Q1 2026 Diodes Inc Earnings Call

May 7, 2026

Operator: Good afternoon, welcome to Diodes Incorporated's Q1 2026 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 star key followed by the 0 on your touch-tone phone. As a reminder, this conference call is being recorded today, Thursday, 7 May 2026. I would now like to turn the call over to Leanne Sievers of Shelton Group Investor Relations. Leanne, please go ahead.

Speaker #2: 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 star key followed by the zero on your touch-tone phone.

Speaker #2: As a reminder, this conference call is being recorded today, Thursday, May 7th, 2026. I would now like to turn the call over to Leanne Sievers of Shelton Group Investor Relations, Leanne, please go ahead.

Speaker #2: Good afternoon, and welcome to DIODES' first quarter 2026 financial results conference call. I'm Leanne Sievers, President of Shelton Group, DIODES' investor relations firm. Joining us today are DIODES President and CEO, Gary Yu; CFO, Brett Whitmire; Senior Vice President of Worldwide Sales and Marketing, Emily Yang; and Vice President of Marketing and Investor Relations, Gurmeet Dhaliwal.

Leanne Sievers: Good afternoon, and welcome to Diodes' Q1 2026 Financial Results Conference Call. I'm Leanne Sievers, President of Shelton Group, Diodes' investor relations firm. Joining us today are Diodes President and CEO, Gary Yu, CFO, Brett Whitmire, Senior Vice President of Worldwide Sales and Marketing, Emily Yang, and Vice President of Marketing and Investor Relations, Gurmeet Dhaliwal. 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 by the company's independent registered public accounting firm. As such, these results are unaudited and subject to revision until the company files its Form 10-Q for its quarter ended 31 March 2026. 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.

Leanne Sievers: Good afternoon, and welcome to Diodes' Q1 2026 Financial Results Conference Call. I'm Leanne Sievers, President of Shelton Group, Diodes' investor relations firm. Joining us today are Diodes President and Chief Executive Officer, Gary Yu, Chief Financial Officer, Brett Whitmire, Senior Vice President of Worldwide Sales and Marketing, Emily Yang, and Vice President of Marketing and Investor Relations, Gurmeet Dhaliwal. 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 by the company's independent registered public accounting firm. As such, these results are unaudited and subject to revision until the company files its Form 10-Q for its quarter ended 31 March 2026. 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 #2: 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 by the company's independent registered public accounting firm.

Speaker #2: As such, these results are unaudited and subject to revision until the company files its Form 10-Q for its quarter ended March 31, 2026. 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 #2: Therefore, the company claims the protection of the safe harbor for forward-looking statements that is contained in the private securities litigation reform act of 1995.

Leanne Sievers: The company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, therefore, we refer to a more detailed discussion of the risks and uncertainties in the company's filings with the Securities and Exchange Commission, including Forms 10-K and 10-Q. Any projections as to the company's future performance represent management's estimates as of today, 7 May 2026. Diodes assumes no obligation to update these projections in the future as market conditions may or may not change, except to the extent required by applicable law. The company's press release and management statements during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms.

Speaker #2: Actual results may differ from those discussed today and therefore we refer to a more detailed discussion of the risks and uncertainties in the company's filings with the Securities and Exchange Commission, including Forms 10K and 10Q.

Speaker #2: In addition, any projections as to the company's future performance represent management's estimates as of today May 7th, 2026. DIODES assumes no obligation to update these projections in the future as market conditions may or may not change except to the extent required by applicable law.

Speaker #2: Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information and gap and non-gap terms.

Speaker #2: Included in the company's press release are definitions and reconciliations of gap to non-gap items which provide additional details. Also, throughout the company's press release and management statements during this conference call, we refer to net income attributable to common stockholders as gap net income.

Leanne Sievers: Included in the company's press release are definitions and reconciliations of GAAP to non-GAAP items, which provide additional details. Also, throughout the company's press release and management statements during this conference call, we refer to net income attributable to common stockholders as GAAP net income. 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. Now, I'll turn the call over to Diodes' President and CEO, Gary Yu. Gary, please go ahead.

Speaker #2: 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.dioedes.com.

Speaker #2: And now I'll turn the call over to DIODES president and CEO, Gary Yu. Gary, please go ahead.

Gary Yu: Welcome, everyone, and thank you for joining us on today's conference call. As announced in our press release earlier today, Q1 revenue grew 22% year-over-year and above seasonal 3.5% sequentially. This growth highlights a solid demand recovery and the momentum we are seeing across our key focus areas of automotive, industrial, and AI server-related applications. In fact, this quarter is the sixth consecutive quarter of double-digit year-over-year growth and the highest percentage increase since Q4 of 2021. Revenue in Europe led growth as we continue to benefit from increased opportunities and orders from automotive customers, as well as improved demand for strong industrial applications. Additionally, gross margin improved 70 basis points sequentially due mainly to the higher revenue contribution from automotive and industrial markets, which totaled 44% of product revenue combined with improving utilization.

Speaker #3: Welcome, everyone, and I thank you for joining us on today's conference call. As announced in our press release earlier today, first quarter revenue grew 22% year over year and above seasonal 3.5% quarterly.

Speaker #3: This growth highlights a solid demand recovery and a momentum we are seeing across our key focus areas of automotive, industrial, and AI server-related applications.

Speaker #3: In fact, this quarter is the fifth consecutive quarter of double-digit year-over-year growth, and the highest percentage increase since fourth quarter of 2021. Revenue in Europe led growth as opportunities and orders from automotive customers as well as improved demand across broad industrial applications.

Speaker #3: Additionally, gross margin improved 70 basis points sequentially due mainly to the higher revenue contribution from the automotive and industrial markets. Which totaled 44% of product revenue combined with improving utilization.

Gary Yu: Notably, we delivered an over 100% year-over-year increase in quarterly earnings, clearly demonstrating the operating leverage in our model. After formally releasing our 3-year interim financial target earlier this year, which includes reaching $2 billion in annual revenue, $700 million in gross profit, and over $4 in non-GAAP EPS, this quarter was a great first step toward executing on these goals. Content expansion, design win momentum, and new product introductions will continue to be the cornerstone of our growth initiatives, combined with increased manufacturing and cost efficiency to further drive margin expansion. With that, let me now turn the call over to Brett to discuss our Q1 financial results as well as our Q2 guidance in more detail.

Speaker #3: Notably, we delivered an over 100% year-over-year increase in quarterly earnings clearly demonstrating the operating leverage in our model. After formally releasing our three-year interim financial targets earlier this year, which includes reaching $2 billion in annual revenue, $700 million in gross profit, and over $4 in non-gap EPS, this quarter was a great first step toward executing on these goals.

Speaker #3: Content expansion, design win momentum, and a new product introduction will continue to be the cornerstone of our growth initiatives. Combined with increased manufacturing and cost efficiency to further drive margin expansion, with that, let me now turn the call over to Brett to discuss our first quarter financial results as well as our second quarter guidance in more detail.

Speaker #4: Thanks, Gary. And good afternoon, everyone. Revenue for the first quarter 2026 was of 22.1% over the $332.1 million in the first quarter 2025. And up to 3.5% compared to $391.6 million in the fourth quarter 2025.

Brett Whitmire: Thanks, Gary, and good afternoon, everyone. Revenue for Q1 2026 was $405.5 million, an increase of 22.1% over the $332.1 million in Q1 2025 and up 3.5% compared to $391.6 million in Q4 2025. Gross profit for the first quarter was $128.8 million or 31.8% of revenue, compared to $104.7 million or 31.5% of revenue in the prior year quarter and $121.9 million or 31.1% of revenue in the prior quarter.

Speaker #4: Gross profit for the first quarter was $128.8 million, or 31.8% of revenue. Compared to $104.7 million, or 31.5% of revenue in the prior year quarter, and $121.9 million, or 31.1% of revenue in the prior quarter.

Speaker #4: Gap operating expenses for the first quarter were $109 million. Or $26.9% of revenue. And on a non-gap basis, were $103.9 million, or 25.6% of revenue, which excludes $3.9 million amortization of acquisition-related intangible asset costs and $1.1 million of board and officer retirement expense.

Brett Whitmire: GAAP operating expenses for Q1 were $109 million or 26.9% of revenue, and on a non-GAAP basis were $103.9 million or 25.6% of revenue, which excludes $3.9 million amortization of acquisition-related intangible asset costs and $1.1 million of board and officer retirement expense. This compares to GAAP operating expenses in Q1 2025 of $103.4 million or 31.1% of revenue and $108.7 million or 27.8% of revenue in the prior quarter. Non-GAAP operating expenses in the prior quarter were $104 million or 26.6% of revenue.

Speaker #4: This compares to gap operating expenses in the first quarter 2025 of $103.4 million, or 31.1% of revenue. And $108.7 million, or 27.8% of revenue in the prior quarter.

Speaker #4: Non-gap operating expenses in the prior quarter were $104 million, or 26.6% of revenue. Total other income amounted to approximately $2.7 million for the quarter, consisting of $5.4 million in interest income, $2.5 million in unrealized gain on investments, $0.1 million in other income, offset by $3.4 million in foreign currency losses, $1.2 million of impairment loss of equity investment, and $0.7 million in interest expense.

Brett Whitmire: Total other income amounted to approximately $2.7 million for the quarter, consisting of $5.4 million in interest income, $2.5 million in unrealized gain on investments, $0.1 million in other income, offset by $3.4 million in foreign currency losses, $1.2 million of impairment loss of equity investment, and $0.7 million in interest expense. Income before taxes, equity in net earnings of equity investments, and non-controlling interest in Q1 2026 was $22.4 million compared to a loss of $2.8 million in the prior year period and $16.8 million in the previous quarter. Turning to income taxes, our effective income tax rate for Q1 was approximately 19.9%.

Speaker #4: Income before taxes, equity in net earnings of equity investments, and non-controlling interest in the first quarter 2026 was $22.4 million, compared to a loss of $2.8 million in the prior year period and $16.8 million in the previous quarter.

Speaker #4: Turning to income taxes, our effective income tax rate for the first quarter was approximately 19.9%. For 2026, we continue to expect the tax rate for the full year to remain at approximately 18%, plus or minus 3%.

Brett Whitmire: For 2026, we continue to expect the tax rate for the full year to remain at approximately 18% plus or minus 3%. GAAP net income for Q1 was $15 million or $0.32 per diluted share compared to a net loss of $4.4 million or a loss of $0.10 per diluted share in the prior year quarter and net income of $10.2 million or $0.22 per diluted share last quarter. The share count used to compute GAAP income per share for Q1 of 2026 was 46.1 million shares.

Speaker #4: Gap net income for the first quarter was $15 million. Or 32 cents per diluted share. Compared to a net loss of $4.4 million, or a loss of 10 cents per diluted share in the prior year quarter, and net income of $10.2 million, or 22 cents per diluted share last quarter.

Speaker #4: The share count used to compute gap income per share for the first quarter 2026 was 46.1 million shares. Non-gap adjusted net income in the first quarter was 19.8 million.

Brett Whitmire: Non-GAAP adjusted net income in Q1 was $19.8 million, or $0.43 per diluted share, which excluded net of tax, $3.2 million of acquisition-related intangible asset costs, $0.9 million in board officer retirement expense, and $0.7 million of loss on investment. This compares to Non-GAAP adjusted net income of $8.8 million, or $0.19 per diluted share in Q1 2025, and $15.7 million, or $0.34 per diluted share in the prior quarter. Excluding non-cash share-based compensation expense of $6 million for Q1 net of tax, both GAAP net income and Non-GAAP adjusted net income would have increased by $0.13 per share.

Speaker #4: Or 43 cents per diluted share. Which excluded net of tax $3.2 million of acquisition-related intangible asset costs, $0.9 million in board officer retirement expense, and $0.7 million of loss on investment.

Speaker #4: This compares to non-gap adjusted net income of $8.8 million, or 19 cents per diluted share in the first quarter 2025, and $15.7 million or 34 cents per diluted share in the prior quarter.

Speaker #4: Excluding non-cash share-based compensation expense of $6 million for the first quarter, net of tax both gap net income and non-gap adjusted net income would have increased by 13 cents per share.

Speaker #4: EBITDA for the first quarter was $49.4 million. Or 12.2% of revenue. Compared to 26.2 million dollars or 7.9% of revenue in the prior year period.

Brett Whitmire: EBITDA for Q1 was $49.4 million, or 12.2% of revenue, compared to $26.2 million, or 7.9% of revenue in the prior year period, and $41.9 million, or 10.7% of revenue in the prior quarter. We have included in our earnings release a reconciliation of GAAP net income to non-GAAP adjusted net income and GAAP net income to EBITDA, which provides additional details. Cash flow provided by operations was $64.3 million for Q1, a $26.2 million increase from the $38.1 million in the prior quarter. Free cash flow was $32.4 million, a $20 million increase over Q4, and included $31.9 million of CapEx.

Speaker #4: And 41.9 million dollars or 10.7% of revenue in the prior quarter. We have included in our earnings release a reconciliation of gap net income to non-gap adjusted net income, and gap net income to EBITDA, which provides additional details.

Speaker #4: Cash flow provided by operations was $64.3 million for the first quarter, a 26.2 million dollar increase from the 38.1 million dollars in the prior quarter.

Speaker #4: Free cash flow was 32.4 million dollars, a 20 million dollar increase over the fourth quarter, and included 31.9 million dollars of capital expenditures. Net cash flow was a positive 26.9 million dollars despite the higher CapEx spending compared to last quarter.

Brett Whitmire: Net cash flow was +$26.9 million, despite the higher CapEx spending compared to last quarter. Turning to the balance sheet, at the end of Q1, cash equivalents, restricted cash, plus short-term investments totaled approximately $409 million. Working capital was approximately $891 million, total debt, including long-term and short-term, was approximately $55 million. In terms of inventory, at the end of Q1, total inventory days were approximately 157, as compared to 161 last quarter, and down approximately 30 days from 187 days in the year-ago quarter. Finished goods inventory days were 55, compared to 59 days last quarter.

Speaker #4: Turning to the balance sheet at the end of first quarter cash, cash equivalents, restricted cash plus short-term investments totaled approximately $409 million. Working capital was approximately $891 million, and total debt including long-term and short-term was approximately $55 million.

Speaker #4: In terms of inventory at the end of the first quarter, total inventory days were approximately 157, as compared to 161 last quarter. And down approximately 30 days from 187 days in the year ago quarter.

Speaker #4: Finished goods inventory days were 55, compared to 59 days last quarter. Total inventory dollars increased 21.2 million dollars from the prior quarter to $492.8 million.

Brett Whitmire: Total inventory dollars increased $21.2 million from the prior quarter to $492.8 million, consisting of a $24 million increase in raw materials, a $0.5 million increase in work in process, and a $3.3 million decrease in the finished goods. Capital expenditures on a cash basis were $31.9 million for Q1, or 7.9% of revenue, which is within our targeted annualized range of 5% to 9% of revenue. Now turning to our outlook. As you may have noticed in our press release, we have refined the presentation of our guidance to help simplify the information provided, while also aligning to the 3-year financial targets we've introduced last quarter.

Speaker #4: Consisting of a 24 million dollar increase in raw materials, a 0.5 million dollar increase in work in process, and a 3.3 million dollar decrease in finished goods.

Speaker #4: Capital expenditures on a cash basis were 31.9 million dollars for the first quarter, or 7.9% of revenue, which is within our targeted annualized range of 5 to 9 percent of revenue.

Speaker #4: Now turning to our outlook. As you may have noticed in our press release, we have refined the presentation of our guidance to help simplify the information provided.

Speaker #4: While also aligning to the three-year financial targets we've introduced last quarter. That said, for the second quarter, we expect revenue to be approximately $435 million.

Brett Whitmire: That said, for Q2, we expect revenue to be approximately $435 million, ±3%. At the midpoint, this represents an 18.8% increase year over year, and a 7.3% increase sequentially, which will be the 6th consecutive quarter of double-digit year over year growth, and another quarter of above seasonal sequential growth. GAAP gross margin is expected to be 32.8%, ±1%. Non-GAAP adjusted EPS is expected to be $0.60, ±$0.10. With that said, I will now turn the call over to Emily Yang.

Speaker #4: Plus or minus 3%. At the midpoint, this represents an 18.8% increase year over year. And a 7.3% increase sequentially. Which will be the sixth consecutive quarter of double-digit year over year growth.

Speaker #4: And another quarter of above seasonal sequential growth. Gap gross margin is expected to be 32.8%. Plus or minus 1%. Non-gap adjusted EPS is expected to be 60 cents.

Speaker #4: Plus or minus 10 cents. With that said, I will now turn the call over to Emily Yang.

Speaker #5: Thank you, Brett and good afternoon. As Gary and Brett mentioned, revenue in the first quarter was at the high end of our guidance range.

Emily Yang: Thank you, Brett. Good afternoon. As Gary and Brett mentioned, revenue in Q1 was at the high end of our guidance range, up 3.5% sequentially, above our typical seasonality of down 5%. This growth was mainly driven by strong demand in Europe, followed by Asia. Year over year, Q1 revenue increased 22%. Our global POS increased sequentially, our channel inventory decreased again this quarter, both in $ and in weeks, which was at the lower end of our normal range of 11 to 14 weeks. We also continue to benefit from the market supply disruption. We remain strategically selective and focused on long-term sustainable business and demand creation. Looking at global sales in Q1, Asia represented 77% of revenue, Europe 14%, North America 9%.

Speaker #5: Up 3.5% sequentially. And above our typical seasonality of down 5%. This growth was mainly driven by strong demand in Europe, followed by Asia. Year over year, first quarter revenue increased 22%.

Speaker #5: Our global POS increased sequentially. And our channel inventory decreased again this quarter, both in dollars and in weeks. Which was at the lower end of our normal range of 11 to 14 weeks.

Speaker #5: We also continue to benefit from the market supply disruption. We remain strategically selective and focus on long-term sustainable business and demand creation. Looking at global sales in the first quarter, Asia represented 77% of revenue, Europe 14%, and North America 9%.

Rachel Smith: In terms of our end markets, industrial was 24% of Diodes' product revenue, automotive 20%, computing 26%, consumer 17%, and communication 13% of product revenue. Our automotive industrial revenue combined was 44% of product revenue, which was a 2 percentage point increase compared to last quarter, largely due to stronger demand in Europe. Let me review the end market in greater detail. Starting with automotive market, revenue growth 3.8% sequentially and over 32% year-over-year. Overall demand was strong in the quarter and visibility continues to improve. We are encouraged by the breadth and the depth of our automotive design wins across all focus areas, including connected driving, comfort, style, safety, and electrification. With an expanding automotive-grade portfolio and strong engagements with OEM and Tier 1 customers, we are well-positioned to benefit from the increase in dollar content per vehicle.

Emily Yang: In terms of our end markets, industrial was 24% of Diodes' product revenue, automotive 20%, computing 26%, consumer 17%, and communication 13% of product revenue. Our automotive industrial revenue combined was 44% of product revenue, which was a 2 percentage point increase compared to last quarter, largely due to stronger demand in Europe. Let me review the end market in greater detail. Starting with automotive market, revenue growth 3.8% sequentially and over 32% year-over-year. Overall demand was strong in the quarter and visibility continues to improve. We are encouraged by the breadth and the depth of our automotive design wins across all focus areas, including connected driving, comfort, style, safety, and electrification. With an expanding automotive-grade portfolio and strong engagements with OEM and Tier 1 customers, we are well-positioned to benefit from the increase in dollar content per vehicle.

Speaker #5: In terms of our end markets, industrial was 24% of DIODS product revenue, automotive 20%, computing 26%, consumer 17%, and communication 13% of product revenue.

Speaker #5: Our automotive industrial revenue combined was 44% of product revenue, which was a 2 percentage point increase compared to last quarter, largely due to stronger demand in Europe.

Speaker #5: Now let me review the end market in greater detail. Starting with automotive market, revenue grew 3.8% sequentially, and over 32% year over year. Overall demand was strong in the quarter, and visibility continues to improve.

Speaker #5: We are encouraged by the breadth and the depth of our automotive design wings across all focus areas, including connected driving, comfort style safety, and electrification.

Speaker #5: With an expanding automotive grid portfolio and strong engagements ements with OEMs and tier one customers, we are well positioned to benefit from the increase in dollar content per vehicle.

Speaker #5: In terms of design wings, we're seeing strong momentum for interface and voltage level shifter ICs across ADAS, telematics, and infotainment platforms. With multiple customer wings.

Rachel Smith: In terms of design wins, we are seeing strong momentum for interface and voltage level shifter ICs across ADAS, telematics, and infotainment platforms with multiple customer wins. EFC and bi-directional protection devices, including protection for automotive ethernet and in-vehicle networks, are being designed into next-generation communication platforms and body control modules. Our portfolio of automotive-grade discrete products, including switching diodes, rectifiers, and protection devices, continue to enable reliable data and power paths. We are also securing increased adoption of power protection, power management, and control solutions across safety-critical systems and advanced lighting. Our ideal diode controllers are also seeing strong demand in reverse battery protection power trees, and our precision current limited power switching are gaining traction for protected ECU power rails.

Emily Yang: In terms of design wins, we are seeing strong momentum for interface and voltage level shifter ICs across ADAS, telematics, and infotainment platforms with multiple customer wins. EFC and bi-directional protection devices, including protection for automotive ethernet and in-vehicle networks, are being designed into next-generation communication platforms and body control modules. Our portfolio of automotive-grade discrete products, including switching diodes, rectifiers, and protection devices, continue to enable reliable data and power paths. We are also securing increased adoption of power protection, power management, and control solutions across safety-critical systems and advanced lighting. Our ideal diode controllers are also seeing strong demand in reverse battery protection power trees, and our precision current limited power switching are gaining traction for protected ECU power rails.

Speaker #5: ESD and bidirectional protection devices including protection for automotive Ethernet and in-vehicle networks are being designed into next generation communication platforms and body control modules.

Speaker #5: Our portfolio of automotive grade discrete products including switching dials rectifiers and protection devices continue to enable reliable data and power paths. We are also securing increased adoption of power protection, power management, and control solutions across safety critical systems and advanced lightings.

Speaker #5: Our ideal dial controllers are also seeing strong demand in reverse battery protection power trees and are precision current limited power switching are gaining traction for protected ECU power wheels.

Rachel Smith: We are also receiving solid demand for our low IQ LDOs in MCU power supplies. Our brushed DC motor drive products are experienced significantly growth, particularly in automotive lighting, cooling, and motor applications. Our 48V Matrix LED drivers are gaining traction in dynamic rear lighting applications, enabling adaptive signaling and distinctive vehicle design. Additionally, our silicon carbide MOSFETs in innovative top-side cooling package are gaining momentum in traction inverters, onboard chargers, and high-voltage DC/DC converters, while our ultra-low VCE bipolar devices continue to win designs in battery management system and vehicle radar. Turning to industrial market, revenue grew to 24% of product revenue from 22% last quarter, representing a 13.2% quarter-over-quarter growth and over 31% year-over-year. We have begun to see solid demand recovery in Europe, followed by North America and Asia.

Emily Yang: We are also receiving solid demand for our low IQ LDOs in MCU power supplies. Our brushed DC motor drive products are experienced significantly growth, particularly in automotive lighting, cooling, and motor applications. Our 48V Matrix LED drivers are gaining traction in dynamic rear lighting applications, enabling adaptive signaling and distinctive vehicle design. Additionally, our silicon carbide MOSFETs in innovative top-side cooling package are gaining momentum in traction inverters, onboard chargers, and high-voltage DC/DC converters, while our ultra-low VCE bipolar devices continue to win designs in battery management system and vehicle radar. Turning to industrial market, revenue grew to 24% of product revenue from 22% last quarter, representing a 13.2% quarter-over-quarter growth and over 31% year-over-year. We have begun to see solid demand recovery in Europe, followed by North America and Asia.

Speaker #5: We're also receiving solid demand for our low-IQ LDOs in MCU power supplies, and our brush DC motor drives products are experiencing significant growth.

Speaker #5: Particularly in automotive lighting, cooling, and motor applications. And our 48-volt matrix LED drivers are gaining traction in dynamic real lighting applications. Enabling adaptive signaling and distinctive vehicle designs.

Speaker #5: Additionally, our silicon carbide MOSFETs in innovative topside cooling package are gaining momentum in traction, inverters, onboarding chargers, and high voltage DC-DC converters while our ultra low VCE bipolar devices continue to win designs in battery management systems and vehicle radar.

Speaker #5: Turning to industrial market, revenue grew to 24% of product revenue from 22% last quarter. Representing a 13.2% quarter over quarter growth and over 31% year over year.

Speaker #5: We have begun to see solid demand recovery in Europe, followed by North America and Asia. Much of this strength in demand is being driven by AI infrastructures and we expect this momentum will continue throughout the year.

Rachel Smith: Much of this strength in demand is being driven by AI infrastructures. We expect this momentum will continue throughout the year. Specifically in AI server power supply units, our bipolar junction transistors portfolio has been winning designs. Our Hall sensors are being used in brushless DC fan applications for thermal management. Additionally, our rectifying battery backup units are enabling hot swap functionality and supporting the scalable resiliency power architecture required by AI servers. We're also seeing broad market recovery across multiple applications like factory automation and medical equipment. From a design point of view, we are achieving increasing momentum across power, sensing, and imaging applications driven by the automation and inspection systems. Our 60 amp 650 volt silicon carbide diodes continue to gain traction in industrial power applications, supporting higher efficiency and power density requirements.

Emily Yang: Much of this strength in demand is being driven by AI infrastructures. We expect this momentum will continue throughout the year. Specifically in AI server power supply units, our bipolar junction transistors portfolio has been winning designs. Our Hall sensors are being used in brushless DC fan applications for thermal management. Additionally, our rectifying battery backup units are enabling hot swap functionality and supporting the scalable resiliency power architecture required by AI servers. We're also seeing broad market recovery across multiple applications like factory automation and medical equipment. From a design point of view, we are achieving increasing momentum across power, sensing, and imaging applications driven by the automation and inspection systems. Our 60 amp 650 volt silicon carbide diodes continue to gain traction in industrial power applications, supporting higher efficiency and power density requirements.

Speaker #5: Specifically in AI server power supply units, our bipolar junction transistors portfolio has been winning designs and our hall sensors are being used in brushless DC fan applications for thermal management.

Speaker #5: Additionally, our rectifying battery backup units are enabling hot swap functionality and supporting the scalable resilient power architecture required by AI servers. We're also seeing broad market recovery across multiple applications like factory automation and medical equipments.

Speaker #5: From a design point of view, we are achieving increasing momentum across power, sensing, and imaging applications driven by the automation and inspection systems. Our 60 amps, 650 volt silicon carbide diodes continue to gain traction in industrial power applications supporting higher efficiency and power density requirements.

Speaker #5: Also during the quarter, our low IQ LDO regulators received solid demand for power tools and industrial fan applications. Supporting energy efficiency and battery power designs and our LED drivers continue to gain traction in intelligent LED lighting applications for smart infrastructure and enterprise environments.

Rachel Smith: Also, during the quarter, our low IQ LDO regulators received solid demand for power tools and industrial fan applications, supporting energy efficiency and battery power designs. Our LED drivers continue to gain traction in intelligent LED lighting applications for smart infrastructure and enterprise environments. Also in industrial, our voltage reference devices received strong demand from a variety of industrial power supply applications, where accuracy and stability are essential. Our AOI contact image sensor products also achieve multiple design wins across inspection-related applications, including IC inspection, battery film inspection, glass inspection, as well as digital check and car scanners. In the computing market, although revenue decreased 3.7% to 26% of the product revenue this quarter, revenue grew year-over-year over 21%. During the quarter, we continued to see strong demand across AI server and data center applications.

Emily Yang: Also, during the quarter, our low IQ LDO regulators received solid demand for power tools and industrial fan applications, supporting energy efficiency and battery power designs. Our LED drivers continue to gain traction in intelligent LED lighting applications for smart infrastructure and enterprise environments. Also in industrial, our voltage reference devices received strong demand from a variety of industrial power supply applications, where accuracy and stability are essential. Our AOI contact image sensor products also achieve multiple design wins across inspection-related applications, including IC inspection, battery film inspection, glass inspection, as well as digital check and car scanners. In the computing market, although revenue decreased 3.7% to 26% of the product revenue this quarter, revenue grew year-over-year over 21%. During the quarter, we continued to see strong demand across AI server and data center applications.

Speaker #5: Also in industrial, our voltage reference devices receive strong demand from a variety of industrial power supply applications where accuracy and stability are essential. Our AOI contact image sensor products also achieve multiple design inks across inspection related applications including IC inspection, battery film inspection, glass inspection, as well as digital check and car scanners.

Speaker #5: In the computing market, although revenue decreased 3.7% to 26% of the product revenue this quarter, revenue grew year over year over 21%. During the quarter, we continue to see strong demand across AI server and data center applications.

Speaker #5: For the other applications like Novo and motherboards, we saw demand moderate downward due to the overall softer market for this applications combined with the memory shortage.

Rachel Smith: For the other applications like notebook and motherboards, we saw demand moderate downward due to the overall softer market for these applications, combined with a memory shortage. In high-performance computing and data infrastructures, key focus areas remain power management, protection, connectivity, timing, and signal integrity. High power transcend protection products are being designed into server hot swap power rail architectures, delivering ultra-high surge protection for mission-critical power rails. Our supervisory reset IC and five low, low RDS(ON) switches are seeing strong demand across data center and SSD applications. Additionally, our ISL portfolio, including voltage level shifters for FTI, UR, and GPIOs, are increasingly being utilized in servers, AI servers, and workstations, with designs at leading hyperscale and AI customers. Our PCIe 6.0, 7.0 MUX buffers are also seeing adoption across multiple AI server platforms.

Emily Yang: For the other applications like notebook and motherboards, we saw demand moderate downward due to the overall softer market for these applications, combined with a memory shortage. In high-performance computing and data infrastructures, key focus areas remain power management, protection, connectivity, timing, and signal integrity. High power transcend protection products are being designed into server hot swap power rail architectures, delivering ultra-high surge protection for mission-critical power rails. Our supervisory reset IC and five low, low RDS(ON) switches are seeing strong demand across data center and SSD applications. Additionally, our ISL portfolio, including voltage level shifters for FTI, UR, and GPIOs, are increasingly being utilized in servers, AI servers, and workstations, with designs at leading hyperscale and AI customers. Our PCIe 6.0, 7.0 MUX buffers are also seeing adoption across multiple AI server platforms.

Speaker #5: In high performance computing and data infrastructures, key focus areas remain power management, protection, connectivity, timing, and signal integrity. High power transcend protection products are being designed into server hot swap power wheel architectures delivering ultra high surge protection for mission critical power wheels.

Speaker #5: Our supervisory reset IC and five volt low RDS on switches are seeing strong demand across data center and SSD applications. Additionally, our ISL portfolio including voltage level shifters for STI, UR, and GPIOs are increasingly being utilized in servers, AI servers, and workstations with designs at leading hyperscale and AI customers.

Speaker #5: And our PCIe 6.0, 7.0 MOS buffers are also seeing adoption across multiple AI server platforms. As process migration driven SOC IO voltage lower, EUSB adoptions continue to accelerate as design in and design wins for EUSB repeaters have become widespread across major PC OEMs and ODMs.

Rachel Smith: As process migration driven SOC IO voltage lower, EUSB adoptions continue to accelerate as design-in and design wins for EUSB repeaters have become widespread across major PC OEMs and ODMs. Diodes P channel MOSFET are being designed into desktop platform for low switch applications, while our OCP power switches continue to see solid demand in 15 watt source path for USB Power Delivery ports in both desktop and docking stations. Our 20 volt high-performance low noise LDOs also continue to gain traction in PC platforms, reflecting record design win conversion. Additionally, in computing, our TVS protection devices have been widely adopted in USB Power Delivery 3 enabled docking platforms, providing robust transcend and ESD protection. Our USB Power Delivery sync switch are seeing strong demand in multi-port USB Power Delivery systems used in laptops supporting high power density and fast charging requirements.

Emily Yang: As process migration driven SOC IO voltage lower, EUSB adoptions continue to accelerate as design-in and design wins for EUSB repeaters have become widespread across major PC OEMs and ODMs. Diodes P channel MOSFET are being designed into desktop platform for low switch applications, while our OCP power switches continue to see solid demand in 15 watt source path for USB Power Delivery ports in both desktop and docking stations. Our 20 volt high-performance low noise LDOs also continue to gain traction in PC platforms, reflecting record design win conversion. Additionally, in computing, our TVS protection devices have been widely adopted in USB Power Delivery 3 enabled docking platforms, providing robust transcend and ESD protection. Our USB Power Delivery sync switch are seeing strong demand in multi-port USB Power Delivery systems used in laptops supporting high power density and fast charging requirements.

Speaker #5: DIODS P channel MOSFET are being designed into desktop platforms for low switch applications while our OCP power switches continue to see solid demand in 15 watt source path for USB power delivery ports in both desktop and docking stations.

Speaker #5: Our 20 volt high performance low noise LDOs also continue to gain traction in PC platforms reflecting rapid design wing conversion. Additionally, in computing, our TVS protection devices have been widely adopted in USB power delivery 3 and able docking platforms providing robust transcend and ESD protection.

Speaker #5: And our USB power delivery sync switch are seeing strong demand in multi-pore USB power delivery systems using laptops, supporting high power density and fast charging requirements.

Speaker #5: In the consumer market, revenue increased 3.8% sequentially and over 26% year over year we continue to see steady demand across personal gaming devices charging and home applications.

Rachel Smith: In the consumer market, revenue increased 3.8% sequentially and over 26% year-over-year. We continue to see steady demand across personal gaming devices, charging, and home applications. Rectifiers, Zener diodes, and super barrier rectifiers are gaining adoption in SSDs, tablets, and mini consumer computers, supporting efficiency, power conversion, and protection in space-constrained designs. Diodes USB Power Delivery controllers and PWM controllers also continue to see growth in the consumer charging market, driven by fast charging adoption and high power requirements. Additionally, our LED drivers are winning designs in household appliances, enabling long lifetime and low power consumption, while our high-performance boost LED controllers are gaining traction in smart home lighting applications. Lastly, in the communication market, revenue increased 3.8% sequentially and over 17% year-over-year.

Emily Yang: In the consumer market, revenue increased 3.8% sequentially and over 26% year-over-year. We continue to see steady demand across personal gaming devices, charging, and home applications. Rectifiers, Zener diodes, and super barrier rectifiers are gaining adoption in SSDs, tablets, and mini consumer computers, supporting efficiency, power conversion, and protection in space-constrained designs. Diodes USB Power Delivery controllers and PWM controllers also continue to see growth in the consumer charging market, driven by fast charging adoption and high power requirements. Additionally, our LED drivers are winning designs in household appliances, enabling long lifetime and low power consumption, while our high-performance boost LED controllers are gaining traction in smart home lighting applications. Lastly, in the communication market, revenue increased 3.8% sequentially and over 17% year-over-year.

Speaker #5: Rectifiers Zener diodes and super varied rectifiers are gaining adoption in SSDs, tablets, and mini consumer computers supporting efficiency power conversions and protection in space constrained designs.

Speaker #5: DIODS USB power delivery controllers and PWM controllers also continue to see growth in the consumer charging market driven by fast charging adoption and high power requirements.

Speaker #5: Additionally, our LED drivers are winning designs in household appliances and abling long lifetime and low power consumption. While our high performance boost LED controllers are gaining traction in smart home lighting applications.

Speaker #5: Lastly, in the communication market, revenue increased 3.8% sequentially and over 17% year over year growth in data traffic and bandwidth demands is driving enhancement in data center networking applications increasing adoption of high efficiency rectification solutions.

Rachel Smith: Growth in data traffic and bandwidth demand is driving enhancement in data center networking applications, increasing adoption of high-efficiency rectification solutions. Diodes' super barrier rectifier products are gaining momentum, supporting reliable device connectivity in high-speed network equipment. In parallel, our crystal oscillators and ultra-low jitter timing solutions are seeing strong traction in smart NIC cards and networking modules, where systems are becoming smaller and power dense. Our recently introduced ultra-low RDSon CSP MOSFETs are targeting battery protection and power management applications. These devices have been designed in by smartphone customers globally. Our battery FETs continue to gain traction in battery managed systems as demand increases for more power efficiency and feature-rich mobile devices. Complementing to this design, high PSRR LDOs, level shifters, and data line protection devices are also seeing strong momentum across smartphone applications.

Emily Yang: Growth in data traffic and bandwidth demand is driving enhancement in data center networking applications, increasing adoption of high-efficiency rectification solutions. Diodes' super barrier rectifier products are gaining momentum, supporting reliable device connectivity in high-speed network equipment. In parallel, our crystal oscillators and ultra-low jitter timing solutions are seeing strong traction in smart NIC cards and networking modules, where systems are becoming smaller and power dense. Our recently introduced ultra-low RDSon CSP MOSFETs are targeting battery protection and power management applications. These devices have been designed in by smartphone customers globally. Our battery FETs continue to gain traction in battery managed systems as demand increases for more power efficiency and feature-rich mobile devices. Complementing to this design, high PSRR LDOs, level shifters, and data line protection devices are also seeing strong momentum across smartphone applications.

Speaker #5: DIODS super varied rectifier products are gaining momentum supporting reliable device connectivity in high speed network equipments. In parallel, our crystal oscillators and ultra low jitter timing solutions are seeing strong traction in smart NIC cars and networking modules where systems are becoming smaller and power dense.

Speaker #5: Our recently introduced ultra low RDS on CSP MOSFETs are targeting battery protection and power management applications. These devices have been designed in by smartphone customers globally.

Speaker #5: Our battery fats continue to gain traction in battery managed systems as demand increases for more power efficiency and feature rich mobile devices. Complementing to this design, high PSRR LDOs level shifters and data line protection devices are also seeing strong momentum across smartphone applications.

Speaker #5: In the wireless infrastructure, our 60 volt buck converters are being designed into RF power applications including base stations, radar systems, and other high power wireless platforms.

Rachel Smith: In the wireless infrastructure, our 60V buck converters are being designed into RF power applications, including base stations, radar systems, and other high-power wireless platforms. In summary, we have started out 2026 with strong growth momentum across our key focus areas of automotive, industrial, and AI server related applications. Additionally, we are benefiting from ongoing demand improvement in both the automotive and industrial markets, which should continue to serve as a tailwind to our near-term growth. When combined, our ongoing margin improvement, we are well aligned to deliver increasing earnings and cash flows towards the achievement of our 3-year financial goals. With that, we now open the floor to questions. Operator?

Emily Yang: In the wireless infrastructure, our 60V buck converters are being designed into RF power applications, including base stations, radar systems, and other high-power wireless platforms. In summary, we have started out 2026 with strong growth momentum across our key focus areas of automotive, industrial, and AI server related applications. Additionally, we are benefiting from ongoing demand improvement in both the automotive and industrial markets, which should continue to serve as a tailwind to our near-term growth. When combined, our ongoing margin improvement, we are well aligned to deliver increasing earnings and cash flows towards the achievement of our 3-year financial goals. With that, we now open the floor to questions. Operator?

Speaker #5: In summary, we have started out 2026 with strong growth momentum across our key focus areas of automotive, industrial, and AI server related applications. Additionally, we are benefiting from ongoing demand improvement in both the automotive and industrial markets which should continue to serve as a tailwind to our near term growth.

Speaker #5: And when combined our ongoing margin improvement, we are well aligned to deliver increasing earnings and cash flows towards the achievement of our three year financial goals.

Speaker #5: With that, we now open the floor to questions operator.

Speaker #1: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question today is from Tristan Gerra with Baird. Please go ahead.

Speaker #1: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster.

Speaker #1: Our first question today is from Tristan Guerra with Baird. Please go ahead.

Speaker #3: Hi, good afternoon. Wanted to understand better the implications of tightening lead times on customer requalifications is that helping as people are getting more concerned about securing capacity for 27?

Tristan Gerra: Hi, good afternoon. Wanted to understand better the implications of tightening lead times on customer re-qualifications. Is that helping as people are getting more concerned about securing capacity for 2027? What's your timing assumption as to when those re-qualification in analog product happen?

Speaker #3: And what's your timing assumption as to when those requalification in analog product happen?

Emily Yang: Hi, Tristan. This is Emily. During the constrained supply market situation, customers always more willing for qualifications, especially with a guarantee of a long-term supply, right? Definitely it's beneficial. Overall, we're still going through a lot of process qualification, improving the technology with our internal factories. I would say the progress is progressing well, it's still going to take some time for us to ramp up more because the qualification of process does take time. I would say all in all.

Speaker #4: Hi, Tristan. This is Emily. During the constraints supply market situation, customers always more willing for qualifications especially with a guarantee of a long term supply, right?

Speaker #4: So definitely it's beneficial. Overall, we still going through a lot of process qualification improving the technology with our internal factories. I would say the progress is progressing well.

Speaker #4: But it's still going to take some time for us to ramp up more because the qualification of process does take time. But I would say all in all, we are on the right track and right direction.

Emily Yang: Okay

Emily Yang: We are on the right track and right direction.

Speaker #3: Okay, great. And then just two quick follow ups if I may. Based on your commentary, when do you think that you could get to the point where utilization rates are roughly the same or at least all of your fabs are at normalized utilization rates?

Tristan Gerra: Okay, great. Just two quick follow-ups, if I may. Based on your commentary, when do you think that you could get to the point where utilization rates are roughly the same or at least, you know, all of your fabs are at normalized utilization rates? You know, is that kind of a late 2027 dynamic, or do we need to wait later? The second one, you touched a bit on the call about traction in data center with your product. I wanted to know how you're approaching the 800V opportunity in data center. There's a lot of very high voltage regulators, you know, in each tray. Just wanted to understand better, you know, how you see that opportunity going forward. Thank you.

Speaker #3: Is that kind of a late 27 dynamic or do we need to wait later? And then the second one, you touched a bit on the call about traction in data center with your product.

Speaker #3: Wanted to know how you're approaching the 800 volt opportunity in data center? There's a lot of very high voltage regulators. In each tray, just wanted to understand better how you see that opportunity going forward.

Speaker #3: Thank you.

Speaker #5: Yeah, I think Tristan, I think I'm going to answer the question. First question first, and I know we are as you know, we have been starting to ship the product produced from those two wafer fab in Scotland and a South Portland to our key customers since last year.

Gary Yu: Yeah. I think, Tristan, I think I'm gonna answer the question, the first question first. You know, as you know, we have been starting to ship the product produced from those two wafer fab in Scotland and South Portland to our key customers since last year. We're continuing to improve the loading in the next couple of years, right? As Emily mentioned about the qualification does take some time, especially on customer side. Even though during the shortage period, customers shorten their, you know, qualification cycle, try to adopt more of our product, and it's good, but take some time. I would say probably 2027, 2028, you can see much more improvement on this utilization on those two wafer fab.

Speaker #5: And then we're continuing to improve the loading in the next couple of years, right? And as Emily mentioned about the qualification, does take some time, especially on customer side.

Speaker #5: Even though during the shortage period, customers shorten their qualification cycle, try to adapt more of our product. And it's good that it takes some time.

Speaker #5: I would say probably 2027, 2028, it can see much more improvement on this utilization on those two wafer fabs. For the rest of wafer fab that we have kind of in a pretty good loading at this moment.

Gary Yu: For the rest of wafer fab that we have, you know, kind of in a pretty good loading at this moment and at back end. We are in a almost fully loaded at this moment. Okay? For the second question regarding for the 800 volt platform, right?

Speaker #5: And at the back end, we are almost fully loaded at this moment. Okay. For the second question regarding for the 800 volt platform, right?

Gary Yu: I think, Diodes has real position on this kind of technology in the place. We have our silicon carbide MOSFET ready for that, along with analog and discrete device, so we can provide a very good solution to customer need at this moment.

Speaker #5: And I think that will position on this kind of technology and in the place. We have our silicon carbide MOSFET ready for that along with analog and D3 device.

Speaker #5: So we can provide a very good solution to customer needed at this moment.

Speaker #4: Yeah. So Tristan, let me add a little bit. With the 800 volt, especially on the AI power system or power supply side, we actually see the power supply unit as one opportunity.

Emily Yang: Tristan, let me add a little bit. You know, with the 800V, especially on the AI power system or power supply side, we actually see, you know, the power supply unit as one opportunity. We also see the battery backup unit with some of the others. We definitely see across the board really, really good opportunity. You know, other than silicon carbide, you know, and the diodes as well as the MOSFET, we also see a lot of, you know, isolation opportunities. We see sensors, we see some of the power rail protection as well as some of the other analog and discrete. I would say all in all, it's actually very positive, there's still a lot of potential for us to continue to expand.

Speaker #4: We also see the battery backup unit with some of the others, right? So we definitely see across the board really, really good opportunity other than silicon carbide, and the diodes as well as the MOSFET.

Speaker #4: We also see a lot of isolation opportunities. We see sensors. We see some of the power rail protection as well as some of the other analog, right?

Speaker #4: And discreet. So I would say all in all, it's actually very positive. So there's still a lot of potential for us to continue to expand.

Speaker #4: We also focus on some of the new product introduction that we share in the future. So we are very, very excited for this opportunity.

Emily Yang: We also focus on some of the new product introduction that we'll share in the future. We are very, very excited for this opportunity, and we definitely will continue to pursue, you know, the new sockets that in front of us.

Speaker #4: And we definitely will continue to pursue the new sockets that are in front of us.

Speaker #3: Great. Thank you very much.

Tristan Gerra: Great. Thank you very much.

Speaker #5: Thank you, Tristan.

Gary Yu: Thank you, Tristan.

Operator: The next question is from William Stein with Truist Securities. Please go ahead.

Speaker #1: The next question is from William Stein with Truist Securities. Please go ahead.

William Stein: Great. Thank you for taking my questions. First, hope can help us understand your exposure to AI data centers across end markets. I think you've got some in compute and some in comms. Can you first just make sure I'm correct on that it's split across end markets and then maybe, give us an approximate sizing or percentage of total revenue in that end market?

Speaker #6: Thank you for taking my questions. First, I'm hoping I can help us understand your exposure to AI data centers across and markets. I think you've got some in compute and some in comms.

Speaker #6: Can you first just make sure I'm correct on that, that it's split across end markets, and then maybe give us an approximate sizing or percentage of total revenue in that end market?

Speaker #4: Yeah. Yeah, sure. We'll this is Emily. So overall, we see the AI as a whole ecosystem. It's not just related to AI server, right?

Emily Yang: Yeah. Yeah, sure will. This is Emily. Overall, we see the AI as a whole ecosystem. It's not just related to AI server, right? Earlier, I talk about power supply. This is actually under industrial. We're definitely seeing huge potentials overall in this area. You know, we talk about, you know, networking, whether it's the networking switchings or routers. This is the other area that we're seeing a lot of expansion overall. Within the networking, I think I mentioned, maybe earlier about optical modules, right? This is also driven by the AI. I would say all in all, there's multiple areas, not just in the compute, that we're seeing, AI-related applications.

Speaker #4: So earlier I talked about power supply. This is actually under industrial. We definitely see huge potentials overall in this area. We talk about networking, whether it's the networking switchings or routers.

Speaker #4: This is other area that we've seen a lot of expansion overall. Within the networking, I think I mentioned maybe earlier about optical modules, right?

Speaker #4: So this is also driven by the AI. So I would say all in all, there's multiple areas, not just in the compute that we're seeing AI related applications.

Speaker #6: But we don't have a sort of sizing of that?

William Stein: We don't have a sort of sizing of that?

Emily Yang: Sizing. I would say, you know, other than the AI server that we are seeing, you know, a lot of ramp up already, which will continue the momentum, we also seeing very strong on the power supply side, with a lot of new opportunities that working to really help to drive to the 800 watt that Tristan Gerra Question earlier, right? Even on the data center as well as the networking area, because that's really the backbone of everything, we've also seen really good momentum driven by some of the big networking companies.

Speaker #4: Sizing. So I would say other than the AI server that we've seen a lot of ramp up already, which will continue the momentum, we also see very strong on the power supply side.

Speaker #4: With a lot of new opportunities that working to really help to drive to the 800 watt that Tristan's questioned earlier, right? So even on the data center as well as the networking area, because that's really the backbone of everything we're also seeing really good momentum driven by some of the big networking companies.

Speaker #6: Okay. Fair enough. Let me get to a couple of others if I can. There's a couple of other areas aside from data center AI that's capturing investors' attention.

William Stein: Okay, fair enough. Let me get to a couple of others, if I can. There's a couple of other areas aside from, you know, data center AI that's capturing investors' attention. One is lower orbit satellites, another one is humanoid robotics. Can you talk to your exposure to these markets? Do you have anything in either of those two?

Speaker #6: One is lower-throughput satellites. Another one is humanoid robotics. Can you talk to your exposure to these markets? Do you have anything in either of those two?

Speaker #4: Yeah. I think humanoid robotics definitely is a key interest. The reason we haven't really talked a lot because the volume still pending to ramp.

Emily Yang: Yeah. I think humanoid robotic definitely is a key interest. The reason we haven't really talked a lot, because the volume's still pending to ramp. All in all, we actually seeing a lot of similarities. I mean, on top of that, if you really think about the automotive, the other key area driving the voltage to higher and higher. I think all in all, on the robotic side, other than, you know, the power related, we're also seeing a lot of, for example, the joint movements, with a lot of requirement on the MOSFET, on the discrete area, a lot of power management as well. I would say all in all, that's actually combined everything, it is a very, very big ecosystem that's extending beyond what we are actually seeing at this moment.

Speaker #4: But all in all, we actually seeing a lot of similarities. I mean, on top of that, right, if you really think about the automotive, the other key area driving the voltage to higher and higher, right?

Speaker #4: So I think all in all, right, on the robotic side, right, other than the power related, we also seeing a lot of, for example, the joint movements, right, with a lot of requirement on the MOSFET, on the discrete area, a lot of power management as well.

Speaker #4: So I would say, all in all, that's actually combined everything. It is a very, very big ecosystem that's extending beyond what we are actually seeing at this moment.

William Stein: Satellite, low Earth orbit satellites, anything there?

Speaker #6: And satellite, lower-throughput satellites, anything there?

William Stein: Satellite, low Earth orbit satellites, anything there?

Emily Yang: Oh, for the satellite, yeah. I think we are definitely engaging with a lot of customers working in this area. We probably can share a little bit more in the future.

Speaker #4: Oh, for the satellite, yeah. I think we are definitely engaging with a lot of customers working in this area we probably can share a little bit more in the future.

William Stein: I'll end it there. Thanks so much.

Speaker #6: I'll end it there. Thanks so much.

William Stein: I'll end it there. Thanks so much.

Speaker #5: Thank you.

Gary Yu: Thank you.

Speaker #1: Again, if you have a question, please press star, then one. The next question is from David Williams with Niedemann Company. Please go ahead.

Operator: Again, if you have a question, please press star then one. The next question is from David Williams with The Benchmark Company. Please go ahead.

Speaker #7: Hey, good afternoon, everyone. Thanks for taking my question. And congrats on the continued progress here.

David Williams: Hey, good afternoon, everyone. Thanks for taking my question, and congrats on the continued progress here.

Speaker #5: Thank you. Thank you, David.

Emily Yang: Thank you.

Gary Yu: Thank you, David.

Speaker #7: Excuse me. Maybe first, on the pricing trend, it looks like there was a little bit of pricing pressure in the first quarter and maybe that's more mixed than market dynamics.

David Williams: Excuse me. Maybe first on the pricing trends. It looks like there was a little bit of pricing pressure in Q1, and maybe that's more mixed than market dynamics. Can you talk about maybe what you're seeing in terms of pricing? Are you seeing the typical type of erosion trends, or are we in a tight enough environment here that you can start to see that maybe flip around and get some pricing power?

Speaker #7: But can you talk about maybe what you're seeing in terms of pricing? Are you seeing the typical type of erosion trends or in a tight enough environment here that you can we'll start to see that maybe flip around and get some pricing power?

Emily Yang: Hi, David. This is Emily. You are absolutely right. The Q1, what we're seeing pricing really stabilized, and it's mainly driven by the product mix change. Typically during the constrained supply situation, you actually see the price more stabilized or maybe upward trend, right? Definitely we are seeing that in the overall market across all different end market segments.

Speaker #4: Hi, David. This is Emily. You are absolutely right. The Q1, what we're seeing pricing really, really stabilized. And it's mainly driven by the product mix change.

Speaker #4: And typically, during a constrained supply situation, you actually see the price more stabilize or maybe trend upward, right? So, definitely, we are seeing that in the overall market across all different end market segments.

Speaker #7: Okay. Great. And then maybe just secondly, you mentioned Europe, I think, multiple times in the script, probably more than we've heard you talk about in the past.

David Williams: Okay, great. Maybe just secondly, you mentioned Europe, I think, multiple times in the script, probably more than we've heard you talk about in the past. Feels like it's coming off the bottom here. As you look out across your markets and where things are improving, do you sense that any of the strength is coming from replenishment, or do you feel like it's real in demand that's coming through and this is the inflection that we've kind of been hoping for here?

Speaker #7: It feels like it's coming off the bottom here. But as you look out across your markets and where things are improving, do you sense that any of the strength is coming from replenishment, or do you feel like it's real in-demand that's coming through and this is the inflection that we've kind of been hoping for here?

Speaker #4: This is the real demand. If you really refer back to our POS point of sales, in distribution, we actually decrease the channel inventory. Both in terms of dollars as well as weeks.

Emily Yang: This is the real demand. You know, if you really refer back to our POS, point of sales, in distribution, we actually decreased the channel inventory, both in terms of dollars as well as weeks. Usually Q1 is a slower quarter for us. Seasonality-wise, usually about 5%, 6% down. We actually achieved 3.5% up, and this is also reflecting from the POS resell as well. It's increased quarter-over-quarter, right? What we're seeing is, definitely demand's real. We haven't really had the opportunity or seeing a restocking behavior going on, both in distribution or our customer base at this moment.

Speaker #4: Usually, Q1 is a slower quarter for us. Seasonality-wise, usually about 5, 6 percent down. We actually achieved 3.5% up. And this is also reflecting from the POS result as well.

Speaker #4: It's increased quarter over quarter, right? So what we're seeing is definitely demand is real. We haven't really had the opportunity or seeing a restocking behavior going on both in distribution or our customer base at this moment.

David Williams: Great. Thanks so much, and best of luck on the quarter.

Speaker #7: Great. Thanks so much. And best of luck on the quarter.

Speaker #4: Thank you.

Emily Yang: Thank you.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Gary Yu for any closing remarks.

Speaker #1: This concludes our question and answer session. I would like to turn the conference back over to Gary Yu for any closing remarks.

Speaker #5: Thank you, everyone, for participating on today's call. We look forward to reporting our continued progress on next quarter's conference call. Operator, you may now disconnect.

Gary Yu: Thank you everyone for participating on today's call. We look forward to reporting our continued progress on next quarter's conference call. Operator, you may now disconnect.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.