Q4 2024 Power Integrations Inc Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the power integrations Q4 earnings call. At this time all lines are in listen only mode.
In the presentation, we will conduct a question and answer session.
If at any time during this call you require immediate assistance. Please press star zero for the operator.
This call is being recorded on Thursday February six 2025.
Joe Shiffler: I would now like to turn the conference over to Joe Shiffler.
Joe Shiffler: Director of Investor Relations. Please go ahead.
Yeah.
Joe Shiffler: Thank you.
Speaker Change: Good afternoon, everyone. Thanks for joining us with me on the call today are bothered by the Krishnan, Chairman and CEO of power integrations, and Sandeep Nayyar, our Chief Financial Officer.
Speaker Change: During this call we will refer to financial measures not calculated according to GAAP.
Speaker Change: non-GAAP measures exclude stock based compensation expenses amortization of acquisition related intangible assets and the tax effects of these items our.
Speaker Change: A reconciliation of non-GAAP measures to our GAAP results is included in today's press release.
Speaker Change: Our discussion today, including the Q&A session will include forward looking statements denoted by words like will would believe should expect outlook forecast estimate anticipate and similar expressions that look toward future events or performance.
Speaker Change: Such statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected or implied.
Speaker Change: Such risks are discussed in today's press release and in our most recent Form 10-K filed with the SEC on February 12 2024.
Bob: This call is the property of power integrations and any recording or rebroadcast is expressly prohibited without the written consent of power integrations now I'll turn it over to Bob.
Bob: Thank you Joe and good afternoon.
Bob: We will discuss our fourth quarter results in a moment, but I'll begin with two other pieces of news that we are announcing today.
Bob: The first is that I have informed our board of directors that I intend to retire from my role as CEO.
Bob: The board has engaged an executive search firm to help identify our next CEO.
Bob: And we will consider both internal and external candidates.
Bob: I will remain as CEO until the search is concluded and the success that is in place.
Bob: I've been CEO for 23 years, and I will turn 71 later this year.
Bob: And while I have not lost in hours of my passion for this company all my excitement about the opportunities ahead of US I believe now is the time for me to step back from the day to day responsibility as CEO and take on it. It is the role supporting a new leader.
Bob: That role will include serving as executive chairman of the board, but as long as needed to help my successor settled into the job.
Bob: Once the transition period is past.
Bob: Spec to remain on the board with the consent of the board and our stockholders of course.
Second piece of news, we are announcing today is that Gregg Lowe will join our board on February 15th.
Speaker Change: Last year, Greg was CEO of ball speed and previously served as CEO of Freescale semiconductor through the time of its merger with NXP in 2015.
Speaker Change: He also spent 27 years at T I, culminating in the role of senior VP of ending that company's analog business.
Speaker Change: Greg expediency in analog and power semiconductors makes him an ideal fit.
Speaker Change: Especially his extensive knowledge of the sales and distribution landscape and deep customer relationships in key end markets, including automotive and industrial.
Speaker Change: His long history in the industry also means you can make a significant contribution to our CEO search.
Speaker Change: We are delighted to welcome him to the board.
Speaker Change: Now turning to the results.
Revenues were in line with our guidance up 18% year over year to one $5 million.
Speaker Change: Revenues for the full year was Florida, and a $19 million.
Speaker Change: While that was down 6% from the prior year.
Speaker Change: The underlying details demonstrate why we are excited about the year ahead.
Speaker Change: The decline was driven primarily by the communications category.
Speaker Change: I should say entirely by the communications category, which fell more than 60% following our exit of the China OEM cell phone business at the start of the last year.
Speaker Change: The rest of the business grew 17% with consumer up more than 35% computer at more than 10% and industrial up about 3%.
Speaker Change: Looking ahead to 2025.
Speaker Change: The cellphone headwind is behind us.
Speaker Change: And in fact, we expect our communications category to grow.
Speaker Change: And by the <unk> fixed wireless rollout in India.
Speaker Change: And increasing dollar content in our remaining cell phone business.
Speaker Change: We also began the year with channel inventory is down more than two weeks from the prior year.
Most importantly, we expect incremental revenue this year from an array of markets and products and I will touch on several of those in a moment.
Speaker Change: Our Q1 revenue guidance is for flat sequential revenues at the midpoint of the range, which equates to a year over the increase of 15%.
Speaker Change: While forecasting beyond the current quarter is difficult in light of uncertainty around the trade policy and end market demand, we expect to sustain a healthy rate of revenue growth over the course of the year.
Speaker Change: Growth should accelerate to see it in the industrial category, driven partly by lower channel inventories compared to a year ago, but also by design drams and high voltage DC transmission renewables and traction in our high power business as well as metering home and building automation and <unk>.
Speaker Change: Automotive.
Speaker Change: In the consumer category the rate of growth will moderate after last year's strong recovery, especially with soft housing markets still holding back demand for major appliances.
Speaker Change: We expect growth in air conditioning, this year based on share gains and a solid demand outlook from our customers.
Speaker Change: We also expect new revenues from the TV market. After recent Gan design wins, which I was discussing in a moment.
Speaker Change: Potential growth drivers in the computer category. This year include notebooks.
Speaker Change: And tablets.
Speaker Change: Absolutely power supply sorry, AI servers.
Speaker Change: And also monitors where do.
Speaker Change: Do I see are in production with a major PC Oems.
Speaker Change: Underpinning our growth across four end market categories are two common themes.
Speaker Change: One is our success in India.
Speaker Change: We have expanded our presence in recent years.
Speaker Change: A priority of India, India is government is to design and build domestically more of the products, but just by its growing middle class.
Speaker Change: The country is also modernizing its infrastructure with electric transportation residential broadband renewable energy and a more robust power grid, including the planned installation of 250 million smart utility meters.
Speaker Change: We are winning in each of these areas supplying gate drivers to one of India's largest suppliers of traction systems, but electric locomotives and.
Speaker Change: And winning a substantial share of the metering and fixed wireless rollouts.
Speaker Change: The second key theme for.
Speaker Change: But this year is get <unk>.
Speaker Change: Last year, we talked a lot about progress in our technology Road map, including the launch of 1700 volt technology.
Speaker Change: We believe the 20th twenty-five will bring an inflection point in terms of adoption and growth.
We expect revenues from Gan based products to grow at a higher rate this year and to comfortably exceed 10% of all ourselves.
Speaker Change: In Q4, we won a follow on design at our Indiana, <unk> fixed wireless customer, which is upgrading to guide again after ramping last year, we had the silicon based you know switch.
Speaker Change: Metering customers in India are also now moving up to 900 wells and 250 volt Gan products to gain extra safety margin.
Speaker Change: India is fluctuating good voltages.
Speaker Change: We also recently received our first purchase order as far again, basically you know amongst two Ics.
Speaker Change: One of the worlds largest TV manufacturers.
Speaker Change: We have one power supply sockets in three models largest being 65 inch screen, which will not only using IMAX too, but also a gan based hyper PFS power factor correction chip.
Speaker Change: Along with accelerating customer adoption of our leadership in Gan technology and products is also being recognized by industry experts.
Speaker Change: Our 1700 volt in amongst two Ics received at 'twenty 'twenty four the product of the year award from a leading UK Technical Journal.
And if power Best award from Electronic design magazine.
Speaker Change: You know sits today with 250 will again, one in Engineering Achievement Award from design World Best Power management products from Aspen quota in China and two industry.
Speaker Change: Excellence Awards from 'twenty, one they are union also in China.
Speaker Change: While the 2025 is shaping up as an exciting year for again, yeah still in the early.
Speaker Change: So we are still very early in the Gander evolution with huge opportunities still ahead in the short medium and long term.
Speaker Change: Short term Gan has just begun to penetrate the power supply market and adoption is accelerating across a wide range of low power AC to DC applications, including the ones, we talked about today and many more.
Speaker Change: In the medium term the opportunity for again at high power levels is massive.
Speaker Change: Nowhere more so than in AI data centers.
Speaker Change: While data center operators are eager for innovative power solutions for the AI.
Speaker Change: Adoption of Gan has been inhibited by the challenges of using discrete Gan in high reliability systems.
Speaker Change: We are tackling the problem with our system level approach to product design and expect to have our first product for air Turbo power supplies next year.
Speaker Change: Estimate the Sam for this product alone to be more than half a billion dollars in 2027.
Speaker Change: With the additional products to follow that will take up a data center sent to well over $1 billion.
Speaker Change: Longer term, we believe gantlet achieved power levels sufficient for EV drivetrains.
Speaker Change: At much lower cost than silicon carbide, we are pleased with the progress we are making on high power again.
Speaker Change: Aided by our acquisition of Odyssey semiconductor last summer and we continue to believe that it that the market ready high power Gan technology is attainable within the next three to five years.
Speaker Change: I'll conclude with an update on our automotive efforts, which are progressing nicely.
Speaker Change: E V power architectures are not only evolving in ways that benefit power integrations, but in some cases are being shaped by our expertise in high voltage systems and the unique capabilities of our products.
Speaker Change: Automotive revenues will grow rapidly in 2025 for the modest space a few million dollars in 2024.
Speaker Change: More importantly, we are building an impressive roster of.
Speaker Change: Customers in the EV industry, including pure battery Evs and plug in hybrids, which should result in a more substantial revenue contribution starting in 2026.
Speaker Change: Building on our early success in China, Vietnam expanded quickly into other markets.
Speaker Change: We have several customers scheduled to begin production of this yet in Europe and the U S.
Speaker Change: In Japan, we were initially expected the initially expected resistance as a non Japanese supplier rebate instead being invited into the market because of the capabilities of our products.
Speaker Change: Following our recent qualification at one of Japan's largest tier one suppliers.
Speaker Change: We have now been invited to begin qualification at Japan's largest tier one.
Speaker Change: And we hope to complete that process by the end of 2025 with that I'll turn it over to Sandeep for a review of the financials. Thanks, Pablo and good afternoon. Our Q4 results are straightforward. So I will just briefly recap the numbers and the outlook and then be able to take questions.
Sandeep Nayyar: As usual I will focus on non-GAAP results, which are reconciled to GAAP in our press release.
Sandeep Nayyar: Fourth quarter revenues were $105 million in the middle of our gardens range.
Sandeep Nayyar: Revenues were up 18% year over year and down 9% sequentially.
Sandeep Nayyar: I will briefly speak to the sequential changes in each category.
Sandeep Nayyar: Consumer revenues were down mid teens sequentially, reflecting continued softness in major appliances in the U S Europe and China.
Sandeep Nayyar: Finished goods inventory of Chinese Oems remain elevated as the impact of consumer stimulus program. Thus far it appears to have been fairly modest.
Sandeep Nayyar: However, we did see a meaningful drawdown in channel inventory for consumer in Q4, giving us added confidence in our growth expectations for 2025.
Sandeep Nayyar: Industrial revenues were down 10% sequentially, largely driven by the timing of shipments for metering applications.
Sandeep Nayyar: Revenues from the computer category were down mid single digits sequentially on lower sales in notebooks, while the communication category was up mid single digits on strong a cell phone revenue.
Sandeep Nayyar: Total channel inventory fell slightly to $8 four weeks compared to 8.6 weeks last quarter as distribution sell through exceeded sell in by about $2 million.
Sandeep Nayyar: For the full year.
Sandeep Nayyar: Sell through exceeded sell in by about $12 million.
Sandeep Nayyar: Revenue mix for the quarter was 37% consumer, 35% industrial 15% computer and 13% communications.
Sandeep Nayyar: non-GAAP gross margin for the fourth quarter was 55, 1% unchanged from the prior quarter.
Sandeep Nayyar: Full year non-GAAP gross margin was 54, 4% up more than two percentage points from the prior year driven by the weaker yen and favorable mix with lower sales revenues and higher percentage of sales from industrial and consumer.
Sandeep Nayyar: non-GAAP operating expenses were $44 $6 million for the quarter consistent with our gardens.
Sandeep Nayyar: For the full year non-GAAP Opex was $174 million up 4% from the prior year, including about half a percentage point stemming from the Odyssey acquisition.
Sandeep Nayyar: The non-GAAP tax rate for the quarter was negative 3%, reflecting a reversal of fin 48 reserves.
Sandeep Nayyar: The reversal resulted in an EPS benefit of <unk> <unk> per share.
Sandeep Nayyar: Including the tax benefit non-GAAP earnings for Q4 was 30 cents per diluted share share count for the quarter was $57 1 million up slightly from $57 million in the prior quarter.
Sandeep Nayyar: Inventory days rose to 315 at quarter end up 24 days from the prior quarter, reflecting the sequentially lower revenues.
Sandeep Nayyar: Inventory on the balance sheet fell by $2 million during the quarter.
Sandeep Nayyar: Inventory will remain well above our target level throughout the year, but should begin to taper down in the second half.
Sandeep Nayyar: Cash flow from operations was $15 million for the quarter, while capex was $3 million.
Sandeep Nayyar: We used $12 million for dividends after the 5% increase that took effect in Q4, and we used $2 million to buy back shares.
Sandeep Nayyar: For the year, we generated $81 million in cash from operations with just over $17 million in Capex.
Sandeep Nayyar: <unk> and free cash flow of $64 million.
Sandeep Nayyar: We returned $74 million to stockholders through dividends and buyback.
Sandeep Nayyar: Turning to the Q1 outlook, we expect revenues to be flat sequentially, plus or minus 5%.
Sandeep Nayyar: non-GAAP gross margin should be between 55.5, and 56% compared to 51, five point 55, 1% in Q4.
Sandeep Nayyar: The sequential increase reflects favorable end market mix and incremental benefit from the dollar yen exchange rate.
Sandeep Nayyar: For the year I expect gross margin to be around 55, 5%.
Sandeep Nayyar: That would be up about one point versus 'twenty 'twenty four with higher back in production volumes and favorable mix offsetting higher input costs.
Sandeep Nayyar: non-GAAP operating expenses for Q1 should be around $45 million.
Sandeep Nayyar: Slight increase from Q4, driven by the resumption of FICA taxes, and modestly higher head count.
Sandeep Nayyar: For the year I expect non-GAAP opex to increase by about 6%.
Sandeep Nayyar: About one percentage point of the increase is a result of the full year of Odyssey expenses compared to half a year in 2024.
Sandeep Nayyar: Finally, I expect our effective tax rate.
Sandeep Nayyar: For the first quarter and the year to be in the range of 5% to 6%.
Sandeep Nayyar: And now operator, let's begin the Q&A.
Sandeep Nayyar: Yeah.
Sandeep Nayyar: Yeah.
Sandeep Nayyar: Thank you.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: Should you have a question. Please press the star followed by the number one on your Touchtone phone.
Speaker Change: You'll hear a prompt that you had has been raised.
Speaker Change: Should you wish to decline from the polling process. Please press the star followed by the number too.
Speaker Change: Fewer using a speaker phone.
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Speaker Change: One moment. Please for your first question.
Speaker Change: Our first question is from David Williams from Benchmark Company. Please go ahead.
David Williams: Good afternoon, everyone and let me just first say congratulations on the retirement, it's well deserved and it will mix you've been Uh huh.
Speaker Change: Actually the best.
Speaker Change: Thanks, David.
Speaker Change: So firstly.
Speaker Change: It really seems I mean, you've obviously been very upbeat on Gan opportunity.
Speaker Change: Over the last several years, but it sounds like you've got greater conviction today.
Speaker Change: And at meeting that higher power and you've been talking about the EBIT drivetrain in those areas can it has anything changed maybe over the last couple of quarters, that's giving you more confidence there may be something that's come along with the Odyssey or just maybe internal efforts, but just anything around that your confidence in that are in the Gan transitioned to the powertrain potential. Thank you.
Speaker Change: Thanks, David absolutely are we talked about it last quarter as well I would say in the last year. We have made significant strides in our technology that will allow us now to address our tensor kilowatts and that's why we are now talking about our AI data center opportunity, we think with the.
Speaker Change: Technology, we have today, we cannot go up to perhaps 50 kilowatts.
Speaker Change: What those applications.
Speaker Change: No the new technology, we are working on which is the reason we are quiet Odyssey semiconductor.
Speaker Change: Will allow us to go to much higher power levels hundreds of kilowatts, that's when we'll be able to get into EV drivetrain and we believe it can be very competitive at actually they look much lower costs in silicon carbide and provide even higher performance that silicon carbide. So that's kind of the.
Speaker Change: The Holy Grail that we're working towards and that we are making.
Speaker Change: Good progress we still have some ways to go we think we can be there in the three to five year type timeframe and acquiring Odyssey is really going to help us get there faster than we originally thought and that's the reason I'm very optimistic about get in general, but I would also say from a business side.
Speaker Change: I'm really impressed how broadly again has been adopted it's no longer just cell phones. We are talking about notebooks tablets are in the monitors and Tvs appliances industrial applications. So it's really across all of the markets and that's why we believe you'll see it is going to be a significant growth for us.
Speaker Change: And going forward it will grow even faster so I am very body count for that Gan will be the high voltage switch of choice for the future and of course all of our products have them. So that's going to make a huge.
Speaker Change: Dividends to us.
Speaker Change: And also we are so far ahead of our competitors in terms of voltage level in terms of reliability in terms of cost.
Speaker Change: We feel very very strong.
Speaker Change: Gan would be a huge.
Speaker Change: Benefits, whereas differential benefit for us as a company.
Speaker Change: Okay.
Speaker Change: A fantastic progress, there and and making a lot of headway, but I guess, maybe secondly on the automotive you. You also talked about that now and what are you playing can you update us on maybe how many design wins you have in the automotive space and maybe just kind of speak to the magnitude that you're expecting from gain in automotive.
Speaker Change: This year and maybe in the next couple of years, how that should trend.
Speaker Change: Yeah, just to be clear a lot of the designs that we had already and if you have about 20 design said that they are in production right now.
Speaker Change: They are either silicon or silicon carbide.
Speaker Change: We recently introduced the 900 more get that would be suitable for the for a 400 volt battery.
Speaker Change: Our systems, and we had actually getting design wins on that and of course, we have the 1700 volt silicon carbide, but we will also have the 1700 volt.
Speaker Change: Gan based devices for automotive as well.
And that is that is required for the 800 volt battery. So the 400 will be required and I know that once again, and our 800 volt battery able to quiet 1700 work yet. So we are in very good shape to address those markets with get.
Speaker Change: But on top of that there are other sockets in the car like for example.
Speaker Change: Is it a DC converters to replace 12 volt batteries. So we are working on products using again it is a in a higher power version of INO switch.
Speaker Change: And that will provide us additional sockets.
Speaker Change: Significant dollars, but that method right now our primary socket is the emergency power supply in the drivetrain and also auxiliary power supplies for various subsystems.
Speaker Change: But the DC to DC converter is a much bigger dollar content and then once we have the the you know 10 20 kilowatt type of solutions that we're working on we can also address the onboard charger application and then we have to wait for our high powered again too.
Speaker Change: Going to the EV drivetrain.
Speaker Change: Great. Thank you.
Speaker Change: Okay.
Speaker Change: Your next question is from Ross Seymore from Deutsche Bank. Please go ahead.
Speaker Change: Hi, guys. Thanks for me as a couple of questions and first and foremost blue congratulations.
Speaker Change: David said, very very well deserved and well be missing you on these calls.
Speaker Change: So I guess, where my first question.
The report and guide we're pretty much in line that didn't even look like the end markets were terribly surprising. So what would you describe as the biggest update of what you're seeing overall from a end market environment today versus 30 days ago, what's changed.
Speaker Change: Well [laughter].
Speaker Change: That's a good question.
Speaker Change: And not a significant change the only thing I would say is that in 2020 five that as this year.
Speaker Change: We expect to see a significant growth in industrial which is kind of little bit out of sync with the rest of the semiconductor market and that's because we have some really unique opportunities.
Speaker Change: Opportunities that'll go into production they are things like infrastructure related projects.
Speaker Change: Yeah.
Speaker Change: The renewables.
Speaker Change: High voltage DC transmission systems electric locomotives.
Speaker Change: And that's in the high power part of the business, but beyond that we're also doing very well in meters, which is also infrastructure related.
Speaker Change: Talked about the India meters opportunity and then we're doing very well in the home and building automation and power tools and so on.
Speaker Change: So this year industrial is going to be the strongest growth market.
Speaker Change: Again, it's a little bit unique but a.
Speaker Change: Part of it is because some of the infrastructure projects, which are supposed to start last year that had been pushed to this year, but that bodes really well for the industrial this year.
Speaker Change: And I guess, that's my second question and you know not to ask too much but I think in your last call you talked about you thought all four segments would grow this year is that still the case.
Speaker Change: From the best are in our modeling we have done all four should grow but industrial would be the largest growth. Yeah. In dollar turns industrial really grow followed by consumer, but we expect all four and even in communication. We are expecting growth you know with the.
Speaker Change: Two areas of cell phone as well as a networking product. So we've got growth in all areas.
Speaker Change: Yes, just to amplify on that.
Speaker Change: You know, we talked about the networking product that has a residential networking.
Speaker Change: Fixed a fiber network, but we are also going to see a growth in the <unk> and the.
Speaker Change: The remaining cell phone market.
Speaker Change: Cause of content growth.
Speaker Change: We have growth because we are able to upgrade to our U a E notes, which P D, which has the PD protocol built into it so that increases our dollar content also many of the products are good. There's also moved towards a higher power.
Speaker Change: To charge AI based phones and that loss increases our dollar content because it doesn't want to Gan for higher power.
Speaker Change: Charges.
Speaker Change: Got it thanks, guys and Blue Congrats again.
Speaker Change: Thanks, Ross I appreciate it.
Speaker Change: Yeah.
Tore Svanberg: Your next question is from tore Svanberg from Stifel. Please go ahead.
Yes, Thank you and.
Speaker Change: Hello, Congratulations on your retirement, it's been a true honor working with you uncovering.
Tore Svanberg: Power integrations during your tenure I wish you all the best.
Speaker Change: So the first question that I had is on the near term by segment I assume your communications segment will probably be down seasonally.
Speaker Change: But how should we think about the four segments into the March quarter, Yeah. The way I would I would look at or that you would see that basically.
Speaker Change: The consumer and industrial will grow and calm and the communication and computer would be down.
Great and as my follow up question.
Speaker Change: Channel inventory Sandeep I know, sometimes in the March quarter, Theres a lot of <unk>.
Speaker Change: Moving parts, especially with Chinese new year, and so on and so forth. So I know channel inventory came down a couple of things.
Speaker Change: I believe you said in Q4, but how should we think about channel inventory target.
Speaker Change: Target in Q1.
Speaker Change: I think as the best I know I think sell in and sell through should be around similar so I think the channel inventory should hold and in fact, you know this is one of the good things for us for 2025.
Speaker Change: Yeah.
Speaker Change: We are coming starting off with a what I call the normal weeks and with all the growth drivers that <unk> talked about.
We feel very good about our growth and really think even for the year sell in and sell through should be pretty close given tech.
Speaker Change: Alright, and then just one last question for you below you talked about some early revenues in.
Speaker Change: Data Center power supply is scheduled for early next year.
Speaker Change: Those gan on silicon products or either one or the other.
Speaker Change: The 31st of all thank you for the congratulations.
Speaker Change: Yeah, just to be clear I said that our first product for data centers will be available next week next year.
Speaker Change: But we won't see revenue until 'twenty, seven or 28, you may get a little bit in 'twenty, seven but really it will be a 28 before we get a.
Speaker Change: Significant revenue and the products out of entirely again cause Gan is where we have a.
Are really an advantage in the in the AI data center power supplies, but I do want to remind you we had already designed into AI.
Speaker Change: You know server power suppliers with our standby products, which had also again based.
Speaker Change: And we that will grow very nicely this year and next year, but that market is not as big as the main power supply for example, the standby market is about roughly $100 million of Sam.
Speaker Change: Sam whereas the the main power supply you're talking about more than you know a $1 billion.
Speaker Change: Hum.
Speaker Change: Once we introduce the two or three products, we are planning for it.
Speaker Change: Great. Congrats thank you.
Speaker Change: Thanks Laurie.
Speaker Change: Yes.
Speaker Change: Your next question is from Christopher low left.
Speaker Change: From Susquehanna. Please go ahead.
Speaker Change: Oh, Thanks for the question and below our I Echo My Congrats Ah you look great for 71 by the way.
Speaker Change: That that picture is a little lower [laughter] I I need your skin care routine.
Speaker Change: Yeah.
Speaker Change: Okay. So my question.
Speaker Change: Is around Gan and it seems like you're really focused on high power are do you think like the low end of the market commoditize between like in the science on one side and.
Speaker Change: 300 millimeter from Infineon and on the other at the low end and then on high power is this like a sustainable competitive advantage or do you think others are going to catch up here.
Speaker Change: As well.
Speaker Change: I believe first of all thank you for that.
Speaker Change: The complements but I believe that we can compete very well across the entire power spectrum from low power to high power and let me talk a little bit up. The two examples you gave you know first of all we don't sell discrete Gan.
Speaker Change: Lasalle just again I think have a very tough challenge with some of the.
Speaker Change: The Chinese suppliers.
Speaker Change: Especially at our size, we sell a system and the benefit of that is that we really can extract the most value out of again at the system level in terms of efficiency in terms of protection and so on and so forth. So that's one thing. So we think we can compete very well.
Speaker Change: In the low power area.
Speaker Change: When you go to high power and the dollar content is much higher and that the benefits. We can bring is also more significant and we think that that's a huge growth path for us. If you look at the data center, we think that'll provide us a strong revenue growth because of the products will bring such.
Speaker Change: An advantage in terms of size and efficiency.
Speaker Change: Now talking about 300 million millimeter.
Speaker Change: There are two things that I think is really important to know first of all that at this point.
Speaker Change: We don't know of any equipment that can do high voltage Gan on 300 millimeters I believe the announcement that was made for low voltage Gan and they say low voltage less than 600 volts.
Speaker Change: Basically you'd be at it.
Speaker Change: 100, 200 was maybe possible, but to really go to have voltages you need much thicker.
Speaker Change: And the challenge with that is first of all the cost of Gan is really in the epic.
Speaker Change: The size of a wafer mix are not that much difference.
Speaker Change: And to the extent the wafer size makes some difference.
Speaker Change: The fact that their growth such they could be on a such a large wafer creates a humongous amount of stress I mean, they caused that I think they call. It as a hey, it's put out a chip that's what it looks like.
Speaker Change: And what that means is able to deal with that when you do that the yield goes down significantly. So it is not clear to me that going to a larger size of wafer.
Speaker Change: He is a benefit for high voltage Gan, just just to be clear.
Speaker Change: What we are doing is reducing the cost in other ways like device design process design and and.
Speaker Change: Really dramatically, reducing the die size.
Speaker Change: The difference in of emphasize it is not very significant in terms of cost.
Speaker Change: Oh interesting. Thanks, Thank you blue.
Speaker Change: The next one is maybe for Sandeep Sandeep, you always have macro thoughts I appreciate those it.
Speaker Change: It sounded like in the press release, there was some commentary around tariffs.
Speaker Change: Your your thoughts there also you're usually plugged in on Chinese subsidy. It seems like you had some commentary there as well.
Speaker Change: Anything else macro are there that you want to add I I would appreciate it.
Speaker Change: Yeah.
Speaker Change: Basically you know we felt the you know the.
Speaker Change: Subsidies.
Speaker Change: A full effect of that Hasnt been out there was also there could be some pull in because of tariffs I really want to see the sell through.
Speaker Change: In the first quarter, which will give me a better idea of whether that was tariffs or whether it is the subsidies. So I'm waiting to watch that I think the trade policy is obviously something we are watching because if you have a lot of tariffs and has an impact on end market demand that can also impact US you know at the end of the day, we go into things.
Speaker Change: Like appliances in there other than that it becomes very expensive can impact demand, but I think if things really don't go extreme and not normal.
Speaker Change: I think the areas that <unk> highlighted of growth and in our appliances as well as in our industrial applications. We really believe that we will have a very good growth here. This year. So obviously a thing which is hard to predict is the real impact of tariffs, which.
Speaker Change: You know, whether it's a wait and watch.
Speaker Change: But I think you know all these things that come even out over a period of time, but do have short term impact so but I think we have enough growth drivers that if things are normal that will have a very good year.
Speaker Change: Excellent. Thanks, so much guys.
Speaker Change: Okay.
Speaker Change: Ladies and gentlemen, as a reminder, should you have any questions. Please press the star key.
Speaker Change: Followed by the number one.
Speaker Change: We will pause for a moment.
Speaker Change: There are no further questions at this time. Please proceed with closing remarks, okay. Thanks, Andrew I know, it's a busy busy day of earnings out there. Thanks, everyone for listening there will be a replay of this call available on our website.
Speaker Change: Investors Dot power Dot com, Thanks, again and good afternoon.
Speaker Change: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.