Key Points
Product and royalty revenue reached $197 million in the third quarter.
Vicor secured two new sites for manufacturing facility expansion.
Bookings reached $100 million in the first two weeks of Q4.
On its third-quarter of 2026 earnings call, held on Oct. 20, 2026, Vicor (NASDAQ:VICR) announced product and royalty revenue of $197 million. The company is expanding manufacturing capacity to meet growing demand for artificial intelligence. Licensing income is establishing a stable foundation for long-term growth. Three things management said stand out.
1. Licensing Practices Are Turning Patent Holdings Into Recurring Revenue
Vicor's intellectual property, or patents covering proprietary power technology, generated $66.6 million in third-quarter royalty revenue. Management expects this revenue stream to stabilize as more customers sign agreements.
With some lumpiness, this is going to be a significant growth business that we are now estimating to reach levels next year and the year after that beyond levels that I forecasted a year ago.
-- Patrizio Vinciarelli, Chief Executive Officer
2. Adding Two Manufacturing Sites Provides Fivefold Output Potential
Vicor acquired two new sites for chip fab 2 and chip fab 3, its semiconductor fabrication facilities, to eliminate physical bottlenecks at its main plant. Initial equipment deployment will begin in the second quarter of 2027 to address specific production constraints.
The 5x, is a conservative number. It could be more than that because, again, unlike Fab 1, we are not going to be limited by elbow room within either 1 of these sites.
-- Patrizio Vinciarelli, Chief Executive Officer
3. Second-Generation Vertical Power Delivery Outperforms Competing Architectures
Vicor's second-generation vertical power delivery, or VPD, supplies electrical power directly under computer chips to reduce power loss. Existing competing voltage regulators, or VRs, struggle to meet the extreme current demands of artificial intelligence processors.
Meetings held with major hyperscalers and OEMs at last week's open compute confirmed that first generation VPD systems using VRs which infringe VICOR patents, are struggling to keep up with the requirements of next generation AI systems.
-- Philip D. Davies, Corporate Vice President, Global Sales and Marketing
Looking Ahead
Demand for high-density power modules, which convert voltage for high-performance computing, is surging across artificial intelligence workloads, driving rapid growth in bookings.
Demand across our main business segments and in our IP licensing practice is strong. With $100 million in bookings in the first 2 weeks of Q4.
-- Philip D. Davies, Corporate Vice President, Global Sales and
Vicor holds proprietary packaging technology and intellectual property protection that solidify its competitive moat. Management is prioritizing plant capacity expansion and disciplined execution.
As production scales across new facilities, operating leverage should drive higher profitability.
We are going to have the economies of scale. We believe we are on the right track, and that is the industry is foolishly going down a dead end road.
-- Patrizio Vinciarelli, Chief Executive Officer
The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.