Q3 2020 Power Integrations Inc Earnings Call
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Good afternoon my name.
Yes, what the topic is today.
I would like to welcome everyone to the post integration <unk> <unk> earnings conference call all lines have been beaten preventing that no I.
To the speaker for Mark there will be a question you have to action.
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Sure Drillship <unk>.
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Good afternoon, Thanks for joining us with me on the call today are Balu, Balakrishnan, President and CEO of power integrations, and Sandeep Meyer, our Chief Financial Officer.
On August 18 power integrations executed a two for one stock split in the form of a stock dividend with one new shares issued for each outstanding share in our presentation of the Q3 results all prior period shares outstanding and per share measures have been adjusted for the split.
Also during this call we will refer to financial measures not calculated according to GAAP.
Non-GAAP measures exclude stock based compensation expenses amortization of acquisition related intangible assets and the tax effects of these items a reconciliation of non-GAAP measures to our GAAP results is included in our press release our.
Our discussion today, including the Q and a session will include forward looking statements denoted by words like will would believe should expect outlook forecast anticipate and similar expressions that look toward future events or performance.
Such statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected or implied such risks and uncertainties are discussed in today's press release and in our form 10-K filed with the FCC on February 7th 2020.
Finally, this call is the property of power integrations and any recording or rebroadcast is expressed the prohibited without the written consent of power integrations now I will turn the call over to Bob.
Thanks, Joe and good afternoon.
Third quarter revenue is worth $121 million up 13% sequentially and above the top end up on the guidance.
We are forecasting healthy sequential growth again in the fourth quarter with revenues up $130 million plus or minus $5 million.
At the midpoint of the range, our full year revenues would be up 11% compared to 2019.
Well ahead of our expected growth rate for the analog semiconductor industry.
Underpinning our strong outlook is a sharp acceleration in orders in August and September as well as it says in distribution sell through which outpaced sell in across all four end market categories in Q3.
The differential was lightest in the consumer category driven by strong demand for appliances and in communications that we are benefiting from short and long term secular trends in the smartphone market.
Shark content is the dislocation caused by USAID and National security policies, which is enabling our OEM customers to take share in the handset market.
The longer term kind of course is the increasing adoption of fast charging in mobile device market and our continued leadership in the fast charging market tanks still as evolutionary innoswitch products and our Gan technology.
Well I mean, that's the ideas that are used in a broad range of applications that success in high volume smartphone market has made them the highest selling power supplies is in the world.
And earlier this week, we announced that we had set more than 1 billion Hello switch chips in the six years since dead product introduction.
Still the only power supply seizing the market capable of crossing the isolation barrier.
In the cities have proven extremely well suited for the past charges due to that high level of integration and energy efficiency, which enable hyppolite charges, the compact form factors and no hit things.
We took these capabilities to another level last year with the introduction of Gan based innoswitch products, which are leading the fast growing market for high end ultra fast charges.
We expect such charges to become mainstream as the power requirements of Fiveg.
Drive power levels higher.
And as the OEM stake in more strategic view of charging to capitalize on new technologies like again, you asked the PD and multi port charges.
While some Oems continue to supply fast chargers with their phones using charging speed as a differentiating feature of their products.
Other Oems, including one that introduced new handsets earlier this month are adopting it and accessory model.
Allowing consumers to choose which charges they want if any.
This is an evolution that we have been we have seen coming for some time.
And while no one can predict exactly how it will play out it's clear that the first wave of innovation in mobile device Chargers is coming and we are well prepared for it thanks to our investments in advanced technologies like Innoswitch and again.
Fast charging should be the largest contributor to growth in Q4, and we anticipate continued success in this area in Twentytwenty one.
Well advanced products have achieved strong uptake in mobile device charges, we expect technology to be adopted more broadly as customers look to take advantage of its efficiency and as we expand our gamma rays.
In addition to our Gan based Innoswitch chips, we have introduced Gan products targeting entity lighting and display applications.
And we now have more than 80 customers in production with Gan products across over a dozen applications, including cell phone charges, but also appliances notebook adapters pvs and use the wall outlet.
We are on track to double our Gan product revenue this year and based on our pipeline of ongoing design activity. We think that is a good chance it could double again in Twentytwenty one.
Last week, we introduced our latest Gan product called mini Cat mini cap is a novel concept that enables designers to reduce the size of the input capacitors used in adapters charges and oxforty power supplies.
These large capacitors account for a significant percentage of the volume of the compact adapter.
Unicap enables the use of much smaller capacitors for a given power level, resulting in a reduction of up to 40% in the size of the funnel adapter.
As our customers continue to look for new ways to deliver more power with smaller form factors, we think minicab will prove highly attractive and it's a great example of the kind of innovation, we have unleased with our Gan technology.
And now I'll turn it over to Sandeep. Thanks.
Thanks, Balu and good afternoon as usual I will focus my remarks, primarily on the non-GAAP results, which are reconciled to GAAP in our press release tables.
Q3 revenues were $121.1 million up 13% sequentially.
In percentage terms the computer category was the fastest grower up more than 75% sequentially driven primarily by inbox fast Chargers for tablets, reflecting work from home and learn from home demand.
Communications revenues were up about 25% sequentially driven by continued strength in fast charging for smartphones.
Consumer revenue were up mid teens sequentially on improved demand for major appliances offset by seasonal softness in air conditioning.
Industrial revenues were down high single digits as growth in home automation and part two were offset by weakness in broad based industrial applications as well as high bar, where a number of projects have been slowed down by the pandemic.
Revenue mix for the quarter was 32% communications, 31% consumer, 28% industrials and 9% computer.
As expected revenue mix shifted towards low margin categories, resulting in an 80 basis point reduction in non-GAAP gross margin to 50.3%.
Non-GAAP operating expenses were $35.9 million in line with our guidance.
Other income for the quarter was zero point $9 million down from the prior quarter as expected due to the lower interest rate environment.
The non-GAAP effective tax rate for the quarter was just under 7%, resulting in non-GAAP earnings of 40 cents per diluted share.
Cash flow from operations was $16.2 million down from the prior quarter due to working capital fluctuations with receivables rising as a result of backend loaded shipments during the quarter.
Capital expenditures were $14.1 million, driven mainly by building construction and capacity additions, including continued investment in Gan capacity.
We beat our $6.6 million in dividends following the dividend increase we announced last quarter in conjunction with our stock split.
Cash and investments on the balance sheet declined by $2 million from the prior quarter.
Internal inventories were 155 days at quarter end down 23 days from the prior quarter, we continue to maintain an above normal level of inventory given the uncertainty of the supply and demand environment, but I do expect inventory days to continue to glide downward and our.
Ultimately return to our target range by the second half of 2021.
Channel inventories fell sharply during the quarter ending September at 4.3 weeks.
Down three weeks compared to the prior quarter.
Driven by the strong sell through that value mentioned, particularly in cell phone and appliance applications.
Looking ahead to the fourth quarter, we expect revenues to be in the range of $130 million plus or minus $5 million with the sequential increase driven mainly by continued strength in fast charging as well as broader channel restocking.
Mix should build a big further in the direction of communication, resulting in a slightly lower gross margin compared to the third quarter.
Specifically I expect non-GAAP gross margin to be approximately 50%.
Turning to expenses, while we did not reduce headcount in the response of the pandemic. We did defer a portion of our into the later part of the year and we will begin to see the impact of that in our Opex in Q4.
As a result, non-GAAP opex should increase modestly to around $37 million.
That puts us on track for just a slight increase in full year expenses, despite increased headcount and despite giving normal salary increases in April.
Naturally the modest growth in expenses. This year does reflect savings from the deferred hiring and from reduced travel and events.
With a significant number of new hires coming onboard in Q4, and a rebound in spending on travel and events Opex will likely grow at an above normal percentage rate in 2021.
Other income, which is driven mainly by interest income will continue to trend downward, reflecting the lower interest rate environment.
Specifically I expect other income to be around $800000 in Q4 and to continue to taper down in subsequent quarters.
Finally, the non-GAAP effective tax rate for Q4 should remain around 7%.
And with that I'll turn it back over to Joe.
Thanks, Sandy will begin the Q and a session now operator would you give the instructions for the Q and a.
Of course in order to ask a question.
And then one on your telephone keypad.
Possibly could come up with one question.
Hi, first question on lineup, we'll keep you up to speed.
Thank you your line is open.
Hey, guys. Congratulations on the strong results in the strong guidance.
We will just wanted to talk a little bit about the filling of the channel that you're talking about in the fourth quarter, obviously a cat.
Leaner in the third quarter.
Excuse me.
It's going to be filled in the fourth quarter, but as you look into the first quarter. How are you expecting seasonality to behave in the seasonality even a useful framework. These days given the change in your mix and the cobot related impacts across the seasonality earlier this year.
Ross Thanks, Thanks for the compliment yes.
It's a very good question.
In a normally Q1 will be flat to slightly down.
But based on all of the drivers we have especially in in the communications and also we think the appliances. It will come back we see strong sell through in appliances.
We think the Q1 could be actually slightly higher.
Because of that so.
It is very different from normal seasonality overall revenue.
The other thing Ross I think you have to it's a little early we'll have to see how Q4 sell through happens and how much of the Q3 bookings ends up into the real demand that which you know was very strong and how much is the end customer of rebuilding even though the channel inventories could go up but I don't think they're going go back.
To the levels. They were in this coming quarter itself will take couple of quarters to get there.
Got it and I guess as my follow up I, just wanted to take a little longer term Cindy you talked about opex growth being a little higher in 2021, I think it makes total sense given the lower base for other cobot related reasons in 2022.
If you thought about that relative to the revenue growth and I know you're not guiding for next year on revenues as a whole, but if you did the puts and takes relative revenue growth versus opex growth any sort of framework that you can brought provide to us to give a little more.
Boundaries around that.
Absolutely as you know our model is low double digit and you know as Balu indicated we are kind of right. There for this year added to that I think the covert related spending as well as you know like travel sales conference.
I think this year's expenses are about abnormally lower by about $3 million. So if you take.
The guidance that we have given that'll give you somewhere around 142 to 143 for the year non-GAAP.
If you add the 3 million on top of that to normalize this year and then give it a 7% to 8% growth that give you a number of somewhere around 150, 556, so really and trying to talk about normalizing. This year and then you'll get a 7% to 8% growth and thats slightly above our model if you will.
Without giving guidance for next year, if you believe our model up low double digits.
That's perfect. Thank you.
Thanks Ross.
Your next question comes the line of points standard.
Your line is open.
Yes, Thank you and congratulations on the results.
Balu, you mentioned 80 customers and 12 applications now using Gan.
It's probably pretty remarkable.
Are you really starting to see again penetrate.
Non smoking smartphone applications faster than expected.
I will now I won't say faster than expected because the cycle times are longer in other areas, but I would say that I am very very enthused by the level of design activity, that's going on and we have one in applications that I would have never part would be a good candidate like Tvs and.
Refrigeration in refrigerators air conditioning.
For different reasons in Tvs, because Tvs have much higher efficiency requirement plus the hardest part is a big issue on TV and then really like the fact that we don't need a heat sink because we don't generate very much at all on the chip. So you don't get any hot spots on the back of the screen.
And then if you take a look at refrigerators, it's not the size obviously, the fuzz it doesnt care as much about the size of the power supply, but the lack of heating is a huge advantage for them.
They say that he think is a major release.
Reliability problem, especially when it's these are shipped due to vibration, sometimes the hits things fall off of the break the printed circuit board and they are very very excited about not having a hissing and also the efficiency also becoming important with the tighter regulations in that area.
In air conditioning that a very tight regulations and efficiency and thats really pulling.
Our Innoswitch Gan Innoswitch devices.
The other one that is not so surprising is the us be wall outlet.
The U.S. PPD can go up to very high powered little things off the 100 watts.
And trying to fit that in the wall outlet, where there is no ventilation.
Means that you have very high efficiency very little heat and there is no room to put a hissing.
And so thats a perfect application.
That comes along.
Home and building automation, which is in the industrial part of.
Our.
Market. So we are seeing areas that we never expected. The other one is contracted ballasts these balanced again going into the.
About the ceiling and they are concerned about heat, they're concerned about weight, they're concerned about the compactness and most of all efficiency and so we're seeing a nice application in lighting for commercial lighting.
So gan seems to be an excellent fit for literally the entire market. The one I forgot to mention the most important one is the notebooks.
Notebooks.
Typically six if I want to know how big those old charges are now that they see really small charges for cell phones and tablets.
They don't want to have very large charges anymore. So we are working with a number of notebook.
Customers are won designs as we mentioned in notebook and Thats. Another area, we will do very well and I saw the tablets, we did very well as a result, we grew.
Computer market by 75% sequentially.
Yes, thank you for that detail and I had a question on the the fast charging business for for communications or smartphones could you talk a little bit about the dynamics, there, especially on pricing right because if.
It is the adapters or in the box I would assume there's heavy pricing pressure, but if this looks.
It looks like it's going to be more on accessory market does that mean that your pricing is going to be quite a bit better.
While the volumes will be smaller and therefore, the pricing will be better and the other thing to remember is that the accessory market.
Is growing very fast there I want to take advantage of the fact that the.
At least one major OEM has gone out of the box and the and if you notice in the website. They also offer third party charges that.
Use our product, especially gan product to make it really small and attractive. The other trend. We are seeing is that multi port adaptors, where you have more than one port and which means we have more than one ship each for typically has one of our.
Innoswitch is but as you go to higher power levels as multi port by definition is higher power level you have to have at least 30 or 40 watts per port.
The gas becomes a very attractive option to keep the size down and you will see number of multi port adaptors that using our Gan technology. So.
We believe that Dan the out of the box type of trend will increase again, and therefore, a higher ASP and higher dollar content and the higher gross margin content for us.
But again that that strategy will be different for each OEM, but.
Because some of the Oems, especially the Chinese Oems they really sell based on their ability to charge very fast they are constantly increasing their power levels to charge their phones faster and faster that already assisted by Watson, they're talking about 100 watts to charge the phone even faster and.
And in their case, because it's a selling point they are unlikely to switch to a out.
Out of the box model.
At least in the near term eventually it might happen, but in the near term, it's unlikely to happen and and also in that case they use proprietary protocols.
So they are not using SPD, they're using their own protocol. They believe that that allows them to charge faster.
So they have a different.
Our strategy in terms of charging.
So I think we are in a fantastic position in this in this market as.
We do anticipate in the long run many of them will go out of the box.
But but that has both pluses and minuses, even though the volume is lower it will allow us to sell the higher end of our products, which is gan products at higher power level higher ASP and more gross margin dollar content.
Very good just one last question.
Could you just I know this is a longer term opportunity for you to can you just give an update on your progress on the automotive market.
Well the automotive market as we mentioned earlier will take several years to develop but.
It depends on where you go into the automotive the drive train is the slowest because as we go through a lot of safety approval and the field test and so on but there are other applications, where our current products like Innoswitch linkswitch.
At those can be used immediately and we just recently introduced a number of.
Products, including our QC diodes for automotive.
And we will have a tiny little bit of revenue this year and you'll you'll see gradual increase in that revenue over the next several years, but the drive train itself will take.
A few years before we see a significant revenue, but in the long run it's it could be our largest addressable market.
And the electric vehicle market is supposed to take off in about three to four years I think we are well positioned to.
Get a good share of that and we are working towards number of products to go after that market.
Thank you.
Thanks Derek.
And your next question comes the line of Karl Ackerman Cowen Your line is open.
Yes, hi, Thank you good afternoon, two questions if I may.
One of your larger peers for high voltage power modules announced a partnership this week.
Seek to address high voltage industrial and automotive applications. I'm curious does this change your view on the competitive landscape or share gain potential across for appliance and industrial business and if not are those 80 customers using Gan you referenced what mix of those are within industrial and appliance that appeared augur well.
For your opportunity in 2021 and 2022.
Hi, Carl Nice to meet you for the first time I don't think we have talked before.
And thank you for the question I assume you're referring to the DST press release, where they are.
Cooperating with the sanction on the ITM for three kilowatts and about.
Well, we don't we don't play in that market.
You can from that call.
Correct.
So first of all we don't play at that power levels. We do have we do address motor control, but at much lower power levels below 400 watts with our bridge switch so it really doesn't directly impact us.
And having said that.
We compete regularly with the sank and SP very well.
Not at that level, but at lower power levels, and we have been gaining share against tankan.
In appliances and industrial applications consistently we have a very high share of anyone in the 40% to 50% share of the appliance market.
And a lot of that has come from.
Thanks, Alan and again in the industrial market. We have we have gained share again SD over many many years. So we think we are very compelling products and.
And so it really doesn't affect our outlook going forward.
As far as this announcement is concern.
You had another question that is there.
Where do we fit in the industrial market with Innoswitch scan our biggest opportunity near term opportunity is the us be a wall outlet. These are used to be.
Outlets right next to your power outlet.
Outlet on the wall and that we bring significant advantages actually forgot to mention one other important advantage in that application that is standby consumption.
When you put a power supply in the outlet you have no have disconnected disconnecting it from the from the grid, which means that if you have this.
20, or 30 of them installed in your house, they're constantly drawing some level of power. Even when you are not using them. So it's really important to have the lowest power level possible and we have a very low standby consumption with innoswitch and innoswitch can and that's a huge attacks in that market, having said that I believe.
If there are other applications that we will get into overtime.
We already see possibilities in other areas in industrial but our near term.
Exposure I began is is the U.S b piece.
PD wall outlet in terms of.
The percentage I would say predominantly we are getting Gan revenue this year from.
From mobile applications, including in on.
Notebook adapters, and the tablets and so on and multi port.
Charges for.
All three of them, but the cell phones tablets and notebooks.
And so the appliance and basically the consumer which is appliances and industrial market will gradually come up because they're much longer design cycles, but we are really surprised at the level of design activity, we are seeing and acceptance of Gan in those markets.
Understood. Thank you for that color.
If I could go back to mobile I think one of the investor concerns is that.
There will be perhaps this demand air pocket.
It's clearly the largest handset OEM and you're still are showing the charger with initial sale the phone.
Right.
What indications are you hearing from machine or partners about the potential for an upgrade cycle.
USBC Chargers second.
Perhaps may be our 21 story you spoken in the past about design wins at China handset Oems, but could you talk about whether the fast charging growth opportunity for you, we'll percolate into the low and mid range Fiveg handsets next year or will the opportunity be tied predominantly to flexion models. Thank you.
Good question Paul.
So the past charging.
Press charges are definitely penetrating too.
Lower end phones the.
The China.
Customers are aggressively pushing fast charging all the way down to that low end phones and that's one of the reasons. Our revenue is growing and will continue to grow in 2021.
The other reason is our Chinese customers, especially and in fact all of workers, even non Chinese Oems in cell phones are expecting to gain share from the challenges that wall. There has in terms of being able to ship falls and so they are all preparing to gain share from that and that's adding to the demand.
That we already have so we are not only penetrating more but we're also our customers are also gaining share from.
From walk away. The third aspect is we have gained significant share over the last year in terms of new design wins at all of our Oems.
So that is compounding the project now having said all of that I would say that the recent.
The dramatic increase in bookings.
It is a result of multiple things one is I know that there is a three year as the items I mentioned, but also I think the distributors have a knee jerk reaction when they see a huge sellthrough. They place a lot of orders. So we have to pay make some judgments on that and we also don't know.
How exactly that way, but today, we will benefit each and every one of our Oems.
But we have a pretty good understanding of what the total.
Volume that's at stake for them. So we are able to gauge at least overall what that.
Opportunity is for all of US. So there are many many different things that are helping us simply because we are we are in a perfect position with our products and technology that is innoswitch again in all of this market.
And actually I would add one more even the one that announced that they're going to go out of the box.
[music].
The advantage is that when it goes out of the box.
And a consumer base upon even if the buyer low end phone the chances are they going to buy at the fast Charger Bill.
Because when you're paying 400 $500 per phone.
Nobody minds paying 90 99 for a really high end charger rather than paying the same amount for a five watt charger because you get four times the charge rate and also the wireless charging that as that has been announced will also require the same fast charge at the 20 Watt charger. So.
In some sense.
The going out of the box gives us the exposure to the entire product line not just the high end like.
Like Weve seen in the past now it is up to the consumer to choose what type of charge that they want.
And so we'll have to see what the tax rate would be but we are optimistic that asset to be reasonable because most consumers would prefer to have.
Fast Chargers and you've talked a number of us our South park friends. They would very much like to have a fast charger and the interesting thing is most of the phones, even going back three or four years can handle fast charging is just that for cost seasons, they're shipping with the lowest cost charters. The five watt charger now it's up to the consumer to make that.
Decision, so and some of the OEM perspective. It also makes sense because now they can make.
By going to an accessory model they can make the charger much more attractive in terms of size and multi port features.
And also they can make more margins is no longer adding to the cost of the fall.
Thank you.
You're welcome.
And our next question comes from the line.
Hi, Keith Your line is open.
Hi, David Haverly on behalf of Chris Rolland, Thanks for taking my questions and congratulations on the solid results and guidance that you produced here.
Hi, first question I wanted ask to clarify on the computing strength here is.
More product work from home driving tablet strength this quarter and next quarter or is this the Gan revenue really starting to trickle in here I guess.
Yes. The question is you guys have been running at mid single digits at quarter end that computer market for a while now.
Double digit revenue.
More than eight on board.
Well it all depends upon how the rest of the other markets grow, but I would say that we expect the computer market to continue to grow.
Next year.
And it really comes from.
Our product to getting in the box.
On tablets.
And so it's not it's a combination of two things. One is we are in the boxes and the second one is the tablets are doing extremely well thanks to work from home and learn from home situation right now so the combination of those two is giving a huge views.
But there are also other areas, we expect to grow one is notebooks I just mentioned that we have won some designs in notebooks, we havent seen the revenues yet and that could that would help us next year. The other area is we introduced a product called INOMAX that goes into monitors and we have won some designs that will add to revenue we already started adding to revenue, but next year it will be.
More if we really see the full year impact of those revenues and that will.
Increase over time, the other area, we have seen a small increase is the standby power supplies than desktops victory, which has been declining over time, because people don't buy desktops as much anymore, but we are seeing an increase in that volume.
Because the they're selling more desktops and in other countries third world countries.
Yes. Thank you for the color then I want to get things going on in that market.
If I could just ask the second one on an industrial here.
I think the.
Hi power markets kind of delaying for a few quarters in a row now I think the infrastructure project is understandable with the pandemic going on at these kind of hit it stands but do you have any visibility on when the projects actually accelerate and kind of get that industrial business going into next year.
That's a good question. The good news is we still won that design. The designs are still there is that just a question of when the governments decide to trigger this projects.
I don't know an exact date, but I have to believe that they have to add more energy capacity, especially in developing countries like India, China, where they have continuous increase in the ellerslie demand and work from home probably makes it worse in some ways.
So it's just a question of time M&A here or there is a lot of pent up that.
Requirement to add when capacity.
All renewable energy, including.
Solar panels.
But also.
Great level installations high voltage DC grid.
And the last one is traction like locomotives.
China has done very well in locomotives, India has a very aggressive plan to add electric locomotives that trying to convert all diesel engines into electric and so there is a long term plan and that was supposed to kick off this year, but again, it's been on hold.
It's really hard to say in a part of me says maybe the quick the corporate situation gets better those will get triggered but I have no way of knowing it's just up to the to the in the government.
But the good news is it doesn't change our position we have the share. We have won that design is just a question of it.
When they start implementing them.
Thank you.
Thank you Ken minor in Oneq two questions first one.
Well I still think that's from your from capital Your line is open.
So from the questions.
Two quick whose capex in the quarter.
For the quarter, we spent about $14 million.
Okay and.
In the past you had to import.
Import equipment I think to your fab in new also by Entresto equipments zero cents.
Can you explain what was.
So I think the way to look at it including this year.
We are going to probably spend as I had indicated earlier in the year. This will be a year of our little of normal spend where we are going to spend about $55 million.
Capex $15 million for buildings and about 40 million is on equipment, including Gan.
And quarter Ics.
Quite a bit is on the backend to however, looking ahead. This will get normalized back where we would normally go back into the equipment into a $20 million to $25 million for next year in 2021, but we have another 10 to 15 million more to spend on our building and solar that we applied for next year.
Bob you want to look at it ongoing and a long term, 5% to 6% of revenue is a regular model.
Got it thank you.
Okay.
Yes, and again I would is that.
You are comfortable with that.
So Rick Astley.
Yes.
Yes, we've got adequate capacity.
Related to that and that's something that we have been investing and we'll continue to invest.
Because this is a great opportunity for us with as Bob had indicated with all the design wins, we are seeing.
In the future years again is a great opportunity. So we are strategically investing here yes.
I'd like to add that I truly believe Gan is going to replace silicon about southern power level like roughly about 30 Watson about Gan makes a lot of sense.
And so we're really investing in Ghana, we have already built enough capacity in the near term, but as time goes on we can add more capacity and we think that we are in a very strong position you're way ahead for all of our competitors in Gan as far as we know we are the only ones shipping can in volume and we really want to take.
The advantage of that and and all almost all of our new products.
Based on Gan about southern power level.
Yes.
Got it and kind of leading into my next question. So.
So you're not seeing anybody else.
In the marketplace to scan products.
Well there are a lot of people talk about talking about it sampling, but we don't see anybody in high volume production at all.
Got it.
I'm, sorry is sort of a new question you've done.
Building on our 80.
Uh huh.
There are many.
Puts and takes we obviously had a very strong.
Quarter in in tablets and.
We continue we'll continue to have in Q4.
This may be this is definitely driven by work at home and.
Loan at home type of situation and that May slow down a little bit. Although you could say there may be a holiday sales. So it's a little bit hard to predict if I were to a fiber to take a guess I would think computer will also grow slightly next year. The big question Mark is industrial.
I think we are really positioned very well.
As we have said the DM drivers in each market and I really believe next year it would be a good year for all applications Directionally for us.
Got it thanks.
Thanks, so much.
You're welcome.
Okay. Thank you bye.
Yes. Thank you need session I now turn the call back to jump ship.
Hi, Mike.
All right. Thanks, everyone. We'll leave it there there will be a replay of this call available on our website, our investor Web site investors Dr. Howard Dot com. Thanks.
Thanks, again for listening and good afternoon.
Thank you and this concludes todays conference call you may now.
All right.
Yeah.
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