CPS Technologies Announces $12 Million Contract with Semiconductor OEM

Rhea-AI Summary

CPS Technologies (NASDAQ:CPSH) has secured a $12 million contract from a major multinational semiconductor customer for power module components. The components will be used in high-speed rail, wind turbines, and EV/HEV applications. Deliveries are scheduled over twelve months starting October 2024, representing a significant volume increase compared to the previous four quarters. The agreement, while cancelable by either party, allows for ongoing discussions about future volume and pricing requirements while meeting current production needs.

Positive

• Secured $12 million contract for power module components
• Significant volume increase compared to previous four quarters
• Expansion in green energy, automotive, and transportation markets

Negative

• Contract is cancelable by either party, creating potential revenue uncertainty

Insights

Financial Analyst

This $12 million contract represents a substantial win for CPS Technologies, marking a 50% growth over the previous year's order. The deal's significance is amplified considering CPSH's market cap of just $20.2 million. The contract's value represents approximately 59% of the company's market capitalization, indicating its transformative potential for the business.

The agreement targets high-growth markets including high-speed rail, wind turbines and EV/HEV applications, positioning CPSH well in the expanding green energy sector. While the contract is cancelable, the immediate production schedule and established relationship with the multinational client mitigate some risk. The revenue visibility for the next 12 months provides operational stability and potential for margin expansion through increased production volumes.

Clean Energy Industry Analyst

The contract's focus on green energy applications - particularly EVs, wind turbines and high-speed rail - aligns perfectly with global clean energy transition trends. CPS's aluminum silicon carbide products are critical components in power modules that enhance energy efficiency and performance in these applications. The increased order volume suggests growing market adoption of these sustainable technologies, particularly in overseas markets where high-speed rail and wind energy infrastructure development is accelerating.

50% growth over prior year order

NORTON, Mass., Oct. 30, 2024 (GLOBE NEWSWIRE) -- CPS Technologies Corp. (NASDAQ:CPSH) (“CPS” or the “Company”) today announced that it has received an award, valued at approximately $12 million, from a major, longstanding customer to provide power module components and related solutions. This agreement, though cancelable by either party, enables both parties to continue discussions about future volume and price requirements while near-term production needs are met. Deliveries are scheduled to take place over a twelve-month period starting in the current month, with volumes that represent a significant increase over the prior four quarters. The components will be employed primarily in high-speed rail, wind turbines and EV/HEV applications. The client company is a multinational semiconductor manufacturer based overseas.

“We are very pleased by this noteworthy growth in our core business of aluminum silicon carbide products. We will continue to provide these components to a longstanding client with a worldwide clientele in many industrial, electronic, and consumer markets” said Brian Mackey, President & CEO of CPS. “We are committed to meeting the growing needs of our client and its customers, particularly in the green energy, automotive and transportation fields. This award again demonstrates rising demand for our unique offerings, as we look to accelerate top line growth in the months and quarters to come.”

About CPS

CPS is a technology and manufacturing leader in producing high-performance materials solutions for its customers. The company’s products and intellectual property address critical needs in a variety of applications, including electric trains and subway cars, wind turbines, hybrid vehicles, electric vehicles, Navy ships, the smart electric grid, 5G infrastructure and others. CPS hermetic packages can be found in many Aerospace and Satellite applications. CPS’ armor products provide exceptional ballistic protection and environmental durability at very light weight. CPS is committed to innovation and to supporting our customers in building solutions for the transition to clean energy.

Safe Harbor
Statements made in this document that are not historical facts or which apply prospectively, including those relating to 2024 and 2025 financial results, are forward-looking statements that involve risks and uncertainties. These forward-looking statements are identified by the use of terms and phrases such as "will," "intends," "believes," "expects," "plans," "anticipates" and similar expressions. Investors should not rely on forward-looking statements because they are subject to a variety of risks and uncertainties and other factors that could cause actual results to differ materially from the company's expectation. Additional information concerning risk factors is contained from time to time in the company's SEC filings, including its Annual Report on Form 10-K and other periodic reports filed with the SEC. Forward-looking statements contained in this press release speak only as of the date of this release. Subsequent events or circumstances occurring after such date may render these statements incomplete or out of date. The company expressly disclaims any obligation to update the information contained in this release.

CPS Technologies Corporation                                       
111 South Worcester Street
Norton, MA 02766
www.cpstechnologysolutions.com

Investor Relations:
Chris Witty
646-438-9385
cwitty@darrowir.com

FAQ

What is the value of CPS Technologies' (CPSH) new semiconductor contract?

CPS Technologies (CPSH) secured a $12 million contract for power module components from a multinational semiconductor manufacturer.

What markets will CPS Technologies' (CPSH) new contract serve?

The components will be used in high-speed rail, wind turbines, and EV/HEV (electric and hybrid vehicle) applications.

When does CPS Technologies' (CPSH) new $12M contract begin?

Deliveries are scheduled to begin in October 2024 and will take place over a twelve-month period.

How does this contract compare to CPSH's previous orders?

The contract represents a significant volume increase compared to the previous four quarters.