CEVA announced that CEO Gideon Wertheizer has chosen to retire at the end of 2022. The board of directors has unanimously appointed Amir Panush as CEO effective January 1, 2023. Wertheizer will continue to serve as an active member of board of directors and will be employed in an advisory role, to ensure a smooth leadership transition.
Wertheizer had joined CEVA since the company’s inception 20 years ago and served as its CEO for the last 17 years. Amir Panush was selected following an extensive search. He joins CEVA from InvenSense, a TDK group company, where he served as CEO and General Manager of TDK Corporation’s MEMS Sensors Business Group and where he led the company through revenue growth of over 100% since 2020. Previously he had held various leadership positions at TDK, following TDK’s acquisition of InvenSense in 2017.
Prior to InvenSense, Panush held several leadership roles at Qualcomm and led strategic marketing and partnerships at Atheros Communications (acquired by Qualcomm). Panush said: “CEVA is uniquely positioned to leverage its deep portfolio of wireless connectivity and smart sensing IPs at a time when the market opportunity for these technologies has never been greater.”
$15.7 million write-off
CEVA license wireless connectivity and smart sensing technologies such as Digital Signal Processors, AI engines, wireless platforms, cryptography cores and complementary software. Its total revenue for the third quarter of 2022 was $33.7 million, a 3% increase compared to $32.8 million for the third quarter of 2021.
GAAP net loss for the third quarter of 2022 was $22.3 million, as compared to a $0.2 million reported for the same period in 2021. This is primarily attributable to a $15.7 million write-off of deferred tax assets, , (b) a $5.0 impairment charge with respect to an investment in Immervision and $3.5 million of which was recorded in operating expenses.
The District Court in Texas ruled in favor of Powermat Technologies Company from Israel, in a lawsuit filed against two Chinese companies, Nanami and Yootech, regarding unauthorized usage of Powermat’s wireless charging patents. Under the terms of the settlement, the Chinese companies, who market wireless chargers (mainly through Amazon), agreed to pay Powermat Technologies an initial payment covering the past use of patented technologies, followed by ongoing quarterly licensing payments for future use, under commercial licensing agreement.
Techtime has learned that this is not a single case, and Powermat had started an extensive move, aimed to monetizing its patents portfolio, composed from around 130 wireless charging patents. This process includes locating companies around the globe that violates Powermat’s patents, and demanding these companies to compensate the company, and later – to sign a licensing agreement for authorized usage. In cases where companies refuse to settle, Powermat may take legal actions, in the same manner they did with Yootech and Nanami.
Powermat estimates that there are hundreds of companies around the world using its patents with no authorization. It was also told to Techtime that this move recently yielded tens of millions of dollars from a licensing agreement with a major smartphone manufacturer that, according to Powermat, misused its technology. Currently, Powermat negotiate with another 20 companies, requiring them to pay and sign a licensing agreement.
The company that manages the commercial litigation battle is First Libra Company. In a conversation with Techtime, Ofer Furth, founder and chairman of First Libra, who also serves as a director in Powermat, says that the potential of this process is huge. Until today, Powermat didn’t engage in monetarizing its patents in a systematic manner. The company owns a large number of patents, and we take it upon ourselves to lead the monetization. When we identify a company infringes a patent, we first try to come to an agreement, and we offer to sign a licensing agreement. If the negotiation fails, we use legal means”.
Essential patents for the QI Standard
Powermat is considered one of the pioneers in the wireless charging area and was the first company in the world to market wireless charging surfaces. The charging is done using electromagnetic induction between the coil in the transmitter and between the coil in the receiver, without the need to plug the device to electrical outlet through cable.
One of the most significant standards in the industry that regulates the wireless charging is the QI Standard. Powermat has number of patents that are defined as “Standard Essential”, that is – they are necessary for the realization of the standard. Powermat took a major part in forming the standard, and is also a member of the WPC consortium, which promotes and enforces the standard.
Companies that want to market a wireless charger with the “QI Certified” seal, must submit their product for inspection in one of the laboratories that work with the WPC. Furth explains that this makes the task of locating transgressors relatively easy. “The minute a company declares that its product has received a QI Standard certification, it is violating Powermat’s patents, as long as it hasn’t signed a licensing agreement. The judge in Texas expressly stated that, and it is very significant for Powermat’s continued efforts”.
Within First Libra’s operation model, it bears the financing of the legal expenses and manages the proceedings, and in case damages are awarded, it gets some of the amount. Furth reveals that the company is currently negotiating with two other Israeli High-Tech companies.
“Israeli technology companies register patents for their technologies, but do not always enforce them. Our goal is to identify companies that hold an extensive patent portfolio and examine whether there is economic viability, since the legal expenses me be high”.
CEVA announced an open licensing agreement with the U.S. Defense Advanced Research Projects Agency (DARPA) to to provide support for DARPA programs. The partnership is a part of the DARPA Toolbox initiative. It establishes an access framework under which DARPA organizations can access all of CEVA’s commercially available IPs, tools and support to expedite their programs.
CEVA, Arm and Verific are the first technology companies to sign commercial partnership agreements under DARPA Toolbox. CEVA is a licensor of IP for Digital Signal Processors, AI processors, wireless platforms and complementary software for sensor fusion, computer vision, voice and other key enabling technologies. Key technologies offered by CEVA under this initiative include DSPs and software for 5G baseband processing, short range connectivity, sensor fusion, computer vision, sound processing and Artificial Intelligence.
DARPA Toolbox is a new, agency-wide effort aimed at providing open licensing opportunities with commercial technology vendors to the researchers behind DARPA programs. For commercial vendors, DARPA Toolbox will provide an opportunity to leverage the agency’s forward-looking research and a chance to develop new revenue streams based on programmatic achievements developed with their technologies.
Apple is developing its own cellular modem that will be utilized in its 5G-compatible cellphones. The modem will be based on the DSP technology of the Israeli-based CEVA. Apple plann to bring the new modem to the market in the second half of 2022 along with the iPhone 13, and will be installed on all of the models that will follow it. This is according to a report by Gus Richard, an analyst at Northland Capital Markets.
Apple’s modem will likely be based on CEVA’s PentaG 5G platform, which provides full IP and algorithms needed for mobile 5G systems. PentaG contains specialized scalar and vector DSP processors, co-processors, AI processor, accelerators, software and other essential IP blocks, in a highly configurable and modular architecture. It supports all 5G bandwidths, including sub-6 GHz and millimeter waves (mmWave) bands, and allows a bit rate of up to 10Gbps.
Apple’s move began in July 2019, when it signed an agreement to acquire the majority of Intel’s phone modems division, for an estimated $1 billion. Upon completion of the transaction, all 2,200 employees of the division joined Apple. The deal came to fruition due to Intel’s decision to leave the 5G modems for smartphones business. Apple’s decision to build its own modem is a results of a bitter two-year legal dispute with Qualcomm that ended in a dissatisfying compromise.
CEVA is enjoying Intel’s Legacy
Intel’s cellular modems have been based on CEVA’s processor for many years, and in recent years CEVA has intermittently enjoyed and suffered from the changes made by Apple, when it switched between Intel’s and Qualcomm’s modems, and in some cases even split its production capacity between the two. But now the situation is different: Apple will not purchase a modem with CEVA inside – but will purchase the intellectual property directly from CEVA itself.
Richard analyzed CEVA’s sales mix, concluding that the fact that it was unaffected by the China-US trade war, as well as its growing presence in the 5G market, are advancing it toward a trajectory of growth. He therefore gave the company’s share a target price of $48 – compared to the price of $36.8 at which it is currently traded. Along with Apple, CEVA has several key Chinese customers, such as ZTE and Spreadtrum, which is its largest customer and whose sales are expected to rise in the third quarter of the year.
He estimates that next year Nokia will increase the production of 5G base-stations that include CEVA processors. He anticipates a 30%-50% increase in CEVA’s sales during the next 3-5 years in non-mobile fields, such as Wi-Fi, Bluetooth and smart home products, smart TVs, smart light bulbs, control systems, etc. CEVA’s 2019 annual sales totaled $87 million. In the Q2 2020, sales grew by 28% compared to Q2 2019, to approximately $23.6 million.