POWI - Earnings call transcript Q4 2019 | Power Integrations, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Power Integrations' Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

to conference like speaker to now Mr. today would hand over the your I Shiffler. Joe you. Thank ahead go Please sir.

Joe Shiffler

Balu CEO Thank joining Nayyar, on are us. Good our With President you. afternoon, me the everyone. Chief Financial call and Power Integrations; of Thanks Officer. for Balakrishnan, Sandeep and today

or forward-looking toward and like discussion believe, will, performance. Our include should, including future similar be may expect, Q&A the which today forecast, expressions would, look that denoted events will outlook, session statements by words

subject or are uncertainties risks may XXXX. our SEC statements most in and Forward-looking to materially Form our that in discussed Such recent cause the risks on differ our XX-K to February from statements. and with press and are XXth, actual implied results uncertainties those release projected in filed

to the we compensation these exclude effects measures U.S. financial not call, Principles. Accepted the from intangibles, calculated stock-based items, tax Generally of in this prior will legislation. XXXX acquisition-related according tax Accounting of measures year to During results the benefits Non-GAAP stemming and of expenses, amortization refer

litigation The patent settlement treatment be litigation with past with ON Semiconductor our the results of consistent our our included to gain expenses. of non-GAAP is associated in with

in benefit of detail on our the A calculation the a remarks. Sandeep provide more settlement measures results. his will settlement earnings per release to is financial presented non-GAAP of of in tables of the share press reconciliation with along our the GAAP impact

the or consent integrations. this is Finally, of property the without Power any call is written rebroadcast and of expressly prohibited Integrations recording power

to the turn over call I'll Now, Balu.

Balu Balakrishnan

chargers from a but driven mobile from strong devices. of quarterly out closed This the cyclical fast continued performance good growth for $XXX.X reflects Thanks XXXX recovery afternoon. We ago. Joe million, idiosyncratic our in XX% up year record success revenues a by also downturn, with and

and the XX levels And from we in XX, category at a different at of fourth watts inbox designs power than communications during grew XX% high-volume Revenues QX. XX, OEM. our new quarter, more year-over-year each won

are All in efficiency X market, designs integration. to InnoSwitch thanks which share gaining use chips energy X-Pro of charger these superior level our and high of or InnoSwitch their

to part devices. designing success form expect growth the XXXX. communications attractive the products of consumers in our we mobile Thanks than with and the these essential faster strong grew chargers are in to expect their factors category in marketplace, XX% characteristics These with more again XXXX, that in

charging with XG Adoption of is faster up trend speed, as devices. aware of steam chargers incorporate batteries that OEMs the consumers in rollout of intensify as to bound picking become a larger differences and is

the designs Also higher market aftermarket our levels driving from Many gallium with achieve that to power silicon. not nitride densities power like technology possible to is use with products are the of RAVPower. and these chargers proliferation companies InnoSwitch of Anker ultra-fast

end to likely level the interest the confine will showing market the to costs OEMs While by in the we near-term, higher of in of chargers technology. GaN-based are the are encouraged

important an mobile We strong is OEM, won in of design ongoing have with roadmap QX, a Korean XX-watt broader device inbox beyond for a our product of design part activity. GaN our and market. a the pipeline design second we GaN

portfolio already be have we'll deeper driving and GaN our a GaN incorporating ahead. light our switches, into We switch LED version drivers introduced product technology the of in years

this -- products, substantial year of to and important making breakthrough. manufacturing technology, in full in advantage to take this full are We capacity investments make

past have first macroeconomic business our and been tariffs category QX in for was in two while the our Consumer by growth turning end rapid time year-over-year Consumer to two impacted resulting the we results, each any of the in years. Appliances, biggest other in nearly years. more related in the saw also perhaps factors, Then driver, than growth charging market declines

a be and our for to for begin macro concern, sell-through fifth in distribution While fourth healthy We year-over-year the business exceeded more continue is are -- inventories at that Consumer year. the to XX% the XXXX. levels quarter quarter, than positioned well consecutive indicating trade quarter channel sell-in grew and issues fifth

so made More have importantly, intact. us the successful that in fundamentals remain appliance years many for firmly

We have commanding power share market in the to long appliance held reliability products. our highly supplies, benefits of a thanks integrated

content of optocouplers the products over only we further our site believe we enhances share gradually electronic necessitates continue components, secondary as dollar an connectivity, market. also but InnoSwitch power to and we increases InnoSwitch continued as additional penetrate some more expanded are eliminating raises which such same well time, and We from add in the even intelligence have the gains and supply. course network the the power level, benefit integrating features our the for rising cases positioned appliances appliance not or At ASP. reliability, downturn, By as

brings the Another of class has growth, also expansion trend continuing appliances the in a obvious efficiency. for concern markets. unit heightened middle is energy but in implications for emerging This

long it important has for appliance becomes an While around of of affordable appliances even efficiency millions people and more world. for the makers, comfort as important hundreds been more become consideration convenience

In supplies accelerate during for December, brushless on the supplies DC this towards market room motors X. standard new and take efficiency the linear migration power for to Chinese -- AC The from and conditioners air Government publishing the July Motors. new standards power effect away switching should inefficient, problem demonstrated by scheduled its concern of

We brushless on new drive of well DC motors, comprising pumps, in newer XXX split fans as a as are opportunity the motor market used watts. our our We well to million BridgeSwitch the to $XXX and motors water air such such up address appliance the products this which as capitalize positioned to estimate units those China subject conditioning applications, to IC, DC to for be AC compressor as with addressable to million, range wide BridgeSwitch standards. $XXX

the appliance production first in strong range of around world. activity our and wide QX have customers a design pipeline shipped BridgeSwitch a we We quantities of at of

our softness in to of driving demand macro products. and trends continues growth a but from the anticipate secular XXXX, return Industrial in also effects which benefit We this our cyclical year felt for to category,

battery adoption for such continue material transportation, and still smart we of of revenues, automotive while the are from and invest energy, the we for in and some include as applications and market. renewable And automation, power These IoT-type away time utility building EV other to meters. infrastructure continuing the tools growth products home

for Earlier is as XXX-volt standard. this and such pipeline product month, a automakers. several successful use, well gate have AEC-QXXX active more the automotive driver we our qualifications qualification with design of major driver Automotive announced a underway gate qualified an This we as under second

in analog are the wide momentum a while margin industry strong semiconductor In quarter. outperformed fourth conclusion, we XXXX, just and our revenues by XXXX X% with entering we a grew following

on importantly, of resources. Perhaps, determination and major intellectual excited our $XXX about also also we we a patent Year The financial significant hope of ON sends and payment to are property, signal the million, management without Semi, which eliminated drain value strong burden was and litigation. a resolution brought the New the in favorable from We of durability it most settlement but announced a October validation of a not with to infringement. enter our us only the resounding protect our

the for that, to With Sandeep over turn of review I will financials.

Sandeep Nayyar

matching the settlement, financial begin course impact over Balu our as included of of the Thanks of the Joe good the which expenses afternoon. and with treatment litigation I non-GAAP litigation. is in noted will legal results, our

separate million of is during the in expense, as item we the shown a of as The which receipt settlement on $XXX line gain the million the resulted directly expenses income cash $XXX settlement, related Net recorded a the statement. in quarter. of contra to

a benefit approximately paid Book share count. tax in share or the with approximately quarter. we $X.XX of the based out net the was $XX impact fourth $XXX The million, tax which on million leaving associated $XX expense settlement per million, cash diluted was QX

digits Turning up of non-GAAP high-voltage monitors. above million QX. The mid-single financial strength projects DC were Revenues from slightly the were range Computing sequentially double quarter. service by and in Industrial quarter. a prior to from transmission mainly results high-power the consumer digits our category desktops the driven air low fell midpoint where $XXX.X with standby, and in increased conditioning. seasonal mid-single for sales guidance just revenues grew growth on down digits, prior the for revenues

the for revenues in significant to terms be continue lumpy As to excellent with be of but to in in along our past, tend gate application drivers applications. we energy contribute HVDC them projects discussed XXXX and an revenue have renewable expect we

X% smartphone computer. XX% Communications in quarter revenue and were reflecting industrial, essentially flat sequentially chargers. as expected, the Revenue for communication, XX% consumer, XX% seasonality mix was

result margin was largely of timing were mix Non-GAAP changes as related and points our to slightly headcount settlement. lower XX of from litigation operating purchases were expectations negative in end below quarter primarily and of operating the expenses gross came in equipment. basis on the XX.X%, as up prior basis market offsetting. a due the Otherwise were sequential additions expenses non-production a Non-GAAP

rate was diluted including quarter share. The XX% $X.XX for due than $XXX.X non-GAAP the the per tax higher earnings the of $X.XX Non-GAAP per or benefit to which settlement. share, million were was settlement, effective normal

a more than the by We on had quarter, end, from XX of low year quarter weeks, of the during down ago. during year than inventory week and X.X weeks quarter. fourth the rose inventory up from in X.X on Channel more XXX sheet but days days Inventories multiyear fourth balance QX million $X.X to ago. a down a a fell about days three hand the quarter at

in course distribution $XX sell-through all, for category. at by cash the ending fourth the the settlement. was year, million on nearly from in million million million. $XXX and sheet million million, by driven $XXX of exceeded out $XX under the expenditures balance In the we were operations Cash in by quarter and dividend. Over quarter, $XXX flow primarily consumer $X.X paid the sell-in just investments Capital the quarter increased the

sheet, continue from influx committed Selective approach disciplined allocation. strengthens of increases cash the in be capital balance mix. opportunistic our repurchases the further dividend to M&A, to the to and remain we further will settlement our While share

will adoption GaN, USB the be such of new markets Our such PD. first internally to to new as rapid automotive, of as always including the priority advantage and in technologies front take us, as opportunities of invest

to investments equipment, capabilities and for our incremental we build sales, we as manufacturing expect to and capacity out in GaN. approximately manufacturing spend $XX for addition add capital XXXX in In million R&D general

our U.S. $XX plan headquarters, our Europe, We which in this as for savings. pay energy facilities new expansion solar and updates of well itself invest million to year business at our for array high-power an in will facilities through the as to also

be ahead Communication be million Looking slightly expect XXXX, contributing quarter in $X minus negative of we Industrial the should sequential and the margin to of XX%. $XXX Computer XX.X% each the with between and end of resulting range markets end gross margin million impact in The the to first or decrease. mix revenues to market plus non-GAAP

as approximately well expect the These seasonal factors, as OpEx Non-GAAP litigation such expenses. year-end operating in by higher typical shutdown increases expenses partially will comparative offset $XX.X non-GAAP the and be to I be will Overall, of as effects reflect million. headcount FICA lower QX. factors

Finally, tax should for the non-GAAP quarter be around X%. rate the

that, And I'll back with Joe. over turn to it

Joe Shiffler

would up Operator, for Thanks the Q&A now Sandeep. questions you We'll for answers. please give and open it session? instructions the

Operator

from [Operator Stifel. Instructions] question first your Svanberg line comes Tore from the And of

Tore Svanberg

talk and strong Yes. confined the more Thank two to make the mainstream? wins getting about factors talked the gating a being more the about this inbox, because on GaN you as congratulations Could of cost. you to about new far to end you for Balu, you also design more talked but the this technology little phones lower year. bit cost as high-end the

Balu Balakrishnan

thanks. question. Tore, Good

that we would fact are GaN. that our newer than like in are product. extensively GaN GaN is system we this actually the proprietary technology, are on believe actually And but already hard effective, any GaN time. takes more use We otherwise working you of we anybody the We reducing effective level, technology cost almost products cost using a tells it technology else's obviously cost new very at believe nobody

continue size few we and The already We believe real cost next having as needed, push are will said silicon question work willing and power size efficiency a is, will we But supply. years. efficiency are the over the customers effective. that, cost how reduction in the the to our supplies. to far it switch on is If the replace power of truly

Tore Svanberg

million the interested being $XX perhaps and add some about add talked GaN, this for you in market? capacity to obviously I And good. for interpret that customers to capacity should CapEx technology asking very as of you Very

Balu Balakrishnan

Well, the time. takes capacity always fab longer

will based need in are is to that for what on have we we the we that now. GaN demand This So next to be sense of start we this years. the the very optimistic new forecast a that of products. would two -- is our capacity number in Yes three think used over

Sandeep Nayyar

million, towards for is about GaN. And the spend $XX Tore around typically is $XX million not We again. otherwise. $XX million million Of $XX the

GaN. So, I the of million incremental part $XX would is towards say

Tore Svanberg

helpful. That's

the Just one and go then I'll question, queue. last back in

So, the channel low. now is pretty inventory running

you two think typical just there think sort little of in there, and you think would the I a cyclicality nervousness you is? why color years. lowest if bit do of could do said that But it just you is Is that add demand, about end be great. just or economy

Balu Balakrishnan

is first of So weeks seven We a unusually should away environment. far it's It normal weeks. think not to from it be expect it a was would DiSTI now right high we and be that all, in long where X.X for the weeks time. around

so the a and and are they all So, different. it's trade little because not bit issues that possible careful on very of forth. so it's And being

that's them to do mean back seven -- -- soon. but away. far expect to So we that's go weeks not I

Tore Svanberg

Thank you.

Balu Balakrishnan

welcome. You’re

Operator

next And of question Ross line Seymore Deutsche your the comes from Bank. from

Ross Seymore

congrats results. guys, strong Hi the on

So, to the bit wanted I very I linearity and about know driven coronavirus the news of that. weighing changes Consumer unfortunate talk see the just if any the is business potentially that's there’s a on side. about especially and the China on little

change color any those for Balu, the then in first you're and linearity by So recently markets health on any what the quarter, concerns. of some given looking end

Balu Balakrishnan

usually Year somewhat probably strong January. bookings very tell. the a stronger and similar, far, Well simply in New is and month, so year based are week Chinese -- Year very through what be on the but January of the quarter based because our on March January last this will it's linear February New occurred I can slightly

it's than in quarter. linearity more much it's a linear Usually, So, first usual. U-type the

still Now in as real far coronavirus time. goes, as the happening it's

we of would manufacturing our know China, products of So, manufacture so is shift very time almost understanding do end old it But there. what good to have what that by way in packages back ability at only China. And impact second be. do we this on and our outside that -- don't some suppliers all of we we is full of sourced the a the we have the

our next test additional that, they vendors Having shut the Chinese and saying do in they for one said week us, who that that case assembly for be will only are is week. down packaging one

up Monday, suppliers, at going other two they running not rate the all don't have are and coming because next The the they be to as of but back. of full employees

this to limited continues to ability be But the our to not point, What something is or coming will workers best we unable to customers period will this shutdown predict can to either the this harder longer for don't whether to determine because time. demand work is unless we are get they the get our at a supply of other components enough production products. That's change predict build time. at can't

to but will have If deteriorate, company. impact on just taken continue things us not So what every that's obviously know other account. an then what that's have we we and into it

Sandeep Nayyar

market, a much your end and helped as my decline Communication were the but market being to been got his comment some us on in Computer won design as far is question lower, of us would wins in and a originally typically than Communication, was you is as As script expecting. more result share QX we actually lower what Communication lot flattish. decline have Consumer Industrial, primarily Balu has greater in we happened which and heard the indicated QX, from The as the that

Ross Seymore

for spoke I around into year given last especially gross Sandeep it. last of Is back kind question this the the you basis? queue. change the full XX% XQ be in for a in you the guidance margin I your full thought of should year. where in then the year side Communication we think I'll full the Got time – growth the any trajectory on my the know started year kind and then, And go but

Sandeep Nayyar

to I know, progresses with and be we'll ramping I this sequential basis similar. of kind And keep XX%. that earlier is year – and in QX be QX And what year, was the as you think growth had and the QX. at indicated around should flattish the year Communication going have full as should QX

and down can XX% So that modeling, the trajectory best looking going that I will about for I about roughly XX gross for year I year. at points the think the averaging XX the the rest of think keep basis do direction margin to in each quarter

Ross Seymore

Thank you. it. Got

Operator

question comes line the David of Capital. next Williams And our from from Loop

David Williams

that Consumer wanted the return there appliances. content thanks. And just how maybe, the in specifically Hey, and you a terms the you trajectory? remind the improvement driving that taking to and gains us the maybe ask appliances revenue? on in big I quarter could Can if bit to in gains Congrats kind appreciate in what are overall I you're segment of then the – specifically little to break a question. of that growth for seeing demand portion between and down

Sandeep Nayyar

category. this quarters as a earlier middle sell-through see getting kind inventory and had this of that, that as around China, about to our coming I if But So, areas we it year the for the we in I major of talked the where supports very indicated like XX%, script, further gain quarter. growth in well we well share regulations we appliances. as think And feel. in the as for we've Consumer is the a look it as sell-in at than conditioning, as with five growing well well percentage had in I comfort believe where as change as the air class greater fourth have in continue somewhere in channel is – should coming And you appliances the do last

Joe Shiffler

asked category I'd percentage XX%. comes Consumer Dave, the appliances? – varies in the somewhere around whether think quarter, of range. by is you And from say appliances. it's what Consumer The XX% category but more I that's And It

David Williams

Okay. progress the in fairly think thinking do that how And just adoption? what rapidly, you little thinking kind levels? rapid I each where stages, seeing Thank then levels very rate about you especially maybe power within that over the still saturation does we're aftermarket in between talk see, you kind but about trends much. we early I the Or in does Can a kind charging. of That's And obviously internally? the chargers. the are how bit jump less of guess, – guess meet you're of that to the of increases generation that that And you expect of time? power

Balu Balakrishnan

Well, USB PD to taken-off. is it it a that took quite but while take-off, for now

seeing of than we be is, would our we ways. are are the you in in people faster are center what revenue – two it We One power gravity if using expected. I seems watts. at seeing two that look And a adoption have are growing around XX levels the to

above of And a designs say many is XX watts. cell watts. using XX But at XX watts. you the of We watts, levels we of how look at, about if let's have most XXXX, volume XX lot XX% XX designs But of estimate our to above XX cell have around phones. roughly power phones is in all watts, watts, XX the XX also watts are

XX-watt supply. this use will In XX% that phones range competitors. growing of of our XXXX, power range, are our watt share share also greater of that in against XX projections, XX% is than will market. be it a looks And within think greater based will be we on the that excess more year, like We our it than than

see. indirect phones, charges and against the is charges are the from seeing are power migrating also not So we end means gaining happening commodity more away suppliers phones you can we X to that share you is XX-plus-watt only will are XX-watt XX, that more smart which and the an we gaining in are -- if low actually what in share way

really faster expected I result than well So, us XXXX. think bode for are we is the growth that seeing will and net in I

David Williams

side How itself? there. then and just or terms maybe about some do charging And think you Where you the of else EV in opportunity the segment just market play car can automotive think of and do the just maybe maybe about elsewhere? Fantastic. you infrastructure outside within the the think infrastructure

Balu Balakrishnan

areas. longest So, The there that are drivetrain. the time difficult one takes is most multiple the

conditions. safety driving also testing that main road for test If has they it weather you're year the one a and requirements qualification actually full it on lot road motor of of has a various lot apparently and and

So, the any four be to before three from years drivetrain is now see significant we likely revenue. to revenue

board go or shorter into design if external charger cycles. whether other like Now, it's chargers, areas charger those on have you

to voltages The guidance have whether from lower battery. other powered area subsystems, the it's a XXX-volt various electronics to is power computer or supplies be for or convert you that whatever a the that XXX-volt battery system needs

electric future It so use the of to efficient. want it's vehicles, XX-volt electronics. existing for XXX the they they all vehicles, battery the much more separate happens because But off a on volts for everything run

DC see will can products sockets work we also voltage. because AC DC So, from several our to for they

they five XXX or or voltage work XX faster and Those need. So, to volts have they will whatever restrictions. cycles design volts down less would volts from

wins attractive the our which other one already The Qspeed seeing within design very for we car and several there. sockets is is are diode

will seeing and then XXXX revenue increase period. this start year, this it probably So, time of terms we won't but we growth, see XXXX, will maybe of increase low until level some $X revenue significant million gradually in under

David Williams

Great. Thanks so much guys. time. Appreciate the

Balu Balakrishnan

You're welcome.

Operator

Rolland from Susquehanna. question comes Christopher And line of from your the next

Christopher Rolland

last for Thanks Maybe whether -- yourself is new year? market talk have the could come guess or guys. on do I potentially guys XXXX the when into first can like you you one you or this Hey competitors to you did think question. GaN. about

think expect least know to many at of SKU inbox? silicon. with the -- I OEMs how Thanks. OEMS, replaces offer GaN you top you But handset then five GaN that And ultimately one would

Balu Balakrishnan

Christopher. Thanks Okay.

First all, competitors. several there are of

been -- talking who probably are about there fact many years. guess companies GaN many, In is have different my about for XX

XX go as them Some far years. back as of

ones the volume and are high the only quality ones very are who strict only we in supplying and on is OEMs with reliability we so information so in very, and and are factual forth. the But

we designs. demand. using OEMs will it So consumer will we adopted. big we several the be consumers question to with. working two is depends it fast And The OEMs If fast high the charging get -- have times. of their are upon end It's far real charger attached us other how very what have in

For example on XX the inbox first design it in you're to And XX-watt design was that you got many the to because charge a to battery we XX cases charge In don't need can a minutes. level. zero design. full to than trying minutes do full not more

And and a is if OEMs, that We don't faster. be could the competition adoption catches there on know. if just between different much rate

as to means trying the you're have and size see. if the the the at higher you have to efficiency adapter. at to even said a increase the of reduce But system We wait price, which I adapter, earlier, level, of

than do We technology. effectively cost other no using other cost to are There our effective. way already that is

technology of of we competitors And than even a do. in of we processing different have most technology though use lot the the competitors, terms a GaN

superior We have we a of not of is terms reliability only in performance, which cost. terms proprietary and also unique in believe technology

So competitors our in much than position stronger to we offer most would technology the our that we a in able customers. attractive be that to of are being think

and/or have they time long but it quality around has issues. has some been use been they've issues tells cost around technology the either that a that issues or you for fact system-level The

we efficiently, discrete customers user is GaN how GaN factor we only devices. a important is for different transparent how drive because use technology but of technology GaN take to very device it's we care to not that it we unique second protect for The difficult it have is the as a almost us

our they of because discrete devices. offering most where are struggle that's GaN think I competitors

don't We GaN offer devices. discrete

means In out publicly GaN shipping in not think only report, figured out because an been It's a about talk end to have way even end the we had we it, the devices. is just are realized did devices and when GaN fact we about technology we people to a it somebody itself. to before come shipping

our like because It customer us protect So gives attractive drive the about the it efficiency. how huge what looks device. has GaN more the or that to a how because silicon to it makes worry user. is just GaN higher that's advantage so much much except to And not does transparent GaN

Christopher Rolland

Yes. Thank perhaps you segments the for looking then at for that. And QX.

be little comps I more bit XXXX the think but for love maybe And a full it's then I you very there thoughts. to drive of would through the your great. moving but you we're talk year. at color beginning your be any as would that had color to about assume expectation can of going

Balu Balakrishnan

for a QX. more very year have to good don't year this on lot �� I growth be add a But us. good the whole think we will for

this better we And XXXX, at grew significantly analog look case X%, the you If that were we only again even than year. though industry. we believe will the be

X%, on the year. we're believe going to look particularly expected will the the whose we you industry thanks But is because year, to depending consumer we grow back fast that hands beat down between chargers. data to to somewhere also at. come The X% And this think communications market, analog this also

Christopher Rolland

the I QX? going Industrial to might you think to contribute was and that any think And for said decline that... color have Okay. I

Sandeep Nayyar

equally another me actuals and would attempt. of I'll and talk midpoint QX What my the – comments And in be take from sequentially. coming Consumer from from was the is so QX. the that Computer to guide I let Communication decline flattish primarily said that from Industrial

Christopher Rolland

believe And QX. is I typically Industrial in

maybe the... So

Sandeep Nayyar

infrastructure that – then in budgets The QX these is funding are the out gradually and QX It's come and actually and in down because about come spends. typically it rises.

So is typically Industrial down.

mentioned design that's share design, because decline. wins the because we as down would but to been more have market question, typically of the and I fact good even they In offset happens. communication that potential had earlier because But more what won

Christopher Rolland

Good.

Okay. Thank you.

Operator

from question Richard line And your Northland. comes Gus next of from the

Gus Richard

my taking question. for Thanks Yes.

legal First of that's prevailing all, you. matters on congratulations just that's glad the behind fantastic. I'm on

Balu Balakrishnan

Thank you.

Sandeep Nayyar

Thanks Gus.

Gus Richard

temper Yeah. your factory? it play? is time. outbreak current any provided sense of the what guidance of the No long the factor all a not that? you at in it's been QX, because a a question it for Or Did you -- magnitude. at My Just did coronavirus did is first guidance

Balu Balakrishnan

I So think, what we -- earlier. this I discussed

supply change what China So can have on old subject products necessary believe they'll next But to because down, are necessary know we in is can most they we they're way products at level all the Monday moment one two in open to the some floor. we assembly of can they can't by second we is back vendors. to operate at case employees course shut in talked source because even shift production that to the if they saying our they based of because currently, they are so get we to shut week it. it not we only partial assembled looks And like the some on will our which other that's that us and of supply customers, cases though the down

based of inventory therefore, told we we what demand a have raw are of have that to on as And, they also you can and have -- materials. comfortable inventory inventory But ship also us. and QX. bit we believe we have We we remember quite in

reasons, I'm on get whether there, until is don't there could build won't they holiday about. know to products. is customers workers there we demand is back come our impact the the multiple Monday itself. it don't that is talking still That's any And be because Chinese is production -- What they enough one

long to that we parts, our they can't that get we impact account. how And into upon take can other potential it the get Those know cannot so but second product. end also component the don't the build they be lasts. things is depends problem. two are can't It's shutdown be some going and -- The a whether they would

You what can going to is happen. speculate

What shut to taken of it the to will planning have how quantify week, gestation is our virus. If continue that that goes government people of it. period But more any until account days, impact That we that's say vendors of end which is is down, which this the our don't know is are or be next they no Chinese to shutdowns. infected this hearing there from down it happens And down if not number And an the spread guidance. more would like I if in at just doesn't is for but to that's into won't thinking it. time. speculation be their end be shut XX they the

Gus Richard

know And numbers? distribution say Got are or of to the that Vietnam of sell Rough as of round distribution, China into that I to then cetera? et just sales opposed out itself it. -- your most percentage Taiwan what is

Sandeep Nayyar

XX% end Well, going is they that out you the sell typically sell if at China don't it we the XX%. the It's great typically the at look from into that extent. really it's if we China into look so into But to DiSTI, what distributors a know. to product you to sell it distributors

Balu Balakrishnan

Yeah.

how your outside question think is it of China. I much of actually manufactured is

be XX% say I Hong So Sandeep roughly our speaking said shipped from as would will into in warehouse Kong. China

most But Vietnam So would I of whether ship some China, it of if don't Usually outside in I do to know. is customers China. manufacturing it we directly presume. Chinese in of will done Vietnam, our would go

Gus Richard

it. got it, Got

roughly into So that's -- product something your China? of half built goes in into

Balu Balakrishnan

Correct.

Gus Richard

lit it that real an much on are going Got -- the $X in of savings and realize it. to on just million $X much then was as million ongoing recall how basis? expense, you how will And that you quick I of one

Sandeep Nayyar

in change. run $X what $X we What to on is you was is, this little the somewhere So million into million around had said a X% rate would rate an in about we we be still And $X about total. would what get X% higher. growth said account, savings. million if QX that we and of that was annual taking after had realize would we was remember that, guided annual the basis, about

Joe Shiffler

expenses. total For

Sandeep Nayyar

total expenses. Our

Gus Richard

very Thanks Thanks so All helpful. Great. much. it. right. Got

Operator

line [Operator Your the Tore comes question next Stifel. Instructions] from of Svanberg from

Tore Svanberg

Yes, you. flow thank settlement? a just that ones. few wanted I get I the million, had you. operating cash about $XX Sandeep, was but just to what by the run excluding housekeeping

Sandeep Nayyar

I mean $XXX out million. million would -- take and I what do the $XX is take

million related $XXX settlement. to the roughly about is that's roughly So,

Tore Svanberg

to Very tied the Balu, that get SwitchBridge sounds the you're conditioners the now policy? for good. because going air And sampling year. like Is to this mentioned new some and going be China government revenues you defense to is that it of specifically

Balu Balakrishnan

of is. Part it

dishwasher We about water I refrigerators. into ones pumps. compressed for also are talked for We go the also and into conditioners. main go are motor the fans into the fans. for other then The others drivers air appliances. And

So, had production year. in this in this QX. But single revenue low the in year We QX. actually we digits of started shipping in bit dollars little something are expecting we few for million maybe

growth. it The And very but gradually market grow slow will then appliance primarily. appliance steady the is market into

designed be And many the the They it gets it will extremely are love company. to question so it growth this It's far once positive. of will happen each So, years. products But indications within in. other just a designed, then getting product. copied over

Tore Svanberg

so you, much. Great. Thank

Balu Balakrishnan

You’re Tore. welcome

Operator

questions And no this further there at time. are

Joe Shiffler

leave listening afternoon. for replay on There it Okay. will and a listening. investors.power.com. website Then good be everyone our of which Thanks is for call this again available there. we'll Thanks

Operator

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

disconnect. now may You

Power Integrations (POWI) 30 Jan 202019 Q4 Earnings call transcript