the WiFi side and now that things are similarly getting locked down for the second half of 2020. Can you help us understand maybe the size of the funnel, the number of customers, the number of designs you think that might be locked down by the end of 2020?

And also, either Jeff or Dave, if you can help us understand the size of the inventory you're building right now in addition to the channel for these WiFi launches at the back half of the year? And what kind of capex do you think you need to spend for the remainder of the year to get ready for 2021? Thanks.

David M. Aichele -- Vice President of Business Development

Yeah. Okay. I'll take the first part of that, Tony. On the WiFi side, what we have announced is a funnel of five that we're tracking right now, and those are the ones that are closer that we've got better visibility and line of sight. As you can imagine, there's more in the funnel than that, that we'll be able to update the market as we get better visibility. Of the five though that we are engaged with, those ones we expect -- we're targeting to try to lock down all, but some of them because of outside influences, we may not be able to get 100%, but it's a good mix of enterprise and retail and the volumes range in hundreds of thousands to more than millions of units per year. And the architecture configuration of the systems, again, we're the only one out there supplying a tandem 5.2 and 5.6 WiFi. So we pretty much pick up 100%. It's not a shared design win, and it could range from 2 per system by band to 4 per system by band. It just depends on the end customer's architecture.

So we're excited about this transition to design wins and production ramp. And I think what we've guided in the past is when we secure the design win and obviously start seeing the release on volume orders, we'll update the market. The good thing is, is that we're already working with the ODMs and building the system. So we're shipping the preproduction volumes right now.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Yeah, and Tony, I'm going to add to that, that not only are we prepared to support the current deployment in that high-band 5 gigahertz WiFi. There's a lot of talk in the industry about WiFi 6E. I want to just take a moment to discuss that. Those -- what effectively that architecture does is take these same high-frequency bands in one of the bands that combine two existing frequencies. In the other, they've got a very wideband architecture, which need to be supported by filters. So I think it would be complementary to just mention that we expect to have product offering in that area, so as WiFi 6 transitions to 6E that we're not concerned about that transition because we fully expect to have product available in that market moving forward.

In terms of inventory we are -- in terms of the volumes of inventory, what we want to make sure is that we have -- we certainly have the ability to build to order, but as a new supplier to these customers, the worst thing we can do is let them down. So we're making sure that we're putting some inventory on the shelf. I'm not going to comment on the exact numbers, but making sure we have on the order of a quarter worth of inventory available to us. Certainly, at the chip level, we don't have to commit to packaging, but that just protects us if there is any surge in demand.

In terms of the capex, I'll let Ken touch on that.

Kenneth Boller -- Interim Chief Financial Officer

Good morning, Tony. In the past, we've given guidance on the capex spend as far as how we are progressing toward our 500% capacity expansion. We have about $10 million to $13 million more to go on that project to be spent in the next nine to 12 months. A lot of that is dependent on lead time for equipment, which is -- tends to be pretty lumpy. I would say, it's probably a little more front-end loaded, but we expect $10 million to $13 million in the next nine to 12 months.

Jeffrey B. Shealy -- Director and Chief Executive Officer

And that capex would be ready to support our business, our expected business in 2021.

Anthony Stoss -- Craig-Hallum -- Analyst

Thanks, guys. Best of luck.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Thank you, Tony.

David M. Aichele -- Vice President of Business Development

Thanks.

Operator

The next question is from the line of Rick Schafer with Oppenheimer. Please proceed with your question.

Rick Schafer -- Oppenheimer -- Analyst

Yeah, sorry guy, my phone was on mute. I apologize. So I'll add my congratulations, particularly on the infrastructure win. I just wanted to follow-up quickly on that and just kind of get a sense of -- I know we've talked a lot about that already with the two tier 1s, and I know we talked about some of the tier 2s feathering in later, but I think in the past, you said you're engaged with all five of the top 5 tier 1s. And so, I just was kind of curious did we get any update on where we stand with the other three tier 1s?

Jeffrey B. Shealy -- Director and Chief Executive Officer

Yeah. So I'm going to make a clarifying statement and then I'll let Dave comment. I actually -- I think what we've identified is that the tier 1 consists of five major OEMs. I do not believe we have stated that. We have engagements with all five. What -- I think, in contrary to that, we've taken a rifle-shooting approach to really focus on a key customer in each segment and work with them on specifications and producing products and refining those products to where we can get in the market. We take great care in selecting which ones of those customers to make sure that we're on the forefront of deployment, particularly in this 5G.

In terms of the characterization of kind of how we see the tier 1 and how we're engaging the tier 1, let me let Dave touch on that.

David M. Aichele -- Vice President of Business Development

Yeah. So with regard to that, Rick, we've got -- we are talking to the whole market and it's similar to what we've done on the WiFi side. And, Jeff is correct, it's a laser focus, because we are pushing frequency and bandwidth and power handling, so we want to make sure that we can deliver robust solutions. And also, we align with the customers that will work with us through the design phase and the development phase.

So the good thing is, we're coming out of that with these two tier 1s that we've identified and worked with. And, what we'll do is we'll expand that with the other tier 1s, one of them -- the other one in China. We're a little bit careful with based on, obviously, the export restrictions, but at least we have an open relationship, we're talking to all of them. And they recognize the benefit that the XBAW technology, all of it coming down to the ability of these microacoustic filters to address network architectural issues that they see at this frequency, reductions in size, reduction in cost, reduction in weight that is particularly of interest for the massive MIMO, but also the small cell network.

Jeffrey B. Shealy -- Director and Chief Executive Officer

And Rick, let me add -- I'd like to add to that, just for clarity. With -- by rule, we own the filter design, so we do have the ability to sell. There's occasionally exceptions to this rule, but the general rule is, we own the filter design and we have the ability to sell across the entire market. And so, we're focused on that. And so, I wanted to add that to Dave's comment.

Rick Schafer -- Oppenheimer -- Analyst

Thanks, Jeff. And if I could, I'd like to follow up also on -- just looking at your segments, and it sounds to me like and I could be wrong, but this also but -- that infrastructure -- 5G infrastructure likely leads growth for you guys this year in terms of revenue ramp. But is there -- I guess, correct me if I'm wrong, number 1 there; and then number 2, is there a chance that WiFi with the strong ramps, it sounds like you have in the back half of the year, could WiFi lead growth for you guys this year? And by the way, is wafer -- is WLP, is wafer-level packaging, is that a big deal for WiFi or only for handset?

Jeffrey B. Shealy -- Director and Chief Executive Officer

Let me take on the two. I think we gave the timing of Q2 ramp in infrastructure and Q3 ramp in WiFi, but we fully expect both of those segments to ramp this year for the Company. Regarding the WLP, we've predominantly focused that on the mobile market having that size available. There would be opportunities potentially in the WiFi to integrate something into an RF for an integration play there.

So we're just making sure we've got very competitive package technology for a wide range of markets. And depending on the ultimate customer needs, for example, how much power that the product has to dissipate, we select the package accordingly, but we also want to be very competitive with our packaging road map. So that's -- so in summary, WLP primarily is for mobile, but has other integration opportunities in other markets. And, I'll let Dave comment as well.

David M. Aichele -- Vice President of Business Development

Yeah. I think the comment I'll make on the WLP for WiFi, that 5.2 gigahertz that we demonstrated was primarily focusing on the mobile market. We don't see a real strong play in the infrastructure side. We're already significantly smaller with our packaged tandem WiFi parts, small filters against the dielectric resonator types. But where we see some interest probably in 2021 is WiFi WLP solutions going into PCs, tablets. Particularly to Jeff's comment that WiFi 6E, where you would have a Tri-Band architecture that's 2.4 gigahertz and 5 gigahertz and full 6 gigahertz, with really strict co-exist requirements, our solution is one of the solutions that we're planning to demo. First half this year is going to be one of the most attractive solutions out there versus some of the other technologies. So there's a play there, but it wouldn't be until 2021.

Rick Schafer -- Oppenheimer -- Analyst

Got it. Thanks, Dave, and if I could just squeeze one more quick one in. I know you guys are adding capacity pretty aggressively this year. I mean, do you expect to see -- and building some inventory now, I heard you mentioned that, Jeff. So any expected constraints there, potentially as you ramp, particularly in the back half of the year, where it sounds like the ramp is going to be more aggressive in terms of ramping against your design wins? Thanks.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Thank you, Rick. So I would call them challenges, and these are just challenges of getting equipment in, getting it qualified and getting the staffing, the appropriate staffing in place, which is recruiting and training. Those are, I would think, normal ramping challenges that you have. In terms of supply chain constraints, we manufacture on silicon, we don't see that as a constraint. We produce our materials in-house. We manufacture the wafers in-house, we trim the wafers in-house, we do the modeling, and we do the RF design of the circuit in-house.

So, we have full control of the levers and from the raw materials, once we start with silicon, full control of the levers to take and qualify that product and ultimately deliver it into the market. So they're what I would consider normal course challenges that I just previously mentioned, but no significant constraints. We did -- I think it is worth noting, on the ordering of some of the -- as part of the expansion of capacity, we're well aware the order lead times and we've adjusted our behavior to make sure that we have the equipment, the right equipment in-house ready to go. So, that's something we're actively working, and it's -- as we've previously shared, it's been a two-year project. We're well into the second year of the project and committed to completing it.

One other thing, if I could add, this 500% capacity expansion, we have -- we fully expect that, that capacity expansion position us to achieve cash flow breakeven. And that's part of what we've committed to is to make sure we got the capacity in the factory to drive our product in the market to achieve that financial objective.

Rick Schafer -- Oppenheimer -- Analyst

Thanks, Jeff.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Thank you, Rick.

Operator

The next question is from the line of Suji Desilva with Roth Capital. Please proceed with your question.

Suji Desilva -- Roth Capital -- Analyst

Good morning, Jeff, Ken, and Dave, congratulations on the promotion. On the WiFi ramp this year, this calendar year, the five customers, is it reasonable to expect that all five of those would be in production by the end of second half '20? Or is that not a reasonable expectation?

David M. Aichele -- Vice President of Business Development

Hi, Suji, it's Dave. Thanks for the congrats. Yeah, the expectation is if we're able to secure all the five design wins that every one of them would be production ramped in calendar year 2020. And again, different time horizons as to when each one of those will be released. So those are the ones that we're tracking. And as I commented on earlier, 100% take rate or 100% secure rate, we're shooting for that, but factors outside of our control may change that, but the good thing is that the funnel is beyond that, and we're tracking those additional customers as well.

So we're pretty excited about the opportunity and see, obviously, a healthy horizon for both the 5.2 gigahertz and the 5.6 gigahertz in addition to all these customers who are actively engaged on technical discussions with the WiFi 6E as well. And depending on how things go with the SEC, that looks like 2021 calendar year will continue with these customers as well.

Suji Desilva -- Roth Capital -- Analyst

Okay. Great. Now that clarification helps. And I just want to go back to one of the comments you had in the Q&A about share design wins in these WiFi platforms. Can you just clarify what that means? I'd assume your product is really unique in being able to provide a smaller form factor, but is there a share expectation on these platforms I should think of Akoustis versus these 100,000 or 1 million units per year opportunities? Can you just provide some color there?

Jeffrey B. Shealy -- Director and Chief Executive Officer

Hey, Suji, it's Jeff. And thanks for the comments. Regarding -- I believe the comment regarding share design wins is, I believe, Dave's comment was, we do not expect share design wins, so we believe the platforms that utilize these micro filters, we're not going to be sharing any volumes for those. So, I think it was the opposite of perhaps what you were thinking.

Suji Desilva -- Roth Capital -- Analyst

Great. Okay, that helps to clarify. And then lastly, a bigger picture question for you, Jeff, perhaps you too, Dave. The competitive landscape and there's been talk of some of the competitive filter apps essentially moving around in transactions. I just wanted to understand your thoughts on that movement and the potential implications for Akoustis is it positive or negative? Thanks.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Okay. I presume your question, it was a little bit coated, but I presume it was regarding a particular asset that may be for sale in the market. From our perspective, the markets that we've chosen to focus on, we have not been directly in line of sight with that -- what that asset produces. And so therefore, I would characterize our strategy is intact regardless of whether a particular asset moves around the industry. We've been focusing on -- we've been hyper-focused on our primary markets, which are WiFi and infrastructure. For us, these are higher ASP opportunities and very favorable for us to ramp our factory around.

So, we certainly monitor all activities in our market space, but do not see a scenario which changes, which is going to materially change our strategy and how we're going to market. We're dealing directly with OEMs. We're dealing direct with OEMs, with all of the market segments, we're pursuing with the exception of mobile. And so, we're going to continue focusing on our product launches, our -- this ultra-high-band spectrum, which is pretty much greenfield in the space. We think that's a winning strategy and focusing on producing the highest performance filters available in the industry, and that's not going to change regarding -- regardless of where any one particular asset moves around.

Suji Desilva -- Roth Capital -- Analyst

That was the question, Jeff. Thanks. Congrats on the progress you guys.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Thank you, Suji.

Operator

Thank you. Our next question is from the line of Matt Farrell with Piper Sandler. Please proceed with your question.

Matt Farrell -- Piper Sandler -- Analyst

Hey, guys. This is Matt on for Harsh. Congrats on the continued execution. Some of the other mobile players have been talking about the key of integration and that being a key differentiator in 5G mobile. Could you guys kind of provide your thoughts on the need for integration? And how is that shaping your longer-term strategy within 5G mobile?

Jeffrey B. Shealy -- Director and Chief Executive Officer

Hi, Matt, this is Jeff. I'll comment first, I'll let Dave make some comments as well. As we said in the prepared comments that we see our strategy, certainly, for the tier 1 that will require a partnership. And that partnership addresses the integration, which I think you referred to. We happen to be focusing on some of the extremely high-performance key pieces that go into that integrated solution. So we think positioning-wise, we build a very key part of that platform. So that's the tier 1.

I think for the tier 2, we're in direct dialogue with customers for tier 2, which may or may not be going to full integration-based platforms, particularly in some of the newer, higher frequency bands. And so we're -- we have a -- we prepared ourselves to have a WLP packaging solution that is very size-appropriate for mobile as well as work directly with those OEMs to understand their road maps as well.

So it's -- tier 1, it's about partnering with a player. Again, I would characterize, so we've been pulled into mobile, more as a -- more so than our primary strategy of WiFi and infrastructure. So we're maintaining discussions with both tier 1 OEMs as well as tier 2 OEMs to understand road maps and understand where our strategy fits. So, Dave, you want to add in there.

David M. Aichele -- Vice President of Business Development

Matt, I'll just add a couple of comments. The -- yeah, I think the -- you recognized that the work that we're doing with the WLP can be used for integration into our front end. And to Jeff's comments, that's part of the reason that we're doing that development. We recognized and I think everybody else does [Indecipherable] that the mobile market is our largest market potential.

The -- also, the other reason we're doing the WLP is so that we can do higher order multiplexers, and that would be targeting the tier 2 markets. And there is -- we've got line of sight of designs that are going to be using a diplexer and even potentially discrete in the China market. Part of it is, is that you've got the integration strategy that's supporting the tier 1s and then a sub-segment of the tier 2s, but the tier 2s want a supply chain that can support them. And so we're seeing a lot of activity and potential usage of discrete components in some of the phone models out of the China market.

And what they're particularly looking for now is, based on the network providers in China are pushing to get better, I guess coexist capabilities out of the filters to improve on the phone connections, not drop calls and so forth. So, shifting away from LTCC-type filter and IPD filter to a higher performance ball-type filter up at n77 or n79, even WiFi. So we look at that as being a good opportunity for us in the coming 18 months.

Matt Farrell -- Piper Sandler -- Analyst

Awesome. Thanks for the additional comments. And then maybe can you talk about how conversations with new customers have changed over the year? So is Akoustis kind of becoming more of a -- are you having to introduce the Company? Or are you able to kind of jump right into products and the benefits of BAW right away? And has that changed over the last year or so?

Jeffrey B. Shealy -- Director and Chief Executive Officer

Well, several things. I would characterize, we think, in the markets that we're engaging with, we've got adequate introductions, adequate discussions and adequate relationships with the focused customer base that we feel necessary to not only address the market, but understand the market, and so that can include other front-end players, that can include OEMs. So I don't -- we spend far less time introducing the customer. Most of our meetings, if you look back to CES or you look forward to Mobile World Congress, most of our meetings are with established relationships. We're not going in with business cards in hats and hands, introducing the Company. It's more so we've got an agenda, we know what the customer is interested in and we're kind of picking up from where the engagement starts.

So it does vary. I think the conversations for us in WiFi, I think it would be appropriate to say they transition from engineering into procurement, that's a positive sign. That tells me we're deeper in the sales funnel, same in the wireless infrastructure. And so, the deeper we get into the organization, the more -- the deeper we're getting into the sales funnel with those organizations.

Dave, you want to add anything to that?

David M. Aichele -- Vice President of Business Development

Yeah, I think Jeff captured it. That's an interesting question. I appreciate it, Matt. The -- I think, Jeff, really to follow up what a statement is of the technical community recognizes Akoustis. And we've got good relationships across the Board in the target markets. We're getting deeper with the supply chain. And the good thing is that having the factory, having the relationships with our OSATs, which are the assembly partners and having the ISO certifications and the quality organization in place, we're able to get through these on-boarding requirements with the OEMs.

We also have established distribution partners that are well received with these client customers as well to support that. So we're in that transition phase. And the good thing is that the brand recognition and the technology has helped us to strengthen these relationships.

Jeffrey B. Shealy -- Director and Chief Executive Officer

I do think the calling card, whether it's years ago or today, is pretty much the same. It's about having high-performance RF filters and being able to take customer specification and transition it into an actual functioning solution for them. So I think those are -- you don't need many calling card points. So when you're opening with, here's parts you can get your hands on, and here's parts you can design your system, that's the best calling card of all.

Matt Farrell -- Piper Sandler -- Analyst

Thanks, guys. Congrats again on the execution.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Thanks, Matt.

David M. Aichele -- Vice President of Business Development

Thanks, Matt.

Operator

We've reached the end of our allotted time for questions today. I will turn the floor back to management for any final remarks.

Jeffrey B. Shealy -- Director and Chief Executive Officer

Great. Thank you all for your time today. We are progressing toward our objectives for the March quarter and plan to update you on further progress as the quarter moves ahead. We look forward to speaking with you during our next update call to discuss the current quarter's execution against our milestones as well those future expectations. Thanks, again.

Operator

[Operator Closing Remarks]

Duration: 61 minutes

Call participants:

Tom Sepenzis -- Vice President of Corporate Development and Investor Relations

Jeffrey B. Shealy -- Director and Chief Executive Officer

Kenneth Boller -- Interim Chief Financial Officer

Cody Acree -- Loop Capital -- Analyst

David M. Aichele -- Vice President of Business Development

Anthony Stoss -- Craig-Hallum -- Analyst

Rick Schafer -- Oppenheimer -- Analyst

Suji Desilva -- Roth Capital -- Analyst

Matt Farrell -- Piper Sandler -- Analyst

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