POWI - Earnings call transcript Q3 2020 | Power Integrations, Inc.

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Operator

Good afternoon. My name is [Tegan], and I will be your conference operator today. At this time, I would like to welcome everyone to the Power Integrations Third Quarter Earnings Conference call. [Operator Instructions] Thank you. Mr. begin. may you Shiffler, Joe

Joe Shiffler

prior shares On Good our stock afternoon, call of me the issued share this outstanding the these Financial for us. Integrations we two-for-one results release. each non-GAAP our integrations of stock measures period for per compensation the split of of with for intangible split. GAAP. our will are is to Balu one the joining financial expenses, in QX included measures Officer. Chief today our CEO in adjusted and of have been stock-based acquisition-related to assets Sandeep With XX, outstanding Balakrishnan, results, measures to our measures A according and Also executed presentation a on call, all press not form Nayyar, thanks In GAAP of August and dividend President items. Power share reconciliation exclude share. amortization and new effects Non-GAAP the during calculated refer tax

February or subject including will, the in cause and like forward-looking Such uncertainties denoted XXXX. look include statements our Q&A expressions risks forecast, future will are and projected session, or words Form that and differ filed toward and implied. events X, today, expect, statements may similar actual believe, by anticipate, to release materially XX-K that the should, Such would, today's in uncertainties to risks discussion results from on SEC outlook, press performance. those are with discussed Our

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

over call Balu. Now I'll turn the to

Balu Balakrishnan

good and afternoon. Joe, Thanks,

our XX% $XXX end were above million, revenues guidance. and top sequentially quarter Third up the of

end analog as full plus as market, growth are continued the which to our introduction again fourth category, market last strong which rate sharp no ultrafast our factors in million, these InnoSwitch compact and heatsinks. with than in ICs chargers. distribution orders another of our long-term market by chargers September for the in leading differential to market revenues their the appliances InnoSwitch with are years efficiency, XX% and InnoSwitch suited well strong through, across and capable market X a The short high-volume in in compared chips device healthy our fast the trends was earlier we million. from all success the widest in ahead smartphone the is categories forecasting are the a InnoSwitch surge sequential power of QX. in would the for revenues growth mobile Their products, the driven four used and communications XXXX, integration fast And to where consumer of energy extremely GaN-based high minus the only supply benefiting high-power to in secular for enable demand ICs the with market. semiconductor power smartphone to up more in acceleration have market we $X technology OEM in introduction. is adoption of this well charging year trend, fast-growing longer-term is of outlook while capabilities the At and announced their policies, supply products of form our range, in the caused midpoint a year industry. The we ICs billion selling our be revolutionary of increasing sell-in barrier, six and proven the Short-term $XXX market. well trend which in made has for enabling expected handset Still highest outpaced charging U.S. sell them security the course, Due week, dislocation broad or have Underpinning thanks since the take ICs trade quarter fast customers national of shipped that in by is August and share isolation of in which leadership We the level applications. world. We high-end took are and InnoSwitch range level crossing our chargers. in GaN in the

USB We to drive a multiport take, of PD expect chargers higher. capitalize chargers. to like become the XG on view levels as power of new such strategic charging OEMs main-stream requirements as more technologies power And GaN, and

and which introduced this Other it OEMs that some charging out, phones continue clear of one chargers coming their supply our play speed including accessory fresh model, can predict handsets their that This an we to it's to innovation we it, using the thanks prepared will is some well device are for how exactly chargers we for is adopting OEMS, that in mobile have while any. a wave coming continued and technologies seen are investments fast in if contributor - and advanced area GaN. in earlier to InnoSwitch we charger charging should allowing month this While in of been XXXX. evolution QX And choose the with in want, products. be as consumers have success they new anticipate growth Fast time. no our one largest to like feature differentiating an

advantage broadly we strong to have expand we more our in technology as While offerings. look efficiency its be achieved products adopted mobile expect uptick and chargers, take of our customers device as GaN to GaN

dozen chips, over And cellphone targeting GaN-based applications. GaN LED with our wall USB products and TVs notebook more In also applications, customers chargers lighting addition appliances, adapters, have and than to display introduced outlets. including production now products have XX in but we across we a InnoSwitch GaN

to a double large our week, in adapters, GaN capacitors designers - enables track is capacitors revenue the the pipeline And concept adapter. MinE-CAP there auxiliary up product in reduce this supplies. the given are We of double of percentage size could XX% of level account resulting in for GaN chance it reduction a for volume a use again our size significant year. These XXXX. MinE-CAP on product power on enables introduced think normal called based to design Last in ongoing the we we activity, latest good our of a that adapter. MinE-CAP. the power compact of to input of much used of the and capacitors chargers a smaller the is

the attractive, form continue new it to As example power technology. to of smaller ways look over our customers it's great to MinE-CAP with we will GaN we for have with a prove and I'll deliver unleashed of think innovation turn more Sandeep. our kind factors, now And highly

Sandeep Nayyar

afternoon. good and Balu, Thanks,

growth driven the will reconciled press are As $XXX.X were the QX usual, primarily non-GAAP release category to pandemic. in of power sequentially, X% I up strength computer. than XX% our Consumer tables. offset million, tablets, work GAAP on industrial charging application driven were In up primarily which focus was sequentially. industrial as quarter as where XX% automation the chargers improved my air from by XX% projects broad-based continued Revenue inbox was communication, results the more mid-teens well in mix smartphones. down terms, were on reflecting digits fastest by up number revenues tools high fast and by appliances, by revenues learned home and about computer weakness have seasonal sequentially revenues the for a for percentage for high-power, Communication consumer, remarks been major grower for up in revenues slowed by as XX% down were demand. XX% demand home XX% from single sequentially, were in offset and home fast conditioning. in softness Industrial

last expenditures share. during we operating down resulting in investments interest the prior in quarter in investment categories inventories low-margin as were of rate to $XX.X towards by in sheet quarter. paid the Capital out Cash shifted down the million, million, for was and back-end lower driven to Cash days gross mix following were million quarter non-GAAP quarter guidance. XXX expenses days working were non-GAAP We with result quarter $X increase quarter income GaN the by rate the of due line in quarter reduction on an a million XX our non-GAAP the million XX.X%. from just building rising revenue quarter. Non-GAAP declined conjunction expected, continued to tax capital including with additions, with per announced and $X.X As in the loaded from receivables The under Other capacity. basis flow $X.XX our million, from operations due at fluctuations quarter. point down were from from Internal stock $XX.X XX split. as earnings end, balance for dividend capacity X%, the environment. prior $XX.X prior dividends the in margin shipments $X.X prior construction expected was resulting effective the diluted mainly

half inventories sharply down sell-through do ultimately strong normal to appliance supply above three inventory, demand September Balu of XXXX. an target to inventory expect and maintain ending particularly weeks continue days at our return But second X.X to We in quarter, cellphone environment. the of the continue to by the and weeks, downward during the Channel quarter compared and the uncertainty that prior driven to of by I range fell mentioned, given the applications. level glide

further restocking. fourth driven as $X broader strength the direction in $XXX of fast tilt in the plus charging of in mainly resulting compared Looking with the increase a million, continued we margin to ahead should the by Mix quarter. to lower quarter, as minus a bit revenues third range sequential the gross expect to channel or million, communication, in be slightly well

gross Specifically, to XX%. I expect non-GAAP be approximately margin

defer of part in our we the see OpEx year, expenses, reduce to not response while headcount and Turning we will did the QX. impact portion pandemic, that in in to the of hiring a of of the the to our we did begin later

travel coming QX a headcount modestly result, the will giving a a at reduced reflecting million. Other an trend continue April. spending interest deferred likely normal expenses With board reflect rate which from growth this us rate does increase new income, track significant puts in a downward, events. As grow of just full events, lower by Naturally, year salary slight should the year OpEx expenses, despite percentage non-GAAP despite around in hiring is income, in travel and from on the That to OpEx for number increased driven and and increases modest increase and on above will normal in savings rebound XXXX. interest $XX in hires mainly in environment. on to and

continue Specifically, quarters. taper and subsequent other around down be in I income $XXX,XXX to expect QX in to to

should non-GAAP the QX for around it back over Joe. tax effective that, X%. Finally, And with rate remain turn to I'll

Joe Shiffler

the instructions Q&A for session We'll the now. you Operator, Q&A. Sandeep. would Thanks give begin the

Operator

Seymore Our line from question [Operator the of Instructions] of first Deutsche Ross comes Bank.

Your line is open.

Ross Seymore

you you're talking wanted the the refill quarter. and guidance. leaner bit the I guys, fourth Balu, change the the the impacts into quarter, quarter? it and in days, are behave? little to even but in results of seasonality going in strong third that given first fourth is about Hi earlier year? about look as across a expecting on And to seasonality a COVID strong filling the the the useful much congratulations talk you just mix this got framework the channel these related the seasonality your Obviously, in then quarter. to It's How

Balu Balakrishnan

because compliment. and it sell-through it's actually for in the appliances. question. also, have, QX Normally, the of see very We appliances communications, higher the based on But Yes, We be Ross in down. be think QX could come to good think drivers slightly that. the strong flat a will we back. all we of slightly will thanks especially

normal So agree would is from I different you. with it very seasonality,

Sandeep Nayyar

into I other We'll QX demand it's have and that real - much thing the very think was early. happens bookings sell-through strong of you have QX how a to the little Ross, which up go to is how you Even see know I ends The channel levels the don't couple quarters quarter the itself. they in It up, end to they're back to though going go much this rebuilding. customer take of coming inventories could were get the there. will think to how and but

Ross Seymore

higher little think follow-up, longer a as to OpEx term. XXXX. being Sandeep, about guess my little you I And just I want in it. growth talked a Got

relative total reasons XXXX. if guiding in given the to the base growth, sort But boundaries revenue I can did to on versus provide the thought you're growth framework related revenues as year that? little and you we not sense, all of takes relative next growth, a give a and more to COVID for the whole? think us the I if that OpEx you makes that any like around puts revenue for lower about But know that

Sandeep Nayyar

COVID-related the year. sales model I for you this conference. And as low as Added Absolutely as kind think right there we of our know, like Balu is travel, spending double-digit. that, to as indicated, are well

expenses by I abnormally low million. think about $X this year's are about

$XXX guidance you that $XXX take somewhere you given, the give million that year will to if around for we have non-GAAP. the So, million

on normalize give top growth, around a to that million, $XXX you then If X% $X somewhere add a and to of it million the $XXX you this that give number X% year will of million.

talk above really, X% normalizing our So then a year, slightly X% to about you'll I'm trying and to that's growth. And get model. this

for believe If model you if guidance you low giving double year, next without - of digit. our

Ross Seymore

That's perfect, thank you.

Sandeep Nayyar

Thanks Ross.

Operator

our question line Nicolaus. next the Svanberg Stifel, And from Tore of comes from

is line Your open.

Tore Svanberg

mentioned starting expected? Yes you on that's to GaN see now XX congratulations thank you pretty and customers applications and really results. using applications you penetrate XX than faster GaN Are the Balu, remarkable. non-smartphone

Balu Balakrishnan

I enthused And say - heatsink really applications because and reasons. would that activity like But different expected don't say faster is on very refrigeration big we that's air going cycle much have requirements, conditioning a have TV. like would the I by at issue that a heat And good than they a design TVs chip. In candidate we of on very am areas. have won't refrigerators, fact the won the on. thought times don't the all because I hotspot generate longer other I that the for need plus in never very, are higher we much level efficiency because be TVs would in TVs

doesn't fall lack especially And really the tighter advantage get circuit care they if efficiency, or at very pulling shipped back it They about huge size. board. the heatsink. devices. the they air regulations that's when also, is about due break in So the the power the the that you not reliability these But area. with InnoSwitch refrigerator the it's that - efficiency And problem, heatsink a supply. major off sometimes screen. are a and And any very, the them. much look Obviously, there InnoSwitch conditioning, is of don't to very not excited is of on our vibration, as heatsinks becoming of then a regulations having the are you GaN, size refrigerators, are say In also printer tight hotspots and for heatsink important

where can to up one trying outlet. so other there go no heatsink. room surprising is levels. very that fit high-power The USB that high the and have to XXX ventilation, a is in efficiency, the wall to can very that means USB up wall heat, outlet And The is They little is very you there no not a PD go to watts. put

perfect And our is automation, home under the so in - that's part and which a of building application. That market. industrial comes

we never are we that seeing expected. So areas

efficiency. the they're are go is weight, all, again, ceiling. one other These of heat, above concerned The into the ballasts, they And Compact - the concerned about concerned Ballast. about and about most they're compactness

so, And seeing commercial are lighting, application we nice lighting. for a in

entire and I are forgot mention, - for to market XX be chargers how Notebooks you old excellent the So those literally is big most typically important to one are. the the Notebooks. watts, fit seems GaN know an one

to see don't tablets, they that large and anymore. for very small Now they have really chargers cellphones chargers want

working tablets, So customers very well. area number and Notebook, do designs, that as a we another we I are And Notebook with well. we and [won] saw very that's did mentioned we of will in

by market XX% computer a grew we result, a As sequentially.

Tore Svanberg

market. right? the little Yes, fast are that or pricing, the about Could detail. in I especially dynamics question talk had charging if that thank a the pricing looks would pressure. - that the communications there, if more you is And your smartphones. a to adapters going box, Because I you for bit an for on be pricing be going like better? Does business on is of it's heavy mean to a accessory bit But quite assume it there's this

Balu Balakrishnan

want least very especially and smaller, gone to attractive. product, be offer will have our their remember the major has chargers is that the also small will if And OEM of product thing market the volumes fast. be third-party the other out use GaN website, growing the that you one better. accessory it you They really noticed make of Well, advantage they and the therefore, to that at fact pricing take in box. is to And

The than more by you other and Where trend we higher more InnoSwitches. adapters. power one you that port multiport, we one as definition But level. multiport higher chip. which has have is is because typically port, power seeing are have than levels, means to Each our of one go

to XX a least our had multiport option watts using number of GaN at GaN keep to the size The you'll or very You adapters per And XX have down. see attractive technology. port. becomes

their phones proprietary watts point, unlikely selling and watts, about faster that the OEMs, their even encourage OEM charge some phone at because higher ability will higher in based and trend faster. charge the And out-of-the-box XXX near GaN it's power higher They each OEMs they're to and to will an XX and They're sell for believe a we in to that constantly the they different talking their to But they're of faster. least to unlikely content happen, be out-of-the-box margin term, it charge case, again, gross to their for Chinese especially strategy So case, the and of switch it's also term. And already type because happen. the near ASP protocols. their content might The are very in but really us. levels Eventually, they GaN. increasing at use model, on fast. therefore, dollar their in

using not PD. They them They're faster. charge allows that their they're to own USB protocols. believe using So

So they of have in terms strategy a charging. different

more a both and in go will minuses, out the fantastic anticipate run, allow dollar higher margin of lower. will the many volume even higher are products, in with we but that higher the which level, position market. long our It to sell do content. is us end though and power pluses them GaN of box, is So the has in We ASP I products of think, this gross

Tore Svanberg

Very good.

opportunity just you this last longer-term automotive market? your one But give I the on know you. can is you as update question, a Just could - for on an progress

Balu Balakrishnan

years so supposed it including drivetrain And earlier, a revenue. it has products, the the automotive you the develop, in to take several we year. for it tiny long but a can because could revenue our on. And automotive. field depends we number years over we in of applications will Qspeed like bit And few LinkSwitch, But market. see the is safety take through drivetrain approval mentioned the diodes to you'll introduced we'll increase vehicle before and little where next slowest significant And automotive. as be immediately. The used current test those are go a just other recently of see InnoSwitch, several lot but years. on gradual go there largest itself this market, is and to our But where revenue the into three four to products the about of years, electric our have in Well, this market take-up will addressable run, be the a

products we positioned get towards that are we think of good and working number market. I share of to a that, are well go after to a

Tore Svanberg

Thank you.

Balu Balakrishnan

Tore. Thanks

Operator

your the Karl question from And of comes next Ackerman line from Cowen.

is line Your open.

Karl Ackerman

address not, high-voltage industrial a industrial announced XXXX view peers referenced. and this that may high questions, you within of GaN, augur or gain appliance automotive to your and this appliance of And seek business? you I'm the voltage, landscape one are afternoon. appear if mix for your those that larger in I share does of thank and well industrial power applications. your on curious opportunity for Two change potential or XXXX? using partnership What competitive good hi modules if customers XX in to Yes, week across those

Balu Balakrishnan

the have you're ST Hi and release Karl, you with for first I referring for X thank the don't the where for meet the Sanken nice press above. to and assume to think IPM we before time, are on I you question. they cooperating the talked kilowatts

Karl Ackerman

right. That's

Balu Balakrishnan

Karl? we yes, Did play First that we don't - of market. confirm in that, don't all, you

Karl Ackerman

Correct.

Balu Balakrishnan

Okay.

our So of much address We lower watts control, level. XXX all, power BridgeSwitch. at do play that do we first below - we with don't but at motor power have levels,

well doesn't power against really power gaining impact with having it applications Sanken we we very Sanken industrial And levels. ST And consistently. share us. So that compete level, directly regularly and I been mean, and lower at in have that, but not said appliances at

of that the We very many the market, against the of high a we have ST industrial XX% Sanken. years. have in And gained share many, appliance share share, mean market. And over come I in a from has to lot again XX%

So, products. we think we have very compelling

as it going so outlook this forward as affect And is concerned. far announcement our really doesn't

is You market with fit question where the GaN. had that another in we do InnoSwitch industrial

disconnecting it a power in have them. way I XX the opportunity near-term you outlets of or the your USB in supply house. not grid, They level that when is which some that to to there using standby right means the important on Our you wall your significant them of other if this mention that constantly biggest consumption. outlet. are forgot is advantage wall. power outlet These of bring XX in USB power next drawing you actually application installed we When opportunity, are even are put you advantages. And the no from one have outlet,

possible. other said really InnoSwitch outlet. have power Having USB important industrial. in InnoSwitch you there overtime. very that a huge in is the we consumption And that's believe level and PD are near-term have and it's But attraction I that, GaN, So that we will other low standby market. with our wall see in with get exposure into already applications possibilities We lowest the areas a GaN

I getting for on of revenue percentage, this That's are adapters including applications chargers mobile the predominantly, year multiport and tablets tablets cellphones, and and the three would Notebook say all GaN of the them. so from we terms In and Notebooks.

and longer are consumer, level which we really at design are up market - And activity of surprised markets. is the appliances so they we are come appliance the design much cycles. of industrial the seeing because will and the gradually basically in acceptance GaN those But and

Karl Ackerman

the color. thank charger go the think can with Second, U.S. one Understood, past potential for mid-range the you to spoke the there be the no opportunity partners story, flagship the this for sale maybe in about of perhaps upgrade a you. for China from handsets percolate But longer chargers? If that of mobile, tied I you an indications you whether opportunity into USB-C cycle largest handset of concerns pocket models? and perhaps wins and are OEM or the at I demand you growth is you is investor will initial design the is your the Thank be that phone. could fast air the talk XXXX next low back charging what about handset channel about predominantly the clearly OEMs, selling will to will hearing XG year but

Balu Balakrishnan

Good question, Karl.

And the aggressively phones. So XXXX. China of charging to one down in customers the the are It the our grow is pushing to low-end definitely end revenue phones. all fast growing. will penetrating to continue fast are lower charging, fast The that's way their chargers reasons

fact, especially is ship expecting companies reason customers, from our that terms non-Chinese other to our gain The of able share OEMs the being Huawei are to even in and phones. in has Chinese - cellphones in challenges all

share to gain they're have. preparing from already that's adding and that the we so demand, to that, all And

gaining are also customers we but So also penetrating our from are Huawei. share only - not more, we're

at the of wins in is year design our aspect all new significant share last terms of have we third The OEMs. gained over

So that growth is compounding the rate.

all the would see also, I a that said that, a recent orders. needed a when I place of in huge result increase the they the mentioned, One think they lot - Now three items have but say having a reaction the distributors things. is of sell-through, bookings is I multiple - dramatic of

that's of how make have them. we one opportunity that. have also And pretty volume will for each we the So Huawei on know stake judgments our OEMs, don't benefit of a exactly we and understanding total the to good but what some at - every

are we opportunity to what least of So at that all gauge is able overall, for us.

a they the the paying $XXX, rather charger. really - Because for for high-end charger when they're minds you're nobody buy if $XX.XX chances low-end phone, I'll buy paying a add announced because even us the the fast for amount the GaN the same things box, that going has And the perfect simply goes paying are And been X will are of out phone, charge and get of out in consumer a there that that that than and all charger. go announced one it Even the charger actually, XX-watt more. fast So products is buys many they're markets. to a a going InnoSwitch of charger, wireless that X-watt technology many, require a advantage charging and position are a we in that the you to the times helping $XXX one our when different box phone, with rate. are also is the because also these same

we some the the in product going us sense, box just like line, high the not So the entire the gives have out in exposure past. to seen the of end,

charges want. they to Now of type choose is up to it what consumer the

would we'll consumers most have the so, But chargers. would - be. what see our to attach rate they number prefer of we phones And reasonable because we rate attach to be And talked are optimistic talked friends, have us would fast to to have just a to lowest like shipping X-watt reasons, It's for the with can And phones, three fast the handle the or even are charger. that fast they a thing very charger, charging. cost much years, four most is with charger. a cost of have going back interesting will

the the decision. to Now consumer it's up make to

they to no multiport the margins. OEM It's cost also much - to by make going it also, perspective, of from sense and more attractive the because longer they - more makes an And of adding features. phone. in make charger can make and can So can accessory size the they terms now an model

Karl Ackerman

Thank you.

Balu Balakrishnan

welcome. You're

Operator

question And Christopher of our comes next from the SIG. line Rolland of

Your open. line is

David Haberle

or wanted behalf to Haberle guidance results solid a on on you quarter have while here. you and really in questions going question Is double-digits, the produced forward? tablet of our next computer and for strength here. now, new low work-from-home that quarter thanks driving Rolland that ask a question, revenue is, the strength the guys here? on David quarter I this to market for guess been Chris is I product the in starting GaN at and My taking this more of this run congratulations a is mid rate clarify trickle computing possible single-digits to per first running

Balu Balakrishnan

markets to expect upon computer box the in product market Well, getting comes other next tablets. on continue grow. rest really the the it of all that how our I from And the to we year. say depends it grow But would

so, combination And in the not thanks extremely we it's to are are and now. doing One it's is of is work-from-home situations two tablets second learn-from-home And well, box. the - right one things. a the

giving combination also is expect is other areas to grow, designs have the we we mentioned just that a huge of So Notebooks. those Notebooks. won one two But I boost. there some are in

and help We haven't revenues the year. next that would us seen yet,

year, product more. introduced already goes The to to started that adding And is we it next add will have other monitors. into called that won InnoMux designs be we revenue, but a will some We area revenue.

increase of will that over impact You'll those revenues the year see full time. and

that countries. supplies been because The seeing a much third in countries, But power small volume anymore. people other because we standby in more increase buy is over desktops the world as are have they're which we has which in don't time selling an area, other we increase desktops, desktops seen - declining

David Haberle

here, second on think high-power hit of for of kind I have good going I for projects the Got going going these start color weighing thank business standstill, few of kind get infrastructure with industrial one been quarters in you do any just have to is year? now? of a think this you could pandemic the on row a things on a market. in it, at understandable industrial that lot ask again I kind visibility a the these and If market next for but the there, on when reaccelerate projects

Balu Balakrishnan

decide capacity, governments I they have of just these in have like makes ways. we energy probably it [electricity] question designs won have That's in add China, the where a continuous trigger The developing I but countries believe worse demand the to still exact is work-from-home question. they and to news in don't good India, increase very more to designs. there. some It's especially good an are still know projects. a The when date,

So energy, is locomotives. China well trying one it's has including requirement traction I of locomotives. locomotives. installations, pent-up time. capacity, grid but high-voltage question all to India a of a mean electric. solar there renewable just all done it's a into to add add plan grid electric the lot level are also DC wind is to very engines and last aggressive like diesel They convert in has very panels,

doesn't COVID our change news get no to It's gets to year, those was is And the so, say. the to hold. kick this up situation me knowing. been it good will of But that way position. supposed off government. hard really It's is again, better, triggered. on Part just have I the a of long-term But And maybe there plan. but that's says

have we just implementing when have the designs. the they them. question We a of start It's won share,

David Haberle

you. Thank

Operator

line next the [Operator Gus from question Instructions] from comes of Northland Your Capital.

Your open line is

Gus Richard

what Just real the CapEx in quick, was quarter?

Sandeep Nayyar

the about For million. $XX spent we quarter,

Gus Richard

you you I in bought Can and And your your past, were? split equipment, the for your give a - you me own fabs they think, buy had of what also tester equipment Okay. OSATs. for you

Sandeep Nayyar

buildings spend. million on the million bit for and $XX be I $XX of spend too. a little quite will to including Where a in is back to year end, the to it, about think including I at is GaN, year, is on So, equipment, year that earlier $XX a going million this in indicated the abnormal we're we're way had probably about spend this and - look going CapEx, as

want this ahead, million to we get have year normalized looking in on have XXXX back to However, a it will to model. $XX is into to will spend year. revenue X% if for million ongoing you at building back. Where planned another $XX the regular of and to but $XX next for million we in X% $XX the equipment more million, into go normally that our look solar long-term, a But we next

Gus Richard

comfortable would these ramp to then and your Got you're on it. book capacity your products? [silicon] GaN, is - with given that And for spending I

Sandeep Nayyar

that us have opportunity Yes, seeing we adequate is and that. future design in have for the a capacity are continue we been indicated, with great something invest. to that's the all a Because - got we is as this had great will And GaN related investing Balu to wins years, opportunity.

So we are strategically here. investing

Balu Balakrishnan

add GaN like sense. a watts about is like going roughly level, of and lot to to I above. GaN that XX power believe makes about I'd replace truly Yes, certain silicon

are GaN. investing And so, we really in

in position competitors And built more way already can strong the capacity are goes as up our for a But in term. on, capacity. GaN. in we enough time very have add think near we of ahead all we We here,

in certain as products As really on take of power one And level. that. the volume. all we all GaN we advantage know, only are And - about GaN far new almost to our want shipping we are based a of

Gus Richard

else it, GaN not my answered you're it. seeing the question, Got And in products? anybody with you got next but marketplace

Balu Balakrishnan

we Well, lot about high-volume it, there don't see anybody a talking but at all. people are sampling production of in

Gus Richard

got sort question. it, or this Are I'm net this sorry, it point still on Got guys is is X-inch X? building And of a wafers at you it.

Balu Balakrishnan

about Are or talking silicon GaN? you

Gus Richard

GaN.

Balu Balakrishnan

technology. We It's it's disclose GaN, to a and can't too that. disclose don't situation. our we competitive sensitive

Gus Richard

do, then terms there? growth any notebooks just compute and stocking, is of between compute year, Okay fair color enough. be And next to in split in or you have tablets that growth going

Balu Balakrishnan

consumer year. revenue. is the primarily the come including in drive will which market, year air also But to Well, is back next communications, continue which we conditioning, cellphones, growth expect next appliances, to

mixed. growth be us. for will area it's Industrial, that of again another So

HBA, how we about tools programs or the nicely which very be will is Some the talked year. Those What it tools. automation know areas home don't battery-operated continue and expect like will further. do. earlier, delayed very whether is back to is come and it well we grow and will to to year next grow will next going infrastructure business high-power We

then had not be takes. a industrial there overcome happens, driven will are of that slow QX. in may tools in on whether the quarter high what strong very computer, and is of shortcomings tablets, be question may that by situation. a still able that work-at-home a any to type depending definitely learn-at-home and sales. to it obviously when we'll or of So, have may HBA could We is puts power you may grow continue down say because This although and to comes And And holiday many - question mark. there little it's bit and the the a just

hard I predict. guess, will is next question slightly I a to big bit computer If were little a it's The So mark to take also grow think would year. industrial.

Sandeep Nayyar

I positioned think we well. are really very

we said market. for drivers have a end all next believe good directionally And year really have applications each we would that in year be for I us. As

Gus Richard

all right thanks much. it so Got

Balu Balakrishnan

welcome. You're

Operator

everyone, And you your today's back turn for session. in now closing to the call for thank participation remarks. Mr. his Joe Q&A I'll Shiffler

Joe Shiffler

All thanks, there. it investors.power.com. will replay of There good for and again everyone. our afternoon. investor right, call on listening, available be a website, We'll this leave website, Thanks our

Balu Balakrishnan

Thank you.

Operator

And call. this today's concludes conference

disconnect. now may You

Power Integrations (POWI) 1 Nov 202020 Q3 Earnings call transcript