DIOD - Earnings call transcript Q3 2021

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Operator

Good afternoon, and welcome to Diodes Incorporated Third Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. At the conclusion of today’s conference call, instructions will be given for the question-and-answer session. [Operator Instructions] As reminder, this conference call is being recorded today, Wednesday, November 3, 2021. I would now like to turn the call over to Leanne Sievers, Shelton Group, Investor Relations. ahead. go please Leanne,

Leanne Sievers

welcome I’m third Shelton Leanne firm. Investor And results Group, XXXX conference Relations call. Sievers, to afternoon. quarter Diodes’ financial Diodes’ Good President of

Keh-Shew Diodes’ Vice Director Senior of of Yu; Dhaliwal. President Worldwide Emily Gurmeet and Joining of Brett Marketing, President Chairman, and Investor Senior today Financial Officer, Relations, are CEO, us and Dr. Yang; Lu; Sales Business Chief Whitmire; Gary President Vice Groups,

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

its Form for quarter results XX, ending third these XXXX. XX-Q September unaudited XXXX such, to are files revision subject its As company and until the

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

extent as applicable projections may by today, these no may any update market as company’s obligation performance of assumes future to law. change, November in except or addition, In Diodes as the conditions the the not projections management’s XXXX. required future represent to X, estimates to

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

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

Keh-Shew Lu

thank you Thank you, us for today. And Leanne. Welcome everyone. joining

success sequentially, X% growth market of presented initiatives content quarter and gross has contributing margin over automotive and underpinning record points, where been This the quarter resulting the basis grew particularly eight-year quarter, XX% the consecutive of revenue XX%. to in expansion in XXX margin expansion of record year-over-year over fourth our revenue we a of second gross consecutive our our profits, CAGR and and

our applications. Additionally, of products by four set driven Pericom server records, and to traction quarters consecutive growth high-end continued computing new in achieving revenue primarily

to the in XXXX discuss call so-called XX% me financial guidance let margins, and loading even growth Brett over midst margin on end facilities are this with Semiconductor Our and top-line these us at have to now increased detail. our our our in in and turn combined gross profit gross actions $X billion XXXX wafers. improvement that, results our toward margin. and of global higher in by markets either favorably equipment margin next enabled revenue quarter to reduce revenue billion increase and ongoing LITE-ON the target lines or expected adding supply-constrained equipment and a These larger our existing our expand positioned converting to is environment. to manufacturing strategically capacity our provides Diodes to With that flexibility fourth costs, with support year into more continued to the $X.X growth of in footprint

Brett Whitmire

Thanks and afternoon, Dr. everyone. Lu, good

of compared As income, or detailed and which of comparisons. income and of quarter sequential to XX.X% previous XX.X% offset items XX.X% XXXX. third other or Income third to revenue. partially million $XXX,XXX of asset XXX from in XXXX in of the expenses. million of I the compares related or for the $X.X of non-controlling investments, of out $XXX,XXX of expenses refer $XXX increased quarter or review of at XXXX. amortization increasing million revenue revenue, the on change interest basis the in before operating GAAP third prior part revenue, review of million million Gross for a $XXX.X approximately quarter each by gross or million million, $X.X our X% XX.X% $XXX.X line $XX.X in quarter expenses consisting $X.X as was profit you points for of million gain in $XX.X like $XXX.X revenue for for were quarter quarter of of or will record And million amounted financial of operating the quarter. tangible to on the Total our non-GAAP foreign an XXXX interest million increase the $X.X more XXX I would million unrealized that million quarter, excludes million comments point today, of million in XX.X% were as $XX.X was would the $X.X of the acquisition was my press second expense. other of of XXXX on focus in gain, XX% taxes a my release quarter income, a to or XXXX. or points Revenue interest to of of basis record $XX.X This million the also well third also quarter the third non-GAAP from currency basis and revenue. results profit in from year-over-year XX% our XX.X% $XXX.X $XXX.X for second record the

costs million million million on gain the $X.XX $X.X and XX% the costs, of from improvement investments. was This in certain or non-cash and intangible in net third This third quarter record quarter related or XXXX third adjusted in a share-based a diluted $X.XX The net GAAP $XX.X share, for $X.XX diluted non-GAAP tax third excluded and the million XXXX. diluted represents XXX% net or effective a for improvement represents count tax quarter million per per a in million XX% was million rate of or $XX.X income $X.XX per share million share, or share GAAP diluted net was diluted quarter compensation or to per and the LSC GAAP diluted quarter XX.X of income to per $XX.X from diluted was $XX.X share share net net approximately $X.X in quarter acquisition a XXX% the compared $X EPS XXXX income XXXX per quarter improvement the net shares. value share approximately of income tax $XX.X Turning expense. compute acquisition income Included the asset adjusted GAAP to third was income related second XXXX. $X.X XXXX restructuring of income quarter $X.XX million used of of $X.XX increase million third which quarter XX.X%. record from $XX.X second taxes, a for in third of Non-GAAP of million our XXXX.

the XXXX, have earnings diluted was adjusted for EPS and $X.XX quarter for quarter share quarter second a increased of by XXXX. On EBITDA third non-GAAP GAAP in year-over-year basis, EPS both expense, compensation the year. XX.X% or per the record per $XXX.X XX% million the $X.XX share highlighting prior further share-based increased operating of revenue would XXXX past third for quarter. Excluding a and third million significant XX.X% or quarter million improvements revenue compared from our $XX.X to the $XX.X EBITDA over in

XXXX. flow million release included $XX.X provides Free the to of in generated quarter the for a Net non-GAAP for included earnings $XX.X GAAP expenditures. was net a have for EBITDA, in adjusted which $XX.X of and details. cash income to GAAP the from our debt. operations $XX.X was flow additional third capital which flow million, included quarter a net quarter, reconciliation million We third paydown negative income income net total cash million was of $XX.X third which million Cash

Turning end capital debt short-term including $XXX sheet at Working long-term $XXX was total investments totaled $XXX and short-term approximately to quarter, million. cash third restricted equivalents, cash and of plus million cash, million. the the balance was

cash our cash and power. significant position generation demonstrates net earnings Our

XX In on terms a to in total XX of or third quarter, last compared $X.X of approximately quarter the increase Capital goods, quarter increased raw basis inventory of the in the in XX X.X% were at last the for million work a expenditures inventory to to of increased goods end $XX process. $XX.X XX quarter, total million inventory dollars increase to days $X.X inventory inventory approximately revenue. million compared quarter, million, materials $XXX.X quarter finished XXXX as total finished in million in were a $X.X million increase in and third cash consisted days

We to remain X% X% model full the for our of within expect to target year.

to turning Now outlook. our

represents about For an revenue approximately increase $XXX and combined on million at seasonality expect X%. of midpoint, to organic X% to plus than XXXX, the increase X%, for sequentially record minus typical basis the is fourth a a quarter we a or of which both which better consolidated down

of GAAP expected plus margin plus acquisition for operating revenue gross operating and to be approximately of GAAP X%. or expect XX.X% assets are minus are to be which a adjusted or basis consolidated Non-GAAP We amortization X%. tangible on related expenses, expenses minus XX%

be We million. approximately expect expense net interest $X.X to

the Emily adjustments acquisitions be approximately rate note use accounting included after be Yang. tax EPS for to the to XX% is that anticipated that plus and these fourth over calculate for estimates. million shares. in expected X% minus call to said, quarter turn are Please million diluted income now purchasing I shares non-GAAP With not previous to Our XX.X of tax is or $X.X

Emily Yang

POS than X% share seasonality, Thank you, guidance third our midpoint above is good sequentially, of flat to Europe. Asia the Brett, defined Distributor normal In XX record, terms by record increased regions. driven gains our Worldwide revenue weeks. and quarter-over-quarter, market remains across and better was and which revenue, was which of revenue and driven all of typical inventory quarter, in demand the POS below strong revenue in by afternoon. XX range record another weeks

quarter, sales Asia represented Europe in the of and XX% global at X%. third revenue, XX% Americas Looking

automotive revenue XX% communication industrial achieved markets. and revenue. end terms In of the of end We consumer of and computing record consumer markets, computing XX%, automotive, in represents our industrial, revenue, XX%, XX% XX%,

and achieved end we greater a grew with market Starting into in XX% XXXX, let in year-over-year a details. environment. launching to add over XX% revenue even supply-constrained automotive a Since me automotive Now market, the the have review revenues in X% record sequentially to market CAGR. our entrance quarterly

in content can our initiatives to have Our that increasing to vehicle. expansion contributed almost opportunity be ongoing per success content resulted $XXX Diodes’

expanded our broader set in portfolio has also increased have of resulted we part product for and As applications that this design initiative, design-ins of automotive a wins.

Wireless As drivers, evidence applications, momentum steering, in cover MOSFET design-in had locks, systems. gate systems XX charging to water drive cooling pumps, sensors electric Hall-effect and quarter advanced of continued battery charging during regulators, for door battery high-voltage our the and assistance more power brushless power traction the motors, fans, protected USB DC driving systems switches. to Type-C windows, low demand we MOSFETs strong managed infotainment, and for AVO and

taillights, saw demand our lighting. infotainment, ADAS. lights, various applications Buck LED for strong lights, rear AC/DC in and lights clusters, as lighting, including and wiring bipolar converters in as automotive-grade rectifiers also also demand We brake and harness lighting forward received carpet linear telematics strong applications, soft well turning instrument drivers in transistors

also strong crystal controllers, prism oscillators During design-ins momentum to for products the I/O with USB Pericom in space the continued our the increasing charging expanders automotive for Type-A quarter, and infotainment. gain

oscillators record, over during XX% revenue the crystal strong business, from supplies, gaining automotive sequentially a the across in and a and the year the product quarterly diverse set Pericom are in traction applications Our momentum and transistors applications. reached distribution power broad the product of package of systems, high-temperature synchronized Express quarter. the gaining family led portfolios including also industrial the systems. smart power and embedded prior are in applications, XX% PCI tools, performance machine power security line contributing Bipolar In growth power switch supply controllers systems Pericom to of metering, the market, growing automated

introduced in compound stepdown won drivers applications. several LED for lighting design-ins package a Newly LED new

high-speed strip motor, technology seeing controls regulators blowers, IC’s lighting. stepper driver brushless MOS continued LED motors, Gate in sustainability voltage the our to our DC control environmental success and garage also and and continues through the Additionally, are support in cooling the equipment fans door robotics. efficiency with green improvement automated Diodes factory and rectifiers Trench

Power-over-Ethernet and with Additionally, in share products. our applications gained increasing MOSFET market inverter we SBR and

smart wins programmable been increased In server in wins also been increasing power the line Lite-On controllers, receipt power scanners, sensor boxes design Schottky and modems. in set-top applications. motors, significantly bipolar banknotes have along PCB transistors supply, semiconductor consumer and applications for gaining security, smart routers product monitors, from our the wins securing Also, and check market, strong as Similarly, SBR our inspection. TVs, detectors, IoT, design We we including growth reality and have audio wearable machines for amplifier DC-DC automation converters for demand low new products and energy. secured in image new with our virtual devices, design grip such and logic speakers, cable industrial

theaters family home in well as the of as positioned consumer integration to detectors. demand support smoke our such product carbon bridge and for well applications is the Diodes facilities, as rectifier the monoxide strong With LSC now manufacturing

delivery wins in of increasing wireless charging USB and gained Additionally, MOSFET power design power number the solutions. decoders an

fab industrial meet list MOSFET small applications. the to most demand Our up is small in ramping footprint critical

We growth wins further also USB devices MUX features applications. and protection experienced and bandwidth IoT with ultra-high new the for in high-voltage our design

to we XG for increasing products continue our Turning in demand drive to the Pericom market. communication,

designed SPDT XG Athena switch has into active XG suppliers. major with units been Our equipment

station applications the quarter for on success and equipment, gears demand seeing our optic well revenue PSSR consumption. amplifier all for switchboard high-performance the in unit CWDM smartphone DWDM we sets and including Pericom. XG-based Building switch NMOS and XG for our traction fiber the LDOs, increased modules protect We’re in and to achieved also remote Also, pMOS from as high Diodes SBR power performance the typical oscillators saw also to the product crystal as in applications. during application. power the of battery significant reduce RF the from

growth jitter crystal also ultra-low optical experienced modules. tremendous family the Our oscillator in

trend computing to commercial Lastly, revenue the which driven Energy grew Re-Drivers. requires of record, market, PC integrity market, Pericom record a continues year-over-year quarter revenue growth. XXX% the in conservation consecutive the and over by fourth signal our in

Re-Drivers, We AIO notebook, USB port wins pMOS Hall buck design power are sensors, seeing Matador USB the Type-C delivery, and display platforms. and Omnipolar and in converters

expectations high-resolution content continued record propelled platforms peaks. forward newly above our multifunction been products also applications with our the like inferior is of coupled and quarter our that, also and seasonality manufacturers. stations, LED for continuous display our designs Additionally, mobile we markets questions. fourth and expansion. we LED targeted increasing Schottky to with HDMI other design wins volume designed-in Along to applications. Re-Driver financial have and data drivers major performance, center which our X.X products, look pleased and With PC with strong new are In demand of and record success record Pericom consecutive computing, released record to our image wins by our across for performance has gaming automotive, in to winning also new HDMI SBR achieved scanners very products quarter key revenue, With displays progress. as channel products metrics. notebooks, are LSC’s The reporting cloud of in PCs another our open by Re-Drivers industrial summary, and expansion design all results evidenced key are contributor initiatives we printers. sensor to served now margin have a been our gaining Operator? in has floor of new revenue

Operator

comes [Operator of Instructions] Gerra line Our from from first question Tristan the Baird.

please. question Your

Tristan Gerra

afternoon. Good Hi.

which would quarter. on by due to lower you some are notably additional You’ve in an a driven presumably share change margin opportunity or an of that mentioned there? product, those Pericom? in share Or some gains market for you the be competitors ongoing go your to Is deemphasizing at share share gains the acceleration seeing gains

Emily Yang

Right.

So is Tristan, this Emily.

lines, I think really right? a gain just board, product Pericom. the only is across the market across share Not all the

current course, So, with everything. would additional and market So I design-in with wins, right? total content I and our of accelerated sell driving activities, it’s our say of think solution some expansion of design also situation strategy, the the combination designs-in

Tristan Gerra

There waiting Okay, ability the waiting ship might other customers your as thanks a earlier your at follow-up, season. level and meaning the And or How do customer constraining discerning a for centring you are either the doing potentially company about for supply not generally be to the shortages see level, rebalancing. at that some necessarily but quarters? on to all large how this was talked potentially feedback. few the you quarter, at next parts

Emily Yang

Right.

because overall, situation we So definitely for all, is dynamic. run constrained, I are mean, quite of the this first

their So doing with actually have demand, bottlenecks. been different true working what we customers, overcome and understanding is

backlog is the extremely still seen we’ve strong. overall, So

changes significant any from seen this the at rebalancing customers really moment. inventory from haven’t We their behavior

Tristan Gerra

again. Thanks Great.

Operator

Thank you.

question comes from next Truist of Stein the William from Our line Securities.

Your question, please.

William Stein

for questions. Great. my taking Thanks

about a markets prominently the is above end to guide. First think more I one it about if there’s wonder or want across this the we ask should more one? that of than seasonal I expectation representing spread seasonal

Emily Yang

Right.

me let that address question first. So

I all markets. strength the we’ve across think overall, seen

let just In very, So very the down a still Industrial bit. strong. it very we’re also automotive, seeing break little it me is strong.

so computing, that’s area, seen. other, And little we wireless yes, including Diodes, X we’ve automotive, consumer is definitely the if Enterprise soft, say so yes, driven focus smartphones. we wouldn’t a driven Server, at stuff, strong, that stable it’s the slow, communication, The a the All strong about we’re demand only still the look a by especially strong. the – segments general. that lot but seeing the cloud-based PCs. really communication, demand backlog industrial, I the have is seeing I us. say I computing seen datacenter say And little related, was strong. I of we’re actually are bit phones for extremely would low-end think overall maybe XG-related very I the then a bit never then On that’s feel in would area by for big But applications.

William Stein

you update pretty you broad-based. what give XX personal on can It’s if weeks or Thank us lead sounds backlog maybe wonder an portfolio more? changed like could provide if maybe How and that’s characterize, you. it’s perhaps I times approximating it?

Emily Yang

Right.

overall, times. strength second customers, is true So Book-to-bill revenue, regions what terms as for really X, especially the ratio record working also do POS well. And their Backlog the change strong as lead is before, strong. there’s we in very we really revenue, Tier Tier with mentioned X demand. still and across no customers, understanding Like I well. the quarter, of had all is significant

you lot a well. as based did So we to as provide see, And QX, on can a strong the strong quarter-over-quarter as guidance information, X%, we is which growth. this usual seasonality of of of a that guidance compared see X% kind for

Keh-Shew Lu

for In addition, backlog. there, we we capacities. almost and bookings implemented backlog this the booked strong get all And still from really [indiscernible] canceled. next have very we X did And our X-month not months are

So you very can strong. still see the business

William Stein

very you Thank much. Great.

Operator

you. Thank

comes Benchmark. next line from David Our question of the from Williams

Your question, please.

David Williams

for results Thanks question here. excellent the the and on taking congrats

had motion the wafers. of larger as should relates or first, Dr. the your adding in about in just it And And expanding this converting you to efforts in or term? mentioned remarks you how is equipment to expansion Lu, we currently by maybe the think provide capacity capacity could remarks. intermediate maybe So color prepared if those wondering some if

Keh-Shew Lu

AOC, X-inch. – several GPP they we is them. – When product their This acquired of Okay. some the of there’s

converted X-inch. expand go X-inch. there, costs can the on from into we to Both be capacity II, see convert will will capacity fab, this. will increased wafer S-Pack down. And and – will some of you Then the X-inch all Then we the cost. and We be the

the X-inch are is at X-inch. half and We other half

X-inch ramping capacity. actually the are We up all

GFAB by ramping so GFAB, service, X-inch the Then, our of year. from we are supposed the own fourth it to bought Texas that some And but of we a And XX% you Instruments. quarters. end because and foundry even we have fab. down into demand And fully GFAB loaded that we remember, X-inch went that, up

foundry sales support capacity our So in foundry Instruments, XX% TI. from them, support to year. a our they we do there, to contract, support, have reduce the more by their Texas

end and we we in this implement actions, example, are of those X all increase install start our capacity. And our oscillator the X, two the at own to Xs, and time, to actually or of April one year. some be due able so going one to this for year Pericom And ramp to facilities, same crystal by

there, to increase So are those expected all to our future we revenue support here is and expansion. capacity able

David Williams

Great. Excellent color. Certainly that. appreciate

capacity think one shortage. I has few this that of of you’re the coming had into kind that

that the thinking guess builds others maybe or are aren’t you’re see. reason the production where it’s production of of excesses builds production is maybe now, the the So part component that yet type think pull you potential ask have about any numbers seeing demand are the maybe where less just maybe in haven’t perspective, and seeing good scarce inventory and shortage numbers clear? visibility forward aren’t preparation there’s to a yet. numbers. maybe Do is the from there a the because that spoken in areas to you’re I those few components And of of becoming been I available, builds that – trends any that and

Emily Yang

across Overall, David, really is this product constraints seeing Yes. all the we’re still lines. Emily.

of but it’s I’ve I really of drop, lines. haven’t relaxed. wouldn’t the pockets seen say any really specific seen We product some

at don’t definitely moment. this that we see So

So noncancellation backlog, on with are we our next And our pretty positioned like Dr. policy. Lu much mentioned, for we with visibility booked well months. few are the the pretty

Keh-Shew Lu

of gaining solution I because we sales, more Well, customer think are just or in market our able balanced. growth share. there. one And really we It’s very Therefore, here is it’s participate are design. not the because to revenue the fortunately

just Another thing like product we automotive. is, in target the mix, Emily mentioned,

of third the the continue future, from coming data those revenue And end our and in those service sit and we in on XX% and us potential record CAGR right. center quarter we now. give PC are focus the We high that new like, growth consecutive four really quarters

those those IoT confidence communication, do growing. base similar may and confirm for XG – therefore continue grow capacity our will related phone, or in cell even type don’t still support consumer, we will Therefore, of future. I high-end goal, I the phone the are station continue. the either So not focus but continue And growth in to on if and growing stuff, even am our growth or start activity on to

David Williams

here Fantastic quick, margin the color. the margin maybe margin been do in can sense if the and on And for just me real gross have side, value what more, the one of versus maybe think? optimization? sustainable I are you How just improvements magnitude squeeze a volume of pricing just the trends do you

Keh-Shew Lu

price Our principle raised only is increase. we the our cost to reflect

Okay.

raised from manufacturing automotive quarter increase. quarter price for wafer take the our mix, product improvement up coming we when basis it. reflect vendor we XX% view more to And growth, increase ASP cost XX% fab of mentioned you we the LSC, Diodes, at due efficiency, can not XXX basis our efficiency is great of much all now you the efficiency see is that CAGR always and material, the get to it, gross manufacturing, year, we or our manufacturing product is but product are we is have already So that area. is And And manufacturing from see, then, that mix, because point, of you GPE in load I we is to when and margin, LSC look manufacturing XQ and when from third it’s in this our the efficiency, but as point. ASP over, quarter. our increase, efficiency, coming XXX% third better at the as majority gives It our I not building point one margin down know, manufacturing our but this XXX mix point, consolidate grow much grow fab went gross you because a we after about think basis and

getting really gross improvement the margin. those of the to So

Emily Yang

There’s new continue new we us right, grow. on for a market as opened lot still wave to the which about product the well a three seen synergy, Besides lot talk sockets to have customer of also of strategic as of top We’ve and at up area of segments. other opportunities, LSC new room lot right. synergies, Yes, still has customers. of think I that, a a base, manufacturing especially doors we

believe we help beginning future. improvements in of contact expansion is focus strategy, drive this will with And sales us it. the total our the to near So solution that continue our the to margin

Keh-Shew Lu

in Our our capacity this strategy shortage constraint. is even

the have raised only ASP. by reflect We cost increase the our ASP We not increase.

why need customer raise opportunity can the key we understand our we ASP, So deeper our relationship to with to but take this develop customer.

for We are in open participate the able past. to the area, not we which are to the able door

but we able us really welcome partnership too the customer relationship. of the the strategy to long-term into solution Now portal At raise and our to develop support time, the a customers’ this we not ASP aggressively, sell same are hand.

and So relationship. customers a those I hurt ASP the raise believe is better strategy than our just

David Williams

on the much. of fourth so quarter. Thanks luck And Fantastic. best

Operator

next from & Company. the Ramsay of [Operator Instructions] line comes from question Cowen Our Matt

Your question please.

Ethan Potasnick

Matt Potasnick Ethan actually Congrats for on nice is results a here. Ramsay. This on

fabs. utilization guess follow to wanted understanding, the in question, up Just of a LITE-ON on I previous the

of a on the products if what the high margin, close products level, are how fabs revenue margin, already getting perspective, P&L is Given utilization through the higher from facility and by older, going ASP might to then that higher ASP much lower full and have impact are come, that replaced to the like much can margin how running incremental be lower forward?

Keh-Shew Lu

I’ll me Gary Well, get and of then answer answer to it. let rest the some

Okay.

fabs, four in in an area up six we to to we making one six one with almost portion it and look mentioned I other [indiscernible], of talking year call we inch. fully is which the to that XX%, one purchased queue, convert that’s which of from half of LSC, equipment now We are right convert audience you inch. three from right. second then fab, ramp the at this the one we’re September inch it’s there ramp about the If it to then converted some inch, four then we But Those function inch JKFAB. And just by and install quarter.

the than function, it for the and capacity of a future. products the other energy, support LSC market So I that energy, going that to in Because customer time. said, LSC took synergy the like growth synergy and making the of kind support the

I It that. ramp takes two to it. to prepare So for be one years to able

mature we so those to the for get prepare ready the synergies. And of capacity

we are an improve. going enhance, LSC. we percent ongoing synergy you to how of make much are know not ongoing to percent – improvement, that It’s much for within forecast we’re how that we asking productivity going did to put be. we the area, ongoing going Now capacity But increase,

separate not from LSC the are we So on.

Gary Yu

put me top to break LSC it on margin it’s very not us But JKFAB difficult color is about it beginning actually Dr. really it’s the low to about And Okay. more what loading. on mention out. and What’s for of let Lu’s statement before, now? that. Right,

Okay. a capacity From reduce quarter, up no the the year it source each XX%, but the idle costs increase second this on of matter item, as first does size from to XX% utilization, product also sub-count. moving

a cost or before. do Okay, LITE-ONproduct. like existing than much structure, better quarters three They have

up those does product, to So us bring the device, LITE-ON no competition product. bios or of help it’s that matters

Emily Yang

Right.

more comment. maybe, So let me add one

for a to and mix product our of replace lower strategy lot include, is that better of regarding also I to semiconductors, portfolio. will a question And that part actually LITE-ON continue ASP drive. room our there’s margin improve, continue margin part about overall mean, we still of ASP or product this higher Your to that us

the execute strategy. So we’ll to continue

Ethan Potasnick

you the understand. little Thank what give a quick for you just the on maybe you that. color guide? then could different us Totally Okay. from if follow-up a given segments sequentially, expect And

Emily Yang

right. I I went segments, So think over did the

center, Industrial driven. automotive We really market be data to see us XG is communications the what is Cloud the strong. surface more that’s and be and each higher guidance we provide will end area PC consumer stuff. then So focus, really down the strong, of IoT going driven But on strong, going segments. down nowadays. break to be in don’t to

Ethan Potasnick

Thank understand. very you much. I

Operator

I’d This back program. conclude remarks. Lu of like session Dr. you. to program Thank the any does further today’s to the for question-and-answer hand

Keh-Shew Lu

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

Operator

today’s ladies conclude Thank thank does your you. conference. for This in And gentlemen, you, program. and the participation

day. Good disconnect. now may You

Diodes (DIOD) 4 Nov 212021 Q3 Earnings call transcript