MPWR - Earnings call transcript Q1 2022 | Monolithic Power Systems, Inc.

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Genevieve Cunningham

Welcome, everyone, to the MPS First Quarter 2022 Earnings Webinar. Please note that this webinar is being recorded and will be archived for one year on our Investor Relations page at www.monolithicpower.com. My name is Genevieve Cunningham, and I will be the moderator for this webinar.

Joining me today are Michael Hsing, CEO and Founder of MPS; and Bernie Blegen, VP and CFO. In the course of today's conference call, we will make forward-looking statements and projections that involve risks and uncertainty, which could cause results to differ materially from management's current views and expectations. safe contained the release the to today. published refer harbor in statement earnings Please other could February statements factors to and Form our in uncertainties Risks, that website. including filings, which identified QX release our the is our the through SEC differ filed cause in safe XXXX, in harbor on contained XX-K earnings and XX, are results actual accessible today's obligation to update call. on no provided assumes MPS information the

income, not for other will accordance both A and operating table We non-GAAP are discussing not substitute SG&A net financial or should superior between taxes, and that outlines operating to gross a non-GAAP with GAAP. the measures a on income financial R&D expense, income, with income be in margin, in to and basis. prepared earnings reconciliation remind earnings measures available GAAP measures website. financial is income GAAP currently also in on is we prepared included the that and These to for before to like a the which be non-GAAP considered the expense, and as of call accordance furnished year, performance I'd release, earnings live is QX being SEC website Internet measures with XXXX you our financial our the will along available SEC with earlier conference for today. on release our over filed be the replay today's and webcast X have GAAP

to over Now call I'd like turn to Bernie. the

Bernie Blegen

new importantly year-over-year share the the increase record introductions. resulting in first broad-based quarter represented posted MPS of more The of customer million, acceptance gains, market higher Gen. revenue revenue and market overall our from first Thanks, product $XXX.X XX.X% of XXXX. quarter than strength

this data basis growth a company's reporting. separate in I since revenue included attention items. center our on for showing and to in quarterly table computing this on provide by the In webinar and X our at change like increased your would storage visibility to get looking cloud line Before a to has revenue revenue, computer reporting market, call The been order XXXX. to

line to total storage storage item computing, The revenue. which is and first called and computing client primarily refers

X.X% called The captures our first from product. with million data of and or sales. and first data, enterprise computing compared compared quarter item revenue center increased XXXX data second in represented fourth data quarter of line quarter the revenue quarter quarter computing XXXX XXXX storage computing XX.X% and enterprise represented revenue market, XX.X% with center storage storage quarter continuing to MPS' our $XX.X quarter increased quarter notebook XX.X% $XX.X sales. to is revenue primarily revenue Enterprise XX.X% the first In in from workstation higher X.X% and market, revenue XXXX due of of million of Computing first -- commercial the XXXX. and revenue due $XX.X XXXX of in XXXX. In million MPS' strength first fourth of first primarily of XXXX data the in which

reflected million XXXX revenue XX.X% fourth represented higher Communications of in the satellite quarter-over-quarter with communications. MPS' revenue $X.X quarter quarter The or quarter compared of primarily XX.X% first of the to XXXX for revenue quarter and XXXX. $XX.X XXXX. increase of communications First first build-outs related XG rose XX.X% million revenue

QX increase the revenue IoT quarterly particularly our to increase sequential with revenue of XX.X% XXXX improvement of XXXX. fourth XXXX. our revenue of in contribution XX.X% increased quarter quarter the $XX.X Consumer of reflected revenue or sequential million from represented broad-based the First compared a a from million consumer first of markets XX.X% $XX.X business. This quarter related

recorded of revenue our revenue fourth the compared quarter XX.X% decreased first million XXXX. of year. unearned XXXX XX.X% quarter In represented revenue in the compared in revenue industrial with market, previous year. of represented of flat first Industrial revenue XXXX. quarter X.X% revenue in of the XXXX prior $XX.X First $XX.X MPS' XX.X% the Unearned XX.X% quarter essentially revenue fourth with quarter of from with million our was

to gross of quarter XXXX basis XXXX. quarter the points was XX GAAP gross margin Moving basis first now higher higher than few margin. XX.X%, on of and a points the comments fourth XXX than

compared operating million GAAP XXXX. was with Our income reported the of $XX.X fourth million in $XX.X quarter

was of XXX non-GAAP quarter For the points basis of the XXXX and quarter points first quarter in better basis better XXXX, of XXXX. margin gross XX.X%, fourth the than XX first

gross was primarily mix fourth quarterly Our product of million higher as compared to reported a are basis, introductions from in improvement a the million ramping. XXXX. quarter non-GAAP $XXX.X income to both was GAAP revenue due value, $XXX.X and non-GAAP the On product margin sequential new operating a better

our Let's expenses. review operating

GAAP Our quarter in the XXXX. XXXX $XXX.X million first compared in of $XXX.X the quarter million of expenses operating with were fourth

GAAP were unfunded Our non-GAAP the income operating in differences amortization operating discussed an the for compensation operating reported of compensation million fourth on The stock here first from quarter $XX.X intangibles plan. million, and between non-GAAP XXXX expenses loss $XX.X deferred expenses expense, of are and purchased up quarters XXXX. or expenses quarter

to quarter XXXX, of line. the was goods quarter charged reported including million sold million first bottom expense, of cost $XX.X the fourth compensation compared with in to For million approximately XXXX. of $XX.X $X.X Switching

or was in to XXXX. per fourth per XXXX $XX.X $XX.X diluted income quarter the compared share $X.XX of fully quarter First $X.XX million GAAP or net share million

or non-GAAP diluted XXXX. diluted million. the shares of XXXX QX fully diluted income fully compared in quarter at was million $XXX.X quarter share outstanding share $XXX.X were million the of or Fully fourth XX.X net $X.XX per with per end First XXXX $X.XX

of and sheet. balance compared end to Let's the end XXXX the million quarter of equivalents quarter $XXX.X the cash $XXX.X at the XXXX. of million fourth look the first of of investments at Cash, were

$XXX.X million cash in the For generated quarter, operating flow $XX.X operating with of of fourth about MPS cash flow of the quarter million XXXX. compared

up totaled X XXXX. XXXX the the outstanding, capital quarter sales day the ended at receivable at quarter $XXX.X of quarter fourth days XX Accounts $XX.X XXXX XX or days from First of million. of first million spending end of

the the XXXX. of of at XXXX, up to the the Days the first increased quarter of our for turn now $XXX.X million, days of inventory inventories from outlook the quarter internal of end the fourth the end $XXX.X fourth were of comparing to at the XXX million XXXX. increased XXXX basis, Our of second the days from QX days Historically, of quarter of current inventory a XXXX. [indiscernible]. can hand XXXX. end of quarter's first calculated of quarter function quarter believe of at We of the would inventory see, XXX the like as XXX this provides we quarter a to inventory revenue. as with fourth end at current on days XXXX days with days compared the at projected up XXX following On I you revenue levels end better quarter of economic at the end to again, of

We $XXX are forecasting QX million $XXX to million. revenue to remain of

Total and to doesn't in will range expense $X.X to expenses follow at be to range before and margin to be XX.X% is shares of and open exclude the between in from including and expenses. or expected $XXX.X SG&A non-GAAP sustainable long-term to In would GAAP approximately million that the for sold, million XX.X% million XX.X%, shares. cost we to This million. fully of XX.X to million SG&A other plan XX.X Interest $X.X goods execute to now the diluted $XX.X foreign our million, and $X.X -- to ranging million in the I expect R&D litigation to $XX.X million gains margin litigation be charged in million $X.X the compensation of and growth. compensation of $XX.X $XXX.X will range stock stock-based of million, income $X.X $XX.X of losses, million. non-GAAP million expenses to million up range gross also expenses We range continue gross questions. to XX.X%, webinar for conclusion, exchange on between R&D

Genevieve Cunningham

session. would you, begin like Instructions]. analysts. Thank Q&A I Bernie, [Operator to now our

Seymore of Our first is Bank. from question Deutsche Ross

Bernie Blegen

there. Ross is can move Perhaps on. not we

Genevieve Cunningham

Our next William from of Alex question is Blair. Vechhi

Alex Vecchi

address supply out China completely of from interested little bit seems Congratulations to on of Maybe in some do you be quarter that allowed It like can in that. you unscathed, environment. dynamics constraints a a a great that's the came some guys the you impact. COVID the in tough

Michael Hsing

not last year grow you and -- in last we at ramp ago. as remember, said Well, products from don't years kind year And Alex, year, that will from exactly not 'XX, many even of we know greenfield plan XXXX, this a this from on minus we're year we or or to going plus so.

this now we when so and plan time anticipated. thing. the aspect, including better internal and a not assembly little a And And is revenues testing. X-year a We house rent long And every is than ago. logistics planned our staff, we

so And result. where that's see you the

Bernie Blegen

provides end lower to policy built can XXX XXX inventories ahead days, being at and to a achieving in look I second the numbers the of of we just add if also the days, good so us our insurance we've XXX which half our And of year. between we're for that goal that, as

Michael Hsing

business the to even and according XXXX our we know second plan, great, is of end the Yes, come. -- the but built in half will of not as we business the

I inventory a us customers it, And inventories a like player. MPS that our of -- -- Our at made part over remember, that lot as long feel our more time, major is reliable, more days. XXX

Alex Vecchi

just I one margin. Okay. gross That's as Margins strong, then maybe have really helpful. for on Bernie, very you, And been believe.

mix. You've alluded product to

gross the more front much runway on the margin sort do your uplift you Just think of from going how new have on that on you forward? products front,

Bernie Blegen

Sure.

along in our As product word, -- I the in positions the had as digesting us for that QX, gross result job done you've uplift around QX, seen fair with of we XX% our a results for a margin, which guidance but think acknowledging of we've the mix. both our margins is incorrect

did we the both was this But we terms most I what XX if increases, want back Ours that a emphasize allows change new a I and products. February will opportunistically, has these by created basis below of it take has another, I'll from points we companies that, higher-value to market set, primarily be take which expand year that the it give to same again, of of was been margins benefited floor broad-based our did us our far again, peer can we sequentially. expansion the is have we've So revenue revenue favoring well, growth but gross a in mix, see once to seen. we in of time increase still price prices driven up that answer only XX happy that. which last believe margin in to And

Michael Hsing

in cost -- we lot headwind little a down Just by a XXXX don't and pass XXXX. we a And have we a some up or bit the pipeline. earlier, -- the okay, 'XX, on production a to case, our margin slowed in said market as amortizations expansion for customers. setting The, our in that of built

went margin slightly much margin it's our So and to And not you see this now continued lower. lower, but grow.

Genevieve Cunningham

next is Cowen. Matt of from Ramsay Our question

Matthew Ramsay

Can hear right? you guys me all

Michael Hsing

Yes.

Matthew Ramsay

one you I what but business. interesting the about X Michael, that's really be separately, to piece PC of guys, is particular our that, breaking new for year. couple guys vendors sockets new trying and segment breaking you're know, guess I like was processor by I up, a I sort before those it data the in things server that out year-over-year, signal enterprise primary out either from wonder don't of guess, launched storage are with this the data the you XXX% of center And may

rates these breaking you the forward? of you growth reason Michael, new about bit for the talk could we maybe a relative expect guys that segments little as go X out and So

Michael Hsing

kind If but more clear it, so together, meaningful when we and past, questions -- and other to a we're of it's those numbers, know a you reported which publish any guys and the anyway you less -- on going answered reasons. in is combine -- questions answer and all we have some

Bernie Blegen

Matt, an up that Intel see think, releases AMD gain here. year a inflection point inflection both us, are clearly momentum of did saying for good I position as coming we and you which is will job product this for

sustainable better of to years. one footprint we a that X that better as And have both X artificial investors. So areas Michael believe expanding intelligence, for for and that, we next for believe definitely certainly growth this to providing will addition exactly XX-volt said, our information our we the be transparency in in is

Matthew Ramsay

at that take provided, for midpoint that quarter quite helpful. was and a was. certainly you second million us Thanks consensus the where model might thinking look my how $XXX through segment, you walk you're if helpful. Bernie, to above about would if where was growth really I bit the both to being second a be by that. guidance That's concentrated, you at guess the

Bernie Blegen

we're basis, during percent the or year. half dollar to in a second on going ramp particularly see that enterprise, think I of an accelerating the

to rate. our going at growth the to the center experience continued not that a to see a reason tends albeit computing is precursor of probably in we're for same our think from least data that be storage and I Part storage at ramp.

in think but the only consumer, -- of into the that's continue a each In broadened there that along, ramp a Internet we're in also the we the driver we seen as be of said, broad-based. obviously, quarters X to In actually, business, X XG strong expecting communications. the the but coming we foreseeable going is to X we've of satellite for emphasized And I center. good, to is Things storage, other prior communications, future. So rest growth into quarters, areas, and we've in the not now data

Genevieve Cunningham

Quinn from Bolton Needham. is question next of Our

Nathaniel Bolton

wanted offer side? most the assembly -- due me COVID? of either in about any in rethinking of final Obviously, is wafer you outside and in Alex' in are Chengdu, to I or and come capacity in question policy the congratulations question, related I I plans to I and Let foundry COVID guess, on to think most you zero your to China. a have just test China you then assembly resulting your lockdowns, place Chengdu place lockdown And back diversify given well. China of source of the takes as case put under contingency test assembly some need the China. and And wafer my

Michael Hsing

years manufacturing and a answer I even -- started of clinical have things. worry and started already yes, and serious a a of ago. center different about they environment. we We debate couple establish know We too the the Asia And everybody you is started that in as so. already We China the okay. is in it, problems, much bigger And if can't think not doing the or Yes. work, yes

Nathaniel Bolton

test have Chengdu, Chengdu, Michael, Chengdu if do In goes of you lockdown? under capacity outside

Michael Hsing

Yes.

more As starting little of ago, a ago, a we're than but to about XX years starting. months couple maybe it's we're

Bernie Blegen

can in we've our now With of started as now automotive. just concentrated that Michael actually capacity is higher parts the said third testing We've including some transition And parties. have Chengdu. value on we where

So built-in we plan. contingency actually have a

Michael Hsing

in other a retesting about have high different that, I okay, it volumes reliability Yes, is in it. Chengdu other we yes, we outside only, of our -- side. And facility. than pretty it's half China. high these -- in talk When than product I do about It's if about just mentioned outside

Nathaniel Bolton

Got it.

to follow-up tell XXX have approaching my my target that inventory of fantastic now days, job Okay. you increasing give of end that I of you're wondering then And tight as a target that get the on times guys would lead low is, increase supply around I times? give on potentially is the you internal your But your inventories what's question us very ability inventory lead levels. you may times market going as to going that if can gain range with level more absolutely lead sense to in think guess share. environment. to start of with could a even an up XXX level, internal in internal you the question what's to done given reduce us

Michael Hsing

as this in is time lead is same last quarter. the quarter the Our

don't and our rate I -- Bernie, our even of even see probably is booking now booking reduced So anything. said. The you

Bernie Blegen

as meet deliberate been took build advance, ones you're again, And decision far very And conscious of inventories each very the build we to under the what on the lead half for year. expect as I both have environment. X answer what a ourselves enterprise the in the uncertain my become second side, positioning consistent of a demand the to and we've inventories quarters. last done you then that has of that the think now good remained particularly in times on job And seeing has

Genevieve Cunningham

Stein of William is question next Our from Truist.

William Stein

however on on see at detailed you're while in always that we number especially We we on wonder customers when guidance, Congrats the anything more strong a owing results, it Ukraine or call these either it a order overall, seeing great particular very And or to the perhaps want I parts balanced or look moving or in level. lockdowns or though any backlog. related to if for outlook. kits understand is you to of focusing the seeing the there's if factors getting full China, you're sets the influencing the either whether rates

things helpful. be these none the happening, would provide you stronger. outlook would us if have example, qualification of For been were can even Any

Michael Hsing

supply. a. not solutions. Yes. the whatever We are Well, of in got part mean a application is is the we we that so [indiscernible]. selling are dominant ship these And MPS I small like -- something

And wall We so so billion. okay? don't We we're we don't call and costs -- effectiveness, know -- they you don't our diversified. very, actually, and know actually there. model. a it. where these That's that's the And much very know, okay, That's whether okay,

questions, I to the So the if mean, not centers. much ended we're a the where product okay. answer other pretty was -- The And yes, it lot car, do product your don't. than data a only things, know to we that, the we these goes where mean up, product are

Bernie Blegen

the quarters. the past from our no the in significant or business seeing it's KPI, is before, of answer whether helpful. change any bookings X, there a that Just That's other reinforcing we're X area over

William Stein

seen time long-term the update building they Well, talked medium were on achieve of us you those quarters, at over very over the the to ongoing planned were place it's of the or levels capacity Bernie, What of few utilization. the planning that's really. ago. revenue levels that couple about capacity words, capacity we've remind could total quickly. the But us years of ago. next other expect capacity quarters? you for. sure planned know upside you're Can started I'm you've full various course, long In that we that last in They not and today? a few can maybe I

Michael Hsing

Yes. That's good question. a

we're to in we quarter, think questions play billion answered we years. that in going the next the of I said revenues last that couple the okay, in $X of

what we do and that's to continue so invest. And we

Bernie Blegen

at just the think year guide about that's that by our billion $X offer to And Yes. QX, of the credibility be you that lend milestone some XXXX, up a I chain. I recall of rate. to expectations ago, a we would that in a of amount that, and end backs the visibility think with And ahead, run the provided we that supply have sort in

right now, So the as said, goal $X Michael billion.

Michael Hsing

it, ago. Yes. do will is we we see And this said billion, there in demand If do $X a there. we in, years will to will continue yes. couple the the the demand year, see and of What we as be in demand

things. okay, not -- Okay. is happen it does that term, a This the year happen will a if not And one after. that short year,

Genevieve Cunningham

is next Oppenheimer. Our question of from Rick Schafer

Richard Schafer

for I'm that I'll any or when AI breakout on because you up like opportunity. you've curious I expectations the of big broader that, on XX curious and just could, question, like virtually below like see volts curious, at other and quarter year SAM like of kind or the MPS my volt and sort line guys that for echo awful all of years. if server you assumed next? cloud outlook. XX-volt following you of areas if year. updates obviously, there's If this seems But sort looks could sort what for other markets give congratulations big ahead because accelerator bit, XX little looked for first of this I XX-volt kind CPU us, of was curious QSMod a move I'm your ramp stellar it auto I or industrial I'm some like within an next the And all couple into I'm a

Michael Hsing

same for have okay, the also, we started all the in car, now these standard XX also that's CPUs. the the volts, the the solution volts and telecom there. silver so it's technologies. volts for and XX And XGs XX actually the thing. And a Yes. the automotive XX these and volts, compliance a areas, -- but different again, with we see and AI,

So can there's a lot of grow. areas we

Bernie Blegen

we're seeing the roll its of the competitively, only that think XX and Volt, adoption we've expect very course would next not with out I ramp, some that And rolled the during we more I that offer are to the broadly, well of XX new out but months. the positioned technologies

the inflection I think product we opportunity. releases of here with So this market time our again, pretty well

Michael Hsing

Yes. the talking And ramping, with as yes. product, module the is we're

customer or So solution a We level module level we chip providing had levels. needs. whatever provide -- we're on

Richard Schafer

sort XG I us from follow-up, Okay. while. I And a then XG, X just I guys with the on I big asked X know update in if you you on Tier just XG maybe here engaged your are can as curious you the OEMs. my haven't XQ give an mean the was expectations. flagged question And of results.

seeing So any are I'm sort ramp update expectations center year. if for you're with how if server how give maybe could that in talk of in curious you opportunity could you you sort data what about how station. that And macro and content base there's your or And looks. what us quantify this compares of on

Bernie Blegen

a The for relatively XG segment us. market is new

and how We're on of like looks fast sort we to draw prior down. we're our from hand and like calibrated experience mouth living So can shipping. or it's what up not demand little a

SAM the but a while of available providing infrastructure, partners a related we we What referred to a top believe us. look of And to content. to good model. what don't easy only talked it's at real have base past calculating So with the in with on means as to we is to again, been predictive station a you XG not broad out has you number that, the as X base, about the we're

we're and think, lower in as fiber specifically. XG to the of support adapted not in lot pointed in XG in putting that transceiver specialized be the a center initial optic again, I tending to the or well as that as necessarily end out, I think we of technology for is data also the And base we're station.

we and value we've able visibility this with past to content. go have So with content, center. the don't being data the it's We used level to and relationships same deployed, build the in how lower on we're of then dollar strategy value comment higher

Michael Hsing

low for Let that said of transmitters. fiber chain, we these not provide solutions be, that a any do the have It end. now. lot is be provide these categories. our used based a now areas in revenues -- design. which me really the market, and do a ramping building the can And telecom, blocks say Bernie of each to from are each all but other design custom for products these we for to product And have optics power we do of can these standard see And activity way a all a modules -- customer single the on it of the products. It's each

Genevieve Cunningham

Our question Chris is of Caso from James. Raymond next

Christopher Caso

quarters, revenue been be revenue as year. And through year. you quarters, segments? next any over far, concentrated particular speaking X, where server based, of for to end kind based, the going has in question the to of do a profile to be to we a X, that But expect get through the revenue your as continue you in X go look we the and we've broadly think know growth revenue past this ramp guess growth most while we the in growth is as about of the seeing broadly thus growth several I been segments. anticipating I we've the about pretty been

Michael Hsing

much even Well, 'XX, and grow, we as and see in don't -- they okay, ease the we're cylinders we among much of similar, energy an product. okay? think in the efficiency they customers We diversifications. using that grows, demand Whenever demand one it, higher thing can, few can and And strategy And see fired see product, the -- it okay? of more means difference. many that's are adopt easily these and we And a which product much next a efficiency is we XXXX okay? quarters, high-value the use I the pretty for strength our we

better for much development Instead we are a customers. for do these of of lot the our so we customer our develop -- lot work, work our for do solution And development us.

means amount higher that So dollar a -- content. higher a dollar

that's difference. really we only as And that so see

Christopher Caso

year? into customer some it. forwarders Got other going revenue right rather get your freight challenges your you're others mean now, we logistics of the accept of of from side. which there And are and some unwilling goes follow-up the any that customers or now And some product because question impact of Is production China but half closed to simply the well? are on or that is as that lockdowns My your now. those is heard second might of the that in one is something facilities challenges the of facing of that from that part right at some on issues solved, about that some are China right of side what least impact not from having the

Michael Hsing

just were Absolutely hit have that not this little we grow -- we us. we get problem, better. wrong. though whole more so a ship me anticipated And we Even a don't we but much, if lot that

roll not our there's the production they product you business. we less clearly, logistics of shipping much mix, -- years And models, in a I even and than have still our And suppliers. we of one auto for the other have -- customers, mean other So can can our problem our again. than X mean our see above in the hand, on and model. of limitations, too. a our portion And year, is model, other

parts. because in they are or for buying So product and -- limited okay, they because you -- speculate of -- in they're our and of can't miss purchasing other

Bernie Blegen

some And and resilient the we've a number is is under that Part of it moment. of in I very ago, and set X diversified be long X, adaptive of years planning we that it of environmental circumstances. how think be some that is continue is to the can how we

we're acknowledge I is us, to continuing element affecting that, So say again, that supply and wouldn't chain the impact a our we but it. customer did monitor pronounced

Genevieve Cunningham

next Nicolaus. from of Tore is Our question Stifel Svanberg

Tore Svanberg

Congratulations on stunning. record quarter, another quite

First growth. long-term question on is

to So there's last looks you like you've at have track said revenues. the you even past, than XX% Michael, It more reason you're higher year. grew XX% this on another though year in no least. can't you accelerate growth growing why

Michael Hsing

good. You remember That's that.

Tore Svanberg

So I'm I you this can yes, number? going number, about be think but know at would to growth to point. not what trying a right you're Is add commit great. long-term the on just XX% anything to probably you that understand

Michael Hsing

Yes.

MPS, at to a about value few if it, demands Okay, related the make about more control low to quality And as all testing I final okay, is product, but we applied don't and related other wanted the that see accelerated only solution models, apply all, in not all -- opportunity MPS. apply a can okay, to opportunities effort higher control. customers always to tools just And anything engineering apply even any said, think because to ago, we're that solutions it's growth power kind for can minutes And the they that OEM. to any else. I it's related a our of be their I products, said

we to plug-and-play solution automation you a those will product type from we has building solutions. And higher which see components and And MPS, of of for and controls. industrial buy specify on, all kind we so incorporate those our or ASPs, and robotics, provide we -- those now for lot components for okay,

And how it's turn it much put lot price that have you And these unit I now And knowledges then and fast the revenue. meaningful solutions of a into we be predict. can't that, can product, all together a So too. higher. will

is keep MPS time, chip a same business, the growing. at Now semiconductor

any don't don't the next it's year term I accelerated. in and so. I So slowdown, actually see near or the see in

And or X, the infancies. think if And you model out so companies it years a very X now, as other like the content. is only part I go will to at of in is we X real semiconductor total the from be silicon solution

So billion I to I no $XX companies, mean more. $XX is billion seen of reason grow want more not? company, why and $XX I've billion, than there

Tore Svanberg

Michael. That's perspective, great

add are could market. of you a I some traction has me, to crack market. today it's business, I follow-up, little wasn't company high-margin of difficult a bit obviously sat Because very had you the the types what a that's hoping in color introduce what right, continuing just more into. are was it's very my to products? there, lot new As but to -- you that aware of applications, in the market comm strengths And a also

Michael Hsing

ago. related or sell mostly, all new we user everywhere, power And And -- is the committed and station designed to these amount. I the not modules. this so solar powering these a that. panels to standards, and the lot And okay think we way cell There's and also, antenna there's few I to years power box. it's receivers is It's a the and the the controlled power a interface, huge Yes. down also self communications grand a and of cell new a antenna lot to we in our from. mean also this for only the into and all to of activities benefit like value in -- this up and are the the And it again, have in a there's in

Tore Svanberg

Congratulations Very Excellent. again. good.

Michael Hsing

Thank you.

Bernie Blegen

Thanks.

Genevieve Cunningham

Our next of from question is Bank. Ross Deutsche Seymore

Ross Seymore

me Can hear you guys this time?

Michael Hsing

Yes, Ross, you're there.

Ross Seymore

to the glad here been work. I'm we that whole it got I've time.

for a question up adding Customers to the a third more more use follow chain, about value first more. talked one. And value. on the the guess I to folks with that's in or first tonight's times markets So longer-term up in I'll moving of shorter-term the tier the up want then past, Monolithic many tier. going second various from Michael, and one, kind call you is

what as you raise And customers? value the fact to at to much didn't as seeing higher evidence that could peers availability, does Anything are that longer-term you do and to value moving is, wins? that giving really want get you up wins, higher you I your higher design you quantify prices of dynamic? design that and had So is

Michael Hsing

negotiated okay, don't the didn't okay, I really that. tier, customers first are know for way to prices strategic that, the didn't have this the And those we -- price, we customers value how the because increase qualify -- the don't we because before audit. we

we're for part and very the that so these okay? these that years plug-and-play, sporadic. is for don't have think also you what e-commerce, products I And going few of a these programmable, said lot honor And it's so even to. do, customers a is just MPS This benefits And offer that related. MPS we ago, that actually and so things. to or is they but are don't what okay? It's that. said solutions offer you or beginning, what And high-value of and -- do. So do know high-value the we we to all we to do e-commerce long We And that entire branding solutions the said starting a we we okay. know even term. relates all that, always other customers

solar customers, satellite I do we said a and so we're large company. for only And

We have the companies. EV

have unit. even we these, do And design of X to the a don't MPS, have demand day We the the more they lot it. or centers and a provide entire data all

just is across So named the board. small. that's a We're I still a revenue actually few. starting. But

Ross Seymore

this follow-up, this, Bernie, my about mix. could margin either really gross both answer for a near-term and be on it's the revenues your and question, And the and/or

You've about products talked being mix gross driver margin rising new of of because that. the and the

couple they're there design margin, on wins? gross of those be just look So accretive of a businesses, lumpiness? And could think equation some that sequentially for for Is the more believe people the bit in side waiting been quarters, that areas. it I they've business? last anything Is mix automotive it of some the year-over-year, months the Is most for on I going X little industrial if but and so. to great at the flat down last or

that be is areas margin supposed others? slightly are positive margins how the to mix the your So such underperforming X for are highest the a if the actually gross

Michael Hsing

Makes was question. sense. good That

Bernie Blegen

were wehat the and said what's demonstrated markets. the reference if that power the And the performance go Michael reflected it and year me came markets, industrial leaders they being Let current the earlier. revenue our in In our drivers. end to back of down you performance, growth it the in to diversification year, we last really shipments. It's automotive model end health of the of timing of X the of

we the us in, that far that believe that we that rules extent a problem. we positive. going don't on cause So orders the believe the design overshipped them coming incredibly as are that to remained book The to as that's

again, about fundamentally it's it's just opposed -- to more different So different market. the to quarter-over-quarter anything as

Michael Hsing

also, out year-to-year go can that if is -- last year to okay? the margins. a mean I mean, -- year-over-year I And And year. phased segments not mean this now, why those questions last look X the you of like be margins, the one and QX from it segments, a the are segments at margin lot I on goes of the growth, sideways, we if contributes these and there other okay, gross up consumers,

last issues, phase So That's maybe capacity greenfield we year. the but the margins. lower year, gets beginning products the overall, of When you as the it. -- always of out drive another part these the margin. And know,

Bernie Blegen

as we're And capture rationalize Michael's wafer to our business, a It's opportunity. some has it the our historically. a trying haven't emphasized as result, production would the used we as have been like far to add our margin lower just component to just lower-margin we as to that starts there point, to in phasing portfolio, out that of of largest planning. our have business not business And in

Genevieve Cunningham

Our question from is next Rosenblatt. Hans Mosesmann from

Hans Mosesmann

to Michael, stuff. else X an opportunity. if have Good I XX everybody like were split volts questions. as has Congratulations, mentioned. we

volts issues center So data with volts and rack, and the I'm the that every to getting rack power and XX the getting it your accelerators the within there's to board board there. XX has thinking to in deal

would first the X for points. XX business And for that's volts touch it, what at each? opportunity the the where you way incremental there's look So for to If MPS? is be seeing

Michael Hsing

market the question is last few -- XX we right, is there's solution, okay? to so Everybody came think the X.X That's not into the a -- okay, we That's market. mean come and down convert then we played. XX depend does volts. now we directly -- similar customers the of yes, and And do -- competitor our builder to convert X play it's providers not We our volts, volts, can XX, down and to to provides XX and applications, and okay? or else X it's it. part, that on And don't in so I solution the it's the you're I to solution. at jump materials. in the X open volts, XX

know is this even of to the the know goes application, And high so do, which X,XXX one than we that watt I some watts. hard you XXX products, more to of tell. don't one, but current kind okay, and Which All we to X,XXX probably these of is and -- know. couple watts

see and the all You smaller. are these get the you these go, solutions are wattage now MPS -- volts higher

firewall. the that And the you see centers. the provide can that to And costs, then the so have a volts you new XX we XX. in to it. solutions and you a in And These convert coming accelerate data population so years those are where okay, that's

So an lot. which okay, close a increase to X% of efficiency, is

Hans Mosesmann

market view to are just parts mentioned that other the is My MPS? low of What's think end what Intel is PC the okay. PC your have helpful, you this, follow-on, participation That Michael. view to end the but market for was the that weak, very degree there? the I the of

Michael Hsing

We end, PC mobile do And commercial PC, do for battery PCs And can spin it's other without we an the we We -- the and CPUs. We effort, okay, case pretty opportunistic actually do norms. -- offer OEs. Yes. business to developed we for commercial for management. And commercial very and obviously -- product did PCs, do even end of have we solutions memories, much other the we off panel. but a than a product products. other much, And the for of an and well. that do a on we And server. low other engineering us, can than because from

And the -- see very -- strong. opportunistic. that's we so very it's demand currently, is And we

Bernie Blegen

platforms. those offerings, seeing we Yes. content same to sell into additional that, commercial very have And side. to is add to many just footprint so we're because have And a what is in able being the different Michael, we good client

Genevieve Cunningham

Instructions]. [Operator

turn like back there over would are Bernie. questions, I further no As webinar the now to to

Bernie Blegen

call, the would Great. XXXX forward look you day. to nice during which webinar. be all we Thank to like for July. I on conference QX our a talking thank joining have Thanks, and Gen. I'd like to quarter you us again earnings you, second to in

Monolithic Power Systems (MPWR) 3 May 222022 Q1 Earnings call transcript