AOSL - Earnings call transcript Q1 2020 | Alpha and Omega Semiconductor Limited

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Alpha and Omega Semiconductor Fiscal Q1 2020 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

Thank you. I'll now turn the conference over to So-Yeon Jeong.

You may begin.

So-Yeon Jeong

everyone, to to results. discuss afternoon, Semiconductor's and good call conference fiscal you, and Alpha welcome Omega Thank XXXX financial

So-Yeon Chang, representative today Relations Chang, our our Jeong, company. President. Stephen I'm me Vice With CFO; for and are CEO; our the Mike Executive Yifan Liang, Dr. Investor

of recorded www.aosmd.com. broadcasted in over seven call the link the following call days and can This the at and is web Investor the Relations section the being for live website be accessed via

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

was today, our The the is distributed XXXX, after The Wire of on also posted by X, Business close November market. release website. earnings company's release

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

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

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

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

Yifan Liang

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

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

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

of segment mix, and Consumer, and total computing revenue; the Regarding X.X%. represented industrial XX.X% power the communications, supply XX.X%; service, XX.X%; XX.X%;

offset million same the improvement and the year. gross XX.X% price partially Non-GAAP by for for mainly to was charge compared non-GAAP the was for excluded for quarter to as September million year. efficiency quarter prior last Non-GAAP mix, erosion. increase margin the in XX.X% quarter margin as and last operation gross compensation $X.X XX.X% margin The the $X.X gross $X.X million prior of the for quarter same product September compared and quarter-over-quarter by of driven the share-based quarter quarter for

$X.X gross million Non-GAAP year. Chongqing also the quarter related same prior million for and margin the $X.X ramp-up to for the $X September the to Joint as excluded compared of quarter million last costs quarter production for Venture

XXXX, all July costs sold G&A September cost goods company's As to fab-related of in the the moved fabs XX-inch quarter. JV were production started from for

$X.X the quarter expenses operating was $XX.X merit increase and engineering year. to and $X.X prior million million expenses for operating Both due quarter for power compared included to increase the compared increase the Non-GAAP quarter were quarter our excluded GAAP charge million quarter last and Non-GAAP expenses as September $X.X for for million year. R&D expenses million last $X.X quarter-over-quarter the for share-based of and quarter prior the fiscal for for expenses non-GAAP compensation million operating the compared the and $XX.X same the annual in in quarter $X.X expenses operating million in quarter same $XX.X year. started million to the primarily new $X.X last to controller for as non-GAAP digital of million team same the prior The year.

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

for compared quarter expense was the tax $X.X year. quarter tax million prior for $X.X to Income million of tax same and quarter income as last million income of $X.X expense the the benefits for

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

positive Historically, operating AOS cash flow. generating has been

However, quarter, by X operating totaling AOS million. net by was was impacted million. $XX.X in September in activities cash items largely the $X.X used This

one-day due payment million from XXXX, major $X.X Mitag because Taiwan. in our of bank one shutdown receivable Typhoon on September XX, delay First, distributors of the to of

receivable net from million company. JV intercompany $X.X Second, impact the

year. operating the million and largely amount local $X.X to interest same each government venture agreement. AOS $X.X will prior and joint quarter $X.X This activities was the year. continue cash two quarter, years the $X.X the the cash same the at prior $XX.X last $XX.X operating for the million flow a million For to intercompany received $X.X quarter next for flow refund and the million operating last cash compared used The payable million AOS for year. to under generated the company flow million refund in $X.X quarter quarter operating million in JV million The the program attributable for from September September generated

for for $XX.X September EBITDAS the was quarter same $XX.X quarter for quarter Consolidated last million the the prior for was AOS $XX.X as same $XX.X and EBITDAS attributable million million quarter last the million $XX.X year. compared compared million quarter the prior to for the and quarter to year. to $XX.X for million

the joint look at balance and last $XXX.X of included AOS $XXX.X AOS cash at at JV including the and million quarter $XX the the million completed quarter, to of at This million the with million equivalents million, September which million end sheet. We cash $XX.X at let's $XX.X compares Now $XXX.X and venture. at company.

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

$X.X $X was end at quarter million September AOS September million from the million line and paid JV the of borrowing $X.X new million and $X.X existing line new $XXX.X borrowed the paid from JV a Bank loans. the a million existing $XX loans. including In and million, company The back at of borrowed company. AOS working million the at $XX.X quarter, capital balance back the of

the Net year. trade million last were the compared at days as to sales and end XX quarter XX quarter prior million last same outstanding in $XX.X was receivables the $XX.X $XX.X quarter. days for of compared quarter million to Day for the

prior down for to quarter-end, in days days from the in as the Average compared came XXX and inventory $XXX.X million to from prior the quarter $XX inventory quarter last up days $XXX.X Net million was in at the million XXX quarter. year.

million at to $X.X compared year. at Net equipment was the property, $X.X AOS million Capital plant million JV $XX.X million were including last last million $XXX.X and $XXX.X company. and quarter, quarter and million for expenditures as $XXX.X the

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

and September continued the mass and XXXX. up started quarter, During ramp fab small the production to production assembly XX-inch test July in

Phase run our approach quarter XXXX. We in calendar expect September X to by up target rate continue accordance to with of year of the the the plan to fab XX-inch ramp

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

Mike Chang

Good Thank you, Yifan. afternoon.

of the a and R&D $XXX.X in quarter. line than AOS Gross of investment year-over-year consecutive the marking The results driven midpoint healthy came growth. record quarterly strong JV in the earnings top was September our in from our guidance, with performance enough the than We delivered the more and financial performance company. by of XX-inch revenue million, additional in are achieved quarter for margin to supply quarter. XXth contribution higher revenue fab pleased part the which was at the offset

you major are us battery drivers in this the take quick minutes such as to is few the chargers. growth share I of for exciting progress we One business. applications, a protection seeing and will mobile smartphone, with

starts with always It strategy.

market and expansion the gain, initiatives, become leap to a with leader. young headstart land, well as core next we as give to a As We volume replicate springboard footprint including then increase with a to expand customer applications technology the a to our the this use company, Once multidimensional identify market scale. we share content as our we relatively success success. that and us

our do of opportunity the to in zero market, about computing the we the to grew We We where market. in revenue. is to have that dollars from market, strategy plan ability available annual same than execute where market this the computing double $XXX demonstrated served mobile million in the more

as the largest X successfully OEMs worldwide of suppliers. each smartphone We their landed key one of have at

quick last significantly. is business products doubled September year. revenue from battery the charger mobile business Our quarter, protection In combining we the same quarter and mobile growing

our expanding and devices. ODMs, top-tier global with smartphone Now will that focus generations we brand to are continue the we to on and OEMs models multiple peripheral aligned presence

by reliable play our room and year, additional model this at last As initially are a our to to models, of many won We point, OEMs grow support global one-year working plan make we our global company brand transferring the year-after-year of mobile a of of chain In current by new new model This year, for to as we demand role several a we years to company. a to the days is products and year's a come. the supplier. production the penetrated JV for further fab OEM products Oregon top models case on as scalable The ODMs. JV the into last supply penetrated and adjacent into vital expected the at sockets. meantime, year's with in a business for share some adding multiple to diligently

with products Typically, of speaking, ODMs of is faster depending the transfer relatively cycles well applications number OEMs a activity requalification applications short transferring simpler process. X such as upon X with Generally as for involved. to and PC takes approximately complexity as months the

and We for progress. started steady have are process requalification computing making products already some the

rather the Given activity with this and still to following is September experienced the growth macro we help environment returning than requalification expect year. is seasonality process uncertain, a record-high December the that the pace us is accelerated the last Nonetheless, less quarter in we normalized transfer quarter. pace buck to slight market the tight the

The in at hands is products for customers' manufactured design-in these already products company building. are JV the and momentum for qualification,

we reach run September our target last earnings in by X quarter Phase confident call. ability our are to the as on rate We next year, discussed the

are across business, demand by mobile product the healthy we to addition our also lines. In encouraged

our increasingly artificial As the high-performance system products, power. value and efficient computing of big the and Vcore highly for data and include especially our to Internet expands intelligence, industry Things, customers

Our IGBT solutions of to strong appliance customers. also contribute -- base footing broad home establish at a also continue

fab running there built products at are our We also Oregon see products has solid supplies. on and demand still its power for some Notably, capacity AC/DC for been the full allocation.

strategy. Despite macro market are generating growing we uncertainty, results business by and executing prudent positive headwinds our

positioned key well are products strategic with diversified multiple players segments. Our in market

We a to through better increasingly sophisticated even serving solutions are total those chain. customers committed supply and reliable

give of We the calendar opportunities our achieving in are XXXX tremendous of million by encouraged $XXX annual us, growth revenue. us of which year confidence target ahead

With our business our in this and will in we continue start in fiscal and the first quarter, growth onward. build to strategy execute XXXX momentum on strong solid year

I over detailed for turn Stephen to Now the report. a will call segment Stephen?

Stephen Chang

and you, Thank good Mike, afternoon.

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

As high. served grew channel a customers utilizing Computing digits record computing reach inventories on sequentially peak double to in hand. by planned, the season we our sell-through

we Our the of adopters power Vcore and at business products some Chongqing built is the early system JV. see strong,

the for quarter. is easing, the conservatively December expected are While supply remain to the in quarter. it modest Based we challenging estimating December increase on CPU a is that, constraint

sequential let's and the driven sequentially X.X% up mainly in was Revenue Now home by growth quarter. products Consumer X.X% was represented XX.X% which the of revenue and in Korea. in September segment, The increased discuss appliances China year-over-year. IGBT total

reliability grow to the conditioning products as with our by provide IGBT refrigerators continue and and these our in applications. demanded systems We our customers air business performance

on are second growth with year, track achieve calendar that We line XX% IGBT year at to another the level. product in this our row a

home is seasonal to season, not sufficient appliances slightly, a low in to grow it offset TVs. expected decline into be Going although will the

segment Consumer the in the December decline quarter. double-digit for a expect We

to turn accounted segment. up segment power let's for of and sequentially XX.X% and XX.X% year-over-year. revenue, Now XX.X% This up the supply industrial total

peak double-digit growth Our during a global strategic smartphone in position strong their momentum quarter season. because quick OEMs the quarter. achieved charger the accelerated September at of from June again We our

saw the We a during business supply our power also AC-DC in September quarter. rebound

season. December we the into was charger slow business the as the quarter, smartphone Looking quick exit

due expect revenue the we However, growth at level to overall segment to from quarter maintain other applications. September

resulted Rising let's demand the and was this in communications Finally, discuss protection substantial in year-over-year. segment which XX.X% up revenue for smartphone the the battery segment, growth of products in XX.X% our XX.X% up quarter, peak season. sequentially in

business based charging discharging. which MOSFET We cooler on of low during leading tensions. softness trade the battery telecom saw are in technology, September our operation higher enables some voltage midst and the in the during products efficiency Our and XG quarter

December Looking quarter. telecom we protection business. to December to revenue be quarter, maintain decline battery recovery to in by some expect slightly. offset will our business this expect the XG segment's Therefore, the the we This of

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

Yifan Liang

XX.X% the compensation look margin the gross $X.X As fiscal company. we million, that to and X%. $XXX million margin minus XX.X% expected ramp-up relating expect estimated year Non-GAAP production to between is share-based $X.X minus revenue or non-GAAP margin forward gross of to Note estimated be X%. plus of plus of or JV quarter $XXX excludes to million costs and to XXXX, be second be we GAAP gross million

to $X million. and share-based plus range expenses the or of Both million operating business. operating are $X expenses relating estimated approximately of Non-GAAP or in in GAAP minus million. to operating of range an charge minus include expenses be expenses to to plus $XX.X compensation power $X.X the million. Non-GAAP expected estimated of be of $XX.X digital $X operating the $X.X development our million controller non-GAAP million expenses exclude GAAP million

or expense million Tax be million. approximately $X.X to $X.X

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

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

open up we'll to the that, four Operator? questions. floor With

Operator

[Operator Loop first question with Williams our David Instructions] Capital. from And comes

David Williams

on the the made. Congrats being and quarter progress

any you about design you to what win terms getting kicking a of projects from acceleration? interest, delays a projects these maybe seeing -- Are willing gauge Or off? I to of some are seeing in First, seeing maybe more little or step talked out perspective, activity push the seeing kind and of just there still past, in and that? trying terms some kick you customer the you projects. are off? you of design know certain level in delays and Are and go customers and in

Stephen Chang

Stephen. This question. Sure. Good is

to normal healthy. now, it's peak win following and the And the time be heavy So is of Right related, tend in our QX design are very in those segments peaking frame. our - patterns. computing seasonal several smartphone we're and

new in of So our terms design wins are into going going next well year. those tracking into projects

the that progress see So we we with are happy there.

David Williams

more secondly, you're they across channel And and of seeing -- a a level lean? Are terms all the Great. then of replenishment have markets. distributor you And in terms and maybe trend excuse levels they or demand all heavy? what of me, down, do the I demand inventory chain? come what of looking you're or guess, seeing expect possible in geographies inventory. you broad-based, end the Are still the inventory supply are in terms little

Yifan Liang

Right our level. months. at two Sure, of toward healthy end low a the of the it Yifan. target channel Right three to is range our now, David. now, at remains -- inventory This is

So inventory we much point. stuffing see right channel now, this at don't

David Williams

Okay. some Do that you as calendar from levels we to see that head would expect you Are into you the and some see to December replenishment? expect maybe at quarter? first the pull-in

Yifan Liang

see we see Well, it bit our that little us overall in to there. in mean, as different picture the scenarios catching the up different I there. different so is stated our prepared sectors, may -- we -- allow over that's buck Overall, and a seasonality. we remarks, can production

be the over computing strong terms sell-in of some we in in would there. expecting area So segment segment,

David Williams

you'll about can and some talk expectation kind you wins bit the design bit that little about at the know you additional talked your Okay, I this major But of the there's I you're there? sockets it, that the may the OEMs source OEMs a I in that periphery-type gains in is some what about picking those And a making up share you're share? sockets or next at where position terms up of you about -- But of may into move and pick in be be talked third-source And a a and just if generation? past. handset earlier. opportunity, think are headway think of Do the little fantastic. maybe guess, second serving - the, what position? are a thinking about to you first you we what making you kind we've is then the guess, and

Stephen Chang

Sure. I'll take that question.

we charger, business, One sold battery these in main many of the our X is is the the get there's applications protection into. is handsets. quick the box smartphone and which in second with So

our position now, growing right is So stronger.

mentioned, as makers. smartphone leading the are, X of Mike We in each

of some these newer. are And relatively

Some long, of longer-term customers AOS. have been

we'll goes So -- of top our same business. as quick out. to business continue on thing to continue The with additional our also roll with layer charger models

David Williams

Okay, great. if And then you one me, last one for don't mind.

efficiencies new margin savings thinking the take of fab with will the could kind through the revenue given cost some work potential, about of and XX-inch as Just margin the incremental time really -- stride? JV yield given the the online, and understand the profile the hits benefits I once fab its comes a to of that size likes. contribution what look and But like

Mike Chang

now, Phase next targeted the fab ramp run up of we Sure, to expect quarter X and time rate in David. year Right can frame. XX-inch the we September

basis This its for So on cost is at be wafer cost on with from some wafer. now, time, Right Phase generating benefit current will phase, there. own. only currently expect par X that our XX-inch on would I a we're additional estimating per-die X-inch our the

Operator

your Craig B. Ellis from question comes with next And Riley.

Craig Ellis

Yifan, on. I'll of first Congratulations clarifications XXX-millimeter you. with for full start output on some fab your quarter

the total mentioned So the that quarter at $XX that were X hit items in first, end of you million.

flow quarter right been that of of end those, operating if assume would to collections respectively? the start for those cash fair? million, fair it and $XXX cash is fiscal I say QX, in not that and million $XX.X is So at came have And that

Yifan Liang

Yes. million came Exactly. is. on The $X.X it was so October way that Yes. in the X.,

Craig Ellis

Okay.

accruals, the expense in we anticipated ramping I Or expecting. would for there been the think was what increase about operating fringe items were performance any had et be came all about in quarter, digital looking But power that in was onetime cetera? I quarter? in I above Secondly, million really the it and up. an $X increase but

Yifan Liang

the in low last relatively OpEx point. Yes. a quarter to was low, fluctuating was

back. investment, so also activities. This quarter, to we our increased it up beef also, some And R&D fluctuated

So we would us support for and growth. all will that the future's expect next R&Ds those the year

Craig Ellis

So is Or cause you'd to half of OpEx it is flatter there to from say the move as 'XX? fair you expect would something OpEx higher a fiscal through that go trajectory second here?

Yifan Liang

have I 'XX, For March increase. R&D current that time, level the yes, more the we'll quarter, the would in would I for following the probably expect activities line wins with in for June an in year. expect, quarter, design-ins or the At

Craig Ellis

follow-up Okay. distributor at down. I PC you happy ago, and get talked were question. clarification, with are distributor the we know you that the space, overall, three My that that, are also to PC levels to last inventories about particularly you're and worried inventory inventories channel intent months normal about I PC levels? levels the in -- it's within a but inventory, earlier inventory saying -- know

Yifan Liang

inventory our between quarters, own our internal that external we Yes. couple managed inventory, productions. and And dynamic last actually, of

will the in be in peak September knew and mobile the we we season. would computing quarter businesses So have

our So we limited constrained dynamics peak season. our use support We're managing PC capacity. quarter's -- September so with those inventory our to channel that

business high the real our that's revenue from So record actually a the reached sell-through perspective, in PC quarter. September why

business more growth. capacity spare side we to the just support the mobile So of

Craig Ellis

versus with the Okay. on can Stephen as is degree a to that And getting use help record ask few just given to is to expectations the you I'll where wins designed-in the Stephen, one, coming get think feel significant its a questions, in that consensus compute. interesting into XG phones which XG? the business, And XXX lot the going a ability Communications be understand, for is on congratulations which around in sell-throughs XG growth the segue phones increase to probably year, us the calendar how in about does for units, of phones that's very those the from since next million 'XX? I is company company

Stephen Chang

Craig. Sure,

for higher So power the there content AOS. in the the more higher battery is general, that's the the power, needed, and is

will advent usage we're With demands and the up battery, streaming more you're there's of as the and more on whether or charging that anticipating video XG, the go discharging.

to of happy performance see for So products. power for the us, greater push we're a out

So believe efficient. capacities a are that could the as increasing be for battery be us to this area more for to us, that's continue and growth MOS as -- have be basically we

Craig Ellis

Or the a design the a end performance majority are very that and for OEMs you wins are smartphone just you high XG? your of that your majority X Does Mike design continuum mean think that that had of at the of mentioned? wins

Stephen Chang

split out general, only trend way. phones power consumption. and XG bit if trends the really is for In We higher that higher don't spectrum on the one are it's ones pushing it capacities the the battery, a a us, pushing we And high-performance in of smartphones. To demand the of for higher-end terms it's that's the the the themselves. not bigger of -- the that's

Craig Ellis

I it lastly, flip space, Mike. the before And in over to Okay. communications then

of what the strength your Communications China the seeing for even others. Is model the the What's XG calendar potential corner? new flat -- view Asian quarter a or there's we're even the first players, be just to given the your XQ current baseband from that around the launch above activity could OEMs models in significant there now, seasonal right as launch out grow business and and think, smartphone quarter? I a XG a the release of XQ quarter, given with the beyond in lot fiscal fiscal business activity OEMs potentially be potentially sense first forming for

Stephen Chang

The I the of that this don't will in the big to be Generally, time smartphone, gap for is seasonal in general, phones. enough peak more between the quarter. models releasing in normal again, offset we're think kind September Definitely, still of But pattern to the September seeing major be tend around peaks. I vendors that think filling frame.

Craig Ellis

you at ask One of it. were have pace it encouraging your does and deploying, adopters then best at for adoption things to there Mike, Mike, sales rate within if some all now? certainly, opportunity a strategy to on land-and-expand perspective in the a in got of march in as My months your is final. Okay, OEMs, to looking of penetration my be signs into Or are helpful land-and-expand? group, it's are term? the I'll XX%, this, that company If the towards and mid-XXs maybe of get it's and the some capacity now, get with X the we better year at really XX% how years the big look success communications. what in if communications XX longer the from question OEMs can X or environment, hit of even is different in case and

Mike Chang

for mobile definitely, momentum, they'll we sure, reach probably be That's practical. the the there, the And to And So look probably we XX%. XX% XX%. which we're okay? in For call would QX, we'll think, business above into for looking XX%. one pretty is healthy the

Craig Ellis

clarify my Yifan, But is answer revenue or sure helps you that one, Steve. contribution the fiscal last quarter guide? And you can for the within question. if great. XXX-millimeter or is not I'm That's Yifan this what second even,

$XX get between million run we're down, quarter late to we rate and need cetera? of got we $XX.X from run differently X were How to If sort year. for, we looking $X that IPC, we if Comms, rate? million $XX to that next now et from the of we buckets, year bridge how to do that of so million that about that next first in are revenue were there's compute, level from the gap we be the fiscal in where break million of where September from And at then much comes quarter, the

Yifan Liang

using quarter the is run now we're the now, I'll target you venture rate and we're fab. spare said ventures confident joint Right not to It right September Yes, start the the there's with the to so the from and room question. in ramping wins - some we doing This of our next produced also be that gradually reach year. we're fab. is this some for the joint design-ins productions up -- products our Oregon linear. we're may products that can XX-inch transferring

a production requalification our that transferring So customers. with requires

depends it So played those out. two things, on how

would And we and takes some mentioned, Mike some to -- time. it requalifications. so I need expect and as some and Stephen design-in Like -- time

I expect see you quarter, most. So in September in probably and quarter, the June some, you see will would the will

Stephen Chang

our chime And Chongqing that The in. the so to that in I'll Stephen. also moving Chongqing, products This not stay only are behind is the move to actually X-inch products fab. helps but

it the So actually with helps total loading.

after So Chongqing to up segment basically, that I we capacity total additional level. think every can benefit from open the

Craig Ellis

rate really of fair participation say it terms the run to going a going majority that the target it from is fab, getting in is with Or new segments? But other to communications? broader-based to here to that be is the Stephen, with be of

Stephen Chang

this with, computing QX, applications. which including as going into hitting is peak as we're like But consumer with right we're season year. to ramping well room, we're as are did said, starting both room those a we when we like now well of various as of trying that We're for make -- segments that applications crunch especially initial computing communications, time for make both to

more next address that year, the we naturally, capacity, comfortably demand. opened-up more more balanced with to expect So

Operator

with from comes Stifel. Tore next question Your Svanberg

Jeremy Kwan

Jeremy is Tore. for calling This

add also million bit more that that interest intercompany about that refund Can JV. my little is? flow came cash on Let $X.X profitability me the what payment. you from what the I tell congratulations for some us of the do that know is a and

Yifan Liang

Sure. receivable $X.X was million impact I payables balance. an mean, and intercompany the

of this the now, is paper processing right venture loan the So joint final stage in work.

approved, loan now, right to we the has of patient. and over bit there a it's going the final so work. been be stage itself paper have through So the bureaucracies are quite There

agreement. venture refund, a $X.X In million interest terms expense of part that joint was the the of

got for expected years, finally, refund then in joint X so we we receive venture for local quarter years. each that approval years to of that So next came the the next September the and quarter is government, the September -- the in, will for next from X the refund same X amount the

Jeremy Kwan

and interest that finance returned the the So JV being it's basically back you? that's paid company to to refund, that

Yifan Liang

that they the are on refunded the Those expense No. on financing and are interest ones lease loans. the paid

Jeremy Kwan

JV, end and the that lease interest the of paid loans of finance some they get the at So the each back on they year?

Yifan Liang

Yes, government. yes, from local the

Jeremy Kwan

Got that okay. government. see, intercompany so then in been terms receivable, to From that's... And you loan that's the related a said I approved, it. that's local of

Yifan Liang

That's not company related -- That's loan. balance. No. No. a to normal No. business

Jeremy Kwan

that's basically guess, incurred for of JV? that -- is on expenses and is AOS that on that the behalf -- Okay, I based for

Yifan Liang

purchased -- outs. us. some I materials they and And then first to sell they finished -- goods from we us. mean, Well, ins those

Jeremy Kwan

okay. you then how loan it, And that a Do quantification the mentioned, have you be? the to in works. that's Got still that's of going much

Yifan Liang

agreement. we disclose when an We'll it sign

Jeremy Kwan

Great. -- of if the you give on through business us much how move the through is idea running can JV? we to I Okay. Can guess, And that JV. then an currently

Yifan Liang

we is the guidance, for ramp-up. in us now, right supported they for yes, the quarter, incremental also December revenues. it factored September the mean I For the

Jeremy Kwan

it. Got

of Okay. just getting And at but questions, maybe way. it the at some kind different maybe looking of earlier a

existing expanding idea the so last over based new you you is -- at introduced you've expect of maybe again, that products -- incremental much to it an If that that $XX.X the have you related or from how can -- of opportunities million on you much how JV, products? from look products or do maybe that year is

Yifan Liang

PC speaking, Well, qualified getting requalification PC to shorter Relatively some when existing mentioned, those venture. some as process, initially right now, are customers transferring for with Stephen normally products the production other than the relatively joint products. -- we're is

started in So we've from fab as area add-in products consumer XX-inch on, there. other we'll the we'll well. the in produce the from supply Later power that yes, area,

Jeremy Kwan

or quantify the us mentioned you are XX erosion pressure -- Can Very XX for gross And to Can earlier. I maybe or at expectations year for you price impacting good. also, help what guess, the months? had margin. pricing that and us, next least you

Yifan Liang

supply now, industry Okay, the quarters. to I sure. last been getting relatively us. would couple after the the environment to back the In and point And loosening normal, it's say. the up, so market say, to us, was relatively This would and ASP so was and a year, tight MOSFET favorable the years two was has of I tight also,

want So products. do right we is new in now, ASP our is erosion What to to it's ASP situation. erosion overcome rolling normal out to those the

performance that erosion. so offsetting the And and margins, so have provide you better those better commanding ASP you

the dynamics Of versus course, products. the on those existing and that new of timing products depends

So from the may you time products temporarily. time, erosion to you products, new see may overcome some old to sometimes and see

Jeremy Kwan

the annually? And X% order is you're in the erosion, of of that looking at? normal what that X% on to terms of Is kind

Yifan Liang

Depends mid-single like digit situation, to It's on single more on and high digit. the market the I say. years would

Jeremy Kwan

to compared years? to slightly past flat down maybe in the that's And

Yifan Liang

Yes.

Jeremy Kwan

the smartphone relative ASP and communications would Okay. exposure, And the then of you margin on the Or with are products? say gross to if similar is terms to we of at different -- rest there corporate? your dynamics it in also, look a dynamic, the the side, the

Yifan Liang

terms say -- In than of environment, I would better. maybe similar, slightly ASP or

terms average. margin our in corporate it In segment, above that profile is of

Operator

At there closing back to no now I'll questions. your this host time, the turn conference further over remarks. for are

Mike Chang

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

Operator

this gentlemen, for concludes conference participating. and you call. Ladies today's Thank

You disconnect. now may

Alpha and Omega Semiconductor Limited (AOSL) 5 Nov 192020 Q1 Earnings call transcript