Q1 2025 Diodes Inc Earnings Call
Good afternoon, and welcome to Diodes Incorporated's first quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen only mode. At the conclusion of today's conference call, instructions will be given for the question and answer session.
If anyone needs assistance at any time during the conference call, please press the starkey followed by zero on your touch don't fall.
Speaker Change: As a reminder, this conference call has been recorded today, Thursday, May 8th, 2025. I would now like to turn the call over to Leanne Sievers of Shelton Group Investor Relations. Leanne, please go ahead.
Speaker Change: Good afternoon and welcome to Diodes' first quarter, 2025 Financial Results Conference call. I'm Leanne Sievers, president of Shelton Group, Dowd's Investor Relations firm.
Speaker Change: Joining us today are Diodes President, Gary Yu, Chief Financial Officer, Brett Whitmire, Senior Vice President of Worldwide Sales and Marketing, Emily Yang, and Director of Investor Relations, Germet Dollywell.
Speaker Change: I'd like to remind our listeners that the results announced today are preliminary as they are subject to the company finalizing its closing procedures and customary quarterly review of the company's independent registered public accounting firm.
Speaker Change: As such, these results are unaudited and subject to revision until the company files its form 10Q, 4th quarter ended March 31, 2025.
Speaker Change: In addition, management's prepared remarks contain forward-looking statements which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions.
Speaker Change: Therefore, the company claims the protection of the safe harbor for forward-looking statements that is contained in the private security's litigation reform act of 1995.
Speaker Change: Actual results may differ from those discussed today, and therefore, we refer you to a more detailed discussion of the risk sentences and the company's filings with the Securities and Exchange Commission, including forms 10K and 10K.
Speaker Change: In addition, any projections of difficulty's future performance represent management's estimates as of today may 8 2025.
Speaker Change: Diodes assumes no obligation to update these projections in the future as marked conditions may or may not change, except to the extent required by a pukable law.
Speaker Change: Additionally, the company's press release and management statements during this conference call will include discussions of certain measures in financial information and gap and non-GAAP terms.
Speaker Change: Included in the company's press release are definitions and reconciliation of gap to non-GAAP items which provide additional details Also throughout the company's press release and management statements during the conference call, we refer to net income attributable to common stockholders as gap net income
Speaker Change: For those of you unable to listen to the entire call at this time, a recording will be available via webcast for 90 days in the Investor Relations section of Diodes website at www.diodes.com And now I'll turn the call over to Diodes President, Gary Yu. Gary, please go ahead.
Gary Yu: Welcome everyone, and thank you for joining us on today's conference call. As announcing our press release earlier today, we deliver another quarter of year-over-year growth, achieving a 10% increase as the recovery in our target and markets continue to improve.
Gary Yu: First quarter revenue exceed our expectation due to better than seasonal performance in the computing market in Asia, primarily driven by increasing opportunity for BIOS product in AI-related applications.
Gary Yu: Additionally, we are seeing improving market condition in Europe and North America, as those regions have begun to show signs of rebunding from recent laws.
Gary Yu: Our automotive and industrial market total 42% of first quarter product revenue as we continue to see expanding automotive content and the design opportunities.
Gary Yu: Another notable indication of improving conditions is channel inventory dollars and the days have continued to decrease and appear to be more aligned with real demand and historical PO's levels.
Gary Yu: Although the inventory depletion is a positive sign for dials and a broader market
Gary Yu: The reduction in channel and internal inventory, combined with the absorbing the Chinese New Year holiday temporarily limited increased loading at a manufacturing facility, and therefore gross margins.
Gary Yu: As channel inventory continues to normalize and the global demanding proves, we should see a more material expansion to gross margin in future quarters.
Gary Yu: Additionally, qualifying more product in our internal facility to increase loading, combined with recovery in our higher margin automotive and industrial markets, will also contribute to driving future margin improvement.
Gary Yu: As further evidence of increasing momentum, we are guiding for the third consecutive quarter of year-over-year growth and with second quarter also expect to be the first quarter of both year-over-year and the sequential growth in this recovery cycle.
Gary Yu: Even though the global market remand dynamic, especially with the recent tariffs, the House is strategically positioned to meet global customers' needs with a hybrid manufacturing model and internal facility located across the US, China, Taiwan, and the UK.
Speaker Change: One final comment before turning the call over to Brett, as you may have seen, we also announced today a $100 million dollar strawberry purchase program, which further re-illiterate our confidence in the business and the future growth prospects.
Brett: Thou's in a unique position with all strong cash flow generation and a healthy balancing to continue investing both organically and in MMA, while also returning capital to stakeholders
Brett: With that, let me now turn the call over to Brett to discuss our first quarter, 2025 financial results as well as second quarter, guidance in more detail.
Brett: Thanks, Gary. Good afternoon, everyone. Revenue for the first quarter, 2025, was $332.1 million compared to $302 million in the first quarter of 2024.
and $339.3 million in the fourth quarter 2024.
Brett: Gross Profit for the first quarter was $104.7 million or 31.5% of revenue.
Brett: compared to $99.6 million, or $33.0% of revenue in the prior year quarter, and $110.9 million, or $32.7% of revenue in the prior quarter.
Brett: Gap operating expenses for the first quarter were $103.4 million or 31.1% of revenue, and on a non-GAAP basis were $97.1 million or $29.3% of revenue.
Brett: which excludes $5.8 million amortization of acquisition-related intangible asset expenses, $0.3 million in restructuring charges, a $0.2 million in acquisition-related costs.
Brett: This compares to Gap operating expenses in the first quarter of 2024 of $86.6 million or 28.7% of revenue and $99 million or $29.2% of revenue in the prior quarter.
Brett: non-GAAP operating expenses in the prior quarter were $95.5 million or 28.1% of revenue.
Brett: 0.5 million and interest expense, 0.2 million of foreign currency losses, and $5.8 million of interest income, and 0.6 million in other income.
Brett: Laws is before taxes and non-controlling interest in the first quarter of 2025 was $2.8 million compared to income of $18.8 million in the prior year period and income of $12.3 million in the previous quarter.
Brett: Income Taxes in the Quarter were $20,000, primarily as a result of the geographical mix of pre-tax income and loss of cost tax jurisdictions. We expect the tax rate for the full year to be approximately 18% plus or minus 3%.
Brett: GapNet loss for the first quarter was $4.4 million or a loss per share of $0.10 cents.
Brett: Compared to net income of $14 million or $0.30 per diluted share in the prior year quarter and net income of $8.2 million or $0.18 per diluted share last quarter
Brett: The share count used to compute gap loss per share for the first quarter of 2025 was 46.4 million shares.
Brett: non-GAAP Adjusted Net Income in the first quarter was $8.8 million or 19 cents per diluted share, which excluded net of tax, $4.8 million for amortization of acquisition related intangible assets, $4.8 million for impairment of an equity investment.
Brett: 3.2 million non-cash mark-to-market investment value adjustment, 0.2 million restructuring charges and 0.1 million dollars of acquisition related costs.
Brett: This compares to non-GAAP adjusted net income of $13 million or 28 cents per diluted share in the first quarter of 2024 and $12.5 million or 27 cents per diluted share in the prior quarter.
Brett: Excluding non-cash share-based compensation expense of $5 million for the first quarter, net of tax, both gap net loss and non-GAAP adjusted net income would have increased by 11 cents per share.
Brett: EBITDA for the first quarter was $26.2 million or $7.9% of revenue compared to $48.3 million or 16% of revenue in the prior year period and $40.7 million or 12% of revenue in the prior quarter.
Brett: We have included in our earnings release a reconciliation of gap that income to non-GAAP adjusted net income and gap net income to EBITDA which provides additional details.
Brett: Cashflow provided by operations was $56.7 million for the first quarter.
Brett: Free cash flow was $40.8 million, which included $15.9 million of capital expenditures, net cash flow was a positive $26.2 million.
Brett: Turning to the balance sheet, at the end of first quarter, cash, cash equivalents, restricted cash, plus short-term investments, total approximately $349 million.
Brett: Working Capital was approximately $868 million in total debt, including long-term and short-term was approximately $52 million.
For more information visit www.FEMA.gov
Brett: Finish Good's inventory days were 80 compared to 82 last quarter, total inventory dollars decreased $3.9 million from the prior quarter to $471 million.
Brett: Total inventory in the quarter consisted of a $5.2 million decrease in finished goods, a $1.2 million increase in raw materials and a $49,000 increase in work in process.
Brett: Capital expenditures on a cash basis were $15.9 million for the first quarter or 4.8% of revenue, which was at the low end of our targeted range of 5-9% of revenues.
Now Turning to our Outlook
Brett: For the second quarter, 2025, we expect revenue to increase to approximately $355 million plus or minus 3% representing 11% growth over the prior year period at the midpoint which will be the third consecutive quarter of year over year growth.
Brett: Gap Gross Margin is expected to be 31.8%, plus or minus 1%, non-GAAP operating expenses which are Gap operating expenses adjusted for amortization of acquisition related intangible assets are expected to be approximately 28% of revenue plus or minus 1%
Brett: We expect net interest income to be approximately $1.5 million. Our income tax rate is expected to be 18%, plus or minus 3%, and shares used to calculate EPS for the second quarter or anticipated to be approximately $46.4 million.
Brett: Not included in these non-GAAP estimates is amortization of $4.8 million after tax for previous acquisitions.
Speaker Change: With that said, I will now turn the call over to Emily Yang.
Emily Yang: Thank you, Brett, and good afternoon. As Brett and Gary mentioned, revenue in the first quarter was above our original expectations, and represented at 10% growth over the prior year period and down 2.1% sequentially, which is better than the typical seasonality.
Emily Yang: Our global POS increase in the quarter and our channel inventory was lower in terms of both dollars and weeks.
Emily Yang: Looking at global sourcing the first quarter, Asia represented 78% of the revenue, Europe 13% and North America 9%
Emily Yang: We are seeing improvements across all regions with a higher book to build ratio and the stronger beginning backlog going into the second quarter.
in terms of our end-markets. Thank you.
Emily Yang: Industrial was 23% of Dio's product revenue, automotive 19%, computing 27%, consumer 17% and communication 14% of the product revenue.
Emily Yang: Our automotive industrial revenue combined total 42%, which is comparable to the last quarter.
Emily Yang: Our ability to maintain this level of revenue as this end-market, undergo inventory and demand adjustments reflects the success of our path and ongoing content expansion and design wing initiatives.
Let me now reveal the end markets in greater detail.
Emily Yang: Starting with automotive market, we maintain product revenue at 19% and are seeing the overstock situation continue to improve. We see some demand recovery, but visibility is still limited.
Emily Yang: Our focus remains on the content expansion and market share gain to position dials for the growth as the auto market recovers.
Emily Yang: In terms of our demand creation, momentum remains drawn throughout the quarter with expanding design ins and design winds across all focused areas, including connected driving, comfort style safety and electrification.
Several examples
Emily Yang: Includes our SBR product with several designs in ADAS and automotive panel applications while our butt converters newly released MOSFET, silicon copper MOSFETs and 400 VOTVS product that were designed into DC-DC on board charging and EV charging applications.
Emily Yang: Additionally, our low IQ LDO family and high current LDOs receive solid demand for always on MCU power supply and wireless charging applications.
Emily Yang: We also seen rapid adoption of our small link-com PCI Express package switches, USB Type-C driver's, an active crossbar moxus for real-sea entertainment and smart copy applications.
Emily Yang: Our bi-directional TVS dials are also being designed into a copy T-Box applications while our high-power rated TVS product are being designed into several automotive applications.
Emily Yang: Additionally, our dual-line CAMBAs protector have been selected for the protection in the battery-managed system applications and our five-low-over-current protection switches to solve solid demand for electronic control unit systems.
Emily Yang: Also, in the auto market, we extend the strong design momentum for our linear LED drivers and multi-mole controllers being used in rear and back up lighting and hot light applications.
Emily Yang: Our CMOS Crystal Oscillator and Spread Spectrum Crystal Oscillators are seeing traction in the image sensor reference clock driven by higher data rate for sensor resolution.
Emily Yang: Turning to industrial market, the inventory correction continues similar to the automotive market. Although we are seeing some signs of improvement as certain end customers, overall demand still slow to recover, visibility is also limited in the industrial market and we are seeing more short lead-time orders.
Emily Yang: Despite the slow-demand recovery, we continue to make progress and gain design momentum across a number of products and applications.
Our Silicon Top Ideos and Moss Fats
Emily Yang: have been winning designs in 850 OPC power supplies and elevator power applications, while our bridge rectifiers are being designed into switching power supplies for telecom, desktop and surfer applications and power delivery adopters.
Emily Yang: Also in the industrial market, our buck converters are winning designs for industrial gate drivers and open control applications.
Emily Yang: and our Y-Wing LDO is a solid, demandful sense, power tools, and e-meter applications. We're also securing strong design wings for our linear LED drivers in traffic and transportation signs.
Emily Yang: Our bi-directional TBS product has several design wings for interface I.O. and battery management system cell protection in multiple industrial applications.
Emily Yang: Additionally, our contact image sensor product for AOI are being utilized in battery-fume inspection, glass and printing measurements, panel inspections, bar co-printers as well as check scan their applications.
Emily Yang: In the computing and market, our ongoing design momentum in the AI server and data center applications continue to be a key highlight for dials in the quarter.
Emily Yang: We secure wings for newly released PCI Express 6.0 clock generators and clock mocksers buffers as well as PCI Express packet switches to expand the CPU used IO requirements.
Emily Yang: as well as BMC controllers, USB host controllers, security encryption processors, and NCIO cables.
Emily Yang: Also for the AI surfers and high-speed data applications, our SBR product have been increasing designings while our crystal oscillators are gaining attractions in optical modules for faster data ray and our ultra-low jitter crystal oscillators are seen traction in smart network interface cars.
Emily Yang: With seeing the broader computing market, demand remains solid for Diodes bus switches in enterprise SOC applications and our EUSB-2 repeater solutions has become the standard interface for CPUs and SOC processors.
Emily Yang: Additionally, our MEP-D5 redrippers are being used in laptop PC camera applications to enable a higher bandwidth camera interface.
Emily Yang: and are newly introduced MOSFET, a scene traction for DC to DC power converter applications in surfer and laptops while our PCI Express 5.0 clock generators and protection devices are being designed into docking station applications.
Emily Yang: In the consumer market, we are gaining design wing attractions with our SBR and TVS products for ACDC power supplies, for TVs, printers, gaming adopters, and chargers applications.
Emily Yang: and our protection devices are being adopted in brushless DC fans and air conditioning applications for smart home appliances.
Emily Yang: and our five vote-over-current protection switches receive strong demand for physical interface power ports such as USB and HDMI.
Emily Yang: Additionally, Dye is newly released level-shifter product family, also achieves desive wings in applications such as PC memory, smart watches, and other computer applications.
Emily Yang: We also see interaction in 5G applications for our protection devices.
For more information visit www.FEMA.gov
Emily Yang: One final comment, the recent U.S.-China tariff increases and related impact remain a very dynamic situation, especially the potential effect on our customers.
Emily Yang: We are working closely with our customers to monitor the situation while also reviewing the potential exposure across our products.
Emily Yang: These styles have multiple manufacturing facilities located around the globe, and many parts are alternative manufacturer flow qualified. We anticipate an immaterial impact.
Emily Yang: Additionally, our hybrid manufacturing model provides us with the flexibility to just a capacity planning between internal and external as well as supply chain arrangements, thereby mitigating the cost impact related to the trade tariffs.
Emily Yang: In summary, as evident by our comments today, our business is gaining increasing momentum with the achievements of consecutive quarters of year-over-year growth.
Emily Yang: Additionally, our overall inventory has continued to improve and are positioned us to benefit from a broadening recovery of demand across our end markets.
Emily Yang: and although the current terror create economic uncertainty, Diodes' hybrid model and global manufacturing footprint enable us to strategically meet the needs of our customers.
Emily Yang: We remain highly optimistic about our growth perspective in 2025 and beyond.
With that, we now open the floor to questions operator.
Speaker Change: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone.
Emily Yang: If you are using a speaker phone, please pick up your hand set before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. At this time we will pause momentarily to assemble our roster.
Speaker Change: And your first question today will come from David Williams with Benchmark. Please go ahead.
David Williams: Hey, good afternoon, everyone, and congratulations on the solid execution here.
Thank you. Thank you, David.
Speaker Change: Yeah, so I guess my first question is really through earning season it's been pretty clear that demand has been better than anticipated. And as you kind of think through that, I'm curious if you were seeing any demand pull forward, just kind of given where inventory levels were, we had largely tried to digest those and then lead times have gotten pretty short and then now we have the tariff situation. So it feels like there could be some pull in here and you kind of think at least we have to think there's some demand destruction that is ongoing. So. So.
Speaker Change: I guess how do you square that with just the momentum that you have in the business and is there anything you would point to that kind of give you more confidence in the stability of the demand that you're seeing today?
Emily Yang: Yeah, David, this is Emily, right? So, definitely terrorists create uncertainty, especially on the end, the men without customers. So, the only thing we can do is actually work very closely.
Emily Yang: with the customers and watching the situation to really kind of understand a longer term impact from the business side. I think, you know, regarding pooling, to be honest with you, we don't really see a lot of pooling activities, you know, but...
Speaker Change: I think of the other angle, if you look at the channel inventory, it definitely depleted more, right? I talk about purest increase as well as channel inventories in terms of weeks.
Speaker Change: Also, in terms of dollars, both in decreases, so this is all positive signs, right?
Speaker Change: So, on the other hand, if I look at the back wall, if I look at both to be or ratio, they all improved.
Speaker Change: I think from the actual business point of view, I also talk about automotive industrial. We definitely seen the inventory improvement overall. We definitely seen more of the activity going through as well as a PLS increase, right? So I think all of these are positive signs.
Speaker Change: that we're definitely going through a recovering period. So I think that's pretty much what we've seen so far.
David Williams, Leanne Sievers, Brett Whitmire, David Williams, Leanne Sievers, Brett Whitmire
Speaker Change: Great, I appreciate that the color there, and I know you all are really close to your customers, so I think you're inside as helpful. Secondly, I guess just as you think about your manufacturing footprint and you've had an ongoing strategy to really port internal versus external.
Speaker Change: Does any of this tariff situation, does that change that strategy, or maybe the pace at which you try to bring some of that stuff internal, so you have greater flexibility, or how do you think about that, maybe?
Gary Yu: Yeah, actually, David, this is Gary. Let me help you answer this question here, right? As you know, we manage our hybrid manufacturing model very well for the past few years. And then we will continue to drive, you know, to porting our external, you know, our product from external to our internal wafer fat, this will no change at all. And actually, we are doing very well and we do see quite a few good milestones to qualify our process in order in our internal wafer fat and the bloody. You know, we are doing very well and we are doing very well and we are doing very well and we are doing very well.
Gary Yu: and also we do see our external customer do qualify our product and start to receive those P.O. from now those key customers in the several, y'all.
Key Statement [inaudible]
Gary Yu: So this will be the direction from DIOS continue to doing that regardless, you know, the tariff issue. But a good advantage for DIOS, you know, we don't have so much tariff impacts because of the hybrid manufacturing model, as well as our footprint across the three different regions.
Gary Yu: Right? It's really kind of not focused only on one region and there will be very easy to tell my customer we can easily have second source in the different kind of region and to supply customer needs. So that's why we so called the flexibility to support the customer needs.
Emily Yang: Right, so as Emily mentioned about it, we don't really see a lot of, you know, pouring because of the ice product, it's kind of flexible but we do see, you know, the customer requests us, you know, to replace maybe somebody else and we have very easy can catch that out and support their demand.
Speaker Change: Yeah, so I think if you look at the overall supply change,
Speaker Change: changed a lot, right? From globalization, to regionalization, to maybe country ization, wherever you want to call it. We believe we actually have a good structure in place, both front and back end, to really support wherever the need or the future change requirement will be.
Okay.
Perfect.
Speaker Change: And then just one last one from if you don't mind. Just kind of on the AI CapEx trends. Those are clearly moving in the right direction. You have some nice exposure there, I believe. Can you talk maybe about where you're seeing that demand regionally and then if there's maybe any shifts in terms of the AI CapEx or just any color around those trends I think would also be helpful. Thank you.
Speaker Change: Yeah, so I think we have to probably look at the AIs in different portions, right?
Speaker Change: The one we actually seen with the actual ramping up demands ongoing with a lot of new designs really more on the hyper-skillers.
Speaker Change: I think on the other areas, really on the edge, computing side, we also seeing a lot of new opportunities that really working down from hyper-skiller to the next level, I think that's actually going to be an even bigger opportunity for dials overall because that's going to consume a lot of
different bore sizes and different applications and different customer base.
Speaker Change: So I would say all in all, we still see the beginning of the RAM. We didn't really see significant adjust from the CapEx expansion point of view. What we've seen really more on the positive side. The other thing we've been focused talking about really on the content expansion, right? So, you know, if you look at, you know, we compare AI server versus a regular server, you can actually increase from $68 to $90 some dollars.
Speaker Change: right, so that will continue to be the focus overall for Diodes, you know, in the future.
David Williams, Leanne Sievers, Brett Whitmire, David Williams
Speaker Change: Yeah, your next question today will come from Tristan Terror with Barrett. Please go ahead.
Tristan Terrah: Hi, good afternoon. Could you talk about the gross margin catalyst that you see in the second half for any potential headwinds? You've talked in your prepared remark about some acceleration.
Speaker Change: potentially in gross margin. And I know that contractually you have opportunities in the second half to increase in sourcing versus what you're currently doing with the outside fab. So how should we look at all of this in terms of gross margin direction and perhaps quantifying, you know, kind of the key factors including utilization rates in terms of their contribution to gross margin expansion.
Emily Yang: Yeah, so Tristan, this is Emily, let me walk you through the margin impact currently what we see, right? So the manufacturing surface agreement, the loading definitely lower than our expectation. And then, if you look at the overall inventory bill, if we compare the Q1 with the Chinese New Year versus...
Last year...
Emily Yang: As evidence that our internal inventory decrease as well as a channel inventory decrease, right? So this is all the signs that we are actually adjusting some of the inventory build and also because the Chinese New Year, right? On the other hand, I think it's normal. We've been talking about price pressure, one to two percent. We definitely see some from there, but still within our normal range, so I would say that's pretty stable.
Emily Yang: So, I think all in all, you're getting pressures in different areas, so what we are actually doing is actually, like you said, we will continue to push the internal loading portings, loadings as well as qualification of the product, but I want to be really honest with you because the economy situation, the customer approving, the change, the product change notice is definitely a little bit longer than what we expected, but overall progress is really good. Okay.
Emily Yang: We also expect second half revenue growth and that will also increase some of the loading to minimize some of the under loading costs, right? At the same time, we will continue to drive the manufacturing costs down together with the product mix.
Emily Yang: Improvement Initiative with a new product introduction, replacing some of the old product with new or product, focused on auto industrial, the paracomptur product, as well as an analog power discreet. So this will continue to be the focus with everything combined together. We are confident that we will see margin improvement throughout the next few quarters.
Gary?
Go ahead.
Oh, yeah, so for me, er, [inaudible]
Speaker Change: You know, some of your peers have clearly access capacity. Does that present opportunities for you to get assets that they add a good price toward your medium term or a new goal? Or would you say adding capacity near term is not on the table given the current macro?
David Williams: Well, I would say that in your Tristan, you know, I would deeply, you know, our capacity currently is kind of stable, right? And especially on the relationship as Emily mentioned about. But I do believe this year is going to be the great year for dials at all your decision going to get improved. However, even though you see the first quarter, second quarter earlier your decision compared to like a second head could be lower. But, you know, our product mix, you know, could be some utilization where 100% loaded. And that why I will not stop investing any cat packs to.
to expend our capacity to support customer need it.
David Williams: At the same time, I would try to do all best to make sure all-
David Williams: passing your station very, very careful at this moment. Okay, made the right investment is what we want to do.
David Williams: Yeah, Tristan, I think one thing to think about would be that the...
David Williams: Some of the excess capacity that others may make available, we see that disruption as maybe opportunities in our top line, versus necessarily thinking we need to increase our manufacturing footprint right now. Especially, we're doing very well on our hybrid model, right, because you know, it's really some capacity, you know, is we don't really want to fast probably those low-end and commodity, but we can always go to the subcomp.
David Williams: Okay, that's very useful, and just a very quick one.
Speaker Change: Have dusty inventories normalized within your target range? I know it's improving, but is it now at level you're comfortable with or is there a little bit more progress to get to those targeted levels?
Speaker Change: So we define the normal range 11 to 14 weeks, right now the inventory is still slightly higher than that
Speaker Change: But if we look at the market outlook, without the terror of consideration, remove that, we definitely expect the second half will be a growth
Speaker Change: compared to the first half. So with that situation in place, we're actually pretty comfortable with the inventory level that we have in the channel, really supporting the target growth coming.
[inaudible]
Speaker Change: Yeah, because just in the week's calculation is backward looking and as we look at it we really feel like what we've done to get the right mix in the channel is quite good and so we're pretty we're gonna we feel like we're in a good place to drive growth and have good availability. Right and the most recent I think or you know shortly time PO is going up a lot which means like that customer types of change their bill you know location dynamically. We're going to have a good time. We're going to have a good time. We're going to have a good time.
Speaker Change: Right, just due to the terrible issue. So we want to make sure you know that the inventory available, even with available to cover the customer's urgent needed, and no matter where it is.
Great. Thank you very much.
Thank you, Tristan.
Speaker Change: Cludes our question and answer session. I would like to turn the conference back over to Gary Yu for any closing remarks.
Speaker Change: Thank you everyone for participating on today's call. We look forward to reporting our progress on next quarter's conference call. Operator, you may now disconnect.
Speaker Change: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.