AOSL - Earnings call transcript Q2 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 Reports Financial Results for the Fiscal Second Quarter 2020 Conference Call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

hand over to today your like Jeong. So-Yeon now the to conference speaker I'd

begin. may You

So-Yeon Jeong

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

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

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

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

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

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

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

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

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

Yifan Liang

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

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

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

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

margin was XX.X%, million December unchanged the gross Non-GAAP last for same XX.X% from the the for for share-based Non-GAAP $X.X last quarter quarter quarter, charge margin year. to for $X.X quarter and as year. compared same prior $X.X the quarter compensation prior for from excluded December gross million the down quarter million of and the

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

to million expenses million excluded million share-based compared operating $X.X the the same to and Non-GAAP December million $XX.X the prior quarter for quarter were for for $X.X same last compared operating Non-GAAP compensation charge, $XX.X quarter and for year. quarter expenses prior the of last the million quarter for year. $X.X million, as $XX.X

$X.X the same power operating compared for digital last million the $X as Both of $X.X included million for and the and team expenses quarter quarter, expenses GAAP million prior to quarter Non-GAAP year. for

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

year. in million compared used for December quarter and $XX.X cash quarter, quarter for flow for $X.XX net the operating and share to the Non-GAAP to in generated was compared the cash last in EPS attributable generated as activities year. million AOS AOS $X.X to same flow quarter same operating the quarter last prior $X.XX as cash $XX.X per $X.XX operating million the

$X.X in used provided attributable the the in quarter by last JV quarter flow operating activities the December $X year. and activities same was to for used the operations, prior million million $X.X quarter, Company million to compared for operating Cash for

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

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

$XXX.X Company including $XX.X AOS Our $XX.X quarter at million, at Company. working and and loans, and JV repaid JV $XX was also $XX.X million $XXX.X including $X.X existing a million borrowed cash the end balance year The at of and AOS the at million of million Bank million at the borrowing million the December AOS $XX.X was million, JV Company December million ago the respectively. Company. $XXX.X the In the balance capital. quarter, JV

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

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

million business of quarter, at XXXX. capital for the JV year the $XX.X X% Capital at the estimate were We core the to revenue at including that million the Company. AOS for fiscal X% total for million stay and expenditure AOS $XX.X expenditures $X.X to

JV call Before to the update I of the you over Company. to I progress turn Mike, like would on our

fab the and to progress inch XX quarter, December as continued and production test the assembly During expected. make

Phase subject to is, XX general that fab the same, of rate approach the market inch year, up calendar by quarter the X target September remains and ramp the overall the this to conditions. of run to goal Our

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

Mike Chang

we focused Yifan. challenging Despite well to quarter. and continued you, during the remained conditions, execute Thank the December

our Our reported revenue strong came AOS range, sequential both year-over-year business in and operating non-GAAP Meanwhile, margin achieving revenue gross Most cash earnings, operational within flow. efficiency. from the generated our guidance improved importantly, growth. and core healthy benefited

provide business. the his total quarter, Looking that to comments. creating Yifan details outlook one ahead March speak is factor headwind and more we on expect in to than the our in will normal I’ll seasonality weaker a

There been coronavirus the coverage wide has of outbreak China. in

well-being grateful priority. our is employees’ safe. are I’m Our employees our all top that

Chinese extended we bans, procedures holiday, additional In as New addition Year screening have well as self-quarantine to travel the implemented measures. mandatory

will While we quarter. return our the that maintained anticipate production factory longer March full partial to production it to take throughout for holiday, the we during

have of providing We this are today. guidance the factored impact the disruption into we

imagine, a effect the is and As its global so you can supply situation on potential developing is this chain.

as the We will evaluate business continue on further developments warrant. to impact our

have products multiple and plan with at pushing with the time, been penetration have customers. into we to accelerating differentiated global diversification the We demand consistently the key segments, the and across brand create our market forward same been

big increasingly computing we highly are Internet maintaining industry. penetrate reshaping customers position products our key data single products, a of PC and OEM, high-performance were efficient the trends artificial to as of all computing, For our With intelligence, them. value Things as every underlying strong able such at

calendar posting in year-over-year XXXX. to the traction growth once solid again by Coming IGBT XX% demonstrated business, we

and to module continued a We base expand appliance footprint both solutions. home our of with at discrete broad customers

mobile for smartphone Our battery multiple pack year, global OEMs. the business, last fastest was terms in productions and quick the business charger percentage ramped high-volume growing we as including applications,

growing additional name facility business in remain at carefully the we demand mobile the and order the and ODMs, and to chain layers XX-inch test Chongqing. on In which strength secure address we of of from As brand global assembly expansion, planned centers OEMs business. fab multiple customers, about supply our confident we this

our our enabling growth appreciate customers support to Our and commitment goals. their

we were to able season due Looking Oregon on fully well-positioned garnered at are think Last wins, we quarter, the to not although satisfy capitalize demand peak our beyond March year, demand meaningful fab. design have constraints we supply we the that created. to we

result, expected This our especially PC year, in year. September difficult and production allocation customers make to which a as support better their growth JV, to in at smartphone added applications to our hit had their usual applications and a to to up capacity customers much last seasonal as decisions hindered with position are since quarter. Chongqing we support, they As and are the this we ramp both volumes, peak

us allow broader and of by applications. diversification this capacity the to we Phase growth Therefore, we the potential year. quarter This capture seen as expect array the momentum September fuel X rate benefited expanded a will across still approach run better from our effort growing to opportunities target

We have team in the execute place strategy and an right it. to outstanding

validates us moving We which with demand, solutions, have at market great We ever expanding share are growth creating the building and capacity to in customers by the production opportunities and are in key to especially of the areas: the confidence remain and we global navigating sustainable return, fully encouraged value-added demand. with forward momentum key multiple remarkable our across fulfill short-term. progress committed driving in facing our OEMs segments, penetrating plans increasing growth. is pipeline and gains headwinds top-tier and volatility in ahead three in demonstrated with design This, wins

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

Stephen Chang

afternoon. you, Thank good Mike, and

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

it During enough supply satisfy eased not the the fully quarter, bit, demand. market but CPU still a to the was

continued high-end migration business. cards and this and high-value tablet ramp in enabled such application the Vcore modest However, graphics growth as the segment products of into

PC first The the to core. has XXXX, with of coronavirus our the calendar shortage been by half compounded small least through This CPU of persist customers. anticipated impact on is especially at

Computing As a are in digit mid -- result, decrease we sequential the segment. a mid single-digit estimating

sequentially represented in XX.X% to the had seasonality. to originally decreased year-over-year. turning of TV XX% expected segment, December We Consumer was total revenue decrease a up Now due the Revenue double-digit see quarter. to which sequential X.X% and

consumer However, we saw during healthy demand the for various applications quarter.

our and with earlier, annual our IGBT posted XX% year-over-year. applications, leading solutions strong customer of especially Bolstered in increase required appliance growing continued by product applications. XX% mentioned Mike year after home momentum in performance line calendar IGBT XXXX portfolio with these by high reliability XXXX calendar As

global our XXXX. and at accelerate IGBT customer home another increase base year XX% the appliances production expand calendar we As ramp OEMs, we in expect in to business

March decline in Looking expect we segment. into quarter, moderate Consumer the the a seasonal

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

applications supply was applications While than we fans, the and grew in anticipated. such solar decrease sharper power power industrial other in as seasonal AC/DC

the As higher key supply. solutions, benefit quick of one paired power we of the believe charging phones are with well-positioned to larger XG that from we with suppliers of introduction batteries wattage

into entering revenue for typically March seasonal to low quick point quarter. our decline during is charger what double-digit business, segment in this a the we see the However, expect

the of down which segment, year-over-year. Finally, was up let's and to Communications on XX.X% XX.X% the X.X% in quarter, move revenue

efficient similar segment’s revenue December highly peak Our continues battery be we during quarter, to the strong this level. business to and the protection maintained

each models year, times launches some OEMs at the Since smartphone global global multiple offset OEM serving new seasonality. helps throughout us different

the the expect on products. continued in the drive For to growth Therefore, in recovery the telecom we the quarter, protection modest in XG strength we Communication March anticipate quarter. pack of increase March a battery segment top in

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

Yifan Liang

Thank Stephen. you,

disclosed Huawei release, with practices authorities federal with press and of its recent in As cooperating export our our affiliates. are investigation we control in their

program have compliance laws complying fully committed to We have control regulations. maintained and with and applicable export been all an

In reduce Huawei to connection is March by suspended with products for our approximately suspension this the investigation, our shipment order Department to million. Commerce. of the of revenue $X we on quarter based by This have issued to million $X expected

DOC We shipment all. we be if to to we resume will this at issue, know not are Huawei, working resolve to do when able with although currently

quarter professional Please fees note $X In DOC expect government only the incur shipments investigation. order $X that Huawei. March to of in during to our ongoing connection addition, to the with applies the to million million we

and continue the sales March to unaffected quarter, beyond by Our to are the other customers expected order. grow

financial you a comments impact with call, the will assess release, law. as directed and this Since we can related that making have required press by be facts Future statements. is to additional shared be in confidential matter, and beyond time, inquiries these we this this will our we not except at on pending that the

and loss the Chinese our the extended coronavirus in Based expectations quarter on this follows. of outbreak year the production are China fiscal as estimated due and XXXX for to New development Year holiday, third

be to revenue million million. and $XXX expect between $XXX We

shipment million the revenue the from to of Chinese to suspended an coronavirus as this the based guidance extended of impact also addition of estimate reduction on loss $X million resulted In in outbreak to information and Huawei, production to holiday have New we the today. $X reflects Year due

to the as $X.X production gross minus or non-GAAP expect be margin X%. compensation that, We million the the to Note share-based coronavirus GAAP by estimated ramp-up minus and to costs reflects suspended plus excludes XX.X%, million relating gross $X.X as Gross to or shipment margin of XX%, X%. be JV anticipate gross We margin production disruptions due plus to well Huawei. of inefficiency caused margin guidance non-GAAP estimated Company.

plus in operating $XX.X million, the $X $X.X and $X operating of expenses million. to expenses to of plus our minus expenses GAAP relating GAAP Both to or million, or are include expect of We expenses power minus be expected $XX digital to development the in range million Non-GAAP of million the million. $X business. range operating non-GAAP be estimated

the to On loss the $X approximately related million production million to $X.X JV a approximately to $X.X million. estimated fees expected around share-based million. estimated compensation. $X.X relating $X non-controlling to to is this basis, be million item operating Tax anticipate estimated expense attributable of excluding We a ramp-up company, be million. interests costs to of non-GAAP and $X be to investigation expenses Non-GAAP should exclude million $X.X professional

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

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

Operator

[Operator we Williams. the David question a Instructions] from have And do line of

David Williams

if how we've a a that correctly, the if was thinking about recall of Good can part business. different until Has much kind my kind guess, fairly of afternoon. started it last time? that those And previously? you trended, And we're change I that question, is has thanks drag. for appreciated. I down? kind since Huawei I taking quarters? about are how shipping And of has of guess, the trended, pieces you as you of here, certainly Just moving about Quickly, I revenues same Can previously, the now? that I were revenue negligible several obviously, talk kind the demand of the guess, – the have come process in Or over

Yifan Liang

Sure, David.

export we maintained mentioned, control have program. we As an compliance

applicable committed to been have We all regulations. and fully complying with laws

government So we now. agencies in are investigations right now, their right the with cooperating

do this the have matter. beyond as this required except earnings call a is by So, to our not release because comments this a and shared pending intend additional confidential that we We said law. fact on and we and make

there. – that's we'll So stop

the March disclosed impacts, Our impact million $X then to March we million quarter have $X quarter. And said and impact factor we about those in guidance, our for revenue also we some already that expense there.

plan with is So near-term, we'll mean, we our we'll this and this grow on I And growth we'll press continue to base customer me, to and applications short-term our it. so through longer-term, serve. diversify get so – – headwinds that

in some they're models shooting even in the – are models now challenges. range, the there, additional our solar. then, and So with Those still

we'll face on. it So, and that marching

Stephen Chang

Yeah. And And to behalf overall – this want towards push just is of diversification. speak I Stephen. on our the

diversify actually and company push there's customers biggest markets are of at the been order past all expanding big geographically, few in in to we've within those customer by the and PC smartphones. and each base successful a our those to Our now and segments the major been reach also, that core And years, base, right pretty spaces. in customer

wide. forward helps as encouraged move of we are because base progress and that that also So and that us we is by

David Williams

then is segment you. I or thinking Thank that Or I'm units? the more contributor, the $X if thinking be the largest about dispersed about that Fantastic. is amongst to related one it heavily should Is And the million it where from? different Okay. coming other?

Stephen Chang

as -- guidance our specifically comment of impact can't is but the well this specifically, each that. we reflecting in again did of as the overall, We about segments all

David Williams

at Okay. And doing might understanding prior cost next bit the moment. -- $XX those down from looks the of the sort for us perspective, coming kind some million guide the trends like you're about OpEx lumpiness quarter from it quarter. thinking about a And of get what is OpEx strategies, Can just the that of then the you little containment in help an what handle on anything of a are talk OpEx, terms the that better longer-term?

Yifan Liang

pretty and million quarter's flattish guidance March non-GAAP is compared Listen, the Sure. to $XX.X OpEx December guidance, actual quarter's much numbers.

our Power view initiatives, will maintain level, we'll we strategic Digital to this and in current will invest to line, continue at that's such certain continue So our who that. OpEx do then that product as

now, so our at are we plan. to And pursue right growth full speed

David Williams

guess, then, that I if And that at for your the look kind million Okay. are numbers of about being $XX.X guidance. to add here, so coronavirus the for do would the from taken the $XX and I math out I million impact, the of to total and Huawei, course,

looking that growth that is to fair So through $XXX demand Is the that nice level is puts a you're it trajectory of about seeing to -- that just if I'm $XXX at $XXX to thinking million anything that fairly I'm demand, that business missing? step. that million. there Is say million, about or same

Yifan Liang

seasonally in that's Yeah. quarter I the ballpark I lowest in mean, is the our March number. mean, quarter, normally.

a design good some and variable gains customers. seeing various are at wins We

March And near-term and so reflected headwinds. quarter's our guidance despite the

substrate not it now, where we yes, out. that that's are. And so right And well,

David Williams

of you greatest higher-margin out demand? I Can other kind where been your us, this. one you that guess there if allocation in mix allocation the same the different you're you amongst more, still taken kind of one that anything the answer still Or could where And and drive of we're on terms thinking slipping is the point, of if maybe Okay. you the for and products And But of doing know I to? about PC out at then in. Are kind Stephen, strategies? allocation type customers? can parse had I the in of can. point

Stephen Chang

I can Sure. talk that. about

last so quarter, was same specialty. for usually preparation expanding at I customers allocation. our be these bit smartphone and the struggle to ramping our for major on chain. sure our a during supply And all our key we're customers priority. on we keep in year, or as the us, So was a been have because very before, matching of it in were all all had we year, these we it PC that the we of calendar last make time mentioned this year, optimal in Both year, in peak loading optimized to a that happy could And working we're encouraged actually because September and

we talking to believe our been the ramp. to provide already We've this Chongqing us This XX-inch lot more a way is that about is venture. that customers. to our And support with in flexibility we expansion joint beginning going help the

yes, that into. we that options more allocation still during only season, some to business working with peak now to to get all to a we'll expand in have we've with, demand have been the also lot new the order peak the believe coming Chongqing issues but deal I So and support but that's address not

David Williams

so luck quarter I'll and the in Thanks the jump the best queue. back much and on of investigation.

Yifan Liang

you. Thank

Stephen Chang

you. Thank

Mike Chang

you. Thank

Operator

Craig comes question next of our the line Ellis. And from

Carlin Lynch

Thanks for question. Craig. for on my Lynch taking Carlin

this there. the in with an the headwind, out past was quarter, that we rate, get is in Obviously, run going to start last there per revenue said but to to wanted $XX.X revenues quarter, in think the quarter, to $X quarter. million was of be coronavirus there had that million obviously, joint venture million looking September then $XXX unwelcome I kind and roughly the ramp -- Just you and

March smartphones? we going be obviously, quarter, $XXX are about Is that hoped this dynamics we to joint quarter, lower driving big what rate to a to in is where Just quarter? going little think of rate the March maybe be -- it that up As coming what, a post about the think curious, the getting at off past end March markets of million from how leg venture? than bit run

Yifan Liang

part we're approach can Okay. to is What September talk saying linear first your it I'll ramp is your to doesn't rate, fab progression. we questions Well, address been in and mean quarterly quarter. -- the target of Stephen targeting joint have venture XX-inch a the product run about run mix. up question, the rate the

time is to So it this fab, months from September around linear. for new year, last ramp-up year's quarter quarter, anticipate a year's September XX we or not the so but

So get to September near-term given still now, run the rate. the to rate that target run headwinds right to remained will

our type what I So, at this of there. will I'll goal we overall Stephen mean, let over run about that's point. products talk

Stephen Chang

Sure.

over in that in of regarding we're the actually probably there smartphones. especially we're to first. and the will growth, help applications Chongqing, technology several PC So serving support Those for come order moving our platforms

that balance and we We have whole wind a to order in chain. – lot will runners in of to move to supply are help high planning we're there out over the – that our loading

but first, going those well, targeting be we'll too. after other applications as we also So, are

the this be that platforms, several XX-inch again, will from – – fab Joint Venture. the supported being Chongqing So has

that. So flexibility a lot again, we support to have more

business. So not help load, existing the support but new for to only business balance also to our

Carlin Lynch

ago we what expect you last historically, quarter, point it. see just growth years that on were to you how and capacity a versus, that Got or much fine fair? June have we've seasonal of more growth above could where or constrained. year September it. maybe That guys just means supply kind still two we put seen given say, fill incredibly above demand And Is could the in

Stephen Chang

ability more fair, we that to support That's Chongqing, still correct. will peak have with but be areas, season. a allocation we – And to that for on be lot certain

Carlin Lynch

like quarter around Two so steady $XX of like it. are can that in – customer? color terms now million And on then big are then just Power of has terms that what to you in are we kind there in per side. of big quarter. rollout? one – where a few $X.X looks is customers? the of between touch Obviously, and it Are second, so bounced operating at looked expense, be has million a kind $X demand Digital Got million – we turning per it breadth And is million A customers? the where we would there. – of Just Yeah. questions great. Any with OpEx on year? $X.X One –

Yifan Liang

Okay. Stephen I'll comment on and the I'll on the then let first, OpEx to comment portion progress.

think it's terms and our or million on of activities. the the OpEx In around right engineering then now, and to range team, running related of range. yes, could million the would probably power $X depending Stephen I expenses fluctuate. that I'll $X And from the digital on I so type to quarter-to-quarter, of per let quarter. mean, And it mean, I million quarter, in progress. per comment $X.X

Stephen Chang

Sure.

in year and set And what and we coming design-ins this on convert – would And design start with of pleased into see. year, providing this will with guidance into revenue of the happy these the But happy Power. it we more so what we last far have kind – are end where getting product at turn quarters, to but opportunities going And into them into expect to so we in and some far. we customers. some wins pretty see reach be with soon. we several a with was bit. definitely customer of and development we're Last a customers into we is So up progress mainly Digital engagement are early engagement quite as deeper

Carlin Lynch

inventory of back quarter-over-quarter? CPU more it touch about that me, on just any Intel Can you know, of had of was two I'll both a and for guys of little inventory quick then of bit we bit Got date are had kind had guys the lean. this dynamics, I where just broadly? color destocked industry pretty guys, inventory On and of know Obviously, long kind you remains dynamics, in for terms the it. before queue. supply any you rise you're kind but in see a kind inventory some you – said what seeing to I channel said color tight, And Because for it period was of destocking? things inventory good jump that running ones, you then – rapidly.

Yifan Liang

Okay, sure.

own yes, is is our range, which low our now at of inventory, For channel to the end target two three right months.

us, So we're an and tight level. is now pretty average it inventory for at so still

the I could and channels channel overall need global of chain. conditions, overall right coronavirus reassess the market now, think this inventory hit supply this In the -- and terms now, and I Chinese of to one after New right the -- we potentially outbreak. because and Year mean,

So very is still virus' situation fluid, hopefully it's right now, -- evolving. this and

need its the conditions. we So to monitor market closely chain and impact overall on global supply

Carlin Lynch

of just the demand that, clarify how and And as situation? coronavirus, that changed -- the that to supply has some of last dynamics kind impacted or within the has China two weeks so? How has

Yifan Liang

New Year. of been couple last Chinese weeks Well, has

I a countries, they of on the China, holidays. Taiwan, are lot lot of mean, a So Asian

say. productions to or the side are now, soon evaluate they production resume to is full some right is productions because their can to hard dynamic, they whether customer -- it need not how to pretty how our there evaluate soon closely monitor time also This capacity, and our assembly get So also still can point? from they and on their much back-end side, China. and supplier that can are And need and pretty our our and productions to start in we test own in China, and factories in entire for

to back. XX, nowhere So workers supposed back evaluate is one once come we -- also that's those February come to the and on need

quarantine also come a XX current the self days time. situation, implemented they we policy. another given in have self coronavirus back Even quarantine But though may and they

things still those all are kind and So of developing. evolving

situations. those keep on eyes to close need we So

Carlin Lynch

in Got it. All right. queue. Thanks guys. I’ll back the hop

Operator

the we line Craig of Ellis. And question have from a

Craig Ellis

to things the Yeah, taking wanted related are appreciate of some going things the to follow-up in the business. transparency thanks And that all the on really I on guidance. for the question. on

looks some this some I was for been following guidance, to as understand of them on Carlin may million And specifics. a look have and reasons, an revenue of there's it the I And better. $XX call. But much two like impact job doing was I covered great want up different earlier; on a at

the is First, on Yifan, China to may of the be to just with in versus side seeing? of the you demand respect that much simply $X you're million, $X mentioned how the making that things of coronavirus side? allowance that Chongqing, any And you million disruption some of supply

million in And can the guidance? Chongqing you much embedded put maybe quarter. tell if how fabs And Or to us from is $X now the revenue Chongqing's had context, $X guidance? related to are adjustment, the in million December question with how all first of that revenues excluded in you much

Yifan Liang

days Right is $X that this estimate. we million New another seven and our lost, Sure. holiday, Chinese and the implemented and other got we Okay. policies Primarily, production. the and million, production based quarantine and With on our and situation. you've so, $X disruptions additional Year days some the estimate on that's we will that with now, then XX -- extended potentially have

So that Overall, this the are backlog and and $X our million, point. reflected that's bookings healthy at $X there. million,

our customers and check New on Chinese more expect probably we and gradually back learn they after at Year this pending after customers point. so And from the come we'll

our million $X million, own based $X or production fact, estimate an a on that's situation. more, So in

Craig Ellis

helpful. That's Okay.

Stephen Chang

Stephen. is This Yeah.

running China yet. see customers, the We on seen side, demand too. they do have -- see our operations the however, haven't side; So impact well in as also major direct any we end we demand do that

the issues same we same So as and that dealing well. -- they're you're are seeing with the

with So labor production But right come it's delays, now, own because to our the there. overlapping force see of some little impact longer also and a back. taking we do

that the situation. China And are deal is demand for temporarily very with healthy. in we have time So, this actually Where that looking our through we we as -- confidence work still love we to reflecting challenging are current guidance. the

Craig Ellis

Okay. but The you're your like customers one, headwind two it existing unable that on? out are might saying follow-ups given be this is loss products fill speak with counted you're to that Steven, a if are mitigated demand sounds any that risk is can then customers to your you that loss that share risk there share accounting,

back so output will level Phase the ramp operational running what in quarter second Yifan, that and you the for a So it to fiscal more you be have question. confidence be the that fourth could up quarter? target of able September get fab that meet calendar then And delivering would quarter to gives an revenue that's X your and the

Stephen Chang

we're demand a we work share as a if not mostly result probably won't that certainly, but as the right could this And be be of just anticipating Right that's question. as it to now. different it affected change, it's story, regarding return loss well. any now, that right now So, things affecting believe

right now. the demand So that's on see we what side,

Yifan Liang

estimated it I knows. Okay. into what potentially, right update overall, see can now, -- This on the future, could We'll it yes, From I as estimate, we and that's nobody what based today. needed. last mean, now give coronavirus, the could we have of the we in mean, quarter. information if

Generally, and I more a it's mean, will hotter information, when weather. have virus like what, away trade current there's temperature, is you a on based

ago, years the the comparison in with time SARS operated it was time spring early late away spring summer some that's that XX and when, went the and like frame. So using in

have. current information we that's So our

run of and the quarter of now, based of season same and, PC that’s, and design September market subject schedule, wins ramping in to customers' the at expecting our Right then from September are yes, wins or peak pipelines course, time. conditions. the terms ramp the up In customers we rate, on our customers to overall

the So at that's need where we capacity most.

we that's So it. we'll we're and longer-term then -- plan And have marching growth on our press forward.

Mike Chang

Chang. Mike is This

technology a something road long-term, as clear billion-dollar just our which This a this be last okay? company, determination be years up because -- to wider too about company, to build long, go infrastructure in build has few map talk application, a have deeper. we've talk been And a to our expand across So mainly the is so. about the company company apart, the or product and and year all

and we migrate specific. upper in more become also, And area can application we application

But, headwind however, So strength we're and be over, this facing will not be the momentum it. will The Yes, is there, a cost is term headwind. is there. there. our the short changing capability

companies our that goal. to four pursue company, to with you – this purchase So have original –

Craig Ellis

just quarter allowance, quarter there And to say, were you when helpful, the the And guys. December you by the in you a revenue to gears us? the Huawei, any to you to I sure Huawei? for associated million can headwind September appreciate Huawei That's guidance your Can quarter the $X that's Mike. I you please with Thank $X out in then as that make and million Is what of context just included DoJ called put third release, I inquiry? identify, you and quarter press in notified understood fiscal in have situation. the the the about wanted the switch color. the would shipped

Yifan Liang

first DOC Huawei. our order DOC applies this of – Craig, all, only to shipments to order this Sure.

beyond So our you March the grow non-Huawei customers to it sales quarter. to expect continue and and other

a release, and on this we and by plan make so then additional unless any that, confidential we since it's comments in that to given – this matter beyond our pending required mean, you what not with do is So I call law. press shared

case So yes, this to those any future this – be and inquiries this about – directed will and statements.

Craig Ellis

Yifan. wanted to try. Thanks, give a Well, right. All

Yifan Liang

All right. Thank you.

Operator

no And back over And the your we turn to speakers. have further call questions. I'll

Mike Chang

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

Yifan Liang

you. Thank

Stephen Chang

Thank you.

Operator

Thank you. conference does conclude call. today's this And

lines. your You may now disconnect

Alpha and Omega Semiconductor Limited (AOSL) 5 Feb 202020 Q2 Earnings call transcript