Q3 2024 Alpha and Omega Semiconductor Ltd Earnings Call

The pitch of participants please remain holding the call will begin momentarily again, please remain holding the call will begin momentarily.

[music].

Jayla: Attention participants, please remain holding. The call will begin momentarily. Again, please remain holding. The call will begin momentarily. My name is Jayla, and I will be your moderator for today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. I would now like to turn the conference call back over to our host with Alpha and Omega. Please go ahead.

Good afternoon.

Hello, and thank you for attending the Alpha and Omega semiconductor fiscal quarter. Three 2024 earnings call. My name is Jamie and I will be your moderator for today all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end I would now like to turn the conference call back over to our host with Alpha.

Speaker Change: America. Please go ahead.

Steve Pelayo: Good afternoon, everyone, and welcome to Alpha and Omega Semiconductor's conference call to discuss fiscal 2024 third quarter financial results. I am Stephen Pelayo, Investor Relations Representative for AOS. With me today are Stephen Chang, our CEO, and Yifan Liang, our CFO. This call is being recorded and broadcast live over the web.

Jayla: Good afternoon, everyone and welcome to Alpha and Omega Semiconductor's conference call to discuss fiscal 2024 third quarter financial results I am Steven Pelayo Investor Relations representative for AOS with me today are Steven Chang, our CEO and economy, all our CFO. This call is being recorded and broadcast live over the web.

Steve Pelayo: A replay will be available for seven days following the call via the link in the Investor Relations section of our website. Our call will proceed as follows today, Steven will begin business updates, including strategic highlights and a detailed segment report after that <unk> will review the financial results and provide guidance for the June quarter. Finally, we will have a Q&A session.

Steve Pelayo: A replay will be available for seven days following the call via a link in the Investor Relations section of our website. Our call will proceed as follows today. Stephen will begin business updates, including strategic highlights and a detailed segment report. After that, Yifan will review the financial results and provide guidance for the June quarter. Finally, we will have a Q&A session.

Steve Pelayo: The earnings release was distributed over the wire today, May 7th, 2024, after the market closed. The release is also posted on the company's website. Our earnings release and this presentation include non-GAAP financial measures. We use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors in conjunction with GAAP measures. A reconciliation of these non-GAAP measures to comparable GAAP measures is included in the earnings release.

Steve Pelayo: The earnings release was distributed over the wire today may seven 2024 after the market close. The release is also posted on the company's website. Our earnings release and this presentation include non-GAAP financial measures, we use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors in <unk>.

Steve Pelayo: Conjunction with GAAP measures a reconciliation of these non-GAAP measures to comparable GAAP measures is included in the earnings release.

Steve Pelayo: We remind you that during this conference call, we will make certain forward-looking statements, including discussions of the business outlook and financial projections. These forward-looking statements are based on management's current expectations and involve risks and uncertainties that could cause our actual results to differ materially. For a more detailed description of these risks and uncertainties, please refer to our report and subsequent filings with the SEC. We assume no obligation to update the information provided in today's call.

Steve Pelayo: We remind you that during this conference call, we will make certain forward looking statements, including discussions of business outlook and financial projections. These forward looking statements are based on management's current expectations and involve risks and uncertainties that could cause our actual results to differ materially for a more detailed description of these risks and uncertainties. Please.

Steve Pelayo: Refer to our report and subsequent filings with the SEC, we assume no obligations to update the information provided in today's call now I'll turn the call over to our CEO Steven Chang Steven.

Stephen Chunping Chang: Now, I'll turn the call over to our CEO, Stephen John Chang. Stephen?

Stephen Chunping Chang: Thank you, Steve. Welcome to Alpha and Omega's fiscal Q3 earnings call. I will begin with a high-level overview of our results and then jump into segment details. We delivered fiscal Q3 results in line with our guidance for revenue and gross margins. Revenue was $150.1 million. Non-Gap Growth Margin was 25.2%. Non-GAAP EPS was slightly better than expected at a loss per share of $0.04. This quarter, we saw seasonal declines in computing and smartphones and continued inventory corrections in gaming, quick chargers, and solar.

Speaker Change: Thank you Steve welcome to the Alpha and Omega of fiscal Q3 earnings call I will begin with a high level overview of our results and then jumped into the segment details.

Stephen Chunping Chang: We delivered fiscal Q3 with results in line with our guidance for revenue and gross margin.

Stephen Chunping Chang: Revenue was $151 million non-GAAP gross margin was 25, 2%.

Stephen Chunping Chang: non-GAAP EPS was slightly better than expectations at a loss per share of <unk>.

Stephen Chunping Chang: This quarter, we saw seasonal declines in computing and smartphones and to continued inventory corrections and gaming quick Chargers and solar.

Stephen Chunping Chang: Looking at the overall semiconductor cycle, inventory corrections across the majority of our end markets are now approaching their conclusion, positioning us for a gradual rebound as we move forward into the rest of calendar year 2024. For example, the rate of decline in gaming and quick chargers slowed during the quarter, and we saw sequential growth in tablets, appliances, and e-mobility. In addition, during the March quarter, we saw an increase in demand for newer applications such as graphics cards and AI applications. As we stated last quarter, we are approaching the recovery phase of the next cycle.

Stephen Chunping Chang: Looking at a broader view of the overall semiconductor cycle inventory corrections across the majority of our end markets are now approaching their conclusion position.

Stephen Chunping Chang: Positioning us for a gradual rebound as we move forward into the rest of calendar year 2024.

Stephen Chunping Chang: For example, the rate of decline in gaming and quick Chargers slowed during the quarter and we saw sequential growth in tablets appliances and E mobility.

Stephen Chunping Chang: In addition, during the March quarter, we saw an increase in demand for newer applications, such as graphics cards and AI applications.

Stephen Chunping Chang: As we stated last quarter, we are approaching the recovery phase of the next cycle. What does that trajectory is hard to predict we are coming out of the downturn and even stronger and more resilient company.

Stephen Chunping Chang: While the exact trajectory is hard to predict, we are coming out of the downturn an even stronger and more resilient company. Starting from the June quarter, we forecast a rebound in gaming and continued strength from tablets, graphics cards, and AI. Looking beyond, we anticipate the second half of this year will be stronger than the first half as customers gear up for new product launches in smartphones as well as PCs. Looking beyond 2024 to the growth phase of the next cycle, ALS is transitioning from a component supplier to become a comprehensive solution provider, enabling us to go deeper with increasing BOM content and penetrating new products and verticals.

Stephen Chunping Chang: Starting from the June quarter, we forecast a rebound in gaming and continued strength from tablets graphics cards and AI.

Stephen Chunping Chang: Looking beyond we anticipate the second half of this year will be stronger than the first half as customers gear up for new product launches in smartphones as well as Pcs.

Stephen Chunping Chang: Looking beyond 2024 to the growth phase of the next cycle AOS is transitioning from a component supplier to become a comprehensive solution provider, enabling us to go deeper with increasing bom content and penetrating new products and verticals.

Stephen Chunping Chang: We have built upon our core competencies of high-performance silicon, advanced packaging, and intelligent ICs to expand our product offering. For example, we now have multi-phase controllers in addition to smart power stages to power not only computing vCore but also graphics and AI data center applications for advanced computing.

Stephen Chunping Chang: We have built upon our core competencies of high performance Silicon advanced packaging and intelligent Ics to expand our product offering.

Stephen Chunping Chang: For example, we now have multi domain controllers. In addition to smart power stages to power not only competing in the core but also extending to graphics and AI data center applications for advanced computing.

Stephen Chunping Chang: We also continue to leverage our core technology IP and strengths in other applications such as battery, motor, and power supply while investing in R&D into adjacent markets. With that, let me now cover our segment results and provide some guidance by segment for the next quarter, starting with computing. March quarter revenue was up 80.4% year over year and down 4.3% sequentially, and represented 45.8% of total revenue. These results were in line with our original expectation for a mid-single-digit decline sequentially due to seasonality and the impact of the Chinese New Year.

Stephen Chunping Chang: We also continue to leverage our core technology, IP and strength in other applications, such as battery motor and power supply, while investing in R&D into adjacent markets.

Speaker Change: With that let me now cover our segment results and provide some guidance by segment for the next quarter.

Stephen Chunping Chang: Starting with computing.

Stephen Chunping Chang: Quarter revenue was up 84% year over year and down four 3% sequentially and represented 45, 8% of total revenue.

Stephen Chunping Chang: These results were in line with our original expectation for a mid single digit decline sequentially due to seasonality and the impact of Chinese new year.

Stephen Chunping Chang: As I mentioned before, sequential growth in graphics cards, tablets, and AI accelerators helped partially offset the seasonal decline that was mostly for notebooks. Looking forward into the June quarter, we expect the computing segment to grow mid to upper single digits on continued strength in tablets, AI, accelerators, and graphics cards. Now, turning to the consumer segment. March quarter revenue was down 47.1% year over year, up slightly 0.3% sequentially, and represented 15.7% of total revenue.

Stephen Chunping Chang: As mentioned before.

Stephen Chunping Chang: Sequential growth in graphics cards tablets, and AI accelerators helped partially offset the seasonal decline that was mostly for notebooks.

Stephen Chunping Chang: Looking forward into the June quarter, we expect the computing segment to grow mid to upper single digits on continued strength in tablets, AI accelerators and graphic cards.

Stephen Chunping Chang: Turning to the consumer segment March quarter revenue was down 47, 1% year over year up slightly <unk>, 3% sequentially and represented 15, 7% of total revenue.

Stephen Chunping Chang: The results exceeded our forecast for a low single-digit sequential decline driven by strength in home appliances and LCD TVs. The inventory correction in gaming continued in the March quarter, but as we suggested last quarter, we see opportunities to increase BOM content within the current console platform as part of a product refresh coming very soon. We also remain engaged in deep discussions about the next generation model design.

Stephen Chunping Chang: The results exceeded our forecast for a low single digit sequential decline driven by strength in home appliances and LCD TV.

Stephen Chunping Chang: The inventory correction and gaming continued in the March quarter, but as we suggested last quarter, we see opportunities to increase Bom content within the current console platform as part of a product refresh coming very soon.

Stephen Chunping Chang: We also remain engaged in deep discussions for their next generation model design.

Stephen Chunping Chang: For the June quarter, we forecast double-digit sequential growth in the consumer segment due to an end to the inventory correction in gaming, which is expected to drive a strong lead. Next, let's discuss the communications segment. Revenue in the March quarter was up 39.2% year over year and down 7.4% sequentially and represented 17.9% of total revenue. These results were below our expectations as continued strength in March quarter shipments to Korea and China-based smartphone OEMs was offset by a seasonal decline in shipments to the Tier 1 US smartphone customer, as well as a slowdown in network costs.

Stephen Chunping Chang: For the June quarter, we forecast double digit sequential growth in the consumer segment due to an end to the inventory correction in gaming, which is expected to drive a strong rebound.

Stephen Chunping Chang: Next let's discuss the communications segment revenue in the March quarter was up 39, 2% year over year and down seven 4% sequentially and represented 17, 9% of total revenue.

Stephen Chunping Chang: These results were below our expectations as continued strength in March quarter shipments to the Korea, and China based smartphone Oems were offset by a seasonal decline in shipments to the tier one U S smartphone customer as well as a slowdown in networking.

Stephen Chunping Chang: Looking ahead, we anticipate a strong sequential rebound in shipments to our tier one U S smartphone customer as they prepare for their fall launch, while we forecast a sequential decline from Korea, and China Oems.

Stephen Chunping Chang: Even with the sequential decline are China, OEM business remains strong and up significantly year over year.

Stephen Chunping Chang: Overall, we estimate the communications segment will be flat sequentially in the June quarter, which is notably higher year over year, because of our bom content and market share increases.

Stephen Chunping Chang: Looking ahead, we anticipate a strong sequential rebound in shipments to our Tier 1 US smartphone customer as they prepare for their fall launch, while we forecast a sequential decline from Korea and China OEMs. Even with a sequential decline, our China OEM business remains strong and up significantly year over year. Overall, we estimate the communications segment will be flat sequentially in the June quarter, which is notably higher year over year because of our BOM content and market sharing. Now, let's talk about our last segment, power supply and industrial, which accounted for 16.5% of total revenue. March quarter revenue was down 6.5% year over year and down 29% sequentially.

Stephen Chunping Chang: Now, let's talk about our last segment power supply and industrial which accounted for 16, 5% of total revenue.

Stephen Chunping Chang: March quarter revenue was down six 5% year over year and down 29% sequentially.

Stephen Chunping Chang: These results were driven by a continued inventory correction in quick chargers following the peak season shipments to our Tier 1 U.S. smartphone customer in the September quarter of last year, and a sequential decline in AC-DC power supplies, power tools, and solar. As mentioned last quarter, we saw strong sequential growth from the e-mobility segment driven by deepening customer relationships for e-bikes and e-scooters. For the June quarter, we expect this segment to increase mid to upper single digits sequentially, mainly due to the end of the inventory correction in quick chargers and continued strength in e-mobility.

Stephen Chunping Chang: These results were driven by continued inventory correction and quick Chargers. Following the peak season shipments to our tier one U S smartphone customer in the September quarter last year, and a sequential decline in AC DC power supply is power tools and solar.

Stephen Chunping Chang: As mentioned last quarter, we saw strong sequential growth from the E mobility segment, driven by deepening customer relationships for E bikes and scooters.

Stephen Chunping Chang: For the June quarter, we expect this segment to increase mid to upper single digits sequentially, mainly due to the end of the inventory correction and quick Chargers and continued strength in E mobility.

Stephen Chunping Chang: In closing, we deliver fiscal Q3 in line with our expectations. Over the past year or so, we have experienced rolling inventory corrections in nearly every one of our end markets. We believe the bulk of the adjustments are now behind us, and seasonality is starting to return as we prepare for PC and smartphone launches in the fall.

Stephen Chunping Chang: In closing we delivered fiscal Q3 in line with our expectations over the past year or so we have experienced rolling inventory corrections in nearly every one of our end markets.

Stephen Chunping Chang: We believe the bulk of the adjustments are now behind us.

Stephen Chunping Chang: Seasonality is starting to return as we prepare for PC and smartphone launches in the fall.

Stephen Chunping Chang: Looking into the next cycle, we are poised for growth. Bolstered by advanced technology, a diversified product portfolio addressing a broadening array of end markets, and a premier customer base across all businesses, Power management underpins key trends such as AI, digitalization, connectivity, and electrification, especially as we move towards a sustainable low-carbon society. We're steadfast in executing our technology roadmap. Customers increasingly view us as a total solutions provider, allowing us to capture a greater portion of the bill of materials and ultimately support growth that outpaces the industry over the long run. With that, I will now turn the call over to Yifan for a discussion of our fiscal third quarter financial results and our outlook for the next quarter.

Stephen Chunping Chang: Looking into the next cycle, we are poised for growth bolstered by advanced technology, a diversified product portfolio addressing a broadening array of end markets and customer base across all business lines.

Yifan: Power management underpins key trends, such as AI, digitalization connectivity and electrification, especially as we move towards a sustainable low carbon society.

Yifan: We are steadfast in executing our technology road map customers increasingly view us as a total solutions provider, allowing us to capture a greater portion of the bill of materials and ultimately supporting growth that outpaces industry over the long run.

Yifan: With that I will now turn the call over to <unk> for a discussion of our fiscal third quarter financial results and our outlook for the next quarter.

Stephen Chunping Chang: Yvonne.

Yifan Liang: Good afternoon, everyone, and thank you for joining us. Revenue for the quarter was $150.1 million, up 13.2% year over year and down 9.2% sequentially. While the March quarter is historically our seasonally lowest revenue quarter due to the technicality of consumer spending, the year over year growth indicated the strength of our recovery from the inventory correction. In terms of product mix, DMOS revenue was $93.8 million, up 15.9% over last year and down 13.8% sequentially. RIC's revenue was $50 million, up 5.4% from a year ago and down 0.6% from the prior quarter.

Yifan: Steven Good afternoon, everyone and thank you for joining us.

Yifan Liang: Revenue for the quarter was $150 1 million up 13, 2% a year over year.

Yifan Liang: Nine 2% sequentially.

Yifan Liang: While March quarter is historically, our seasonally lowest revenue quarter due to the cyclicality of consumer spending the.

Yifan Liang: The year over year growth indicated.

Yifan Liang: <unk> of our recovery from the inventory corrections.

Yifan Liang: In terms of product mix.

Yifan Liang: Revenue was $93 8 million up 15, 9% over last year and down 13 eight.

Yifan Liang: 8% sequentially.

Yifan Liang: Power IC revenue was $15 million up five 4% from a year ago.

Yifan Liang: 6% from the prior quarter.

Yifan Liang: Assembly Service and other revenue was $1.2 million as compared to $0.6 million for the same quarter last year and $0.7 million for the last quarter. License and engineering service revenue was $5.1 million for the quarter versus $5.5 million in the prior quarter and $3.6 million for the same quarter a year ago. Non-GAP gross margin was 25.2% compared to 25.1% a year ago and 28% last quarter. The quarter of a quarter decrease was mainly driven by lower utilization and ASD erosion, partially offset by a better mix.

Yifan Liang: Assembly service and other revenue was $1 2 million as compared to $6 million for the same quarter last year and $7 million last quarter.

Yifan Liang: Lessons.

Yifan Liang: Engineering service revenue was <unk>.

Yifan Liang: $5 1 million for the quarter versus $5 $5 million in the prior quarter.

Yifan Liang: $3 $6 million for the same quarter a year ago.

Yifan Liang: non-GAAP gross margin was 25, 2% compared to 25, 1% a year ago and 28% last quarter.

Yifan Liang: So quarter over quarter decrease was mainly driven by lower utilization and ASP erosion.

Yifan Liang: Actually offset by better mix.

Yifan Liang: Non-GAP operating expenses were $38.9 million compared to $36.2 million last year and $37.9 million for the prior quarter. The quarter over quarter increase was primarily due to higher payroll tax expenses given the start of a new calendar year. Long gap quarterly EPS was a loss of $0.04 compared to a loss of $0.21 a year ago and $0.24 earnings per share last quarter. Moving on to cash.

Yifan Liang: non-GAAP operating expenses were $38 9 million.

Yifan Liang: <unk> to $36 2 million last year, and $37 $9 million for the prior quarter.

Yifan Liang: The quarter over quarter increase was primarily due to higher payroll tax expenses, given the start of a new calendar year.

Yifan Liang: non-GAAP quarterly EPS was a loss of <unk> compared to a loss of <unk> 21, a year ago.

Yifan Liang: <unk> 24 earnings per share last quarter.

Yifan Liang: Moving on to cash flow.

Yifan Liang: Operating cash flow was $28.2 million, including $9.9 million of repayment of customer deposits. By comparison, operating cash flow was $11.6 million last year and negative $23.5 million in the prior quarter. We expect to refund about $4.5 million of customer deposits in the June quarter. We also repurchase 287,000 shares of employee restricted stock units that vested during the quarter for $6.7 million. If that's for the quarter, it was $11.6 million compared to $6.5 million for the same quarter a year ago and $20.7 million for the last quarter. Now, let me turn to our ballot.

Yifan Liang: Operating cash flow was $28 2 million.

Yifan Liang: Including $9 $9 million of repayment of customer deposits.

Yifan Liang: In comparison.

Yifan Liang: Operating cash flow was 11 $6 million last year.

Yifan Liang: Negative with $23 $5 million in the prior quarter.

Yifan Liang: We expect to refund about $4 $5 million customer deposit in the June quarter.

Yifan Liang: We also repurchased 287000 shares so employee restricted stock units vested during the quarter for $6 $7 million.

Yifan Liang: Ebitdas for the quarter was $11 6 million compared to $6 $5 million.

Yifan Liang: For the same quarter, a year ago and.

Yifan Liang: $27 million last quarter.

Yifan Liang: Now, let me turn to our balance sheet.

Yifan Liang: We completed the March quarter with a cash balance of $174.4 million, compared to $162.3 million at the end of the previous quarter. Net trade receivables decreased by $18.7 million sequentially. Their sales outstanding was 15 days for the quarter compared to 18 days for the prior quarter. Net inventory increased by $6.4 million quarter over quarter. Average days in inventory were 153 days compared to 141 days in the last quarter.

Yifan Liang: We completed the March quarter, with a cash balance of $174 4 million.

Yifan Liang: Compared to $162 $3 million at the end of last quarter.

Yifan Liang: Net trade receivables decreased by $18 $7 million sequentially.

Yifan Liang: Sales outstanding was 15 days for the quarter compared to 18 days below the prior quarter.

Yifan Liang: Net inventory increased by $6 $4 million quarter over quarter.

Yifan Liang: Average days in inventory were 153 days compared to 141 days in the last quarter.

Yifan Liang: Fairfax for the quarter was $7.4 million compared to $9.1 million for the prior quarter. We expect CapEx for the June quarter to range from $6 million to $8 million. Now, I would like to discuss Droomcoder guidance.

Yifan Liang: Capex for the quarter was $7 $4 million compared to $9 1 million for the prior quarter.

Yifan Liang: We expect Capex for the June quarter to range from 6 million to $8 million.

Speaker Change: Now I would like to discuss June quarter guidance.

Yifan Liang: We expect revenue to be approximately $160 million plus or minus $10 million, gap gross margin to be 24.7% plus or minus 1%, and non-GaF Gold Smarton to be 26.3% plus or minus 1%. Staff operating expenses to be in the range of $47.9 million plus or minus $1 million. Non-GAP operating expenses are expected to be in the range of $39.5 million plus or minus $1 million, net interest expense to be approximately $.5 million, and income tax expense to be approximately $.9 million.

Yifan Liang: We expect revenue to be approximately $160 million plus or minus $10 million.

Yifan Liang: GAAP gross margin to be 24, 7% plus or minus 1%.

Yifan Liang: We anticipate the non-GAAP gross margin to be 26, 3% plus or minus 1%.

Yifan Liang: GAAP operating expenses to be in the range of $47 $9 million, plus or minus $1 million.

Yifan Liang: non-GAAP operating expenses are expected to be in the range of $39 $5 million plus or minus $1 million.

Yifan Liang: Net interest expense to be approximately.

Yifan Liang: $5 million and income tax expense to be approximately $9 million.

Unknown Executive: With that, we will open the call for questions. Operator. Please start the Q&A session.

Speaker Change: With that we will open the call for questions.

Unknown Executive: Later.

Speaker Change: Let's start the Q&A session.

Operator: At that time, we will begin our question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by. Again, to ask another question, press star 1. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking a question. Our first question comes from David Williams with the company Benchmark. David, your line is now open.

Speaker Change: At this time, we will begin a question and answer session. If you would like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remove a question. Please press star followed by two.

Operator: To ask a question press star one.

Operator: Under the fees and the speakerphone, please remember to pick up your handset before asking a question.

Operator: Our first question comes from David Williams with the company benchmark.

Speaker Change: Your line is now open.

David Neil Williams: Thanks, good afternoon, and thanks for taking my question. Congratulations on the return to growth here, and it sounds like you guys are a lot more positive than we've heard in some time, so that's great to hear.

David Neil Williams: Thanks, Good afternoon, and thanks for taking my question.

David Neil Williams: Congrats on the return to growth here and it sounds like you guys are a lot more positive than we've heard in some time, so that's great to hear.

Stephen Chunping Chang: I guess, Stephen, just one of the first things I wanted to ask was, on the smartphone, on the handsets there, you talked about that being a little bit better or stronger Q2Q. Is that when you would typically begin to see that order pull in for those flagship launches, and how do you think that compares relative to prior years? Do you think you're seeing any changes in those order patterns, or would you describe it, maybe, as typical?

David Neil Williams: I guess, Stephen just one of the first things I wanted to ask was.

Stephen Chunping Chang: On the smartphone on the handsets there you talked about that being a little bit better or strength in <unk> is that when you would typically begin to see that order pool in for those flagship launches and how do you think that compared relative to prior years.

Stephen Chunping Chang: Do you think you are seeing any changes in those order patterns or would you describe it maybe is typical.

Stephen Chunping Chang: Certainly, we've commented that smartphones are doing better than normal seasonality. In a typical year, we would usually see the March quarter as a low season for smartphones, kind of the opposite of the fall launches that we normally prepare for. This year actually, we saw strength in the March quarter. It is, you know, generally it is still, no, not it's still dropped a little bit compared to the December quarter, but it's actually still at a very high level.

Stephen Chunping Chang: Certainly we've commented on that.

Stephen Chunping Chang: <unk> is doing better than normal seasonality.

Stephen Chunping Chang: All year, we would usually see the march quarter as a low seasons for smartphones kind of opposite update but the fall launches that we normally prepare for this year actually we saw strength in the in the March quarter.

Stephen Chunping Chang: It is generally it is still not it's still dropped a little bit compared to the December quarter, but actually still at a very high level and I think the key difference for that is actually the <unk>.

Stephen Chunping Chang: And I think the key difference for that is actually the strength in the Chinese market, especially, particularly in the premium phones. And that has helped to offset some of the normal seasonality we see in the other phone makers.

Stephen Chunping Chang: In the China market, and especially particularly in the premium phones and that has helped to offset some of the normal seasonality, we see in the other phone makers.

Stephen Chunping Chang: Okay, and just as a reminder, are you guys able to ship to Huawei on any products there, or are they still not a customer?

Stephen Chunping Chang: Okay and.

Speaker Change: As a matter or are you guys able to ship into Huawei on any products there or are they still are not not the customer there.

Stephen Chunping Chang: Yeah, right now, we do not ship to Huawei.

Speaker Change: Yeah, right now, we do not ship to Huawei.

David Neil Williams: Okay, perfect, thanks. And then I noticed there were you guys, and you talked a little bit about some of the new products, but it seems like you put out quite a few, especially on the compute side. And I just wonder if you can kind of help us maybe quantify the magnitude of what these new products kind of bring into that compute market and how that can help you grow that content relative to what you've discussed in the past on just kind of that CPU upgrade or generational change. But how much additional content do you think you can capture from the new products that you're releasing into that market? Thank you.

Speaker Change: Okay perfect. Thanks.

David Neil Williams: Okay.

David Neil Williams: Then just noticed there were you guys and you talked a little bit about some of the new products, but it seems like you put out quite a few especially on the compute side. Just wondering if you can kind of help us maybe quantify the magnitude of what these new products kind of bring into that that compute market and how that can help you grow that content relative to what you've discussed in the past on just coming back.

David Neil Williams: You upgrade are generational change, but how much additional content do you think you can capture from the new products that you're releasing into that market.

Stephen Chunping Chang: Sure, so there's actually quite a bit going on in the computing space. On the normal computing, I would say it's the client computing side, we are expanding our BOM content there by going after total solutions. So not only going after the sets and the power stages, you know, we're also introducing the multi-phase controllers in order to sell a total solution for that and power the vCore solutions.

David Neil Williams: Sure.

Stephen Chunping Chang: Actually quite a bit going on in the computing space in the normal computing.

Stephen Chunping Chang: I would say is the client computing side.

Stephen Chunping Chang: We are expanding our bom content, thereby.

Stephen Chunping Chang: By going after a total solution so not only going after that.

Stephen Chunping Chang: And the the power stages, we're also introducing the multi phase controllers in order just to sell.

Stephen Chunping Chang: Total solution into that into the.

Stephen Chunping Chang: Powering <unk> solutions, so with that we are seeing bom content grow it used to be in the $2 range is going into the $3 range and depending upon the configuration can push higher than that.

Stephen Chunping Chang: So with that, you know, we're seeing BOM content grow. It used to be in the $2 range, but it's going into the $3 range, and depending upon the configuration, it can push higher than that. But, you know, that's helping us in general because with the latest power maps, you know, being used and that the CPUs are being used, we're seeing more driver models, more phases, which basically means more content for us and going into powering the CPU. Now, so that's what's going on on the client side.

Stephen Chunping Chang: But that is helping us in general because with the latest.

Stephen Chunping Chang: <unk>.

Stephen Chunping Chang: Power maps not being used.

Speaker Change: That's it.

Stephen Chunping Chang: The Cpus.

Stephen Chunping Chang: And being used we're seeing more driver Mos is more a more phases, which basically means more content for us going into powering the CPU now and so that's what's going on the client side. The other thing that we're seeing in general is that we are expanding more not only from the client PC side, but also going into advanced computing and.

Stephen Chunping Chang: The other thing that we're seeing in general is that we are expanding more, not only from the client PC side but also going into advanced computing. And you guys, you know, we've been sharing about our success in general in the graphics market. We're seeing a return to growth for the graphics side. So, you know, we feel a little more confident that the inventory correction there is behind us, and we are seeing growth specifically on the graphics side.

Stephen Chunping Chang: We've been hearing about our success in general into the graphics market.

Stephen Chunping Chang: Seeing a return to growth.

Stephen Chunping Chang: The graphic side.

Stephen Chunping Chang: It would be we feel a little more competent that the inventory correction. There is behind us and we are seeing growth specifically for the graphics side and the graphics, we've been in there since.

Stephen Chunping Chang: And graphics, we've been in there since, you know, around, you know, more significantly since the year 2000. So it's good to see that market coming back for us. And the other new area that we'll say is in the computing space is AI. And over there, we're starting to get some business because of our success in graphics cards. You know, one of our customers is basically using a similar solution in their AI accelerators, so we're seeing some contribution coming from there, going into AI accelerators.

Stephen Chunping Chang: More significantly ever since the year 2000, so it's good to see that that market coming back for us and the other new air area that would say thats in the computing space is AI and over there we are starting to get some business because of our success in graphics cards, but one of our customers is basically using a similar solution in their AI.

Stephen Chunping Chang: Elevators, so we're still seeing a song some contribution coming they're going into.

Stephen Chunping Chang: S elevators.

David Neil Williams: Lots of great color there, I certainly appreciate that, and it's good to hear the progress. I guess maybe the last thing for me here is just the home appliances. You know, you've talked about that being a greenfield opportunity still relatively underpenetrated, but you've got the new products, and it sounds like that market is performing a little bit better. Just wondering how you see the appliance market, maybe not just in the short term but in the longer term.

Speaker Change: Lots of great color there certainly appreciate that and it's good to hear the progress.

Speaker Change: Maybe last one from me here.

David Neil Williams: Home appliances.

David Neil Williams: About that being a greenfield opportunity still relatively underpenetrated, but you've got the new products and it sounds like that market is performing a little bit better just wondering how youre seeing that appliance market, maybe not just the short term, but the longer term how much share do you have there and maybe what you think that can be in terms of total opportunity for you in from a revenue.

David Neil Williams: How much share do you think you can have there, and maybe what does that could be in terms of total opportunity for you from a revenue standpoint as you look out the next maybe 12 to 18 months? Sure. Home Appliances is definitely one of our targets.

David Neil Williams: The endpoint as you look out the next maybe 12 to 18 months. Thank you.

Stephen Chunping Chang: Sure. Home appliances are definitely one of our target end applications. We've been addressing this with our IGBTs as well as our modules based on those IGBTs, going after the compressor motors in refrigerators, going after the drum motors used inside washing machines and dryers. And this is a great market for us. We are just starting in this space. Overall, this is a $2 billion market where we have somewhere around 1% market share

David Neil Williams: Sure home appliances is definitely one of our target and applications. We've been addressing this with our JBT as well as our modules based on those <unk> going after.

Stephen Chunping Chang: <unk>.

Stephen Chunping Chang: <unk> motors and refrigerators going after that drum motors.

Stephen Chunping Chang: And as I watched machines and dryers.

Stephen Chunping Chang: <unk>.

Stephen Chunping Chang: This is <unk>.

Stephen Chunping Chang: Right market for US we are just starting in this space. Overall this is like a $2 billion market, where we have.

Stephen Chunping Chang: Somewhere around like 1% market share so there's quite a bit for us to be able to do more in this space right now.

Stephen Chunping Chang: So there's quite a bit for us to be able to do more in this space. Right now, we are trying to catch up with the general trend toward inverter motors being used to power those motors used inside those home appliances. Right now, there are some headwinds generally in that end market just because it is tied to the overall global housing market. But yes, we do see some strength, at least in the next quarter or so. We hope that this trend can continue going forward. It is an important end market for us, and we continue to invest in this space.

Stephen Chunping Chang: We are trying to trying to catch on to the general trend towards inverter motor is being being used to power those motors skus inside those home appliances right. Now there are some headwinds generally in that end market just because it is tied to the overall global housing market.

Stephen Chunping Chang: But yes, we do see some on some of the strength at least in the next quarter or so we hope that this trend can continue on going forward. It is an important end market for us and we continue to invest in this space.

Speaker Change: Thanks again for the time.

Speaker Change: Thank you David.

Craig Andrew Ellis: Our next question comes from Craig Ellis with the company B Riley Securities. Craig, your line is now open.

Stephen Chunping Chang: Our next question comes from quick Craig Ellis with company B Riley Securities Craig Your line is now open.

Stephen Chunping Chang: Yeah, thank you for taking the question and congratulations on getting through the cycles truck guys. I wanted to start with a follow-up on a point that was made in prepared remarks, I think by you, Stephen, regarding the sharing content gain that is occurring across really all of your end markets. And the question is, this is, as we look at what's happening, and, for example, the content gain in PCs with, you know, dollar content going from $2 to $3 in some systems, or with share gain that you might have in the communications and media market.

Craig Andrew Ellis: Yes. Thank you for taking the question and congratulations on getting through the cycles truck guys. I wanted to just start with a follow up on a point that was made in prepared remarks, I think bayou Steven regarding Sharon content gain that is occurring across really all of your end markets.

Stephen Chunping Chang: And the question is this is as we look at what's happening in for example, the content gain in Pcs with.

Stephen Chunping Chang: Dollar content going from $2 to $3 and some systems or with share gains that you might have in the communications end markets can you rank.

Stephen Chunping Chang: Can you rank which end markets would benefit the most this year from those company-specific gains down to the least benefit? How do we think about the relative contribution of that as we think about what's going on in the business this year? That's the first question.

Stephen Chunping Chang: Which end markets would benefit the most this year from <unk>.

Stephen Chunping Chang: Those company specific gains down to the lease benefit how do we think about the relative contribution of that as we think about what's going on in the business. This year. That's the first question.

Craig Andrew Ellis: Sure. I would say if you asked more generally, I would say the smartphone impact is probably the bigger one, and we're talking about the short term. Because, you know, as we mentioned the strength in China phones, but as regards the bomb content increase, our products are doing particularly well in the higher end phones. And one of the general trends there is actually moving towards higher charging power. Basically, the end customer wants to be able to charge their phone much faster. Therefore, you have to push more power through our devices to charge a battery or to operate the phone.

Stephen: Sure I would say if you ask more generally I would say the <unk>.

Craig Andrew Ellis: <unk> phone impact is probably the bigger one talking about the short term because we.

Craig Andrew Ellis: We mentioned the strength in the China phones.

Craig Andrew Ellis: Regarding the Bom content increase.

Craig Andrew Ellis: Our products are doing particularly well in the higher end phones and what are the general trends there is actually moving towards higher charging power basically at the end customer wants to wants to be able to charge their phone much faster and therefore, you have to push more power.

Craig Andrew Ellis: Through our devices.

Craig Andrew Ellis: Two a charge the battery or to operate the phone so.

Craig Andrew Ellis: That is increasing the performance.

Stephen Chunping Chang: So that is increasing the performance and the bomb content for power in those applications. So both are gaining share overall, and we also continue to do well in the US tier one phone maker as well, in terms of having a solid share there. So both share gain as well as bomb content increase is playing well there. On the PC side, we talked about the general bomb expansion contributing there. We are starting to see more IC content going in there in general.

Craig Andrew Ellis: And the Bom content for power in those applications. So both gaining share overall, and then where are we.

Stephen Chunping Chang: Also continued to do well in the <unk>.

Stephen Chunping Chang: U S tier tier one filmmaker as well too in terms of.

Stephen Chunping Chang: Having a solid share there.

Stephen Chunping Chang: So both share gain as well as Bom content increases are playing well there on the PC side, we talked about the.

Stephen Chunping Chang: The general Bom expansion is is contributing there we are starting to see more IC content going in there in general but at the same time, the PC market is still not out of.

Stephen Chunping Chang: But at the same time, the PC market is still not out of the down cycle yet. It's going to take a little bit longer to get there, but we are being better positioned with more content addressing the PC. But in the meantime, we're also expanding diversification within computing to get into more on the graphic side as well as the AI portion.

Stephen Chunping Chang: I would say out of the.

Stephen Chunping Chang: The down cycle, you actually take a little bit longer to get there, but we are being better positioned with more content addressing the PC.

Stephen Chunping Chang: But in the meantime, we're also.

Stephen Chunping Chang: Spanning diversifying within within computing and to get into a more on the graphic side as well as the AI portion.

Craig Andrew Ellis: That's helpful, Steven. And the follow-up question is really twofold. First, very specifically about PCs.

Speaker Change: That's helpful. Steve and then and a follow up question is really.

Speaker Change: Twofold first very specifically to Pcs.

Stephen Chunping Chang: You know, if Intel is on track to ship 40 million Meteor Lake units this year in the back half, per their target, and then I think it's 60 million next year, is that where you're getting some content gain? And are we seeing some of that in the guidance for fiscal 4Q? And then the broader question beyond just computing, I think three months ago when you talked about mid-year and the second half of the year, you saw the potential for there to be a seasonal rise in business.

Craig Andrew Ellis: If if Intel is on track to ship.

Stephen Chunping Chang: Ship 40 million midyear like units this year in the back half per their target and then I think at $60 million next year.

Stephen Chunping Chang: Is that where you're getting some content gain in US is are we seeing some of that.

Stephen Chunping Chang: And the guidance for fiscal <unk> and then.

Stephen Chunping Chang: The broader question beyond just compute I think three months ago. When you talked about mid year in the second half of the year you saw the potential for there to be a seasonal rise in the business. It looks like we're starting to see that can you just talk about how your expectation for the back half of the year.

Stephen Chunping Chang: It looks like we're starting to see that. Can you talk about how your expectations for the back half of the year or the fiscal first half of 25 have changed in the last three months? What's gotten better, and is anything ticked lower? Thank you.

Stephen Chunping Chang: Or the fiscal first half of 'twenty five has changed in the last three months, what's gotten better and there's anything ticked lower thank you.

Stephen Chunping Chang: Sure. Regarding PCs and calendar, first half calendar versus second half calendar a year, we do think that the second half will be stronger than the first half, but it's hard to see how strong it will be going beyond the peak season in September. We do believe that seasonal patterns are already coming back, but we're hesitating to call it a full recovery, and I think we'll know better once we're into that second half in terms of whether it will persist going into this December quarter.

Speaker Change: Sure regarding Pcs in.

Stephen Chunping Chang: Calendar first half calendar versus second half calendar year.

Stephen Chunping Chang: We do think that the second half will be stronger than the first half, but it's hard to see how <unk> how strong it will be going beyond the peak season in September we do believe that the seasonal patterns are already coming back.

Stephen Chunping Chang: But we're hesitating to call it a full recovery and I think we'll know better once were once we're into that second half in terms of how whether it will persist going into December.

Stephen Chunping Chang: December quarter.

Stephen Chunping Chang: Overall, I think we think it will probably take a little longer to get to a full recovery for <unk>.

Stephen Chunping Chang: Overall, we think it will probably take a little longer to get to full recovery for PCs. I think Intel's transition to Meteor Lake will help. We're hoping that some of these new platforms, in general from the OEMs, will also start to trigger more end demand for PCs. But overall, yeah, we are expecting that to happen, and PCs will be stronger going into the September quarter, but we're going to be careful watching out.

Stephen Chunping Chang: I think.

Stephen Chunping Chang: The transition to <unk> will help we're hoping that some of these new platforms in general from the Oems will also start to to trigger more and demand for Pcs, but overall, yes, we are expecting to see.

Stephen Chunping Chang: <unk> be stronger going into the September quarter, but we're going to be careful watching out for that.

Craig Andrew Ellis: And if I could, just lastly, one for you, Yifan. It's nice to see gross margins performing a little bit better than, at least, our model. My question is this: as you look beyond June, what are some of the bigger gives and takes that we should be aware of for gross margin and really the pace of expansion, and what do you need to see to be confident that gross margins can move back to that 30% level and then to some point higher? Thank you.

Speaker Change: And if I could just lastly, one for U E. Upon now.

Craig Andrew Ellis: Nice to see gross margins.

Craig Andrew Ellis: Performing a little bit better than at least our model. Mike. My question is this as you look beyond June.

Craig Andrew Ellis: What are some of the bigger Gibson takes that we should be aware of for gross margin and really the pace of expansion and what do you need to see to be confident that gross margins can move back to about 30% of Poland and then at some point higher thank you.

Yifan Liang: Sure, yeah, I mean, as we guided in the for the June quarter.

Craig Andrew Ellis: Sure.

Craig Andrew Ellis: Yes.

Yifan Liang: As we.

Yifan Liang: Guided in.

Yifan Liang: I mean, we do expect to see some gross margin pickup there. Beyond that, and then, you know, there are many factors that could affect gross margin. I mean, utilization will be the one and also product mix and the overall ASP environment. So at this point, and I mean, we still think, you know, our midterm target model and, you know, when we reach one billion dollars in revenue, we expect to get to 30 percent gross margin on a non-gap basis.

Yifan Liang: June quarter I mean.

Yifan Liang: We do expect to see some gross margin pick up there.

Yifan Liang: Beyond that in.

Yifan Liang: There are many factors.

Yifan Liang: That could affect in gross margin.

Yifan Liang: Utilization will be the one.

Yifan Liang: Also product mix.

Yifan Liang: Overall.

Yifan Liang: The ASC environment sold.

Yifan Liang: At this point.

Yifan Liang: We still think.

Yifan Liang: Our mid term target model.

Yifan Liang: When we reached.

Yifan Liang: $1 billion.

Yifan Liang: Revenue.

Yifan Liang: We expect to to get to 30% gross margin on a non-GAAP basis.

Craig Andrew Ellis: Got it. Thanks, guys. I'll hop back in the queue.

Speaker Change: Got it thanks, guys I'll hop back in the queue.

Operator: Thank you, Chris. Our next question comes from Jeremy Kwan with the company Stifel Nicholson Co. Jeremy, your line is now open.

Craig Andrew Ellis: Thank you. Our next question comes from Jeremy Kwan with a company Stifel Nicolas and cone Jamie Your line is now open.

Jeremy Lobyen Kwan: Yes, thank you, and I guess maybe a follow-up on the gross margin question. Yvonne, you mentioned at the $1 billion mark, 30% gross margin. Can you help us bridge that gap, I guess, from now to there? How much do you see coming from revenue absorption and how much from better mix and maybe how you see pricing, the pricing environment, factoring into that forecast? Thank you. The short question.

Jeremy Lobyen Kwan: Yes. Thank you.

Jeremy Lobyen Kwan: I guess, maybe a follow up on the gross margin question.

Jeremy Lobyen Kwan: You mentioned at the 1 billion Mark 30% gross margin can you help us bridge that gap I guess from now to there how much do you see coming from.

Jeremy Lobyen Kwan: Revenue absorption and how much from better mix and maybe how price how do you see pricing the pricing environment factoring into that that forecast. Thank you.

Yifan Liang: Sure, I mean, when we get to the $1 billion level, you know, we expect most of the gross margin improvement to come from product mix. So you know, by reaching $1 billion in product mix, I would expect that we have quite a bit of improvement in terms of Power IC products and some higher sockets products and even in the MOSFET businesses. So overall, I would expect the majority of the and the world's smartest improvement comes from product mix.

Speaker Change: The short.

Jeremy Lobyen Kwan: I mean, when we get to the $1 billion level.

Yifan Liang: We expect most of the gross margin improvement that would come from product mix. So.

Yifan Liang: Reaching.

Yifan Liang: $1 billion.

Yifan Liang: Mix.

Yifan Liang: No.

Yifan Liang: We have quite a bit.

Yifan Liang: The improvement.

Yifan Liang: In terms of.

Yifan Liang: Power IC products and some higher sockets.

Yifan Liang: Yeah.

Yifan Liang: Products.

Yifan Liang: <unk> businesses sold overall.

Yifan Liang: We expect.

Yifan Liang: Majority of the.

Yifan Liang: Gross margin improvement comes from.

Yifan Liang: Mix.

Yifan Liang: And I would say, you know, the ASV environment... We'll be returning to normal. And I mean, right now, it's a little bit, I would characterize as a little bit worse than normal. We are still in inventory. Correction Mode

Yifan Liang: I will say ASC environment.

Yifan Liang: Would be returned to normal.

Yifan Liang: Right now, it's a little bit.

Yifan Liang: I would characterize as a little bit worse than normal.

Yifan Liang: Since we're still.

Yifan Liang: Still in the inventory.

Yifan Liang: Correction mode.

Yifan Liang: And just as a reminder, the normal environment is that mid to high single-digit declines, and right now, it's maybe high single-digits. Can you help us quantify that a little bit more in terms of the pricing environment? Yeah.

Yifan Liang: And just as a reminder, the normal environment is that mid to high single digit declines and right now it's maybe high single digits can you help us quantify that a little bit more in terms of the pricing environment.

Yifan Liang: Yeah, I mean, typically that would be in the mid to high single digits declined, and right now, there's more on an annual basis trending toward the high single digits.

Yifan Liang: Yes.

Yifan Liang: Typically that would be in the mid to high single digits.

Yifan Liang: Decline in <unk> right now there is some more on the.

Yifan Liang: On an annual basis trending towards the high single digits.

Jeremy Lobyen Kwan: Great. And I guess in terms of the competitive landscape, I think you mentioned before, you know, seeing more competition at the low end. Has that changed appreciably, you know, in the last three months? And, Yeah, any more clarity on that that you can provide for us in terms of, you know, how, how much of your portfolio it affects, that would be very helpful.

Yifan Liang: Great.

Yifan Liang: And I guess in terms of the competitive landscape I think you mentioned before seeing more competition at the low end.

Jeremy Lobyen Kwan: That changed appreciably in the last three months.

Jeremy Lobyen Kwan: And.

Jeremy Lobyen Kwan: Yes, any any more clarity on that that you can provide for us in terms of how how much of your portfolio. It effects that would be very helpful.

Yifan Liang: I mean, in the past three months, and I don't see a whole lot of, you know, changes in terms of the uh... product mix. You know, as we mentioned, and in certain applications and markets, we do see some improvements. For example, in the smartphone, in the graphics cards, and that.

Jeremy Lobyen Kwan: Yeah.

Jeremy Lobyen Kwan: In the past three months.

Yifan Liang: See whole lot of changes in terms of.

Yifan Liang: Product mix.

Yifan Liang: When commissioned an.

Yifan Liang: Applications and markets and yet we do see some improvements in.

Yifan Liang: For example.

Yifan Liang: The smartphone.

Yifan Liang: Profit cars.

Yifan Liang: In those areas.

Yifan Liang: Yeah.

Jeremy Lobyen Kwan: Got it. And one final question, just going back to gaming. For the recovery in the June quarter, do you have a sense of how much of that is coming from inventory headwinds going away, and maybe even restocking, and how much of it is coming from the higher BOM content you have? And one final question on that: I know it's a little early for the next gen, but do you also anticipate a step function BOM increase over this mid-cycle refresh platform in terms of the BOM Yeah, any more details on that would be helpful. Thank you. Sure, Jeremy. Yes, for the gaming consoles. Just a reminder that we are

Speaker Change: Got it and one final question just going back to gaming.

Jeremy Lobyen Kwan: For the recovery in the June quarter is there do you have a sense of how much of that is coming from inventory headwinds going away and maybe even restocking and how much of it is coming from the higher Bom content you have.

Speaker Change: And one final question on that.

Jeremy Lobyen Kwan: It's a little early for the Nexgen, but do you also anticipate like a step function bomb increase over this mid cycle refresh platform integral the Bom content.

Jeremy Lobyen Kwan: Yes, any any more details on that would be helpful. Thank you.

Stephen Chunping Chang: Sure, Jeremy. Yes, for the gaming consoles, just a reminder that they are in about year four or five of their about seven-year life cycle. And so that's where the inventory correction was coming from as they're entering the second half of that life cycle. So we are happy and encouraged to see the orders coming back and going into the June quarter. And I don't have a hard number, but maybe roughly half-half.

Jeremy Lobyen Kwan: Sure Jeremy Yes for the gaming consoles.

Speaker Change: We are.

Stephen Chunping Chang: And about your four five or there about seven year lifecycle, and so that's where the inventory correction was coming from.

Stephen Chunping Chang: During the second half of that lifecycle.

Stephen Chunping Chang: So we.

Stephen Chunping Chang: We are happy and encouraged to see the orders coming back and.

Stephen Chunping Chang: Going into the June quarter end.

Stephen Chunping Chang: I have a hard number, but maybe roughly half half.

Stephen Chunping Chang: It is we are definitely seeing.

Stephen Chunping Chang: We are definitely seeing the return of orders for the existing parts that are in the bomb. And we're also seeing a ramp-up for the derivative product that they're bringing out towards the end of this year as well, too. So both are making an impact and helping that subsegment to grow. Thank you very much.

Stephen Chunping Chang: The return of orders for the existing parts that's in the bomb and we're also seeing a.

Stephen Chunping Chang: Ramp up for then the derivative product that they are bringing out towards the end of this year as well too. So both are making impact in helping to put that sub segment to grow.

Stephen Chunping Chang: Yeah.

Stephen Chunping Chang: Thank you very much.

Speaker Change: Thank you.

Speaker Change: Thank you Jeremy.

Operator: At this time, there are no other questions registered in queue. Again, if you would like to ask a question, please press star followed by one on your telephone keypad. There are no questions registered in queue, so at this time, I would like to pass the conference call back over to our management team for any closing remarks.

Speaker Change: At this time there are no other questions registered in queue again, if you would like to ask a question. Please press star followed by one on your telephone keypad.

Operator: There are no questions registered in Q. So at this time I would like to pass the conference call back over to our management team for any closing remarks.

Steve Pelayo: Okay. Hi, it's Stephen Pelayo. Before we conclude, I'd like to briefly mention two upcoming events the management team will be participating in and will be available for one-on-one meetings at the B. Riley 24th Annual Institutional Investor Conference, May 22nd in Beverly Hills, and the Stiefel 2024 Cross-Sector Insight Conference, June 5th in Boston. If you wish to request a meeting, please contact the institutional sales representative at each of the sponsoring banks. This concludes our earnings call today. Thank you for your interest in AOS, and we look forward to talking to you again next quarter.

Operator: Okay, Hi, it's Steven Pelayo before we conclude I would like to briefly mention two upcoming events management team will be participating in and will be available for one on one meetings at the B Riley 24th annual institutional Investor Conference May 22nd in Beverly Hills, and the Stifel 2024 Cross sector insight conference.

Steve Pelayo: On June 5th in Boston, If you wish to request a meeting please contact institutional sales representative at each of the sponsoring banks. This concludes our earnings call today. Thank you for your interest in AOS and we look forward to talking to you again next quarter.

Speaker Change: Thank you.

Steve Pelayo: Yeah.

Operator: That concludes the Alpha and Omega Semiconductor Fiscal Quarter 3 2024 earnings call. Thank you for your participation, and enjoy the rest of your day.

Steve Pelayo: That concludes the alpha and Omega semiconductor fiscal quarter through 2024 earnings call. Thank you for your participation and enjoy the rest of your day.

Operator: Okay.

Operator: Okay.