POWI - Earnings call transcript Q3 2021 | Power Integrations, Inc.

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Operator

Good afternoon. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Power Integrations Third Quarter 2021 Earnings Conference Call. At this time all lines have been placed on mute to prevent any background noise. After the speakers’ remarks, we will have a question-and-answer session. you. Thank Instructions] [Operator like the now Mr. over to would call turn to I Shiffler, Relations. of Joe Investor Director go please Sir, ahead.

Joe Shiffler

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

reconciliation to these we and release. non-GAAP amortization calculated of in of intangible measures assets according items. stock-based to GAAP During this included financial exclude expenses, call, GAAP. tax compensation of effects the A will refer our is to not Non-GAAP measures measures acquisition-related results press our

Our those or filed or Q&A would, February consent projected press property differ statements believe, today, Integrations. risks expressly Such in to subject today’s performance. Power look Such and uncertainties will is recording call Integrations, and our will, denoted outlook, of without expect, include that the forecast, anticipate, uncertainties statements may to prohibited the is of are in discussion forward-looking results including and discussed the Power cause the with and actual should, similar materially risks like events and are by or XXXX. This that future implied. words from any expressions Form session rebroadcast SEC XX-K release written X, on toward

turn Now, over to the call I’ll Balu.

Balu Balakrishnan

analog are we earnings this reflecting substantial for we QX in Thanks, And of the of Revenues growth guidance. Joe, industry, our year, That’s XX% the the and than good track the above on gains projected strong year. in another and have midpoint share XX% well of cash better rate QX. market revenues, achieved flows. quarter the based semiconductor afternoon. growth We delivered for up year-over-year of growth were on

benefited so. had reflecting of gains mainly the also inventory as our trends decision a were to charging, do position such the our at others our affecting refers supply have enabled deliver secular efficiency impact chain of portfolio weather of of outset the manufacturing share the the have from capacity the We as we to geographic back-end benefited model, and product pandemic. crisis, of from our build have our immune issues when reflect competitors from ability struggled to start fast energy not While dedicated and to has our our which foundry partners to when strength the at And industry, strong clearly cutting unique while COVID-related the suppliers, which we production chain us shutdowns. the and diversity at supply

carefully, distributors. to to as We at pains also rather managed up customers than as ship inventories taking closely to possible inventory our have actual and demand build allowing

other perfect, While ability share, to win categories. to efforts competitors these not have notably where product enhanced allocated us customers capacity appliances, and in most our serve have help

hold expect Given chain begin bulk of the to the appliance to stickiness the as supply we of on to conditions designs, gains normalize. even

gained summer. this efficiency in air have tighter following of the imposition China’s We over conditioners share for year additional standards appliances

seasonal conditioning appliances, the XX% declines appliance Driven some And normalizing As in normally in have at we next year-to-date. grew excited contrast quarter. the we doubled consumer in also revenues and from a by are are year-over-year sequentially result, XXXX see demand to of point air even September than more category the with about up QX, for revenues likelihood year.

the uptake saving drive solutions. heatsinks competing of the DC appliances. which BridgeSwitch The energy BridgeSwitch with to power by AC of seeing products, brushless and we in in needed compound gains share to strong efficiency drivers DC benefits cost many motors used our DC and supplies, motors enhances brushless that are addition reliability In eliminating

range in meaningful revenue a contribution in months of wide at recent We XXXX. expect BridgeSwitch have won designs and

accommodate to GaN-based seeing InnoSwitch in power enables also more electronic increase consumption. traction minimal are our with appliances whose with increased features We designers products, in efficiency

appliance growth key While GaN reliable by use component a and and for year GaN has a with in product familiarity of than their more the factor cautious products sold element XXXX. competitors. this our to been count GaN Power low Integrations technologies, in products We in typically than broadly, grow about track preference XXX to are new more designs our willing our we is our GaN-related critical customers and with More QX, adapting make OEMs are them to roadmap. revenues on Xx far

GaN of growth a continued from in speed, Transformation commodity continues value-added again products in for phase GaN chargers, and the market market by use a led is mobile GaN success of fueling the cost-driven transformation. is for XXXX, strong expect technology-centric next smartphone at our compelling. charger We extremely to the case full device where market

be charger based charger charging growth on years their of entirely to price. less even makes ago years X differentiate volatility them We’re today’s us ODMs This market it the far of mobile because And and from we a by well-diversified the dynamic OEMs new past when come. kind ourselves contributor with In little a stickier engage to our This susceptible years the share significant of for element ecosystem. products. technology strategic directly now cellphone stream. OEMs, charger how the a saw to win we’ve distanced products, highly market designs design expect made resemblance understand across to dramatic to competitors to the broad we change XX in have a short, almost to with from can past. revenue decisions or of help and resulting were we a able is our been differentiated bears spectrum our in

underway are design we power of charger a in top-tier power a just of commodity in for computers. a our factor GaN-based seeing that And we GaN PC technology in using notebook are as OEMs an supplies the provides notebook since market, recognizing their design believe market, smartphone products. InnoSwitchX PC similar the form with OEM In of XXXW ample the increased as the side disrupted QX, obsolete transition in cellphone engagement brick charger. cellphone new are power a has Just we is now at supplies. level OEMs won

As reduce and X density recycle our Inno power transformer can to losses maximize size further employs paired enhance switching high CAPZero we and ICs discussed and to the switching with frequency quarter, be of last efficiency. the

We InnoSwitch design also GaN-based a multiport accessory advanced continue brand Pro. PD including to Japan’s healthy with share aftermarket of USB #X chargers, win new our XXW X for

and charger of just revenues, years brand We category a a only from Pro. X with X% than store silicon-based retailer to now tablets major accounts won chargers, the up Inno XX% Thanks also XXW the computer notebooks, ago. more electronics U.S. aftermarket for in growth X for

chip only single-chip front Our us, implement direct of to Last PD component a latest the chargers market high-voltage product optical the FluxLink and first along we USB down. our secondary of all innovation. And and external isolation with we for not products and X-PD a integrates slowing components result our eliminate users first leadership for GaN, power our a a third-party feedback count, conversion with USB are has advanced advanced protocol the with market primary simplifies in and huge still introduced our InnoSwitch side technology silicon not been the family, in a solution opportunity InnoSwitch eliminates need range components. is component functionality X-PD sourcing. month, a IC but Inno wide of competitors chargers Like X-PD eases of This controllers to Inno our reduces PD significantly the processor. also incorporate for which design protocol that switch.

efficiency less and than typically competing designs require a components half our density. As power result, to compared number offering of while superior the design

Finally, building power range more XX% broad-based automation, Revenues by metering, solar to industrial and of industrial continues year-over-year category and applications. across a QX, than grow in our home driven diverse were applications. up

significant results reason our and These excited Sandeep. enhance opportunities industrial to are ability invested have channel over resources combined turn XXXX Software partners. with for it We as past I’ll include online our of our our website now, be These as leverage fulfillment over attractive about of Expert beyond. to the consolidation and distribution market customers. And efforts years such us couple and serve better and as design give vertical producing a category and new to locate small resources well Design to our our PI to industrial

Sandeep Nayyar

quarter XX% than for above and Balu had above revenues row afternoon. in up the forecast, margin XXX% good We ago. outstanding the more and another with second a a EPS midpoint Thanks, year operating quarter of non-GAAP our non-GAAP from

revenues slightly with offs the second communicated quarter to the be lower despite the first to outlook the significant quarters. inventory December tracking half and on last are in We market March cellphone overshoot course that half in a we improved than

above much largely be resolved partially quarter year. with July of will track as of Meanwhile, range category a elevated the June the As part across the we following to normalized Huawei. down revenues impact broad range of end of to on expected, $XXX in work was noted our and reflecting QX revenue million, of customers sequential by by communication call, by up we efforts on sequentially. gains offset applications. XX% were in the of take appears share inventory the period aggressive the market our and the X% year-over-year share overshoot at from was midpoint decline guidance shipments, driven continued down The a driven

up quarter margin XX% market up and air the inverters, XX.X%. Revenue and than growth were new more up of applications. high driven computer. XX.X%, appliances Non-GAAP monitors. growth also and up mix up efficiency were China on points than teens driven Computer expectations, and expenses expenses. timing and revenues building continued categories Non-GAAP operating was in revenue consumer, strength were strengthened sequentially headcount the and in adapters industrial, margin sequentially, Non-GAAP standards. metering, solar million, basis primarily share all better was major XX% our from broad-based by industrial XX% were stemming XX% home conditioning, which revenues additions travel gross mainly mix. gains reflect other favorable communication low the expected The XXX automation revenues by seasonal Industrial reflecting for were was end below sequentially, sequentially. Consumer single-digits in $XX operating and lower notebook

were at expect a margins per change near-term level year the allocation at function rose while have fourth QX below $XX I a million of in of the beginning Internal settle XXs, an inventories quarter-end. earnings share. on of to seen back than of million While buyback, repurchases stood ago rose shares weeks, of based our $X.XX for diluted step from to with million and quarter our Also, brings $XX had XX model. XX%, X from at on dividend at roughly further to and year inventories increased $XX Cash thanks million increase total We of of price our million high desired an the the quarter That the an an of operating more the the clearly Non-GAAP level million. weeks. another to XX% rose $XX.X share. slightly $X.XX. to channel plans the quarter. demonstrating with an for $XX our profitability, or That’s investments sheet, to investments, for on in $XX. allocated XXX% for other to our into in still prior seven That’s flow leverage has price million. to CapEx $XXX we paid just out balance our early quarterly the generated the $X X $XX quarter X.X the average days, balance per part growth terms the the strength Board $XX increase operations. by very in $X.XX the dividends share from our additional total repurchases, leverage. days Reflecting $XXX and revenue was from of quarter shares XXX,XXX average Board under buying million sheet in We by prior XXX,XXX strong our just has utilized bringing cash million and of back hiring per of

the $XXX be quarter million for be rate for areas, income in million. of a at full-year rise prior Looking should up million midpoint At or expect and the reach minus non-GAAP around the compared revenues third ahead, gross XX% Other of million while the year. R&D. now, functional for we And $XXX,XXX the $X to the revenues fourth our would operator, December to in be $XXX plus the remain and as quarter operating on be to quarter range, non-GAAP around bring let’s Q&A to approximately while should expect about I headcount to $XX begin similar will session. level, tax additional margin particularly effective the QX range expenses sales X%. we should

Operator

[Operator Instructions] Cowen. comes from Karl from Ackerman question Your first

Your line is open.

Karl Ackerman

results guess, that has communications. the Yes. how point, headwind this and OEMs healthy in on these of you the are to Android your from I adjustment Thank about Congrats you smartphone that course? trajectory first thinking communications foremost suggest now you. run its pretty despite business, the inventory

Balu Balakrishnan

We our that the we, next is happen down in cellphones. share the will nicely be QX, on cellphone very bit design to believe grow slightly inventory by be to but end more think inventory going clean. of a based really pull expect the gains business year. is in we And little the going wins and QX, The QX up in fact, to

the So year next growth year a really should communication space. in good be year, strong

Karl Ackerman

gains of in you appliance that irrespective XXXX. about follow-up, revenues my are for end-market year? next grow opportunities share as allow growth could such there guess I you spoke as risk But a rate to to some moderation

Balu Balakrishnan

the the BridgeSwitch of to to just in think we markets X get at question demand, expect grow year expect It’s China. year. drive a faster plus get will and We Industrial. we much the have all is Consumer next grow two, of a energy normalization the efficiency we to two and our product. full-year so but Computer, that, we the and work-from-home on of top time gains, be In of also other growth. that, we our share of which added just Consumer, And clear, or next benefit will markets revenue Yes, relative those from same slowdown will end Communications than

is believe as Communications based business we the that Consumer grow the not our but of all year, that on next of that net-net the modeling as So will much business.

Karl Ackerman

Very I’ll in back turn helpful. queue.

Balu Balakrishnan

Thanks Karl.

Operator

Deutsche from question Bank. Your next comes the of with line Seymore Ross

open. is line Your

Ross Seymore

on the or largely it echo guys, point continue that with originally Hi Nothing year? congratulations was a you about wanted strong the did or by that rest any So, think But that much digestion on year. the change to through a end was being in done last pretty period is you that implied quarter what the of had schedule you to at quarter, us it. of ago? nitpick year you think done told talked total. I did going Balu, was on there the had in it to

Balu Balakrishnan

it will by we thought, was The we the a quarter that had QX. little in made QX. said was more occurred substantial a than last stronger that knew continue normalization consumer bit it it more in But for little being than than Perhaps we up but bit we thought.

extent make So large And a to design will communications we difference. with flattish. uptick have next expect the be much overall, it of QX, because year because didn’t We think they our have. is because done be by to QX, should the all of have time, a an would then it for ordering start expectation that a communications that nice here in wins quite we to is

Ross Seymore

it you trade thought. was that strong Got mix assume side, obviously, and off it. your guide that the mentioned The was the the quarter markets. on Sandeep, just end better fourth And even I on margin pretty for gross entire pluses to relatively ballpark is clear that. and due that areas? in Thanks Balu one should How versus flat. clarification about the be minuses some as and think gross it’s do computing What pluses the for think are the XXXX aggregate we year? staying for and ranges of stronger in communications going for the margin to we are about minuses than

Sandeep Nayyar

been because to for this and year non-GAAP of utilization, segment. best volumes Balu growth and best mix point we this faster. yet, The grow But XXXX. Consumer year may the in Yes, a it the in the adding indicated, got we model But tailwind of category the actually Computer, Computer for of next next we’ve we little the the will directionally, capacity XX.X% a but Ross, can give the turn see I done at we I the and little Industrial bit the that is have – because can is even best haven’t year. guess, because Communication best XX% as from plan and as will

Ross Seymore

again. Congrats Thanks. Got.

Sandeep Nayyar

Thanks, Ross.

Operator

comes Rolland Susquehanna. Your question Christopher next from from

Your line open. is

Christopher Rolland

Thanks products. remarks, guys In mentioned their customers were prepared competitors away allocating your question. certain for you from the for

what question allocating from? what away or competitors, were and are what they my questions customers So products

Balu Balakrishnan

naming good margin somewhere We I of spectrum. gross very in all, them, that us they of is sell the without this their gross XXs. end make And first market, – on into specific people that they’re margins who this make MOSFETs sell in competitors lower competitors, So market discrete market say with but margin would who for They the our solutions. controllers, this into market. compete all controllers and this gross

they whether higher gross their if that’s it’s automotive allocate make they their That’s areas, allocate can where capacities. other margin where computing, they So in resources. or

to are accelerated customers they out, really our more reluctant business doing has lower which it. to margin anyway, and that because a So they changed but power capacity put to anxious are were that just designs, – it helped much us

Christopher Rolland

you back with this And question well. that. Thank for I’ll into tie as

you least necessarily not big high-profile ones. They’re So, at I three think partners. foundry have the

So that if – guys most others, because talk And assuming maybe using don’t, where are a you in you you others that. strategic? find which more strategic than be relationships? And you I’m guys but you supply have to that supply those have bit may shortages can to then little do push to

Balu Balakrishnan

is, partners worked Well, we decades. for these the with news good have

have we So strong a very relationship.

some equipment. of in investments the made also have We

not available we TSMC. capacity in to companies like competing So us. standard are dedicated that’s we And foundries have big some with

advantage. big So that’s the

The we other and capacity. how don’t is bad times, in that maintain thing slowdown the is we

wafers, of a on didn’t. back remember lot last We everybody If inventory. cut we you year, built

partners. take give we that’s have And so with our and the

able keep to that are their share we’re happy foundries running capacity. our way very that keep and they and we So

also investing know, We because we additional for we need grow, more capacity. are we as capacity

continue to, investing been will as Sandeep have alluding along more, be all and we that’s that. We and doing we investing do are that what to more will was speak. And we

And investments, but be estimate gross tough headway based should so, year slightly XX.X% be that But the next our be on from will high. more then very next of been year margin think the utilization will with – this higher we even our XX%. has margin, to year this gross

model our So think these times. humongous gives advantage our model, manufacturing us we in a

Christopher Rolland

at the in Yes. for Thanks. I’ll queue. get back end of line

Operator

comes question Your with Tore next from line Stifel. the of Svanberg

open. Your is line

Tore Svanberg

Yes. Congrats on results. the

Balu. on is the content GaN question First

is So Inno out some talked from about around, peers controller. of this your different your clearly incorporates And how time architecture the there. you that X-PD,

So three can as you just little elaborate device. have Our a on that parts understanding GaN can you bit there? a in many as is

So so just there, going some extra growth please, GaN of the color understand profile we forward.

Balu Balakrishnan

– Yes, how what or processor we adapter, for it’s InnoSwitch Pro the and in our products. power PD, into package. package, to added they the With have same taken done we identical have – the a four make fact is small depending three PD have we delivery can XPD stands want upon InnoSwitch protocol USB

goes in can addition they a use in So have when TimeZero, content use also to we Inno that. can also with an X, the adaptor that, so count more or do And your But charger. they significantly and lot component down you can the then MinE-CAP.

switch, quite controller processor. customer a switch have then dollar controller and increases side normally very to primary high a they significantly. secondary from And are we a has different from buy then other the to a count somebody sell voltage people at else, buy because and site that So they our

way the So to of that more all whereas single-chip have couple chips. of reduce size we adding solution by plus a to a here,

Tore Svanberg

very then to have smartphone sounds is out a notebook fair going X And or break is robust was continue that year to feels in for But it Obviously, last starting the it like stronger helpful. it’s notebook charger say years. you. very That’s XXXX? on to pretty market, really and

Balu Balakrishnan

year year very is In be a notebook grow think can fact, next we where significantly. to going

wins. small, very design market our share And of single-digit that is percentage. number a of is have the in We

cellphones. lot have a same the the of to we is through room so phase there And as going psychology grow. And

look But almost been number ODMs cellphones If be of was OEM they lightweight much their – but to as you charger scratching And price. say, Why supplying changing the this true alike. never with on a look the because that smaller. notebook and remember, thin is involved notebooks, the I am based is now they’re cost-driven made XXW, cellphone, and it? making. where have notebook. shipping adaptor. was just That’s saying, very And the Taiwan decision And would in this beautifully which all power few has I at speak. So big ODMs an it’s is all of we I similar well, for to with happening used provide the true, why okay, in XXW, brick heads that a in market the OEM same notebook, level, they dramatically

direct now so getting And we engagement with OEMs. are

And that’s last the the because your our only that so we are see charger they noticed, them. actually what And is notebook win are about aftermarket your believe but can of they helping now advertise when also guys of so of the cellphone. I can And some their helping much I do if to notebook notebook, technology talked and think able much aftermarket consumers course, more a to charger growth not the and design actually us. smaller. you’ve show don’t product And continue, total in and also truly We trend, supplying quarter, also is accept will market, that small charger attractive. where make their to brick multiport notebook guys – really chargers you seen a the of combine chargers cellphone building weight the will because of both the weight they

Tore Svanberg

great context. That’s

do number one Sandeep, a this have Just for one at capex ‘XX for point? Sandeep. you last

Sandeep Nayyar

think of X% For you about XXXX, at I revenue. should think

Tore Svanberg

congrats much so and you again. Thank Great.

Sandeep Nayyar

Thanks Tore.

Operator

from Your Richard Gus comes Northland. next from question

is open. Your line

Gus Richard

you if see doesn’t anymore? for just is additional Yes. was quarter. wondering about you in you in Congratulations guys that great tailwind the or And market the on matter I could just, an a tightness general? Balu, MOSFET talk

Balu Balakrishnan

high is. MOSFETs. is including it a all Gus. voltage shortage Again, of Absolutely, components, significant Thanks there

So less no switch as very than the they So solutions over for attractive they question just the source at a uses There’s are by many this fact about it. half different them components, result, "Okay, half, so components." of our don’t saying, to it our looking makes have to number that to solutions.

less You components. those about the absolutely benefiting procuring is us. worry MOSFET And you’re have far shortage right, high-voltage really

Gus Richard

you relative it. And smaller be could talk SAM, the SAM or computer the TAM sizes? TAM the versus there – any same they’re would and is Got the Okay. units cellphone, about smaller Could just or then briefly or helpful. or the the opportunity computer in color because

Balu Balakrishnan

Yes, a just The taking I’m it. it. – check look me at SAM let

our SAM So $XXX the communication order SAM $XXX million. is products. of And the for in in about the million computer the is

So it’s comparable.

Gus Richard

that include $XXX standby kind of thing, comparing power like like and we DC? that and power AC/DC or And to include does million, monitor are to that AC

Balu Balakrishnan

small little standby. includes Well, printers is standbys, PC and it server tablets, And notebooks, that’s It It very very includes includes there things. chargers. all of monitors, now. of because those

Gus Richard

then moving to on And Right. just market. the consumer

cellphones? half? in think in of given inventory see and can strength say that units You share. the that Do and with of made think comment Consumer back communications interesting you first PCs. so didn’t you probably why the the with don’t as the the not keep PC sort much up strong it grow with, gaining fast to as expect correction of you market, communications year, you’re let’s PCs And as In would an half as being

Balu Balakrishnan

concern OEMs think there much our a as because inventory is don’t inventory, Well, our relationship very we as consumer we is close But far really with them. keep twofold. at customers

that. in one the going magnitude, know is We to going we happen, normalize. next going believe business, sometime know eventually year, don’t it’s So the okay. know to We home happen we is to really which everybody work don’t helping is when demand, from all this but it’s

helping markets. Now would The truly get by transfer very of It’s competitors favor in is we us faster. our just share market to from market who we shortages better. share offset share share either share are be have or permanent this once gains this other is the the from are more sticky. share, the are than this faster going We we next our because these that’s is for anyway, walking the de-emphasizing much And get away believe gotten year. that happening is products us getting

So, normalization – that’s demand. work-from-home of is the the headwind

the to situation housing in The China. second is one extent a smaller

where there it you problem appliances not the installed. buy worked there, are that way a there and As the are China buying people homes, no know, in home, you is is until

So reasonable amount appliance I concern. though China come of a that to even countries. is is a of to ship a The reason other concern say it’s out small of products because we our a China, small lot them

probably course, China. of we U.S., demand So in total of we the think because around in overall, China appliance appliance ship demand is then, to companies XX% and Europe, in in Korea

other benefit growth in this has believe make next a market positive And have that to there pent-up is been India area very us likely we that side, soft it is India also – is year. one the on appliances I for year. Now demand

will So feeling we are it really all in good all, grow.

there some headwinds are growth a this But the that concerned know don’t for modeling is our be may best we slightly impacted. right now. little are We But bit that sure. just

Gus Richard

me. makes Got to complete stimulating long sense Thanks. COVID it. That from Million probably you’re now. it That’s go a doses demand. vaccine to going of and way

Balu Balakrishnan

Thanks.

welcome. You’re

Operator

next Company. comes of David from Williams Your question The Benchmark

line open. Your is

David Williams

for and here. thanks me ask good Hey the afternoon question let

build perhaps simply be inventory? that well is Huawei playing within potentially a that part just And or So of to of on the share of there type any wondering the there of it any there. over just back obviously there’s could dynamic or if touch inventory just potential segment. or comms maybe be the could kind I’m that this scenario is that But changing if other wanted as is any erosion impacting is

Sandeep Nayyar

David. question. Thanks afternoon Good for the

have that sales, not We losing we very quite opposite. confident the are

did continue That’s thinking they gain they the normalization, too Huawei. have an the that parts, products several very nowhere because will OEMs share we Obviously, expecting. share, near is some They they to share. can’t but just get get they were get what way the of unfair We bought didn’t much This clear. are seeing share. of

is the we products. time, are very we the going Having We So to demand already likely to year. to They of year on And positive that, And still And back. gaining well. have they don’t go. come business. all impact same have strong Even as to grow the with always with we a to doing market, they the normalization, a year. way they also the to business then said India a of going having next very think is the aftermarket be which work-from-home the add share that’s side believe cellphone more next smartphone in next are is about have year. but well share. good guys, is have going long

are products feeling will share about and the too market we grow just in we position really continue So, are our our to for foreseeable our this very future way that good believe because strongly compelling. the

David Williams

that’s of are maybe what sense. a there’s color Makes design wins appreciate claims there lot as I hearing newer been similar some entrants we’re of But well. by, the and that there.

to the wanted So set tone. just

in your thinking you’re to chain last maybe several speak over And there pockets chain meet seeing from color. that’s strength the in you Are of developed impacting weakness the the terms a to or in the supply anything new anything of or of then, quarters? that’s demand? areas about the Or anything ability or challenge fourth supply or could maybe business terms quarter. any appreciate I that So if particular

Balu Balakrishnan

No.

One semiconductor companies. lot relationship supply our they strong said, we partners. for with different of had challenges truly like reasons. better than have, regular partners. foundries foundry chain we as to are else where have people. are But not situation a are They all very – our We almost is, is number They anybody other I a multiple sell

kind of are there with have terms even that they’re mean sorry, business in Malaysia us back-end, in and We of had I could committed capacity – And some stoppages other Thailand, we to expand when we areas. the shift of the the our so in capacity. diversified and geographically to Taiwan working we

impact and shift did not was say to I Then less. us, we thing impact our want being spread the it lastly, there I did was so to and no be did, of can’t well. we best It our the say customers probably, some And among was of the we serve would it that impact. is But customers. What demand. do is very our won’t easy customers to real did able inventory to distributors. happening impact number

to So, company we in almost I And probably by build take one inventory so that inventory, the other can of. than that semiconductor our care of having place. I did that not customers we customers any know all all think begged better we

it. take And so appreciate us. our that’s situation. care really really better in way the able By much be has And that of we’re why they and to benefited customers a

David Williams

Fantastic. one visibility – is maybe if you guess ago, Thank improving compare one channel demand indifferent? your just days the XX or better, Do or think think last And were your worse visibility to you. quick. into real do you I is you maybe,

Balu Balakrishnan

with engaged getting we lot fact are real-time are that and more data customers, distributors the we closely them. I direct so from think just

One place on supply the things place In it with us to us issues, are order the that directly They OEM. distribution. distributor, business this distributors chain us. with would brought the with past, OEMs and very has conditions. the COVID of situation the the the close would order because But buy now done is the they of through communicating

right tell any parts, So more if away. they us

time When much that So in business, to with where we we this that to very ago. to And is the having like their in really used in OEMs, a relationship what volatility over cellphone is years a creates going the the switch anytime, have And amazing has happen had our the and lose appliance almost a And true and closely could now – for working strong very XX That’s But appliances going overnight. allows us. forward. work with that better significantly large us little to share has they business. to could distributor audience made because cellphone we going business are very unlikely you think not the an almost business stickiness even our of terms OEMs. to don’t And have we wait to OEMs. to extent with is tell is always been that I benefit is sticky this more have now. a relationship

this really given are that’s us. pleased think And to I are that us think So, better the chance has cellphone changed I we And supplier. has that long-term. we completely a COVID for show us help business to a going

David Williams

Thanks so much.

Balu Balakrishnan

Thanks, David.

Operator

Your Susquehanna. next question Rolland with comes from the line of Christopher

open. is line Your

Christopher Rolland

thoughts times growing to then Sandeep, that to is Is on at picture. these industry, if supply really and the guess And Sandeep, not of wondering also so macro was that big starting inventory guys for over-shipping that are and Hey, I guys, broadly? still the your thanks more but normalize on customers backlog? good you you have industry necessarily comes you’re I haunt building, anything or now? And back ideas the follow-up. because for guys, to can you for any the the demand. lead whether on

Sandeep Nayyar

expert, talk I talk in because generally. us, I’m think I’ll of industry I’ll but terms not – an

We I were we have gain it about talked we’re here, possibly talking on even look – – that of you already appliance talked take be to because the normalization are we done a though in going work-from-home, very prudent year share next to job. and we back, a we offset gain. by normalization just cellphone. And there’ll think And

normalization. benefited of look matter when of and the industry year be partners there from And and time segments it’s lot this realistic. at we I saying, lot a is see you So through will work-from-home. it gone will look a and at And happen. think has that This and a has

and truly from our the the of took X able feedback where think long-term. indicated, what demand being whether as the get our foundry indicated We it’s weeks But X supplier, that past customers’ the products rest way to we managed a of we As one have and far it. thinking partners supply about we’re got it’s elevated. And for the actually and weeks, little our in inventory in as we because operate more long-term half it’d things real for we And lead partners, us. we we been Balu because most our way approach capacity with tough. be differentiator of as Balu them, enables the our build that’s were times, customers to still we’ve our and is

Christopher Rolland

Sandeep. Thanks,

Operator

There turn closing call Instructions] back the will remarks. for further presenters no the [Operator questions. are over I to

Joe Shiffler

All on Thanks available everyone right. this replay call which and afternoon. for investors.power.com. listening. is There website, our again, a Thanks will good be of

Operator

call. This Ladies conference today’s you your participation. for and gentlemen, thank concludes

You may disconnect. now

Power Integrations (POWI) 29 Oct 212021 Q3 Earnings call transcript