AOSL - Earnings call transcript Q2 2019 | Alpha and Omega Semiconductor Limited

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to Alpha and Omega Semiconductor Reports Financial Results for the Fiscal Second Quarter of 2019 ended December 31, 2018. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, So-Yeon Jeong. begin. may you Ma'am,

So Yeon Jeong

the will afternoon, conference Senior the welcome been is second the call So-Yeon Stephen President will since representative This provide Good the guidance of follow and the CEO; quarter us Mike me our review Yifan Yifan has speaker. quarter. as on the take Omega time will is for Relations business a for for the today's Investor of the CFO. Semiconductor's he and Vice a for Chang, Stephen, Jeong, With everyone, Chang you. a next with to XXXX. Stephen to Liang, highlights, to like Marketing and Then call Alpha report. and results. financial Company. followed quarter. Thank results fiscal segment review welcome today who Yifan Company would the call who up Mike by are this detailed Dr. our will with I the that, is begin joining with XXXX After

is our posted the today the distributed days answers. the release reserve by web can and broadcasted market on earnings February the seven Investor for Business the website. X, accessed questions Relations The also of live www.aosmd.com. is website The closed. Wire in link and call we section will for recorded Finally, Company's at over being via time the call This release be and was XXXX following after

information statements of These by we actual cause from GAAP We conjunction operating that outlook measures that and and certain in conference remind measures Management's current the provide. Our provide including because financial is measures. differ of comparable projections. GAAP believe We non-GAAP are our we'll earnings financial expectations included the measures would that A this business our use discussions performance like non-GAAP you involve such and useful forward-looking our measures include call, considered we could with investors of results release. to reconciliation certain based to release forward-looking be this on non-GAAP these they should during to course in presentation that expectations. and make risks about statements, earnings uncertainties materially

risks more detailed and refer SEC. uncertainties, description please a to For assume of update subsequent call. these the in our provided no and with recent information to obligations We the today's filings

an results. turn quarter the provide over overview to fiscal CFO, I'll Now, the Yifan? Yifan, financial discussion second our to of

Yifan Liang

higher-value Revenue our the Thank in overcame performed $XXX.X We afternoon market of products. and the for you, So-Yeon. Good you quarter same was compared challenges top momentum line result the on to well December million, from essentially quarter and flat growing up year. joining us. when a last quarter for thank the as XX.X% and prior new

revenue mix, from In was million, revenue from was X.X% IC XX% $XX.X year Power up up terms the product sequentially $XX.X flat quarter of and up year-over-year. prior and MOSFET ago. a X.X% million,

last year. as Assembly $X quarter for for prior to the million was $X.X quarter the and million service revenue million compared same $X.X

compensation compared $X.X compared $XX.X million and for last the excluded $X.X $X.X Consumer expenses in for of Non-GAAP also also to million million share-based venture compensation team $X.X sequential quarter million prior production and $X.X last Chongqing related quarter XX.X% operating for December for was prior quarter margin $X.X as for quarter same last expenses year. of quarter million to as gross million Non-GAAP decrease Supply mix, to non-GAAP impacted of the December XX.X% $XX.X $X.X $X.X the power quarter for million million The for Chongqing compared and million represented the for quarter in the share-based of margin primarily XX.X% related Power for prior as of to prior was included expenses. same XX Industrial charge quarter million margin the last as others fluctuation and were as the $X.X operating revenue, to compared quarter operation $X X% digital quarter and and the quarter expenses to expenses quarter. million gross of the $X.X for compared segment the charge the Regarding excluded compared excluded expenses for in margin same the year. $X.X gross in quarter as the our the production excluded joint X.X%. expenses million year. year. and same joint non-GAAP and last million quarter and prior of to Non-GAAP points the XX.X% to $X.X same the million for Computing controller XX.X%, costs total quarter year. million the ramp-up the pre-production Communications last segment by the compared of operating December to venture $X.X quarter Non-GAAP year. the XX.X%, for the million and Service XX.X%, for same GAAP prior basis prior operating Non-GAAP Non-GAAP gross Both the $XX.X quarter

last joint million million Chongqing to quarter operating million to making $X.X for quarter attributable prior as continues digital $X.XX product year. a AOS the $XX.X $XX used and the and to December for roadmap. for prior as securing for quarter year. shipment was same from for million million Our per one-time deposit the in compared to continued million million $XX.X same per for prior same expense the the tax generated operations to million In compared quarter year. tax the to and the as December included the for for December same quarter a prior last quarter $X.X share operating for EBITDAS compared a the to quarter quarter, was flow $X.X controller flow. $XX.X result benefit $XX.X for $X.X million flow customers cash last million prior last million in quarter quarter positive quarter $XX.X steady for for attributable share quarter US compared $X.X year generate we work million for and million attributable product Non-GAAP progress benefit $X.XX power compared to venture cash of customer $X.X The quarter the us. of the reform. same the the due toward future $X.X team EPS and million tax cash the last per $X.XX was AOS designs to to the with Cash quarter our year. of tax Income is share flow to was as and operating $X our the more AOS for $XX.X million for quarter

as to at our cash at on We venture with $XX Chongqing balance completed joint $XX the quarter, balance Moving equivalent the to of balance December included including $XXX.X the and the quarter million, JV million Company. at cash million end of cash million sheet. balance compared cash $XXX.X which last

Our at was million, a ago Company. cash year million balance $XXX.X including the $XX.X JV

approximately our refunds. capital quarter, future loan of value-added $XX.X JV against the million Company a tax borrowed working During

days to ownership the up and $XX as XX addition, same end, was for outstanding $XX.X at in including last JV occurred as Company mass receivables the quarter XX $XX.X to last and was compared we In test end The from quarter Net production $X.X for last Company are quarter. $XXX.X to million AOS. the trade AOS quarter the ramping for quarter. balance inventory were the inventory days equipment million million days property, $XXX.X back JV additional quarter as the JV to venture of million XXX cash from which to $X joint contributed million end assembly the and $XX.X million the changed were $XX.X inventory XX-inch the preparing ownership million in were prior to million Company XXX Capital and and the million the expenditures in at venture the year. quarter $XXX.X $XX.X last in million of compared of prior the XX% to joint Average at compared million year. fab. quarter inventories quarter for last and as partners' at year. for $XXX increase our from Net and December primarily prior sales XXXX, million up partners XX%. days from the was quarter, million Day compared was days the and Net plant $XX

update Before our of like on production during a trial XX-inch and venture. ramp Mike, the the We're both I the quarter. Chongqing turn I to words assembly the call track joint were production December pleased to on few that test fab would over and say

in level test continue quarter production targeted up March to production the our ramp We and to during June assembly will reach the quarter. our

fab and With expect to XX-inch the to the Dr. call with XXXX the Mike in turn our customer highlights like provide over that, quarter. would business March will quarter. start qualification process for We Mike? CEO, to the now, the who sampling Chang, product I the our

Mike Chang

good everyone. and Yifan, Thanks, afternoon,

have flow, increase key as quarter business initiatives. XXth is business we to quarter. March The in China, markets in home changed demonstrate and cash The weakened consecutive December represents that deteriorated December appliances growth discussed which soft the our XX.X% quarter generated weakness momentum during results continue quarter namely funding we operating last the quarter, year-over-year The applications solid we recently. of Our build. healthy revenue smartphone Furthermore, of had the further smartphone conditions the high-end growth.

production inventories, customers to led us which our reducing plan smartphone Our adjust are has their accordingly.

trade tensions In are the near-term. headwind in adding more addition,

challenges by However, these products. we growing higher-value business navigating momentum new in are environment our

strategic smartphone quarter, adjustment, is high-end after ran the and -- winning The share work Even fulfill increased in of venture, our key us build ahead tablets. the with forward can ask in BOM Computing a customers December and why are AOS. capacity we Investors further the we and home better to why market at in demand expanded customers fab to full our so like During ramping still we Chongqing share the often won and look we capacity. appliances of demand. Oregon applications, joint

core a into the take a preferred customer transforming supplier and me are AOS philosophy reiterate to markets. support highlight Let few our in and minutes that key competencies

Our Two. larger is highly competitors capability. our core versus differentiator effective R&D

We forms, enabling have extends components deliver silicon advanced We and range and can have processing now beyond but that. solution products us of our in to of design, building best patents, customers technology, Power over blocks and ability worldwide many with critical wide packaging total IGBTs applications. granted far in a serve X,XXX MOSFETs, the discretes, IC our We the pending ICs.

the of and to components, system-level value customers know-how, customer in significant future to eager. manage and support agile we apart of solid a as We also healthy thereby headwinds In of customers' our us is application improving with I help is the our build we competencies deliver them have offer efficient, way times technology is customers' traits well the execution us so process addressing across programs. see underpin as trait sets out are with endure better summary, above customers customers' the We overall our and to of always believe strategy bring systems go same to and key challenges delivering The our are working in work and the development, That challenging supplies nimble, current the businesses. design products pleasant results better. the our that our further the to growth. What efficiency This cycle. that ordinary, all us that one something winning the spec will new we a being the combination deep times. and to through Beyond the beyond that simply enabled try more speed their make that our financial is can of philosophies foundation involve creating strategy sound with. design critical or for phases

solid long-term We my our challenges, concludes on remarks. are business remain our business multi-dimensional focused while solutions. on proprietary This relentlessly further against near-term ahead driven We by the with plans. the by encouraged delivering growth our market prepared initiatives pushing pipeline

for share and from to in update. over you dynamics our report. fast-changing on with and our market, evolves marketing that, we the Stephen of is pulse more his comprehensive department finger requirements. a As market turn direct to business first-hand call Stephen? it the has line with I think helpful With customer insight Stephen will segment fast with segment paced

Stephen Chang

results across pleasure Thank the today update you market and my segments. to call you, be afternoon. It's an on our major good give Mike, on to the

Let XX.X% total December and me start in the a revenue XX% XX.X% We growth with of quarter. Computing. It sequential posted year-over-year. represented a increase

content BOM our computing applications. expanding our We continued to grow business in by Computing various

to continued platform design graphics major our application. card the and products market. market DrMOS into in diversified the further high-value achieved Our Add-In-Card IC gain We Power share business into the latest Vcore wins

our addition, not our these we our June it business tablet application and the on big last our because that in during more of global new protection the to business in a footprint December we the March tablet adjusting support originally began higher ship name separated customer the this Accordingly, March same note to from to parts affect the when for it Please expanded to and product In applications align business brand quarter. major our at quarter. Computing CPU OEM for XXXX quarter. categories are battery systems. To Computing PC this moved tablets down Communication particular was marginally shortage we the the better guidance tied impact is segment resolved business prioritized segments, in we value have expected our but to The Communication quarter, with did forecast segment gave we our expected is The be tablet shortage new the processors segment. core business to quarter. to in high-end were

Now, XX.X% which let's of revenue. segment, the total Consumer was discuss

IGBT seasonality segment similar XX.X% weakness strength in gain weakness, calendar sequentially track design increase in home increase in markets. to were devices our applications. appliance XX% XXXX traction activities, drawing Chinese a year efficiency power is in this IGBT the of declines year line Despite expected, and in on declined year-over-year. to The the optimized XXXX. continued on our As more appliance that than for and TV due in grew XX% calendar and motor

During Chinese the and gained December the market refrigerator share home market. quarter, we in applications in new won appliance customers

applications, wins us. For in for design which TV secured represent BOM premium TVs, content higher we significantly

healthy quarter. in more are In Consumer allocated these the capacity TV growth for quarter. context, we the now expect the in March March segment ramping We products this and

slight high and expect of products. trend near-term higher voltage fewer Now, product our line. let's X.X% smartphone year-over-year. segment management our This charger of and in trend well expand thereby segment. by sequentially our turn March even business to continued and Quick XXXX. XX.X% players positioned increasing Industrial medium to levels momentum segment accordance performance we in expect quick market, from applications more was the X.X% and to to Even favorable the voltage calendar see sequentially share we up MOSFETs, by we charger Supply revenue, up commanding believe activity, the year the are see Power We with in selling In efficient requires and USB benefit power the in softening market. this PD prices, current. leaving charger moving This ongoing mix higher total are We a encouraged with in gains this our to in medium decrease quarter. voltage product while

Keep rates. increased XX.X% impacted was revenue December makers the December segment, market X.X% Computing XX% global Finally, battery the and expectation. dropped as in year-over-year. our sequentially adjusting the new the Without tablet segment, Communication their protection smartphone let's revenue was Segment smartphone came mind in business line which quarter. discuss of in in moved it, The which revenue inventories. are with weakness further is growth into deteriorating that

added we December customer the ramp quarter, the overall smartphone for demand quarter. new global slowdown in September production in that partially the the During of offset with Chinese we the

the for quarter, the secured also an In smartphone global wins design enterprise We in in XG. gradually we ramp won December equipment additional quarter. OEM telecom parallel, March in multiple will which

the Demand as new in we XG XG the should excited to not us designed ramp. with so with for deployment, stations. headwinds specifically did are are telecom past combined base robust of very quarter, moves opportunities products grow voltage in actively industry our the about performance participate telecom forward deliver slowness. March medium the in We products smartphone the the thus equipment offsetting ahead seasonal partially Our

expect the quarter, June the confident While will I are quarter. rebound that, this guidance. segment the will trough Yifan now starting to With for to over that from in call segment the we turn we our March Communication

Yifan Liang

you, Stephen. Thank

estimated plus to of $X.X year quarter to exclude million. or X%. approximately to and the of million. XX.X% Non-GAAP estimated million. and minus plus range expenses compensation to are gross we $X.X expenses million. and costs $X.X charge $XX.X and approximately venture margin to plus be non-GAAP fiscal to million estimated attributable expected an third excluding forward expect operating million be venture. $X.X GAAP Non-GAAP $X.X be charge $XX.X $XXX around interest to million. Operating be approximately Both $X.X operating range expense share-based expenses to and ramp-up expected share-based minus Non-GAAP approximately of basis, estimated operating is million expenses digital to of expected related be Non-GAAP excludes On million relating relating non-GAAP expenses costs our plus relating Chongqing approximately power X%. margin to to joint XXXX, venture, $X.X revenue be million or million. Loss pre-production ramp-up XX.X% joint $X.X look to million be non-controlling team. to the $X of of in the expenses production million. $X.X be minus million million production Tax a pre-production between to gross minus item this $XXX the $X or expenses we compensation the in to is include controller of Gross joint to million As the or $X.X estimated margin estimated

practice, As to up this not any questioning. floor part will open our update information. assuming we that, the With obligations are normal of Operator? we for

Operator

comes Stifel question first from Thank Nicolaus. Kwan Instructions] And Jeremy your [Operator you. with

open. is line Your

JeremyKwan

you June. the talked confident much ramps rebound and understand it looking it like market March I the a you've and business you the bottom a for how of -- coming could the us program for is nice end about good you're and quarter from itself thanks in in it of Yes, guess, at of Can question. being sounds new much if afternoon recovering? Stephen, help kind taking how that smartphone pretty the is

StephenChang

you. Thank

So, yes, our March turn see least quarter of quarter. to it the into a in a that March drop end little the typically last in at continue expect a to December is smartphone down is Certainly, a starting we market usually global the we low both. what seasonal the the going in From bit business, and bit quarter. of at took business

Of course, time, a seasons. than it's lower this little bit typical

are quarter June we that variety So a OEMs. of seeing the the that already our customers, well including at market China as begin should rebound global as to in

we're reflects -- into cycle well the new and both products ramping. being still selling into more So phones, of talking about in. our this Right we're already today more the and and so we're products QX, now are products that the designed as going market in existing right QX current as now,

JeremyKwan

little to you help are terms helpful. backlog seen? that's supply. talked they lead the versus of stepping maybe us And Can maybe in even six times, outstrip Mike, characterize this of and you've now context your about you question how for demand Great, and you maybe and very that where it cycles back months continuing quantify in ago past bit, a maybe can

YifanLiang

were the One power there. expect some in terms adjustments this Jeremy, supply and year Titan clean areas, me backlog. up, mean, in with bookings several Yifan. the quarter discrete double in question. we is December did mean, there Hi. booking -- overall, I would see elements in of would the MOSFET say. booking guess, take global some in I double we Maybe I this here. in the is let the I Last

for the clean actually up actually good is us. So

in areas, and and Mike some mentioned, Another smartphone customers our bookings. element Stephen as customers their of some the is, China are adjusting especially

accordingly. So plans we need to also adjust our production

then all if Another is at Right changes adjustments element to capacity you from those and all-in-all net this bookings is backlog fresh our our designing our new seeing ahead moment. of still some now, wins, and so adjustments. after say

JeremyKwan

the of Thank to then us terms this coming and guess, ramp switch it from balance, you'll a up the the plans, get looking can and flow given the it I that can repayment was $XX burn JV cash is And nice million the JV, cash you this and at see I going neutral point, the infusion for in -- is to if and -- your that Is stage, gears to cash CapEx at schedule that's -- funds. kind running of you, give your operating it be to cash -- up Yifan. also mean financing need current lease you up?

YifanLiang

right in is we'll and ramp up is now for December ramp Sure. assembly continued track The venture and March on so the similar quarter. up and joint in ramping see the test quarter the

assembly quarter, production and So we June see range. and test target to expect by the can we level our their up

expect fab, on XX-inch in our quarter sampling products March production quarter, of and terms to the December the trial track the In was in we customers. start yes, then can we

going the see quarter that gradually to fab back into ramp. see certainly patient we and call how we'll XX-inch we expect the So quarter, starting from so September expect June

terms and partners, the of definitely yes, side. million additional showed their joint the in which the venture -- with cash, contribution from pleased the confidence are $XX we our from In

process to capital. our the enter are into and equipment the overall some In cash banks currently our with negotiation we still in working local payment of to the support terms needs, loans

it finalized So we as will in contracts. report we'd

JeremyKwan

need Maybe purchase the X? idea still Phase for and is give an on terms that can this much last that to of equipment how you kind any you us note, of left remaining in CapEx

YifanLiang

of Phase the in. X, most right are equipments now and

So some equipments. right we now, to payment need down get so money stage, pay it to borrow the in order those to

way. them all interest along to chunk upfront to the big in a year borrow I is it I want So that's in pay the have notion ago, don't -- have we a to of

the those we for be buildings equipments are so and currently used So Those the contributions money we'll all borrowing those land and from cash capacity. need investors' on, borrow bank. things right and now, and then and also can -- own they

over still enough borrowing there. capacities they have So

Operator

you. Thank

from with comes B. Your Craig next Riley. question Ellis

line Your open. is

CraigEllis

trough I Communications. to be be fiscal touch revenues taking Nice wanted a quarter, the just I business it thanks entire welcome I from thought heard the for third clarify, that the prior Steve to Yes, Mike What and could Yifan and that think call. questioner, is the do quarter in again, Company the the question. to But in you are calendar third point for headwinds trough in quarter? a the year for for was calendar the forming that be fiscal there would second fourth your the see first and some or that or

StephenChang

What trough that mentioned, expect communications as with is we a well. it's March due the and for lower us, as well quarter, QX, we -- smartphone again, also as expect, typically season And definitely to the holidays. Normally business, especially will regards recovery, in in the especially as we to other only the segments in business. smartphone we but not

the So the recover. the a in bit demand also the market expect that At will side quarter. will other in we than shortage shorter PC our production time, the is we June little smartphone mentioned marketing market quarters. same and alleviated But CPU from and be

June So expected drive that quarter revenue. the also is up to

CraigEllis

confidence That's what gives shortage issues that Stephen, June? an be helpful. of alleviation you there the in And will

StephenChang

by the we've our our the of the June. but to shortage recovery they CPUs CPU with the end by Specifically, and customers, latest expect is and also in been ODMs been -- not told that happen by by the within -- the has what only field at main maker,

a and within quarter. already for in are to customers the June ready expecting -- we So recovery our prepare

CraigEllis

Company's opportunity helpful. One, your be this think dollar devices? what's your there. sounds A do couple base power Okay, top what across follow-ups five the content And of then that's the will XG station participation is management round how and and broad you with makers share of interesting. the

StephenChang

So you some just giving background.

As that we that the to on the couple few participate into we enter XG the ramp we up of now, we business starting remarks, and pre-XG didn't past. are Right are participating in prepared in mentioned players. Tier the in the X the programs much in

market. enter to are starting this So really just we into

now going major to a for we're sure the all be already them are of and a at moment. engaged We targeting few makers the right couple -- with

CraigEllis

is or management ICs with And that MOSFETs? power

StephenChang

phase now But That we total solutions offering the our the going first with in was mainly too. future, be for MOSFETs. right will to be

CraigEllis

Okay. on about base and the server Yifan, is power some for And power, relationship we that quarterly than side product on the were station that? the server that there's the then to would the potentially the that's team working rate expenses in perhaps or between further that team moving or in tangentially million. quarter team $X.X and expect initiative run higher forward going expenses million $X.X rise should either but

YifanLiang

But with point, would now some At tape-out expect Yes. expect added and would team sampling, the the develops we this level. into expense additional there. expenses products further I as new -- and starting engineering

CraigEllis

-out when? tape would initial product And occur

YifanLiang

I would fall. in or say time the summer closer the to

CraigEllis

to of XXXX, grow queue, fiscal trade so, the and to that can in severe quarter US-China Okay. before hope has had of beyond period things a Company objective initially you in more fiscal And that some to fourth XXXX? revenues we Company in macro then last the the but question, encountered XX% in but of -- third from me an what back before choppiness I established the the the was fiscal the there? Is need issues. it still happen grow that are And XX% quarter, if get get

YifanLiang

current now, QX is reflected also environment Right business and you so Craig. some guidance there. our our target and in that still is cautions Sure, within the seasonality-wise goal low model. saw

it be CPU alleviated the in seasonally June expect expect we as area, growth the can then quarter. for And this Stephen mentioned, PC quarter. in We June the

still we're right that now. targeting So model

MikeChang

Yes.

Chang. me add this Let just a is little Mike bit By color. way, the more

Okay. Yes.

okay, up we there. building track some there, up recovery new what momentum really but stand the our of get and the seasonality the really -- see client, The product from also from here. the Basically start okay, and okay new benefit win, Okay. our us some technology design to our for is,

Okay.

confidence. course Of is never okay, to where our think you'll further some economy; not this able be environment, I now -- predict the okay, that's environment decline will consumer

CraigEllis

you that volumes, the but there, feel design So be environment have, the macro a and of may the start about good time this you actual around Mike? some program point that in products program uncertainty takeaway is wins and the kind there is

MikeChang

Yes.

is think win, the record, everybody think not okay directly this necessarily okay, I be will pipeline, what then but suffer. I against bid us, relieved, track will it is the hopefully basically otherwise on tension which there, affect global trade design economy, it will couple based of

Operator

Thank you.

comes Ed with next Your Sidoti. question from Roesch

is line Your open.

EdRoesch

equity Hi, about this what repeat the at you said afternoon. ownership JV good infusion after you point Could from the partner? your

YifanLiang

million After our equity $XX this partners Right. yes, joint in for to Yifan. venture contribution ownership And AOS ownership this joint back XX%. to partners, from venture XX% Yes. is and back and

EdRoesch

Okay.

Okay. There's drop your right, the below no can that ownership threshold, XX% that be way would floor? foreseeably

YifanLiang

Well, that when venture joint negotiated this we deal. originally was

So--.

MikeChang

think a this angle, Mike a there's is couple is this Chang. of I Ed, --

Okay.

first, on because of based business our The okay, that. expansion future

also we better one is says and to So This good AOS way thing other control. need angle. it. highly that manage sudden some of is trust is assurance they this that. they see The that side, or the business technical and specialized

benefit Going will the there, forward, that AOS situation when okay, change to see what's we'll be.

EdRoesch

capacity? Is expected an June the quarter And assuming million update figure, Okay, in demand that when please? in then $XXX still thanks on for just capacity? there, it production that about does is next you could that a quarterly of give the us up color. recover the step And

YifanLiang

Currently, is yes, our range. million Yes, Ed. capacity This $XXX around Yifan. is

during Chinese the timeframe. guidance reflected New Year production quarter, This some March loss quarter's

next the increase joint $XXX of on depend venture, capacity ramp fab. still of range. Chongqing So The will overall, the the XX-inch wave that so at we're that million

calendar and and fab fuel our then year XXXX that's want in to and growth. the why that So -- ramp we fulfill to gradually demand

EdRoesch

that on last Computing the expect mean, one it CPU be available contending that segment, just latent hasn't fair that then you on and quarter? could to needs that CPUs is once end that And in be quarter there with back which the outsized is the it. been fulfilled that one got shortage. is I the demand market Okay, caught March because with for up the market a in are to

StephenChang

is second the have the XXXX. and of Yes, been Stephen. at the that is persisting, expectation half again starting This shortages

serving under been in demand has So the the -- overall, that this marketplace. market

some the So rebound are that that in will some happens we in be that of expecting beginning addition as result a seasonality -- QX. there normal there to is

our what what -- is from from also customers we're we and the that seeing that's market. So

Operator

Kwan Stifel. from Your with question is a follow-up next Jeremy

Your line open. is

JeremyKwan

follow up I capacity you. question. I on wanted thank the guess, the, to Yes,

you're million the With that only, if things like in maintenance to AOS it? and kind this spending out, there more maxed $X or ongoing fully capacity is costs is is

YifanLiang

our Yifan. is this pretty our fab done. Yes. Jeremy, Oregon capacity much expansions major now, Yes. in is Right

production our fine-tune, now, So in line. we're the -- stage right optimize the to mix,

nature, not it So in capacity. so would the significantly increase total that

contribute the additional from total capacity this we'd this year, will So joint year. calendar our expected the venture along year,

JeremyKwan

targeting XXXX? So range the are then only, -- XX% you is fiscal still for for AOS

YifanLiang

and mix. Yes, for maintenance, yes. That range for the much the one is operations, fine-tune pretty optimize in our

JeremyKwan

-- an thing last expect And us to us estimate? the a JV. Can you kind Is long qualification can question in give or it you give how process one is idea terms the quarter of an you like of be? it

YifanLiang

But Sure. some faster. It perhaps qualify may right to -- I the customers. already order we with to sometime Even ramp kind mean, customers. first we've in depends. now, to order up, from received still customers need of qualify

two, a up. say should quarter able see some or will probably that to I be in So ramp we

JeremyKwan

as sorry, -- And question. just it last

margin of some there challenges? is to up, it expect the because or to do yield XXX As does benefit ramp this some out millimeter you work stuff see gross

YifanLiang

yes. Well,

ramp neutralize phase that wafer expect so. During the we ramp up the capacity, actually our and fab a to to up benefit, first XX-inch I wafers X-inch would time, with to not cost Once cost our expect fab see contrary. I would

MikeChang

is Now, is you production, of key economy scale. Mike this called Chang. factor this one talk okay, Whenever

the there, the be okay, the case get we until you know in there Q&A running yes. would into cost of equivalent, So End

Operator

Thank the you. call remarks. back And I'm at showing to like further this for questions turn closing to over time. Management no I'd

Yifan Liang

look today. Thank concludes AOS for you. our This we you earnings to interest next in again to your you quarter. call forward and Thank talking

Operator

for today's you does you have wonderful conference. This thank disconnect. may gentlemen, participating and a all and conclude program, in Ladies day. the Everyone

So Yeon Jeong	Investor Relations
Yifan Liang	Chief Financial Officer and Corporate Secretary
Mike Chang	Co Founder, Chairman, Chief Executive Officer and President
Stephen Chang	Senior Vice President of Marketing
Jeremy Kwan	Stifel, Nicolaus
Craig Ellis	B. Riley
Ed Roesch	Sidoti

Alpha and Omega Semiconductor Limited (AOSL) 6 Feb 192019 Q2 Earnings call transcript