AOSL - Earnings call transcript Q4 2019 | Alpha and Omega Semiconductor Limited

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Operator

Good afternoon, my name is Christine, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Alpha and Omega Semiconductor Fiscal Year and Q4 2019 Conference Call. [Operator Instructions]. Thank you.

So-Yeon Jeong, Investor Relations, you may begin your conference.

So-Yeon Jeong

Christine. you, Thank and call everyone, year-end Alpha Omega and results. Good discuss welcome fiscal conference to and XXXX Semiconductor's afternoon, to fourth financial quarter I the representative Investor am for So-Yeon Jeong, Company. Relations me are With today Dr. Liang, Yifan of VP CEO; our Chang, our and our Marketing. Stephen CFO; Senior Chang, Mike being broadcasted of in link call be Relations the section can website live the Web at the is This for call X via over and our www.aosmd.com. accessed days recorded and following the Investor

results begin for Yifan review detailed quarter business the who with fiscal a the session. Then, will highlights, After Stephen will financial year. of Yifan guidance have for the question-and-answer the next review by that, segment with report. a and Then, Mike quarter. the will conclude will will provide followed we

today, was XXXX, is also The distributed X, close market. website. wire Company's the business by The August of release posted release the after earnings on

presentation use information we non-GAAP investors GAAP Our certain financial provide. comparable the and release in our conjunction operating We included these about is they our release. this believe in be performance of that measures that non-GAAP with measures. considered earnings A we measures should measures to because by include provide measures GAAP earnings non-GAAP reconciliation useful

course differ risks and These actual our materially forward-looking you statements expectations that business that we remind certain to projections. financial current including this make uncertainties expectations. forward-looking management's involve will are We from statements, during could of the results and call, conference on the discussions outlook and of such cause based

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

fiscal an our XXXX call CFO, year quarter the overview financial the and over provide turn I'll the Yifan? results. fourth Now, fiscal of to Yifan, to

Yifan Liang

and Revenue when joining up June Thank to the and $XXX.X you for quarter X.X% up Good prior compared the last same us. you, afternoon, quarter everyone, million, for thank year. was X.X% from the So-Yeon. quarter

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

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

segment the represented total mix, revenue, X.X%. XX.X%, XX.X% the Service Industrial Computing Supply Consumer XX.X%, Regarding and of XX.X% and Power Communications

fiscal $XXX.X million, revenue up year-over-year. the For year was X% XXXX,

Non-GAAP of same for the quarter, Non-GAAP for mainly million the June gross non-GAAP compared for Chongqing ramp-up to margin for year. quarter million in same compared gross and quarter for the of improved by the quarter for also charge margin gross increase year. mix. production prior excluded the margin quarter margin $X.X to quarter-over-quarter XX.X%, XX.X% driven compensation $X.X for was the June quarter related $X.X share-based as the quarter. costs product the Venture Joint $X.X as to as for to was quarter, prior compared last the and The the million prior excluded gross Non-GAAP last June million

gross representing margin mix. improved compared for fiscal to of last the non-GAAP an was XXXX, year XX.X% the product year, points fiscal basis the For by mainly XXX as driven increase XX.X%

year. for in quarter last for $XX.X non-GAAP same The digital compared as compared the quarter million $XX.X quarter the the million, to million to Both quarter JV million decrease and primarily million Company, preproduction of quarter expenses operating in was the related our last year. of June and operating Non-GAAP same $X.X $X.X and controller quarter for prior expenses were Non-GAAP operating million to last expenses operating expenses the power $XX.X also for prior million million million $X.X $X.X share-based quarter year. same prior $X.X $X.X the the R&D for expenses the Non-GAAP operating quarter to fluctuation the compared for quarter same the GAAP million of as included as expenses. for million $X.X prior due for expenses to team last to engineering and and million charge, excluded of the compensation year. excluded expenses $X.X $X.X quarter-over-quarter compared for quarter, Non-GAAP

roadmap. continues Our our making with digital progress power designs controller steady team customers to in toward product engage and is product

of Non-GAAP fiscal compared million were for year. operating prior expenses Non-GAAP $XX.X $XX.X for charges the operating $XX.X the excluded million and $XX.X fiscal million million year share-based to compensation expenses $X.X share-based of Company year. preproduction current the of JV fiscal as $X.X charges fiscal preproduction related and million expenses in the in expenses compensation of to year, prior to million our XXXX compared

subsidiary the for This actual $X.X same the tax the tax quarter, tax returns. for compared the were prior million, million for and quarter for benefits tax quarter tax $X.X of million. included was the The million expense to year. true-up by $X.X last the $X.X of benefits to as benefit $X.X provisions the Income from offset million of quarter expense a

had electing credit. also We the R&D directive method the million for $X.X from IRS a benefit

Income million tax was benefit last was one-time million. $X.X expense of year expense Income for tax tax million, the impact from year Tax for the the which $X.X US of fiscal fiscal Reform. included $X.X

year. earnings compared share to as attributable $X.XX AOS Non-GAAP EPS for per $X.XX and share quarter for for the quarter year. earnings $X.XX per the the earnings the for last EPS per to $X.XX for prior same attributable share fiscal the AOS Non-GAAP $X.XX quarter to year to compared prior per was fiscal share was as

million flow Company for operations was compared prior in to million million the $XX.X to same quarter the the and operations fiscal flow to in million $X.X and positive Cash to attributable $XX.X last for as generate fiscal quarter, used flow the year. year. Company year the we year. $X.X $XX.X $XX.X In the to $XX.X $X.X for year. operations to continued for was JV to for June JV to million compared quarter AOS the Cash generated our the $XX.X cash for same operating attributable AOS quarter for the last for quarter was to attributable compared million from Cash cash flow. million quarter prior million million AOS the prior $XX.X for attributable year the million operating prior compared as flow used June

$XX.X the $XX.X Consolidated last for quarter year to attributable attributable EBITDAS million EBITDAS compared quarter the quarter was $XX.X million $XX.X as for million million to for year. quarter compared AOS compared quarter same to Consolidated as XXXX. for and AOS and the year the to year for as the for the million prior $XX.X fiscal same million $XX June prior was $XX.X year year. $XX million EBITDAS a last to $XX.X million the for $XX.X full quarter the fiscal EDITDAS in the was ago. for was compared to

at JV at quarter, $XX.X at the $XXX.X at compares We $XXX.X which million look let's and our AOS completed and million balance $XX.X to June of with the at included at cash million quarter cash equivalent AOS of and Now Company. sheet. million, including Company. $XX.X $XXX.X million million balance the This last end the JV

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

and the bank $XXX.X at end including the $XX.X million million, balance JV The Company. was at borrowing million June AOS quarter the at of $XX.X

lease. of $X.X its and AOS paid our paid June $X.X million Company JV loans down million down the quarter, financing During of

JV of and and loans AOS borrowed fiscal year of repaid a XXXX, The a million of $XX.X $X.X million. total $XX.X the Company million. borrowed repaid $XX.X During total million

outstanding in to last million in Day Net $XXX.X as million year. days same days plant sales for million quarter. were equipment $XX.X last quarter compared for million, Net the million $XXX.X compared $XX.X was of million year. XXX property, in days were year. prior up and from the the Average the quarter. end prior as inventory XXX trade to the quarter $XX.X last in and receivables from days quarter quarter inventory compared XX $XXX.X last last was for $XXX.X at XX to compared days the was million quarter $XXX.X at and prior million to as Net and quarter-end, $XX.X the the million quarter

$XXX.X quarter, for the Company. million AOS Capital for AOS $X.X and including JV year JV expenditures and for were at Capital including million million expenditures $XX.X million Company. the million, fiscal at million were $XX.X the the $XX.X for $XX.X

call over the Mike, progress to our would I to Company. the share JV like turn at I Before

During customer qualification test and product quarter, production production. went and process assembly XX-inch the the continued In the sampling June fab's to XX-inch July, ramp, small well. and mass started fab

expect to to XX We continue the Phase months in so. X next or ramp up

Dr. the over quarter. call With would CEO, the our provide Chang, to for like the business that, who Mike highlights Mike? will to now turn I

Mike Chang

Thanks, Yifan, afternoon to and everyone. good

cash earnings and consecutive per consistent represents Revenue a Our well approximately quarter quarter. controls the and year-over-year to the flow growth. of guidance of and of AOS business team range implied Non-GAAP healthy free our due cost and of exceeded one-time delivered with adjustment. cash $X.XX $XX executed XXth the tax high million. guidance operating $XX $XXX share flow million core was million sound of of end effective generated

progress solid to new production in quarter. Shipments we operational made in dynamics optimized our results, for manage inventory to and of in Meanwhile, appliance the products good home rapidly business. the addition and order our In grew financial mobile applications. Computing we

volts from Junction We Super also Joint Venture. volts our families products, technologies launched and several Chongqing in XXX XXX XX-inch including new MOSX MOSFET alpha

encouraging of year line We backdrop the considering top finished top the of trade and economic fiscal was bottom year XXXX a tension, strong record with uncertainty very This shortage. healthy CPU growth, and XXXX. another escalating on

of operating excellence, product portfolio base. customer as Our our the and business our strength results expanded demonstrate diversified strategy, well clearly as

are progress in toward current of we XXXX challenges revenue. the conditions $XXX geopolitical despite ahead, of solid and our making annual environment, the Looking calendar market million target

pipeline of applications. wins is This focus design a strong, are drives our healthy and bookings especially design-in customer level Our and backlog. in fresh solid robust

growth last mentioned to to that believe well-positioned of on our are multi-year sustainable the scalable call, ramp, achieve I we growth. beginning drivers some with we As and

supplier Additionally, and leadership as applications, mobile our extending a are a of home range broad top-tier in in appliance. particularly we

year, well-timed. approaching target In is ramping JV July, our and at We OEM Phase we expect be time customers Chongqing customer in we to X demand, next initiated China, solid are our gradually for this of diversification strengthen With further and ongoing brand XX-fab production the global we in expect we production quarters as States. rate. foundation a production the coming to multiple Around run plan. United ramp the Korea ramp this of to according

we new conclusion, execute dedication. strategy and years, portfolio over our and product continue in the the investment will We success as diversification base, past In product of disciplined and customer initiatives, growth. in several believe with capacity long-term propel as our focus further to well business timely our

a I to call turn And over detailed now, Stephen will segment for the Stephen? report.

Stephen Chang

good Thank you, Mike, afternoon. and

year-over-year. represented Computing. quarter. total down in of XX.X% start sequentially It up with was our revenue June Revenue me X.X% X.X% Let and the

were prioritized we commercial inventories PC, our this the to started on support the allocation production call, and ongoing already allocate growth customers, last we our internal high into continue capacity the quarter. amid on and both that more other areas our we plan shortage. mentioned June a I hand higher September As CPU to able which With Computing expect received quarter ramping to for in channel to

segment remains of Computing our component important an Our business.

a market revenue our and our as Computing with closely is provide we leading down strategic continue we and to and sell-in we to PC digits products to As mid-single ODMs, sell-through, partner inventory. be while OEMs customer strong the September innovative work manage customers support. leader quarter, In to superior expected to anticipate continue

the X.X% last in Strong new customers wins softness in the appliance June discuss further revenue the Consumer increased the Chinese segment, quarter year-over-year. offset but appliances and was Revenue quarter. home with Korean flat in quarter. ramped announced Now XX.X% design during we Consumer let's in applications growth June total sequentially home in June The other which stayed quarter. of

Our customers our efficiency, energy the savings offers value and through home robustness and reliability IGBT technology smaller that size. better appliance

technology by customers, the encouraged global will our our OEM share are of content. more and add we sharpen and We continue at gain fast to greater technology to adoption

year in We are on track calendar to over XX% by product XXXX. increase line our IGBT

as appliance business. home a expect TV the segment in the overall as to we well growth modest continued Consumer of our seasonal by expansion of September led business, quarter, our Looking growth

the turn Segment. Industrial year-over-year. to X.X% Supply Power let's X.X% XX.X% and of total Next, revenue, This segment accounted and up for sequentially up

expect allocation trend bodes a in products, revenue strong as remained MOSFETs. for requires year. of for AOS adoption capacity doubled grown battery quick well high-performance voltage this we customers. applications. business charger supply the medium ever-increasing quick power as same grew September rapidly years it an charger for to smartphone smartphone recent This expanded medium AC-DC June more our our further With segment in voltage charger order expanded This meet increased top revenue quarter quick business our than requirements last as from at the quarter. power has has the quarter's Overall soft, in While increase demanding

segment, up Finally, Communications the quarter, at by driven our let's was XX.X% discuss XX.X% the customers. products XX.X% in mainly was smartphone for The the demand year-over-year. of rising up revenue which growth battery sequentially and protection

As requires prolong mentioned and increasing higher before, smartphone efficiency battery capacity battery is life. to

us Our protect products low with that coupled of power voltage high generation allows scale compact, expertise to packaging in density MOSFET advanced technology the chip deliver smartphone batteries. latest

into the Looking smartphone peak double-digit US another quarter, are and we players growth as Korea entering segment major production. this in anticipate September China, in all

With guidance. the the that, Yifan turn for I call now will to over

Yifan Liang

Non-GAAP production million. $XX.X non-GAAP share-based operating power be of to revenue expenses Non-GAAP million X%. in and of XX% be approximately the be million. expenses of expenses look controller margin between we plus to and to expected $XXX are in or first compensation forward expenses to include GAAP plus million As million; we XXXX, $XX minus range gross year in margin the million expect Operating to digital relating operating million $XXX charge plus our is range margin ramp-up quarter approximately be $X share-based gross Joint compensation July operating exclude million minus to of or starts the development $X.X million of XX.X% X%. the Venture, $X.X minus the or be gross Non-GAAP estimated as expenses non-GAAP Chongqing $X.X relating to an business. Both Note estimated of minus to estimated production to approximately that XX-fab $X.X million and or fiscal the $X.X excludes of of plus estimated million. $X expected XXXX. costs

is costs approximately a to noncontrolling million. Company, be be be Loss ramp-up basis, $X.X the JV attributable to million. this relating estimated approximately On million. production excluding non-GAAP to to to million expected to item around expense $X.X Tax $X.X interest $X.X

this As assuming information. obligations any not part update to of we are our normal practice,

With that, the questioning. we for floor will open Operator? up

Operator

[Operator Instructions].

comes line the first Your question Jeremy Stifel. from from Kwan of

Jeremy Kwan

see Mike, the strong the nice to on just that $XXX Congratulations coming target. communications XX, million Counter on it's ramp; a question on.

something June correctly? You I hear run hitting quarter. that in that Did XXXX mentioned rate the about

Mike Chang

Yes.

Jeremy Kwan

you up or demand maybe some a meet take more see of us ramping have in wins design that fab give you already and place it's between to can just And things matter you how now that of to and that these color already terms of other ramping the -- is basically needed that won there then?

Yifan Liang

XXXX to million Phase we to Yifan, comments run Jeremy, June on this the June X is not of I bit our want by $XXX quarter target we correct that a fab, the approach quarter June XX-inch quarter, remarks is, million What little rate prepared close Venture's in of run rate. target. XXXX regarding $XXX rate the the the -- will run Chongqing Joint so the said

Jeremy Kwan

get was a meant by that would to trying -- quarterly it just work quarter, of basis out sense where for that? a then is On the I'm June to what

Yifan Liang

rate, target the to one means we that the approaching Well, so run will closing. that

Mike Chang

run capacity the rate. It's

Yifan Liang

Yes.

Jeremy Kwan

And Phase that's for X?

Mike Chang

your XXXX calendar I for -- for mean -- year, question right that $XXX Yes. is million?

Jeremy Kwan

Yes.

Mike Chang

good very a That's question.

all, question. thank of for First you

have our prepare but product first and sure make We platform technology towards to that we direction. everything. is new

Of ready course, for capacity we need that. our

trouble. in place it's one fulfill missed to It's just place then there you'll not everywhere that just one by -- be you So goal.

from there our So geared have whole we technology, manufacturing, from marketing is to the for the Company the from look everything sales; that. even and

Jeremy Kwan

to JV of quarter. an there -- a if at operating like sense turn improving capital that the a -- itself, need also maybe projection for look is where where be? working the last flow give the also guess, I I break-even? mentioning it can that you for you you remember do how that might something Is and much ramp have is we each plans the loan quarter, still cash internal looks the might it in us

Yifan Liang

we'll at to joint cash point, yes, balance see. right do support Yes, this the we capital loans working negotiation have are still so this point, ramp. their At for ventures under now the

stage, terms expect the that can when break-even, would flow ramp be venture. neutral of cash at we time X In at cash Phase joint I to up flow we

Jeremy Kwan

just one CapEx been for question the controlled over I the a looks maybe fiscal up give sorry, It new before -- few last expect bit, this that the fiscal pretty for nicely -- to 'XX? quarter like final -- rate 'XX sorry, is has we the September And queue. quarters. OpEx can the the guidance, up it's Is little that run

Yifan Liang

of Yes, I you normal last of use relatively would expenses mean, up. the we I that expenses. than a level at operating and other when thing engineering fluctuation expenses some think quarters OpEx is those and of September look the was this that quarter, as lower couple of expect we run in because that those reference maintained R&D to will kind because can a forward

Mike Chang

can Jeremy, up, a of it's first right. AOS and should the in top as prepaid complicated, portfolio because and little just But this the [indiscernible] because hang it what idea, question, even your actually, still be start about I brand about there add before important your to customer answers, more talk a bit name. recognize technology that is we on

our now direction. the Tier is [indiscernible] our with customer really right design, towards the X engagement So

that why is to everywhere That's are that are say direction. on So direction. we pushing confident that we

Operator

Your next from of from question comes line David the Capital. Williams Loop

David Williams

the solid the to year made. progress the is that finish and being on Congrats

or guess I any lot that are the inventory that particular any some Are health areas like over-stock. digestion seeing your maybe there. on First, to areas much maybe give sounds thoughts too seeing of nice channel of weakness concerned of wanted I you an concerns maybe It remains? just us inventory and you're and those update a anything seeing see could or if if you

Yifan Liang

area, There dynamics quarter that -- smartphone the Computing even our of manage target have productions dynamics and to quarter mean, before, quite a X I this and including are we X channel in healthy the bit this right Sure, within our I inventory is or months. this internal and inventory mean, now, overall of in optimizing to our June inventory and business. been channel David.

manage support productions we our customer our demand. So to

production goal customer Our our support schedules. their according demand overall to to is

complicated There So to I adjustments. and we schedules have push-outs, this the customers pull-ins in they mean, so whole and market trade there those different things. have recent are and tensions, conditions different more manage Also, things that. ramping I some have been mean,

will things quite support win But customers online dynamic. is we take what expect manage came Right like portion some our gradually customers diligently. in customers time our June support those capacity an -- constraint have But quarter, Venture, bit to ramp our ramp productions it a whole a design this using said, we at additional little -- supply it the and to so the up. Joint our now, So and ramp other -- Mike Chongqing production qualifications of overall, inventory their through then more in in quarter up other situation to ease. our with and to a on go the for September design

So our right those inventory diligently now, overall, is But very kind channel we're managing of situations. healthy.

David Williams

different do a today, their you there of easing -- realized in hearing really transactions are the maybe pulled-in being a you you anything guys from as of think, maybe your are that a guess, customers think that's for would have I I China you're really and trade you what tariffs customers becoming are is but further do What or of kind overall, you cautious, do your out bit? see you your issues? more expect, view demand how are concern ahead they is driving or dynamic looking at And order if environment today business terms what's little they

Yifan Liang

adjustment there this and dynamics mean, another lot definitely. and goes. is people Yes, may differently. see which pull-ins point. depending a would and pushing-out situation some also thing that's situation this the quite of I mean, tension mean, tomorrow, see is say at mean, -- tension ahead trade we those areas. tweet I we I this on the in whatever react if some this moving of I trade are do is at dynamic, and parts there If and point. I way yes,

David Williams

made? anything you're give maybe demand, in maybe of the seeing would Just progress server you helpful. then that can side And be on there softness, any being is is there weakness any the or terms color server

Stephen Chang

power you're mean, our digital initiatives. regarding I asking

that on still regarding track. So, we're space,

next already a in -- current -- we're Right the products customers. development and as this Our right now, year engaging treating, design-in target our now final we're with of now, we're phase. out are right getting we and

chase target meaningful model on are revenue has that in believe to along all we XXXX Our and track. regard and been on we

David Williams

revenue sense on that the Just magnitude contribution next any year? of

Stephen Chang

what $X to million, $XX is saying. million It's we've been

Mike Chang

Let be take solid be it me people the lot normally add just but this business time grow, because grow, very design-in of addition careful area This in are would very bit. it to it and to there. a some little of will once a strong business has it

So we are pretty that. excited about

Operator

Your next Riley from the FBR. question B. Craig line of comes Ellis from

Carlin Lynch

CPU latest have ramp taking round for congratulations had be I question, but Thanks Craig. in for I quarter. have the on it, half the the of how regarding supply think tariffs because I has year? Carlin but the apologize normal and tariffs of this missed dynamic, on quarter has back a things more the results guidance, the good and the quick how I what through my question September -- just Computing might would ramp made It's a and obviously, seasonal impacted

Stephen Chang

-- seen up up supply the getting we've see both overall X as of been in chip makers are it catching situation major and What terms industry, to the shortage. the ease the in overall has CPU their demand. an combined to We

happening second tensions and QX of also back the it's that now quarter. happened September had the of in threat tariffs the happening course already with additional quarter; and trade these in that saw we So in

had we we've area customers that, I our dynamic some to guided is some in in growing sell-through we've at have some our because Computing we there capacity -- in but that allocate and production of for than that overall So sell-in they to allocated Communications especially quarter. and expecting our are Computing, terms what to pull-in the the think other higher support are the inventory in to business, is quick that charger and also able area, for we've September be to

Carlin Lynch

September So I to was what down the actual sequentially? it just for mean, to going be or quarter, clarify the sequentially guidance was up

Stephen Chang

It will for be down sequentially sell-in.

Carlin Lynch

then if a And I follow-up. could ask

of So -- free last the this but feel me did power as you that quarter, about I'm though at the be had business it joint closer initiatives or venture I of you seems think to quarter I Did in and have the ramping guys would to wrong you're if the correct quarter. digital how change wrong, said is said year, would now be last kind through ramping March that June that year? way something thinking

Yifan Liang

digital I mean, First not venture; the of joint first power that's all, thing. the in

is, thing July. joint fab started venture's regarding I the Second mass ramp production in mean, small up, this XX-inch

or lead this period much time XX ramp -- previously, next we so in same months fab expect that's As I to I we said mean pretty year.

So the to ramp we're to Phase X up. targeting get

Carlin Lynch

by thinking be And of it to you're expect XX% of the color give kind how we can quarter, one gross XX% to do that quarter, Once capacity expect in hop online target to how by calendar Just around new be more track in of venture we pressure towards and I'll queue. back any get upward from more and the the Will margins forward? end June then that joint XX% full about you of gross moving we or the that me towards June 'XX? because target? going product the margins towards tracking would is kind coming

Yifan Liang

XX said fab what targeting all, next that year so, of of X to rate translate quarter or the XX-inch in would run about year. Phase we so calendar we're September First was months --

that on our we wafer thing be on estimate up X Second so at the die Phase and when cost is, fab, we par with XX-inch per the cost, XX-inch X-inch basis neutralize impact wafer the that our cost ramp time. what will

to get target target in overall is we when XX% million revenue. model $XXX So our margin to

So that's in XXXX. model our calendar target year

Operator

Kwan the line from next Your comes question Jeremy from of Stifel.

Jeremy Kwan

Maybe on follow-up just that previous question. a

that of gross JV understanding up, -- target as of bit million, now there what from a saw that months that -- in -- actually bit of ramps? margin and the Is the terms baseline margin is that I XX.X% XX% quarter. progression negative impact model September the it like XX% ramps the $XXX overall it that guess in we where at of the I between trend about is that So -- in looks to is a XX the see and might next how JV a understand we a little then as kind gross little the can

Yifan Liang

I in would range. up it of couple get that expect would quarters and the XX% in to will and XX%, stayed recent I XX%, gradually expect neighborhood, XX%

So that's those primarily from it. the new products, and all product mix with along

pressures, different now, than ASP you dynamic is onward will in right the because is this years our in we space. and know, last -- factor is, this another factor year So market

shortage So some up and modest would build-in ASP now been you know, has I and last easing so year's right erosion.

Jeremy Kwan

kind from having you of is months year? change of I stabilizing that kind ago little Is or ASP a some being the ASPs maybe And is that something... or a where mentioned a think last is we modest versus it bit -- of erosion, uplift shift X X there

Yifan Liang

little A shift. modest bit

Jeremy Kwan

switching little CapEx the maybe of side things. bit a gears to And

us your and for internal you both year With fiscal give the AOS JV the CapEx on 'XX? behind can update then us, an for plans fiscal

Yifan Liang

revenue of things. would right X% toward AOS for like to more the 'XX, still now it think is I of of low-end X% side fiscal targeting AOS. For range type

so -- equipment money For the need payment. JV, production equipment again, all-in, purchase may Phase they is primarily, payment lines will continue pretty are that much there, the to we that portion fine-tune spend and the some payment remaining one some here of X, remaining that and we'll

we be will under that for sufficient So were X up. current ramp once Phase the then that negotiation, cash loans the would we have plus expect that

Jeremy Kwan

And one last question.

industrials In doing if the And this an overall to market going ramping mix in strong quarter, pretty Do it's the your it is quite terms shift in enough you for I nicely you seasonality? consider Communications you've from, shift guys in bit periods fiscal of more significant got QX. and QX you. their bit think, a it like ramps stronger JV see strongly Do XX your and end being overall see quarter. supply then the little there months, on be or looks market things little you to and end is again downish up power last mix, are to as of have that holding -- different terms -- now, to right up, and seasonality QX so, flattish there fiscal are true QX a

Stephen Chang

think short we base. term, In segment heavy. won't too we've towards been are the our diversifying the Computing longer probably past I the change moving in it In term, more much.

course, the we in continue our seeing Communications the business grow other right protection grow are quick supply. our invest and but now, we segments charger now tied or the faster, in smartphone it's to to Computing power will right Of battery whether

these seasonal we help a overall, I some in pattern, are smooth to like of can we to just seasonality Some past. out still think the the going have bit, but see

Mike Chang

strategy and areas is our our In Company of goal so gradual diversify technology growth, general, policy. we also to -- that's it our into other

Operator

from next B. line Your Ellis comes of the Riley question from Craig FBR.

Carlin Lynch

quick Just follow-up. a

target to calendar and joint in flow was flow X model there guys? plans of cash more think trying X of guys are prep and -- for kind then meaningfully to to of venture 'XX just anything How of to about usage ramp cash the that gets -- how strong track the think X cash once flow 'XX the was calendar kind do you and 'XX the of free moving need calendar free you and free do I'm So about guys $X you financial quarter billion? Phase kind Phase Phase AOSL for towards through for also what is behind

Yifan Liang

mean, fiscal I this generated Overall, year AOS free flows. cash healthy 'XX,

flow some Going forward, it I similar the our from too AOS cash and can do of -- more expect cash depending investment fine-tune fiscal CapEx much too now maintaining year I free XXXX, like lines, side we would mix, areas. needs. that level production not expect debottlenecking would product heavy on flow

to cash continue operating to generate a alone, free healthy AOS So flow. expect for I would

the get made, joint a and to the their Company and from own borrow them, it can are owns has ramp. their For contributions support then buildings financing we and I a than there venture, its we money; equipment, separate they Other entity. mortgage they Venture -- capacity to mean, Joint for land out have that's

they are major suppliers for So AOS, in one way. of our that

investment some that So be will we for mean, ramp considering work Phase are less and for mean, Phase X of CapEx because X, the infrastructures, say incremental than the much through start I all Phase the buildings when Phase joint X, those halfway X. I for I Phase X, X and will down. I up the would things; mean venture, and

some equipment may small cleanroom and we overall then need tools to just be purchase So expansions. incremental

it sometime. So the about year next think we'll requirements,

Carlin Lynch

quickly just I want to And really back then, to segment, hop really the performance. strong Communications

on banner about not year the year. next and to much start to meaningfully continue -- more we protection how should and battery of of we your increases having diversification As dependence, are was more out, roll comes content unit around -- think this year's how how great would side expect XG because kind rather in that obviously units business a than kind customer performance handsets

a sorry? next quarter up what quarter, next and potential upside was really to year what's shaping strong So be this year a to really is the next quarter quarter like strong --

Stephen Chang

but bigger, itself. battery or especially XG, more virtual streaming Indecipherable latest it's gaming the us, on would where with very the at With or to XG additional battery much application XG, more the drive a even have you on for regards video just can first, reality, smartphones Right that's the getting and protection, now, see they which not with capability play. only demanding definitely content you are is we looking the For power.

for need -- So battery the and is efficient protection becomes keen. very

going products going net and year of year AOS beginning front-end and the digital this into the last continue so, our expansion. over of of we're growth. be telecom enjoy And -- guys, benefit side loads. The solutions we growth the applications within as conversion the And that the on also telecom be to do client has variety on that. with discrete includes all you is for a not saw going and end strong the next the well added that and power the is client customer to on year so for has us the handsets, lot see with -- to MOSFETs the will wide at side, we've continue a infrastructure telecom. That as the definitely, years we that only we makers shared expect The of to smartphone covering that system. on this added This go into with as XG side. expect DC-DC course growth year the have next the for to replaced will to to of global but major We we few infrastructure area

believe good to So protection, side. we beyond we further battery grow opportunity infrastructure just moving even client side, the a are the very also on have we AOS, into

Carlin Lynch

telecom XX-XX, on to about you what that's would you be know maybe it ramp now. any once to I your that mix how right smartphones XX-XX, know start way? going because it's it just is? business eventually Is be is getting small do of perhaps of be going kind going so do -- trying in And think in long-term have to guys really versus like terms to mean, sense that I under you -- end-market

Stephen Chang

digital is in mid-term longer big much digital XX-XX right. is too. the Obviously, stations as has into is market, the protection to going base well large sustaining, for more think in I battery start power about that going the power the something content quite that's but a probably it's head

protection side. up So in can client portion to the the battery the longer the I run, power of digital catch believe

Operator

time. the at I further over are the team. to There questions turn call no management this back

Mike Chang

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

Operator

This concludes today's conference call.

You may now disconnect.

Alpha and Omega Semiconductor Limited (AOSL) 10 Aug 192019 Q4 Earnings call transcript