AOSL - Earnings call transcript Q2 2022 | Alpha and Omega Semiconductor Limited

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

Operator

Good evening. Thank you for attending today's Alpha and Omega Semiconductor Fiscal Q2 2022 Earnings Call. My name is Bethany, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. [Operator Instructions] I would now like to pass the conference over to our host, Gary Dvorchak with Alpha and Omega. ahead. go Please

Gary Dvorchak

Investor me and call everyone, results. Alpha Omega our AOS. and Gary our Mike Good Stephen CEO; discuss welcome fiscal conference Chang, With for representative to President; Investor link following A financial are section being be replay Relations XXXX Semiconductor's and and available Dr. Dvorchak, Chang, afternoon, CFO. in the live broadcast for is Liang, call Relations our days to call will the via over today second I'm the Yifan seven website. our This recorded quarter the of web.

review Our then financial guidance provide the follows: Stephen as a results Mike March highlights business for quarter. provide with will updates and strategic After call the will will report. detailed and will proceed segment begin Yifan that,

Finally, question-and-answer we'll website. after The over the posted release the X, was close on services earnings release of distributed The XXXX, today, the market. February also the have wire session. is the Company's

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

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

Mike? highlights. Mike CEO, turn strategic to Now Chang, to provide over the our call Dr. I'll

Dr. Mike Chang

from Thank It of Gary. to to to achievements I today's call. begin, with you, welcome again of believe in summarize strong briefly all a I major deliver like to operations to the very we position our you To why pleasure everyone a speaking achieved is today. growth the would and some last we in like our be milestone are a would and critical years to and in year shareholders to come. outline value have

of supply on Looking strategy. year back, was results. our execution calendar executing AOS, focused an well our year Due as shortage, three-pronged terms we both our production exceptional semiconductor global XXXX the for as financial capacity in business to

First, we made a significant our our investment facility. Oregon our capacity and capabilities at enhance to expand further R&D

for our expansion on to shareholding flexibility the IPO independent market venture an its to December, S-T-A-R or Second, in completed of one, company. $XX and allow JV strategic capacity equity we accelerate plans; Phase intent for in JV interest way September, more the eventual STAR approximately our in three, in pave as capital further Shanghai's Chongqing Two, the the sold to The ramp below market. million. a more and transaction this XX% X was raise of X.X% joint of reduce

has a to investors plan, Additionally, which our part X see XXXX. JV after the $XX To JV months complete transaction, of Company less the fruition JV I see am in Phase plan sales from the million to been its expansion successfully than to first sometime joy. of delighted come initial original that outside raised part our two the for as expects of

growth the but to manage to our need with expand today's risks JV side, our of be meet unforeseen Not the of AOS three-pronged we be regard, and we aggressive core disasters plan, business associated natural key JV foundry of to one And uncertain the our One the as important our of tenets world, capacity to such strategy Company only a do is In continue security. our partners. Company. ensuring flip risks will supply will capacity this geopolitical need customer diversification. on through also

also the Lastly, partners capacity third-party products. expanding our demand increasing not meet foundry least, actively but we relationships multiple for are to additional with our the for

Another serving. the dimension past we business significant of may undergone year quality of that obvious not as that change that are customers our has over the be the is

our PC Communications graphics our example, one smartphone other we an business, the we card and because it gaming to leading downturns console number segment, the number resilient up one brands. premium number OEMs this manufacturer Korea business economic more X segments, to we than conditions, brand. faster the appliance one number the maker, one in majority in for summary, power brands demand sell home consumer provider. As manufacturer, of one leading and our global sell smartphone to brand business the in revenue the tools sell the during the number our the in number much makes OEMs brand to lower-tier States, one all does smartphone the Computing world's Tier typically make now The of mix. effect dynamic In In decline difficult United China. In for our

worked production by to customers the to years their have our to the uncertainty lines. pandemic, In two with over addition, created tirelessly COVID past interruptions avoid due we

was them annual and result partner of been stronger. XXXX, a execution, beyond for trust nearly pursue in of of and our providing multiple through greatly with efforts, Power well-planned relationship utmost and each business helped a goal design financially. Also a business sales. pattern our deepened of our to enabling to our only our of deliver XXXX out has our AOS diligent our Today, customers, set has also annual our improves target XXXX. customers as revenue A original This capacity convenience has year and respect to precise we IC has while revenue component representing value relationships $XXX a power customer few more system product wins. This to the in business also customers, us offers never production ago, not margin, million a achieve over our segments initiatives calendar $XXX solutions portfolio, strategic and level just in offering total year As significant finally going target. record years our our emerged to rate. but portion our million revenue run stickier traditional of the become business, well our

optimized record. is these us demand All end contributed at non-GAAP $X non-GAAP a coming our each XX.X% because was the consecutive we in in In mix, crossing December quarter, milestone addition, significantly last margin product the in board, expansion quarter to strategically gross the on structures across resulted which with strong market a quarterly basis, quarter. which in EPS

per share our in $X.XX our are quarter, R&D trusted and our XXXX, by customers. earnings reinforce of This which as to by and further we dedicated annual execution, non-GAAP and report achieved serving happy we thanks product power record company's summary, a of In capabilities earnings to $X long-term our results our strong to EPS. partner extensive $X driven planning portfolio, to

been and than Our is the confidence in our it business today. strategic greater positioning has model never

adversity our for the are our a crossed business placing of while in our customers, confidence of especially way their employees to come pandemic. shareholders say the Tier success. midst I job our most for navigated revenue with and proud the and and staying of now I global the have outstanding together X of achieving we have and Company. employees' focused an partners, challenging continuing want in in for the we safety I leading and semiconductor established am this company want engaged proud while customers, the Now I'm also health we power their that of at support acknowledge our chasm believe the macro from thank objectives with as to and center to our supplier. environment, an OEMs, we coming our to

our on most world's look marching and to revenue, more and actively we serve. the and operations, sights have future, R&D with billion supply customer set OEMs chain leading sophisticated stronger and market planning our with base the the capability we consisting the annual of a now we in much of $X that towards As

about are excited We growth our trajectory.

to Stephen? detailed and our I Stephen turn for business call the report. the the Now, over will segment updates on

Stephen Chang

Thank segment and you, with then products the an start extremely strong, remained provide I and In our new afternoon, to for profitability. good business update results. and color our continue on our we will on everyone. revenues set Mike, December in our and quarter, demand records

in We midst the our revenue to optimize continue difficult and disruptions environment a to same margins. to of strategically customers work them time, closely with and the help avoid at production for gross allocate our capacity

to remain of to While to for least return, than we signs we industry's for the expect beginning semiconductors demand seasonal historical patterns some see is meet at healthy, which global it. remainder that this year, do the ability stronger are

focus production to diversifying our strategically Regarding capacity. continue capacity on strengthening we and plans, our

$XX $XXX capacity we of revenue Equipment capacity facilities in the expansion R&D Our Oregon approximately December annually. upgrade is When is million completed which has undergoing quarter fab to a is million estimate been clean and the already room expansion new already to and based XXXX. be expected in be the ordered progress. project, completed, currently on incremental this

his provide reduced venture own we Yifan its of this section Chongqing of as on marks below XX%, its call. already to transaction us venture in our allowing this equity separate the both Mike controlling details fab legally more venture. and step our entity. As an in the joint joint our in for ownership effectively will threshold mentioned, This operation joint important independent

means For raises flexibility its capital capabilities. manufacturing the JV, this to in future greater expand

fab work we and partnerships. the further years its to us customers. to to key Oregon supply the allows looking as closely to it forward are other AOS, our For plans across attention executing come, diversifying with expansion continuing In JV towards our our focus of foundry one chain

our management with by periods about we capacity industry while on In these during are strategy strategy allocation foundries. be and sustainable us contract supply and supply challenges the We growth. down provides and current we own supply expanding increasing decisions nimble part much foundries. With of and our in economic of are focusing control believe right foundries partnerships wafer as thankful industry, are all bringing global that from for new our efforts overcapacity to Finally, as on the chain, especially semiconductor our chain long-term diversifying shortages, flexible allows being to of well the existing capital slowdowns. summary, this capacity also strategic of risk

Unless following drill figures of quarter December let our the into Now XXXX. noted, the me of to business each down segments. refer otherwise

total start XX.X% Let's Computing. our with segment This and year-over-year was XX.X% of revenue. sequentially. represented Revenue up up XX.X%

demand shifted well as applications to as To best we Computing As end for our resources the cards. and was graphic allocate capacity, support and desktop notebook production segment, expected, products strong. especially

Computing expect revenue to Looking ahead be into slowest seasonally typically the slightly March quarter, following lower to is we our holiday which flat. strong quarter about shipments,

We QX a graphics applications. offset shipment demand to continue ODM expect decline such for our to computing. in and cards notebooks customers by strong as client be demand in a following calendar at partially strong areas as will in desktop reallocate support other we our resources This slight

of MOSFET results supplier. sequential Revenue as X.X% in quarter of year-over-year X.X% to year-over-year Turning products component The for primarily due timing due customers growth and OEMs. our primarily to gains original revenue. segment. in total delays orders to Tier appliances IC grew one the than pushed shipments by declined at March The demand major out represented Power of our strong lower and share our target, XX.X% in gaming, were driven both the gaming from our X another and Consumer to sequentially home and was

shortages. will was Accordingly, total double-digit business. the company strong we sequential able we as quarter shipment this growth to achieve we the to expect wafer quickly customer not to parts other after other Our resolve March supply their our revenue capacity particular segment gaming were Consumer of they as reaccelerate affected in shift

some XX.X% Next, from expected smartphone and was leading of OEM. saw weakness revenue, sequentially. the U.S. This in Korea, year-over-year helped X.X% the than which we X.X% last two makers stronger quarter we let's anticipated China discuss the that down Communications total world's demand segment, out our offset down better from segment played and which we as

at are believe growth the excellent all an to next smartphone couple we in global for continue quarters battery major designs of as the makers. protection We in secured we over position have

the revenue. to about of and allocation our and talk X.X% for down accounted we total up let's In slightly our in two year-over-year December was which Power was largely line segment which of AC-DC Finally, XX.X% sequentially, the Industrial quarters supply segments, strong XX.X% quarter, with expectations. shipments. following business This power consecutive Supply reduced

shipments to to allocation industrial relative us power for emerging brushless growing our demand U.S. battery synergy, year. X products, Further, we application However, maker strong top U.S. medium-voltage Tier Power remained product power an increased support given management particularly low- microinverter a our tools laptops, demand and the for supplies, strengths resumed prior is the targeting great to motors. a for our and tool manufacturer. in with solutions and DC solar with

Power expect business recently quarter in our tool decrease slightly in and quarter a supply ahead, elevated. on our ramped we temporary solar due it and all Supply due and fire segment Looking while our continues allocation, to power Industrial up, was the to power our another AC-DC To wrap to slowdown business business remain March AOS outstanding cylinders. for to

for the second now executing outlook our discussion capacity to to fiscal deliver expansion for next financial to products our over and a With to stay I turn plans. Yifan the will time results diligently We quarter continue our on diversification laser-focused work customers quarter. and call on of and that, our

Yifan Liang

Good Stephen. you, for everyone, you joining afternoon, us. thank Thank and

Before I the reporting. say few the the like I Company words and and interest start a accounting JV financial equity results related to of would for our in discuss the quarter, financial changes to about

we interest stock interest December, no JV X, and X-K, in $X.X X% in the were X.X% employee the JV ownership the on also controlling financial Company equity Company of of December as we JV of Company for another shareholder. the sale equity XXXX, sale in million plan. deconsolidation we previously Form our million its of longer discussed a approximately X.X% Subsequently, the As issued to completed for equity $XX.X resulted of statements interest which completed our on

the With JV our $XXX.X Company the sheet and at in the balance transactions, million. our above equity interest on was was December investment of the XX.X% end recorded equity

Company gain after-tax an to and the as related the million addition, such $XXX.X we the non-GAAP ongoing JV to of the financials Subsequent last business for few it from not we and Company suppliers. income the the December the interest net of equity our the equity January excluded statement our In operations. post-transaction gain quarter approximately of of was while equity of which Company completed In the month Nevertheless, for was created financing the our during with the recognized one in diluted of million, XX, Company, reports, equity JV $XX method December, XX.X% outstanding financial equity account equity value as interest to representing JV years, major indicated X.XX% an of the beginning our accounting. gain XXXX. that JV we we now under up built transaction further our quarter, as of on our

elected our We one a quarter basis. share of the on also record lagging earnings to pro-rata JV's net

see exclude so shareholders will our our from the our of ongoing it financial business easier results operations. and it's We non-GAAP to for performance

XXXX. discuss the we shareholder Finally, in Revenue same December let's figures the financial the quarter and otherwise discuss going last are a quarter up the that, of prior forward, for following we minority Company, was XX.X% longer the quarter up X.X% because refer JV operations results from the Unless will from the year. of $XXX noted, to now Company. quarter. the no million, the With JV

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

the the for Non-GAAP from million $X.X and up $X.X quarter quarter driven was the $X by Assembly same million prior Non-GAAP for $X.X purchased amortization compared in mix. margin same year. quarter respectively. as service was million year, margin gross quarter-over-quarter XX.X%, and non-GAAP same the December IP up quarter The gross in quarter in and last of better margin last quarter, of gross from year. was the the last last prior to revenue increase mainly XX.X% million quarter product XX.X% excluded

JV was $XX.X charges gross Non-GAAP expenses $X.X interest In addition, the and quarter. million compared and one the expense $XX.X expense AOS $X.X $X.X was the to last the quarter million $X.XX expenses $X.X were equity of for due income quarter Non-GAAP compensation margin million, for quarter operating and $X.X prior excluded for tax to the non-GAAP prior which million year. EPS non-GAAP for last same last Company's million accruals million same In operating compared JV compensation the tax quarter on gain same share The per to share-based for for and compared year. decrease prior of $XX.X million compared for year. excluded million as of and of year. of sum, to $X.XX in the the the lower same as prior was the quarter last attributable $X.X Company million for to the this month million quarter-over-quarter to deconsolidation quarter our quarter $XX.X variable primarily the quarter $X.XX

let's operating million, at Consolidated flow. was flow Now million deposits. cash $XX.X the including $XX.X cash look customer net

Our operating million, million $XX cash deposits. quarter $XX.X $XX.X for $XX.X flow customer prior Operating million flow a which Consolidated $XX.X year. and included deposits. quarter compared $XX.X customer for was million EBITDAS prior million in million, ago which the was same included $XX.X the year cash million the last quarter to was

included end Company. the ago compared year to included a no at sheet. of $XX.X balance $XXX Let's the the note cash at to December last completed balance the the JV million move Please balance XX, JV Company. million sheet JV anymore. quarter $XX.X a balance consolidated cash $XXX.X which at cash quarter, of Company million with on accounts We longer at the $XXX.X was December which The XXXX, balance million the that million,

from million will was You compared ago, million $XX.X $XXX.X borrowing balance which our to the quarter that JV million $XXX bank note Company. included a

of and loan. repaid the existing of $X.X term quarter, working borrowed capital we million loans million $X.X During

for the to Sales inventory in to The compared reduction XX XXX were quarter. in due the trade XXX quarter days JV days, was in as compared receivables the days and flat prior to for inventory the terms In mainly of inventory, quarter of quarter. the Average Outstanding Company. deconsolidation the days Days prior days was

to and shines were low Net Plant $XXX.X The of the our financials our from capital for significantly which balance strength year. really earnings light again, fixed has and million, sheet, our due down assets AOS power deconsolidation. primarily Property, our on Finally, last million quarter JV $XXX.X last was relatively $XX.X and the reduced, asset from to debt. deconsolidation of the compared million. quarter million a was expenditures balance very Equipment low $XXX.X down fixed

Now, quarter I would like to March discuss guidance.

excludes $XX.X please acquired of the expense that, charges. expenses million in $XXX will estimated the $X.X to revenue in million session. legal $X tax the expenses minus charges expect in approximately be million. open be plus expenses margin to range $X.X exclude anticipate or for estimated million. Non-GAAP to be million, to to $X XX.X% operating Operator, investigation. plus to to of non-GAAP the $XX.X start minus gross be million. $X estimated share-based income call we of X%. With government be of of to million to relating operating $X.X be $X.X the range We of minus million be gross and or X%. approximately minus the million, Q&A $X of questions. margin GAAP expense operating are Non-GAAP plus million million plus and compensation and million. IP expected or XX% Interest $X.X GAAP million We gross minus expenses Non-GAAP range plus margin amortization share-based compensation or $X or

Operator

is with The Benchmark. first from Williams question line the Instructions] David of [Operator

proceed. may You

David Williams

really quarter. another on Congrats solid

were the thing, we lot gross obviously they're which -- So better margin. guidance one on is There's of quick expecting. than what and a

you any terms related, being think know that is more there to can specific cycle? mix? mix pointed But the you it is or IP of it structural as in there. the driver maybe be grew more product all feel maintained Just in of overall you that bit? and segment? be is more of wondering, a little a big I what it this you And Or the -- throughout But mix can be do are do terms

Yifan Liang

margin increase was product better David. the December mix. to due in Sure, the primarily Yes, quarter, the gross

selling more products. are We higher value and more higher margin and

carries For example, Power a IC line product margin higher for us.

IC the been Power XX% product grew it Power line before, quarter, year-over-year. IC has and think nicely. In over product year-over-year December quarter growing line I XX% the Our grew

are line, with That's the Power products million now, with the doing already our IC are very advanced as we Even product IC run older we product which margin crossed So, products, for us replacing Right well rate. higher Power annual provide line our within revenue those business. more $XXX significant well. products. to DMOS

of products, MOSFET industry-leading more and our that markets products more serve. in So we the

current to So gross of this is our overall, I and gross target quarter, margin non-GAAP think well to improved our mid-XX% positive is I happy see we're within trend see margin XX.X% range. which our

yes, So play we to margin I and our would grow expect our then business well. that gross should as continue

David Williams

to Well, that I'm Yes. perhaps it's impressive to -- getting margin the see.

quickly? little On guess to the inventory really ability than short markets maybe around Or I other the but surprised have there I side, little could your just reallocate following we some that it Or from you ability shipping And the bit you other is fulfill, a gaming this guess, expected. the build? the you How resources a talked And impact softer being cost there, of console that maybe I'm didn't just about components? when should think revenue. is to that about any one? have softer a just

Stephen Chang

Sure.

this Stephen. Yes, good So question. is

So the gaming console business us. for good is business a

customer been prioritizing been procuring having been have has this common X production a all materials And that difficulty that. seen, Tier have pretty at produce our they leading that situation unfortunately, the even need issues. they story these consoles. has And customers, we've to We a

this We us. last to year. there issue been So throughout know of this is most has not new

to that sure been can production watching situation and closely that and the make we their position internally So, so we schedules very demand places. we've kind accordingly of always production into shift our other

closer shifting customer what's at have best situation. demand a and way the able production of -- be more is to best understanding So, agile happening to in the be the thing to to

David Williams

Sure.

new of and opportunity And terms Will don't in more the But mind. economics? the as what X does if the the like quickly, one attractive prior first Okay. even as the JV, Just you you with be the do look maybe Phase I you anything it structure of be in relation long-term does think helpful. guess the one phase? phase? have around And from place? it that, anything the to agreement, in if JV And capacity change about pricing security would

Yifan Liang

happy I mean, ramped are we we for JV the are Sure. And the up Phase this step see Company their X. the in -- expansion. raised in also January to $XX also, JV happy capital one to Phase of see the X billion

see managing So changes I the good relationship I mean, the suppliers the have business. a relationship Company. don't we is of relationship because -- just in with deconsolidation. a JV We And mean any

Shanghai a the the money their to the STAR their listing path provided further raise more from deconsolidation expansion JV flexibility of investors So on market. to outside potential for fact, then matter for intended clear as Company and the

by our our three-pronged securities So executing overall, our diversifying to expansion are mix capacity and strategy mix. foundry we ensure supply subcontractor

confident we we to So, that continue grow. can are

David Williams

Great. Best next... to look quarter I the forward on luck seeing end, the

Dr. Mike Chang

future Even just is with relationship the Mike Chang. Yes, there. though the good is supply. been do secure have for Mike relationship the the is this we I'll of course, so good but Yes. there, long-term. long, words. working JV, This Yes, a our is with them relationship add Chang. contract few to agreement We've is

to we Thank but we very which commitment, we count maintain, relationship, that sure don't hard on do the also So, want to yes. I just have just you. make official

Operator

The Mani line Michael next from Securities. Riley comes question of with the B.

may You proceed.

Michael Mani

the on maybe ramp for us could follow-up. anticipate ramp that's necessary across an you wondering installations. of fourth that annual start, was $XX a you Michael coming or capacity how year? and of in the following To me questions. line? This most Thanks revenue Oregon quarter the on more And the for is then it I Craig. ask give million this letting into couple on two if update anticipate a out Maybe to Or of you quarters XXXX? potential Could three spread of we do contour

Yifan Liang

we fab expansion Right, are now. sure. mean Oregon I the undergoing right

room mentioned, ramp we for orders this equipment ramp to year. way. that can Stephen get it for capacity, we already up additional that we up under As new quickly. the is of December expect expansion additional have and in capacity placed The online quarter we clean expect And relatively

we by I the run of ramp million up probably rate. first annual think can So quarter revenue to that [$XXX] XXXX, would

Michael Mani

chain I do do things set I in year expect further of you guess next Great. you volume falling see around Or we fiscal on $XX largely saw this this maybe to through last same you that deposit as and million customer I to second quarter, quarter. That's could of my anxious, much the question helpful. supply this, normalize? the it supply customers appreciate the million question that. received year? year? return given deposits. how a is last the And towards off still are half sort know go is around The $XX waning customer activity you

Yifan Liang

Yes, supply. we because $XX all kind deposits, Yes, received about million a deposits December Michael. with deposits. the hesitated receive not in earmarked of commitment right now of overall, quarter, Sure, we customer customer are those to of

that So allocated our already right now, largely, out pretty expansion already. Oregon much fab

So, deposits not I would on. a from see customer large now

Operator

The next Kwan question of comes with the from line Stifel. Jeremy

You may proceed.

Jeremy Kwan

Yes.

there dig been my guess into can the overall some the to and questions on wanted already record little to in your capacity available are gross a get Oregon about margins. the calendar strong deeper and 'XX. add you me And you asked the that's when into I ramp Let I basically in execution place. congratulations -- equipment

you up to step in that March the them place see until of JV, able be initial get won't revenue starting like is to XXXX capacity? revenue in be orders to sounds now, similar a it time next And So frame for -- able initial with won't their Oregon. to just

Yifan Liang

relationship remember, Sure. time, executing are the are foundry with this quarter mean, and we And we online some in our have on three-pronged also I mean, December our -- year. yes, this that we of approach. I expanding expect capacity at fab same partners. to Oregon

So we with working them. are

been working them. have We with

see some and year, the way. we during the So, along mean, additional ones should I capacities

the not other hand, on So still. standing we're

our factories managing so to process at are we revenue continue our improvements and and So, operations the process all product and growth. do also can mix contribute business to additional those

Jeremy Kwan

And good. terms a the maybe of in pricing. Very question

pricing you're -- customers, 'XX? that are on the you how your potential calendar is this much something on a for firstly, March? is that that pricing that of And revenue your baked tailwind for providing some to into you for have target counting being So

Yifan Liang

Right guidance now, on production. on that for is so our the Stephen mentioned, are March quarter more guidance, allocation, we based as

as you Lunar so March quarter, on have holidays, was New would So in know, there -- some will our sometimes is pressure production. there the it that -- Year actually

quarter comfortable with So then overall, is and we our our guidance. strong, March looking are

terms mean, in there's shortage industry pricing still pressure, and the -- dynamic. now, So in is right of I

have, and on -- pass cost increases, the input so -- the So, to we we adjusted have some some the in ASP our selectively in some instances, of seen cost. increase

want our at we So same the to customers. gouge time, don't

So...

Jeremy Kwan

this XX% this mean -- has the we've And pricing, the something seen in going -- I The is contract that has is JV, your been -- And you've pricing to up? with Fair is discussed that I build yet? input on encountered that off foundries enough. raised guess prices industry plus. forward? is And the being leading discussions come something

Yifan Liang

I the pay tool pricing So mean, to is with Company. market Company our JV with go we market the the JV pricing to price.

Jeremy Kwan

pricing your that gone assume price have since would gone seems I up? has so, market up to And

Yifan Liang

same time yes. time, as from what mean, other and that's mean, the to I from subcontractors. I quarter-to-quarter, with foundries we do that's, Well, just

Jeremy Kwan

base. their going you? the allocation that would to future that you capacity of And something I And has capacity? want is of Have customer terms assume Okay. to around more terms give us in to diversify in that the would -- growth some discussions that of capacity JV kind of available forward, they the can the intent

Yifan Liang

Sure. well wants Company does I mean, their customer AOS. so diversify going definitely, forward, JV the as base to

as Company, own foundry I diversify with also we mix our subcontractor well. we supply with the overall, with want well. JV fab and our we the So, comfortable as other mean, foundries and from are and are working Oregon to mix

Dr. Mike Chang

words. by way. me couple add a is the up Let Jeremy, this Mike of Chang,

however, obligations, which mentioned what, have is to the needed. all okay, partner, know definitely as but always I agreement. They the okay? just our So we need friendship business, this have -- yes, we ago, you So, firm right? friendship, business is You We their is cannot business what by okay, Well, are all know want you goodwill, goodwill, what obligation. know So agreement. buy also okay? then

I clear do So have your we to question, yes. agreement, the maybe a clarify situation also commitment, think answer

Jeremy Kwan

is it I the guess back. Oregon that. if could, the last Hillsborough or one And hand is Great. Mike, also appreciate that -- what at place? just I is expansion, spent spending the for equipment? being -- -- you mostly Can there I I split before help the really end front end looking Or back the question, taking this going be? get some to is on us sorry, a

Yifan Liang

Sure.

it's for I fab, front on mean, the Oregon the fab end. only. For entirely not the

well. as and Shanghai also assembly expanding We facilities in our test some capacity are

Jeremy Kwan

margins the going there for is as any gross ramp impact up? And to and Great. to things equipment new you spend be

Yifan Liang

our mid-XX% range now, range. can of is within our we Right maintain targeted estimate

Operator

waiting this remarks. to team are it additional questions time. any at management I would back to There for now closing no pass like the

Yifan Liang

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

Stephen Chang

Thank you.

Dr. Mike Chang

bless Yes. Thank you you all. and God

Operator

Omega enjoy hope I Call. and QX Semiconductor rest the all Alpha XXXX the concludes Earnings you Fiscal day. your of That

disconnect now lines. may You your

Alpha and Omega Semiconductor Limited (AOSL) 8 Feb 222022 Q2 Earnings call transcript