DIOD - Earnings call transcript Q4 2017

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

Operator

Good afternoon and welcome to Diodes Incorporated Fourth Quarter and Full-Year 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. At the conclusion of today's conference call, instruction will be given for the question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded today, Wednesday, February 7, 2018. I would now like to turn the call over to Leanne Sievers of Shelton Group, Investor Relations. ahead. go please Leanne,

Leanne Sievers

welcome conference fourth President call. Investor Group, and XXXX of and financial Diodes' firm. results I'm Relations to afternoon, quarter Diodes' full-year Shelton Good Leanne Sievers,

President us Laura and Financial Joining Mehrl. Rick President Emily and Vice Worldwide White; Taiwan of Yang; from are and Officer, CEO, Keh-Shew Director Lu; today Dr. Chief Sales Marketing, of Diodes Investor Relations,

preliminary call to results completion turn by the closing over they are remind announced public registered listeners I Lu, its like company's firm. to the to Before I'd of subject the our that today finalizing audit the as are Dr. independent accounting the company annual and procedures

XX-K results As the to XXXX. files in are until Form revision the subject such, fiscal its these company on annual report

the Securities which company Litigation prepared to and for including safe protection Private today, may additional filings forward-looking XX-K from harbor risks management's remarks subject in the uncertainties, management your statements, to claims that forward-looking the response statements forward-looking contain questions. results may differ of are and addition, of Therefore, a the statements uncertainties make Actual the Commission and is detailed XXXX. discussed the and in Act and you with discussion we contained those more risk and refer the therefore Exchange In Reform of to XX-Q. company's forms Securities in

change. management's obligation future today, not estimates In addition, to of represent the may projections any assumes projections these in conditions as or as performance the as X, future update XXXX. to February market company's may Diodes no

throughout press net stockholders refer call, the attributable of GAAP financial Included non-GAAP and Also, in this statements net statements conference during GAAP additional press conference and company's to company's income. call certain common release in as items, which release GAAP will we the definitions management's press the management the terms. are Additionally, and discussions information company's to include non-GAAP and and measures income details. to reconciliations during provide release to

at of this via XX Diodes' www.diodes.com. Diodes' For to those Lu, please call section of the ahead. to recording CEO, available President unable days turn Dr. you a for Investor Dr. and time, the entire Keh-Shew I'll in Relations over the website at go will call now And be listen Lu. to webcast

Keh-Shew Lu

Thank as for Welcome market year you, milestone us achievement share. reached and XXXX for our revenue increased the the with Leanne. new thank goal annual Diodes. well We everyone $X as achieving and you of joining of in recurring gross profit, was the commanded the billion today.

of differed soul continued the across growth Our from as end strength as Pericom. all results target our market, geographies in well

levels still We record and In fact, in have the in XXXX. reached driver we commutation automotive, a revenue industrial end growths primary our markets.

XXX GAAP achieving margins the prior above basis fourth and of a aim margin our ability XX.X%, next We the demonstrating quarter gross our sequential tool amount target XX%, XX%. the in increased also to that points to expand of

to product entrepreneur the on as have to process margin opportunities. and spend continued products new new past to years, to our that been our package product several provide customer as at of highlighting value well are Today focus customers. accelerate all continue generation we the the gross margin investment which For and the we our higher the content we higher transitioning pace and

mid-November complete we In the in of planned. the shutdown KFAB as facility terms of our manufacturing operations,

production. starting Also, past completed in quarter, beginning during action this and of stated in should X KFAB in needed SFAB year. we $XX to annual $XX we this the wafer saving and the million As between the are fab million rent dissolved process

benefit months year. billion to $X and favorable qualification $X goal market from in gross drive by in Further value XXXX orders. expansion overall in the cash and for they achievement flow annual this including pure with month leverage of market to with per to capacity we With industrial, as the profitability XXXX, remain continue by of new share wafers focused revenue demand. are expand smartphones, of wafers aligns products billion support of projection higher This we the earnings profit. our end solid and wafer high expect company our also X-inch the In long-term our renting gross in our of and with next market and on end the high-end our opportunities, for end this X,XXX XXXX the fab completed computing key increasingly and that committed end increase SFAB share objective, quarter We to we operating for the expansion our recently and X automotive, to IoT we established this to components. XXXXX

and sales Emily Vice Asia, to and first Europe over quarter are I With XXXX XXXX. that since first of November America the to Before positions more Marketing off mid-December I let was me North time Rick to turn this guidance discuss take in our and our number acquisition Pericom quarter call call financial she Rick, is managing of on also call. would to us and with has Diodes, joining turn detail. and President in Yang. of Global over to now where since Vice sales today's here in President like results Worldwide covered Sales Emily the in XXXX, been welcome

Rick White

everyone. good and Thanks Dr. Lu afternoon

an increase million XXXX of which for today's release and XX.X% Diodes a increase was Act approximately Revenue the X.X% sequentially and is Cuts quarter do Let will tax increased of tax result the $XXX.X stated XXXX me as in quarter on that in fourth of mentioned year-over-year not and the in decreased an full We typical continued expense million press as markets seasonality a XXXX been to impact enacted $XX million, and third to in December results. due in of fourth decrease the target Jobs non-GAAP the of quarter has anticipate across that $XXX.X the and year of the $XXX.X bill all fourth from quarter Tax XXXX million have the geographies. tax quarter first estimated increased a this cash excluded the from expense strength be refracting impact. from the in of XXXX. Revenue end GAAP

to of the was gross or KFAB third For revenue our XX.X% was million combined year full in prior and $XXX.X the increase of of million primarily year of of the XXXX revenue gross as in the GAAP was revenue XX% revenues, fourth $X.XX over in quarter The for XX.X% points quarter and XXXX, profit or XXX continued improvements XXXX. the the mix, billion due strong to margin $XX.X business, million Pericom or of compared margin the $XX.X million contribution reduced quarter. XX.X% basis with product in as closure. increase $XX.X in well impact profit from

$XXX.X quarter for full-year a million revenue GAAP record were or XXXX compares of or revenue, XX.X% amortization compared basis. on the and revenue quarter a $X to of fourth was which $X.X on $XX.X gross third of expenses, profit of of a $XX.X the For as acquisition This revenue revenue non-GAAP of prior of of in million $XXX.X or operating asset intangible the million XX.X% the year. million million charges. restructuring or $XX.X and non-GAAP to GAAP basis, or XX.X% of XXXX XX% $XX.X million operating expenses or in million XX.X% million expenses related XX.X% excludes of and

Combined million $XX.X selling, to XX.X% general quarter, or quarter million specifically Investment million XXXX of currency of or quarter compares previous XX.X% the to revenue This the of or XX.X% and approximately the million the in $XX.X and and X.X% or of XX% compared was non-controlling SG&A to quarter quarter million X.X% amounted quarter compared $XX.X and or and in for expense and revenue $XX.X at SG&A plus or of of fourth XXXX of quarter, for approximately XXXX. was $X.X $XX.X $X.X $XX.X quarter million million revenue development Looking of XXXX. last quarter million in revenue million fourth expenses negative fourth revenue. million in in of before quarter for and other revenue research previous $XX.X for of for or Income income the in million fourth to the compares This $XX.X including in to and or fourth of or Total administrative million taxes R&D X.X% the the $XX.X impact. fourth $XX.X was quarter quarter approximately revenue of to quarter the revenue. fourth XX.X% interest the $X.X amounted a million $XX.X last XXXX. the XX.X% XXXX. revenue fourth

of full-year income taxes, fourth approximately our $XXX.X million income the and to XX.X% for tax and respectively. Turning rates XXXX were effective quarter

million tax the income quarter effective our million, XXXX. approximately of diluted loss for approximately Reform XX% $XX.X a of impact in would reform not passed and $X.XX tax fourth fourth XXXX new the been included original loss the net diluted quarter GAAP Excluding due or have loss GAAP Act. $X.XX $XX.X or net for was XXXX to rate for the of of a loss related XX% of expenses The million in share. recently share our $XX.X tax per per guidance Tax

share the net per million was full in $X.XX income per and net of of diluted the or for $X.XX million quarter of XXXX. fourth year share EPS income quarter loss count compared per compared GAAP of used XXXX The XXXX. income would diluted a for compute impact $XX.X XX.X per million share shares. net the fourth with $XX.X $X.X in or million diluted law GAAP $X.XX million the was or XXXX to GAAP tax share or the income or in to $X.XX been $X.XX Excluding share $XX.X $X.X per quarter share net have third diluted million loss XXXX net

Excluding in or represented or was net per expense to diluted million XXXX. million of $X.XX diluted acquisition-related compares $X.XX XXXX. year tax of adjusted costs, $XX.X per reform intangible share, diluted amortization diluted XXXX our net $XX.X share to million consecutive share million Non-GAAP reform law share $XX.X of tax, $X.X income to asset Fourth per which XXXX This the XXXX for $X.X $X.X impact or restructuring and profitability. law year income per compared or quarter of noncash tax due $XX.X net fourth last XXth million non-GAAP income impact. quarter quarter non-GAAP million the in excluded million charges per million adjusted diluted and of $XX.X and the $X.XX the $X.XX was share, $X.XX full tax net adjusted

earnings income was tax adjusted approximately of additional net Included the $X and noncash income release provides in We have adjusted of income fourth non-GAAP net our in which net share-based GAAP GAAP of net a compensation net quarter XXXX income details. included reconciliation million to non-GAAP expense.

million million flow $X.XX and debt additional repurchase. the operations Excluding were $XX quarter year included including share-based million GAAP Net for approximately the of for full both share pay for levels. the negative $XX.X the diluted and non-GAAP full and and XXXX which $XXX.X flow cash a and million $XX.X XXXX, quarter, million long-term both cash Net EPS share expenditures $XXX.X year. year fourth of positive quarter down flow diluted generated $XX diluted the by long-term $X.X the in the EPS for was expense full million record at $X.XX and for was the down which pay would of including the the CapEx. of Free Cash share was increased for included per million million million adjusted flow was full fourth cash million capital repurchase. of $XX.X compensation $XX.X a a debt million for the year from $XXX $X.X of have fourth XXXX

equivalents quarter the materials. for goods the in goods, inventory Chinese fourth inventory the accounts $XXX.X At and to for New in last XXXX raw XXX cash At finished fourth $X.X end AR of revenue decrease compared investments of third current increase The XX portion to balance quarter, XX.X% Turning XXX $XX.X $XXX.X approximately was end quarter. cash from increase Working of $XXX the sheet, to receivable million in process approximately inventory by is from million $XXX.X quarter, a in $X.X to Year and million. increased the and quarter, debt days to the increase totaled of including million, $XXX.X million. The million in quarter. plus work or was slowdown. $XX.X fourth revenue decrease was million last due the end Inventory compared expenditures million approximately the a last million. long-term approximately preparation million days at million were capital quarter the days the the a or quarter. the XX Capital full-year. $XX.X short-term were XX.X% for increase were approximately finished of of $XXX quarter in and reflects the in million $XX.X

target revenue to As we in related newer projected our to expenditures above X-inch with China advanced SM XXXX transferred of to and X, KFAB X% expansion our majority the test full-year capacity as capacity SFAB support operations the X. assembly to CapEx packaging model was of in as X% in well expansion of process our

$XX.X XXXX model of to CapEx of expect was and to target of We the for for to amortization fourth return full-year million $XX.X expense Depreciation our X% the revenues. million and for X% XXXX. quarter

X.X% $XXX in typical represents down target to and expect this is our our XXXX, end XX.X% up Now increase quarter for to At expected and range midpoint million continued is between turning $XXX strength results better than we to or Revenue a the outlook, to the markets. quarter flat X.X%. fourth first year-over-year. million seasonal due to

We plus X%. plus or to expect which minus amortization of expected acquisition-related GAAP expenses be minus intangible expenses X%. revenue operating gross are or margin to be GAAP adjusted of XX.X% XX% approximately expenses are asset operating Non-GAAP for

expect $X approximately We be to interest million. expense

rate Emily estimates previous purchase the EPS or anticipated Not adjustments acquisitions. plus over to minus Pericom million be will are turn in are after I X% now used million. that and shares said to these the tax call non-GAAP of With included $X.X accounting XX for quarter and Yang. to approximately tax XX% first be is calculate diluted to income Our expected for

Emily Yang

Vice and Rick, good and Marketing, a you afternoon. months and of as you, Sales pleasure coming be and you meeting the quarters. some forward Diodes' joining in all to It's President look today Worldwide Thank I to of

quarters both Let across comments XX% down second typical with being North we of and for X.X% remains revenue POP clean up my demand supply, dropped two all me sequential growth down focused X% of supporting in to X% growth Asia on quarter seasonality quarter. distributor X.X% X.X%. Customer quarter-over-quarter activity had of globally in is it following strong our high was and resulting in strong summary design record Diode and regions, and continue quarter reflecting tight being POS very record quarter. healthy. the We and Due last the Channel inventory in with immediate a the XXXX. by America. positioning Fourth

the market. particular battery in traction computing into record We in the We Pericom set with also categories in high gain during revenue switch. including further product power product line in quarter, offset, management, digital

CMOS sensors While win also in LED ASIC. driver, connect continue our design hall and momentum strong LDO,

Going to process. margin introduction new forward with with expansion we wins, higher expect and make value product progress design new continue

XX% Asia Europe Turning to quarter, the fourth XX% sales and in represented America North global the revenue, of X%.

represented the industrial XX% XX% communications of XX, terms and X% In end our consumer of of automotive markets, XX%, revenue, computing revenue.

sensors end for LDO in AC Let products CMOS supply hall increasing speakers. for our strong provide and power adaptor gain In as battery from wins design within continue DC of smart detail the well each consumer me as now more including to controllers market, chargers applications voice-enabled the we traction devices the switching markets. and

a In our across switching, wireless CMOS wins momentum with secured set market, for our activities gateways, also multiple devices corner especially trackers. of also solutions. integrated LDO, applications design-in logic dropout for we applications. also wireless switches, Ultra-low new charging have telecom and in in top of timing low routers, in IQ chargers voltage chargers We connectivity solid and boxes, regulators products the design other TVS, including MOSFET, applications, like highly CMOS IoT battery gaining LDO communications IoT number

in gigabits MUX key to MIPI expand example coming MIPI during smartphones high working designed for into smartphone being an are customer end differential our our contest as second help year, we're quarter the a per specifically, XX port. the As focus switches to with

Our insertion chip fast minimal between channels low to extremely loss between the offers the skew enable ports. switching and

which in launched devices protector some panel particular For for was the several protection. from secure variables in mobile and of application design-in. portable mobile One an charging for Diodes TVS product devices active including resulted an new major surge immediate transmission communication general general

from new voltage for low space products will new range protection, were for in also featuring MOSFET ranging footprint. LED industrial such X consumer package high feature application six amp Our up Also devices innovative in this CSP amps. two profile, the battery to are a rectified X density applications. features in lighting This bridge ranges of very operating suitable power new XXXX low volt a also footprint with market and as small device product and to small single-phase

and activity in our ReDrivers well X.X continue applications. integrity, multiple for LDO C new ReDrivers we for design-in logic Display of for USB as new LDO connectors, We secure applications, by interface for server X.X new designs Port computing ReDrivers and several to signal with SATAX see in our CMOS wins integrity new products. Type for markets. as activity PCIeX, led applications and server interface, products Signal new storage our USB was For along our combo product

Type X.X We also ads provide as at translation for CJ systems a for including buffer and targeted in the applications. several and charging TVS quick server surge system. translating USB products well Diodes as applications, launched TV needs connectors, for computing to application, introduced C a X.x protector storage our and transceiver Thunderbolt lateral Also,

in aimed that In application. we servers addition, XXX-volt to are Trench and at consumer XX power also XXX-volt launched Schottky applications for supply notebook parts suitable

For for as power-supply, our to brushless the and XXX-volt motor XX applications. MOSFET technology such quarter Shielded industrial DC charging, XX-volts based during launched applications on applications Diodes Gate

motor to volts motor XXX due market. favors superior and also suited stage this size in drivers tracker inside Industrial from ITVT volts launch their complete devices aimed those four compact driving Diodes additional and are new to form power the recent and motors escape DC enabling increasingly Gate a industrial efficiency for small to XX trend portfolio for Diodes at with introduced ideally first driving. ranging XXX-volt evaluation us factor We brushless Diodes provide XXX-volt Complementary present device for application. products range

LED applications. Additionally, LED expand our during for portfolio and the universal we by to the dimmable the market converter PWM lighting continue lighting quarter, a tunable connected buck for adding industrial

of this newly transistors, In pre-biased Diodes bipolar, MOSFET, realigned to have fact, product new And as being several used. our including lighting, products significant lastly LED automotive efforts a consumers for as where key LED drivers. well the markets, in connected from work released number parts are families, lighting fast-growing linear market launched

market focus this momentum product Our as infotainment, we motor new assistance driving on in applications the continues for as systems. design-in drive, such events

recently released family several hall our for being motor designed-in of sensors applications. drive are Additionally,

XXX-degree a We tailgate applications showed seat also positions. leading detection, such qualifications packaging significant class proximity across released rating that gear Diodes seatbelt temperature Hall for door design-in strengthen technology position Asia. switch MOSFET unit sensor automotive position, customers holder major position and family shift the Once capability drove for the and activities was Europe, and again in as and customer power and U.S.

began is in that stage continued Finally, device generating summary revenue In margin for large and Diodes XXXX. XXXX IntelliFET interest. customer result. we sampling record with also expansion the high-side first our out Setting growth closed

consistent product to result. contributor products new combined have with Pericom our initiatives to be strong Our additional proven

computing. phones, that mentioned, focus on Operator? that As the opening IoT our market floor industrial, Dr. with I'm include to high-end key smart forward With high-end automotive, end going Lu and be opportunities questions.

Operator

Baird. Gerra from Tristan comes Instructions] first Our [Operator with question

begin. You may

Tristan Gerra

Could some about shipped POS first POP demand we in should the inventory QX. you exceed the the days and you as you increase the overall under outlook expect expect also you demand do replenishing longer when inventory of internal to of start year, for further to this as Diodes to talk into OEM half

Emily Yang

POS overall, so actually POS I think results as seeing result. we're year-to-year we're reported on I strong significant growth earlier,

we the to capacity strategically point inventory and really the supporting from For our as customers continue of expanding the immediate on focus view and well. need we're

and number very days we of for monitor closely. So, inventory definitely position the

Keh-Shew Lu

from go And Chinese our inventory. changing and long going this China we means but night days therefore Chinese for and in strategically days New going working hours two We will actually and operation action, And days days mentioned choice is Year start and no New which three walk three XX in Chinese year in to six shifts week I another have shift operation be December have shift to start we some XQ. we to a they four one rest all mean full last rest days, viewing working New [indiscernible] two operations and and the also day. Year the operations Year four teams. shift four

gear portion to good of support from very or But because prepare it New of Chinese So, was [doubt stock for typically finish inventory, to to start our] capacity Year shutdown Chinese some decided year. the inventory, last -- in Chinese and this market when customer this tight prepare therefore, two-shift tight, take up I issues. people. the very market and December done have result, we Year build tight is to And way X, the we operation, this we for time, who is during don't operation bottleneck really New face enough the us good, prepare is the for

Year POS some So -- needs. very POS thing, strong actually the POP, anyway, for and do -- prepared to customer is have Chinese New inventory support is we and POP the the than better very, key

Tristan Gerra

you then you expecting on have Year's and what's production, Chinese you mentioned as are the in demand? the tightness stop times to have And coming experiencing down given XXXX that the supply and New up currently timeframe lead with catch where expect are where to impact you

Keh-Shew Lu

okay. this think tight that see futures, Well, loosen the near in I going up situation mentioned to not I is time, before. I

put half continue not -- but second because But support growth putting to of year. need we market to And And of the so really share. visibility some of on for the up first is clear, majority tight we needed do capacity, working year. far, gaining we this see still very really in now, capacity we half this the the the its

for at in all see two America, for the of have North you we our actually speech, record share now Europe. the market end I all X% especially And you we and this again quarter regions, gained now automotive the markets, revenue think the revenue. year our can the Asia, we during noticed continue

So, working revenue. our to toward continue goal year X% of we are this our

need market the the growth we gain all for to a and prepare all capacity So, it. do

think us expansion capacity be growth over least capacity from because strong Okay, going for a market that -- still far, to don’t Diodes. I so I at see so I very

Operator

you. Thank

with Our next Gary Mobley question comes from Benchmark.

You may begin.

Gary Mobley

curious should margin of to get quarters we I'm to second know for can the year XX% strong your you gross predicting which and of is QX think you you further if margin the new as of base gross third 'XX. seasonally expand fiscal

Keh-Shew Lu

this so qualify and XQ KFAB SFAB all we end seasonality typically are should output, already online, ramping state and the Well we that KFAB can same if grow on installing to is in we of if by focus and think beyond November you equipment we start from we quarter the we strong we the the the to ramp rent $XX from down I increase. current market we're synergy the yes, schedule. the we is up X GP then X, and start support we the first are early therefore have for to fab beyond goal of should time is like now in the be we lower even, schedule month QX. -- we XX.X% almost at from I be million we the the start KFAB, then guide remember X typically current and And don’t cost but and will XQ second assume thing the equipment SFAB if start at inch XQ, continue you that, actually and SFAB get or KFAB more this KFAB, the the quarter down is XX% shutdown. which million the And have still we in to have the be see to everything to see can And just shut ready XX% shipping shut the everything far, install X very should will which and $XX you if then

will see end you that to go So, XQ too. I GP improve. the XXXX X-inch the by and end that fab, to if continue about to an this XXXXX mentioned all I the yes, continue XXXX value of will wafers quarter And and to the area, improve by think then of ramping in year

So, market said improve will continue the GP will Diodes should and are overall and shrink. the no we good assembly the but that then market underloaded feel I continue not strength, I expect synergy share, the it yet, exist expect if and our like XX% continues gaining X-inch and to should one we too. cost be and I'm making forecast

Gary Mobley

for you the year rate plan? new in on And with your your can share goal tax us reducing XXXX And you debt tax us for that flow Rick, outlook can for with on? based under your cash assumptions the share what and

Rick White

Sure.

then debt we we of the issue basically non-U.S. guilty of part I Pericom, year code over adjusted reduction to the XX% make code going to in his is on a pay government since and need XX% to don’t Taiwan issue there So, an do bought and lower their be have the guess. or and down it's to more to depends it the is from cash the and we about XX% U.S. guided over has much of forecast in fab we interest has we a From XXX places, XX%. are perspective so so paid XXX tax rate wafer a tax $XXX certain earns called we here million, that a the going not assets been a probably last it's disallowance detail range if down take parts and rate million is from anyway tax a how interactions is there with my tax family three it of perspective the tax

So those in included that three are pieces XX%.

to make in and structure to some we're also it and going have are the we processes go things and changes in so do make some we down way to the business So, the go do process rest we we're we to at give of of what have. going that. for rate can I'm still the a looking it, in impact are because the you doing and year steady not still

Keh-Shew Lu

you we debt. our XXX, more back operation, for plus is and make If that the to XXX money pay-off to almost able look the money at bring we cash should XXX our to so to best

So, my next debt. hoping pay-off to end of by year, aggressive point try is our

be not it down Now than able that. case go do to least we at the need be may to to but much more be

Gary Mobley

more you making acquisitions. are so still Okay,

Keh-Shew Lu

Gary, or story. if don’t have But today, I'm all. acquisition we the I make okay. under one I then I screen radar talking still very yet, obvious different whatever a it's That's operated above talk

goal minimum the is has very that tax a So, reduce more cash really to against and debt. to the try

Operator

Our Shawn comes from with question Longbow Research. Harrison next

Gausia Chowdhury

Gausia aside could Chowdhury and first the best of of quarter then first markets us is Pericom? without you what Can from in on funds the the quarter This provide Shawn. XXXX for automotive with And any you remind normal color end please. be is would behalf the that seasonality which any

Keh-Shew Lu

growth gaining market That is really one quarter This let me XX% is third down a then about XQ is year really previous similarity. and year typical two continue X% But typically fourth then XX%, X%. the share. XQ we typically to answer things, to X% X% quarter that Okay, second first. and this around from a similarity we is then And clear quarter typical. typically that were X% to down the

is guide we Second this at at us the the Therefore, very participate. least we our are for market the to market XQ. able XQ from platform, good still

quarters. so that better these is than similarity And of

for if almost us you market which is very market good. Now we each are see asking

products, acquisition very applications. the IoT area. And of a very us for one since quite is consumer communication growth different that even on give the In that on we high actually and focus top smart compute IoT phones, good automotive I the computing in they -- focused And Pericom that’s and strong. are say of form up products, And communication. if growth. end different really And still Diodes us notch example, industrial higher. we a in and therefore, due actually, quite are strong Pericom getting computing and For that to we don’t we

every Diode almost we for record So, -- in are the market different segment, you share is why of are market. gained we Diode in a saying if at it you we growth all market we that’s the order, revenue -- grow because look then

grow we the revenue participate. see and and and you record end markets all all regions in the if So, markets we

Gausia Chowdhury

can then And components you down improvement. break behind gross the margin the

much Pericom between it versus the was how KFAB? roughly mix versus Just

Keh-Shew Lu

The contribution… gross margin

Rick White

don’t that We don’t that, we have of... kind disclose

Keh-Shew Lu

type Diodes a if crystal, oscillator product so higher Pericom, servers USB But strong PC data don’t market C called and areas. one we Type a segments. Pericom product. you share a two margin around in a think very somewhere to GP when increase over Henry's before high. the the One through slightly below Yes, you in And the to those if [indiscernible] products very is the FCP, There business acquired and XX% other and we had margin is XX% GP. read speech, to Pericom very their good brings frequency-controlled IC and gross up step very called is is take really and of area, XX% in a us at lot center an I IC of effort good telecom growth high are it's That portion is its with better from disclose. than portfolio we going market look is lot put quite to area

improve Emily, is share, this it the Diodes the so, can. to computing the market And how and GP you area in gain helped to

Emily Yang

on focus top expanding provide products share, context, a that higher of I the think the value focus to our really value higher continue and the market customers. our to gaining on we

and would margin expansion this Diodes' continue the So, to in growth believe focus strategy area. enable we

Gausia Chowdhury

and synergies, half if quarter should year. one end closure the clarification the I I last and you seeing start or how of will you the it the correctly Thank be weighted the you may, you think did would CapEx it hear said we throughout about weighting back that

Rick White

SFAB going is March. impact that’s between ramps X KFAB as and SFAB in $XX So going we’re million on the Doctor we've and output the with as versus that to $XX Lu along that all associated to million start based and said just lower cost said X up, that

through quarters moved increase the production. have they will as it So,

Keh-Shew Lu

the but last in proven And the one have number originally are three boost higher still stock at two, running SFAB go because KFAB, one the actually SFAB combine million. one equipment, SFAB combined based utilization is number equipment $XX has we capacity away are notch limited one, and two the it XX% even before we to to you performance put that capacity down, shut confident than to cost is be actually two direction synergy now when around -- Number is so that KFAB. that So other you KFAB now higher. in million SFAB we XX% due capacity capacities, increased after capacity one is should into KFAB because both fabs running fabs from yield, higher call has because is better its low been, better XX% now our with a actually the SFAB $XX to synergy on we in somewhere one,

Operator

Company. with question Edgar Our from next & Roesch comes Sidoti

Edgar Roesch

you So, little I understand have for there I know does I in you about qualification commentary easier late automotive end to something any the or As shorter get Diodes? wanted gave joined some process market? about success way the but

Keh-Shew Lu

Especially pretty several is of going to are is it's statements in the or we reason I up don��t and like going to XXXX, times the it's wires think are tougher, be spend different to couple qualification focus revenue in talking forget with able about shorter. I and then even The XXXX up that gradually a of this that’s XXXX we to XXXX, and saw make due our XXXX qualification X% XX% to new on now I started back to a focus year we the the investors rented part X% engagement grow this but coming production. and for automotive XX% automotive twice X% automotive, it

later want you direct. peak highest on see more is the it really products even is to growth of because and at more So,

tougher. rent therefore system and fast not get of very it the before virtually speed time growth. getting type range take do continue now safety these and any shorter it of that to enables waiting So, to of the is it's we for actions us product, more But a and safety way type especially tougher,

Edgar Roesch

obviously as winning a the and win you guys follow-up factor package intense And there. to Lu used innovations automotive more are that Dr. is quality a on side it is intense packaging is innovations standardized? know but I or lot a how big business of business,

Keh-Shew Lu

basically two been power on packaging. Yes, is talking power is I've Diodes directions, focused about it's the one package,

package power energy efficiency, one smaller power area. We higher have the is but so direction delivery,

area smaller geometry both like CSP, small Another -- and is that in like smaller direction. gets and DDFN

very automotive capability, audit. SAP of the our to get high the they the in audit before assembly. So, area All of site area which automotive volume companies. passed product our our they said the can for Diode And our they power and We're automotive we like obviously manufacturing using And all Europe is packaging of facilities. that need audit the our packaging -- our in a companies our getting quality can really power packaging, Neuhaus even CIP all trend automotive, there. pass good yes, we therefore the has

the to those enable market. enter highly in and into So automotive growth us

Emily Yang

driving cars, crossing also seeing also technology improvements to definitely are technology we connected think with we're and our higher expansion level. I

a expand contacts So, with technology we significantly higher Pericom this see into area.

technology technology; segment. enable what to believe with mentioned grow continue Lu a I strong over see very years our to view. from of pipeline our improvement We us this the So, in the demand Dr. packaging think we creation will really point

Keh-Shew Lu

all that into This Diode infotainment, Pericom those can car Yes. area. bring product product or connected

Edgar Roesch

as 'XX? then give a you again and strength other on of I you bit is and color coming or little products on -- But a category one from. power whether you connectivity in business XXXX a sensibly where power do timing Could don’t in question. semis a good or know strength us your And give semis categories? lot was you see that could

Emily Yang

Yes, the definitely. lot covers switch, a ports package for different call PCI of product, applications. Connectivity it we really basically PCIe Express, expanding

rate mentioned market we're right. our a little high-speed also very segments. muxing in are definitely bit from earlier, which which adapted even adoption of multiple automotive seeing a PCIe, segments technologies We that being lot into covers just seeing a Pericom, strong we

smartphone key industrial, high IoT can timing. the strong we point IC other computing the is focus have think of high automotive, people area and and of leverage with that with key area actually strong this segments leverage customers end areas. And crystals Diodes frequency end from that view we application, is as print and which sell multiple well position oscillators. usually actually the covers with crystal the we across I And our controls, as clock kind into cross product well really familiar timing end including believe as as both market

So, we leverage synergies do to product families. lines see product of between Diodes the a lot within

Keh-Shew Lu

different [indiscernible] if USB type Well, we is very actually C, Diodes the product the the our areas. strong have the view group of from Type MOSFET but power is of point you they screen focused delivery Diodes we USB and our and C [indiscernible] from in on different in Type at area. basically acquisition power in C are that dealing portion power product address from delivery, type in look

combine, power that MOSFET of about the MOSFET AC the producing the so. that cable, the of other side this spend the one we and technology strong of charger, So to all how talking to delivery, you then now on Type the technology telecom very when is DC kind thing cables, is address the C you’re

Emily Yang

actually of this growth. different with of will future supply facility, are see very do also we that so up One area our is infotainment PCIe, see picking we the strong believe product so happy in application single other we C, of trying extremely that actually in line, kind prototype momentum very that a integrity we TYPE

Keh-Shew Lu

one the but a [Technical share too you so developed plus telecom, and end portfolio many systems portfolio say, that product products, solutions. about have area, is if gain different we we detail typically so because different Diodes product have difficult cover on Difficulty] talking did and market to just so the much it to markets do very we

Operator

I'm showing questions no And at Thank you. time. further this

So, call I'd like any over Lu remarks. to back closing to for Dr. the return

Keh-Shew Lu

may disconnect. today's Thank you you for on call. your Operator, participation now

Operator

day. wonderful have conference. a for gentlemen, today's and Thank this Ladies participation Thanks concludes you. and

Diodes (DIOD) 9 Feb 182017 Q4 Earnings call transcript