About Data I/O

Data I/O Corporation (Data I/O) is a global market leader for advanced programming, security deployment, security provisioning and associated Intellectual Property ('IP') protection and management solutions used in electronics manufacturing with flash memory, microcontrollers, and flash memory-based intelligent devices, as well as secure element devices, authentication devices and secure microcontrollers. The company collectively refers to IP protection, security provisioning of devices, provisioning of security into devices, and related services, such as cloud onboarding and device and provisioning documentation management as 'security deployment'. Data I/O designs, manufactures and sells programming and security deployment systems and services for electronic device manufacturers, specifically targeting high-growth areas, such as high-volume users of flash memory and flash memory-based microcontrollers. Most electronic products today incorporate a number of programmable semiconductor devices that contain data, operating instructions and security credentials essential for the proper operation of the product and more and more products require security deployment. The company's solutions, some of which include security deployment and process control capabilities, enable the company to address the demanding requirements of the electronic device market, where applications security and IP protection are essential to the company's customer's success. The company's largest customers are heavy users of programmable semiconductor devices and include original equipment manufacturers ('OEMs') in automotive electronics, industrial electronics, consumer electronics and IoT markets, as well as their programming center partners and electronic manufacturing service ('EMS') contract manufacturers. Products To accommodate the expanding variety and quantities of programmable devices being manufactured, the company offers multiple solutions for the numerous types of device mix and volume usage by the company's customers in the various market segments and applications. The company works with leading manufacturers of programmable devices to develop the company's products to meet the requirements of a particular device. The company's newer products are positioned and recognized as some of the most advanced programming and security deployment solutions. The company's programming solutions include a broad range of products, systems, modules and accessories, grouped into two general categories: automated programming systems and manual programming systems. The company's PSV family of automated programming systems delivers a broad range of programming capacity and capability to the marketplace. The company's PSV2800 Automated Programming System focuses on dedicated high-volume manufacturing in a lower cost platform. The company's PSV7000 Automated Programming System continues to be well adopted in the marketplace, in particular for automotive electronics customers and as a base for security deployment upgrades. The company's PSV5000 Automated Programming System combines mid-range capacity and flexibility with competitive pricing and also supports security deployment. The company's PSV3000 Automated Programming System is a lower cost platform for basic programming needs. The company's PSV family of handlers has won multiple industry awards for technical excellence and innovation and has a large global installed base. The company's security deployment system, SentriX, is offered for security provisioning on a pay per part use basis along with related fees. Data I/O programming technology is integrated with the PSV family to create highly-flexible systems that deliver outstanding performance with low total cost of ownership. The LumenX programming engine is the company's highest performance programming engine, designed to support eMMC and UFS programming of large NAND FLASH, as well as microcontrollers, serial FLASH and other devices. Increasing memory densities and the need for faster data interfaces are resulting in an expected transition to the use of UFS devices. LumenX is available on the company's PSV7000 and PSV5000 and as a standalone manual programmer. FlashCORE, and the company's universal job setup tool, Tasklink for Windows, are available in each family of the company's automated programming systems and in FlashPAK, the company's manual programming system. The SentriX security system adds security deployment capability to the company's data programming system. SentriX allows customers of any size and demand-profile to securely add keys, certificates, and other security information to specialized regions of authentication integrated circuits ('ICs'), secure elements and secure microcontrollers. The company provides device support and service on all of the company's products. Device support is a critical aspect of the company's business and consists of writing software algorithms for devices and developing socket adapters to hold and connect to the device for programming. The company's products have both an upfront solution sale and recurring revenue element. Adapters are a consumable item and software and maintenance are typically recurring under subscription contracts. The company's SentriX system revenue typically comes from per part use fees, set-up or minimum quarterly fees, consumables, non-recurring engineering fees, service fees and the sale of equipment related to SentriX. Customers/Markets The company sells its solutions to customers worldwide, many of whom are world-class manufacturers of electronic devices used in a broad range of industries. OEMs Automotive Electronics: The company's customers include Borg Warner, Bosch, Alps Alpine, Visteon, Kostal, JVCKenwood, Harman, Denso Ten, Continental, Aptiv Panasonic, Magna, Marelli, and Tesla. IoT, Industrial, and Consumer Electronics, including Wireless: The company's customers include LG, TCL, Siemens, Danfoss, Philips, Schneider, Endress+Hauser, Insta, Microsoft, Sony, Amazon, and UTEC. EMS Contract Manufacturers: The company's customers include Pegatron, Flex, Jabil, Wistron, Sanmina SCI, Foxconn, Leesys, and Calcomp. Programming Centers The company's customers include Arrow, Avnet, BTV, CPS, Elsil, Elmitech, and NOA Leading. The company's solutions address the data programming of devices and security deployment needs of programmable semiconductor devices. Semiconductor devices are a large, growing market, in terms of devices, bits programmed and need for security. The company's sales are driven by many of the same forces that propel the semiconductor industry. The company sells to the same firms that buy the semiconductors. The company's device programming solutions target two high volume, growing markets: automotive electronics and IoT systems, including industrial and consumer devices. During 2022, the company sold products to approximately 200 customers throughout the world. Geographic Markets and Distribution The company markets and sells its products through a combination of direct sales, indirect sales representatives and distributors, as well as services through programming centers. The company continually evaluates its sales channels against the company's evolving markets and customers and realign them as necessary to ensure that the company reaches its existing and potential customers in the most effective and efficient manner possible. The U.S. Sales The company markets its products throughout the U.S. using a variety of sales channels, including the company's own field sales management personnel, independent sales representatives and direct sales. The company's U.S. independent sales representatives obtain orders on an agency basis, with shipments made directly to the customer by the company. International Sales The company makes foreign sales through its wholly-owned subsidiaries in Germany and China, as well as through independent distributors and sales representatives operating in 45 countries. The company's independent foreign distributors purchase the company's products for resale and the company generally recognizes the sale at the time of shipment to the distributor. As with the U.S. sales representatives, sales made by international sales representatives are on an agency basis, with sales made directly to the customer by the company. Patents, Copyrights, Trademarks and Licenses The company has approximately 20 U.S. and international awarded patents related to the SentriX platform and security provisioning architecture, processes, and methods. The company attempts to protect its rights in proprietary systems (architecture, implementations, and software), including the SentriX Security Deployment System. The company attempts to protect the company's software, including LumenX software, FlashCORE software, TaskLink software, ConneX smart programming software and other software products, by retaining the title to and copyright of the software and documentation, by including appropriate contractual restrictions on use and disclosure in the company's licenses, and by requiring the company's employees to execute non-disclosure agreements. Research and Development During 2022, the company made expenditures for research and development of (in millions) $6.1. History Data I/O Corporation was incorporated in the state of Washington in 1969.