Financial Data and Key Metrics Changes - Revenue for the December quarter was $117.9 million, flat compared to the prior quarter and up 2.6% year-over-year [7] - Non-GAAP gross margin for the December quarter was 28.3%, unchanged from the prior quarter but down from 29.2% year-over-year [8] - Non-GAAP EPS attributable to AOS for the quarter was $0.23, compared to $0.26 for the prior quarter and $0.30 for the same quarter last year [9] - Cash and cash equivalents at the end of the December quarter were $107.2 million, up from $103.1 million at the end of the prior quarter [10] Business Line Data and Key Metrics Changes - MOSFET revenue was $101.5 million, up 0.9% sequentially and up 8.8% year-over-year [7] - Power IC revenue was $14.7 million, down 6.8% from the prior quarter and down 24.4% year-over-year [7] - Computing segment represented 41.3% of total revenue, with a 5.4% sequential increase but a 12.8% year-over-year decrease [21] - Consumer segment represented 18% of total revenue, with a 1.3% sequential decrease but a 13.8% year-over-year increase [22] - Power Supply and Industrial segment accounted for 21.3% of total revenue, down 7.6% sequentially but up 13.5% year-over-year [23] - Communications segment was 17.9% of revenue, down 1.1% sequentially but up 32.5% year-over-year [24] Market Data and Key Metrics Changes - The company anticipates a mid single-digit sequential decrease in the Computing segment due to CPU shortages and the impact of the coronavirus [21] - The Consumer segment is expected to see a moderate seasonal decline in the March quarter [22] - The Power Supply and Industrial segment is expected to experience a double-digit revenue decline in the March quarter due to seasonal low points [23] - The Communications segment is expected to see modest growth in the March quarter driven by recovery in 5G telecom [24] Company Strategy and Development Direction - The company is focused on creating demand with differentiated products across key market segments and accelerating penetration into multiple global brand customers [16] - The company aims to ramp up the Phase 1 of the 12-inch fab to approach the target run rate by the September quarter, subject to market conditions [12][19] - The company is committed to diversifying its customer base and applications to mitigate risks associated with specific customers [33] Management's Comments on Operating Environment and Future Outlook - Management expressed concern over the impact of the coronavirus outbreak on production and supply chains, emphasizing employee safety as a priority [14][15] - The company expects weaker than normal seasonality in the March quarter due to the ongoing challenges [14] - Management remains confident in the long-term growth strategy, despite short-term headwinds [67] Other Important Information - The company is cooperating with federal authorities regarding an investigation into export control practices with Huawei, which is expected to reduce revenue by approximately $4 million to $5 million in the March quarter [26][28] - The company expects to incur $1 million to $2 million in professional fees related to the ongoing investigation [27] Q&A Session Summary Question: Impact of Huawei on Revenue - Management confirmed that the impact of the Huawei situation is a short-term headwind, with an estimated revenue impact of $4 million to $5 million for the March quarter [32][33] Question: OpEx Trends - Management indicated that the OpEx guidance for the March quarter is flattish compared to the December quarter, maintaining investment in strategic initiatives [37][38] Question: Demand and Supply Dynamics - Management noted that while there are production delays due to the coronavirus, demand remains healthy, and they are confident in their ability to meet customer needs [62][63] Question: Joint Venture and Future Revenue - Management reiterated the goal to ramp up the 12-inch fab to meet the target run rate by the September quarter, with a focus on supporting growth in PC and smartphone applications [46][47] Question: Inventory Dynamics - Management stated that channel inventory is at the low end of the target range, and they are closely monitoring the impact of the coronavirus on supply chains [54][56]

Product Development - The company introduced 55 new products during the three months ended September 30, 2019, contributing to a total portfolio of approximately 2,100 products[100]. - The company continues to invest in research and development to develop new technologies and products critical to long-term success[118]. Financial Performance - Total revenue for the three months ended September 30, 2019, was $117.8 million, an increase of $2.7 million, or 2.4%, compared to $115.1 million for the same quarter last year[128]. - Cost of goods sold was $90.9 million for the three months ended September 30, 2019, an increase of $8.4 million, or 10.2%, compared to $82.5 million for the same quarter last year[129]. - Gross profit decreased to $26.9 million, representing a gross margin of 22.9%, down from 28.3% in the same quarter last year[129]. - Research and development expenses were $12.4 million, an increase of $1.0 million, or 8.6%, compared to $11.4 million for the same quarter last year[130]. - Selling, general and administrative expenses decreased to $15.2 million, a reduction of $5.2 million, or 25.4%, compared to $20.4 million for the same quarter last year[132]. - Interest income and other income (loss), net was $(998,000), a decrease of $1.3 million, or 480.9%, compared to $262,000 for the same period last year[133]. - Income tax expense for the three months ended September 30, 2019, was approximately $410,000, compared to $560,000 for the same period in 2018, a decrease of 26.8%[135]. - The effective tax rate for the three months ended September 30, 2019, was estimated at (27.3)%, compared to (159.8)% for the same period in 2018[135]. Operating Expenses - The company is incurring increased operating expenses due to costs associated with ramping up production activities and developing its new digital power business[106]. - The company expects selling, general and administrative expenses to fluctuate in the near future due to cost control measures and reduced pre-production costs[119]. Joint Ventures and Market Position - The company recorded a net loss of $2.9 million attributable to noncontrolling interest in the joint venture company during the September 2019 quarter[102]. - The company anticipates that the joint venture will deliver significant cost savings and enhance market positions in China in the long term[102]. Production and Manufacturing - The company expects to ramp up production at the 12-inch wafer fabrication facility gradually, which commenced limited mass production in July 2019[102]. - The company expects average selling prices of existing products to decline in the future, consistent with historical trends in the industry[109]. Cash Flow and Financing - The net cash used in operating activities for the three months ended September 30, 2019 was $1.2 million, resulting from a net loss of $1.9 million[153]. - The net cash used in investing activities for the three months ended September 30, 2019 was $15.8 million, primarily for purchases of property and equipment[155]. - The net cash used in financing activities for the three months ended September 30, 2019 was $1.1 million, primarily due to repayments of borrowings[157]. - As of September 30, 2019, the company had $105.4 million in cash, cash equivalents, and restricted cash[151]. - The company continues to finance operations and capital expenditures primarily through funds generated from operations and borrowing under various debt agreements[136]. Debt and Obligations - As of September 30, 2019, the outstanding balance of the short-term loan from China Everbright Bank was $0.8 million[137]. - The outstanding balance of the one-year loan from China Everbright Bank was 20 million RMB, equivalent to $2.8 million as of September 30, 2019[138]. - The total outstanding balance of loans from China Merchant Bank was 80 million RMB and 20 million RMB, totaling approximately $14 million as of September 30, 2019[139]. - The outstanding balance of the lease financing agreement was approximately $51.1 million as of September 30, 2019[142]. - The outstanding balance of the loan from The Export-Import Bank of China was 190 million RMB, equivalent to $26.7 million as of September 30, 2019[144]. - The outstanding balance of the term loan from Jireh was $16.6 million as of September 30, 2019[145]. Market Risks and Changes - There have been no material changes in market risks previously disclosed in the Annual Report for the year ended June 30, 2019[164]. - There were no material changes in contractual obligations from those disclosed in the Annual Report for the fiscal year ended June 30, 2019[161]. - Recent accounting pronouncements and their expected effects on operations and financial condition are detailed in the Quarterly Report[162].

Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL) Q1 2020 Results Conference Call November 4, 2019 5:00 PM ET Company Participants So-Yeon Jeong - IR Mike Chang - CEO Yifan Liang - CFO Stephen Chang - EVP Conference Call Participants David Williams - Loop Capital Craig Ellis - B. Riley Jeremy Kwan - Stifel Operator Ladies and gentlemen, thank you for standing by, and welcome to Alpha and Omega Semiconductor Fiscal Q1 2020 Earnings Conference Call. [Operator Instructions] Please be advised that today's confere ...

Growth and Strategy - AOS is an emerging total solution provider in a market exceeding $40 billion[5] - The company projects a revenue CAGR of 13-15% from CY2018 to CY2024[15] - Major growth drivers are expected to contribute for multiple years[28] - The Chongqing JV 12-inch Phase 1 is targeted to reach its run rate by Q1FY2021, supporting approximately $150 million in additional revenue[43, 59] Financial Performance - Q1FY2020 saw a record revenue quarter, marking the 15th consecutive quarter of year-over-year revenue growth, driven by the mobile business[42] - The company targets revenue of $600 million to $1 billion, with a gross margin exceeding 30% and operating expenses around 20%[65] - Non-GAAP gross profit for the quarter ended September 30, 2019, was $33359 million, with a gross margin of 28.3%[68] - Non-GAAP net income attributable to AOS for the quarter ended September 30, 2019, was $6476 million, representing a net margin of 5.5%[68] Balance Sheet - As of September 2019, the company's consolidated cash position was $103.1 million, and total debt was $136.4 million[61] - Inventory was valued at $118.6 million, and fixed assets totaled $400.3 million[61]

Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) AOS designs and supplies a broad portfolio of power semiconductors for high-volume applications globally - AOS is a global supplier of power semiconductors with a portfolio of approximately 2,100 products, targeting high-volume applications like PCs, TVs, LED lighting, and smartphones[6](index=6&type=chunk) - The company holds a significant intellectual property portfolio, with **781 U.S. patents and 816 foreign patents** as of June 30, 2019[6](index=6&type=chunk) - AOS is expanding its manufacturing capabilities through a joint venture in Chongqing, China, which includes a 12-inch wafer fabrication facility that commenced limited mass production in July 2019[9](index=9&type=chunk)[10](index=10&type=chunk) Revenue Concentration from Major Distributors (FY2017-2019) | Distributor | FY2019 Revenue % | FY2018 Revenue % | FY2017 Revenue % | | :--- | :--- | :--- | :--- | | WPG Holdings Limited | 36.4% | 35.2% | 35.8% | | Promate Electronic Co. Ltd. | 28.8% | 28.3% | 26.9% | Research and Development Expenditures (FY2017-2019) | Fiscal Year | R&D Expense (USD millions) | | :--- | :--- | | 2019 | $46.4 | | 2018 | $37.3 | | 2017 | $29.8 | [Item 1A. Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from its Chongqing JV, US-China trade tariffs, PC market cyclicality, and competition - The joint venture with the Chongqing government faces risks such as **high initial costs negatively impacting short-term results**, potential under-utilization of the new facility, and difficulties in integrating operations[79](index=79&type=chunk)[81](index=81&type=chunk) - A significant portion of revenue is derived from the PC market (**45.9% in FY2019**), making the company vulnerable to its continued decline[87](index=87&type=chunk) - Proposed U.S. tariffs on goods from China could reduce demand for the company's products or lead to pricing adjustments that **lower gross margins**[84](index=84&type=chunk) - The company faces intense competition from larger, more established competitors with greater financial and technical resources, such as Infineon, ON Semiconductor, and Texas Instruments[45](index=45&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - Reliance on two major distributors, WPG and Promate, accounted for **65.2% of revenue in FY2019**, posing a concentration risk[132](index=132&type=chunk) [Item 1B. Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[226](index=226&type=chunk) [Item 2. Properties](index=36&type=section&id=Item%202.%20Properties) The company operates key owned and leased facilities in the US and Asia for R&D, manufacturing, and sales - The company's main U.S. office is a **57,000 sq. ft. facility** in Sunnyvale, CA, used for R&D, marketing, sales, and administration[227](index=227&type=chunk) - AOS owns a **245,000 sq. ft. wafer fabrication facility** in Hillsboro, Oregon[227](index=227&type=chunk) - The company operates two significant packaging and testing facilities in Shanghai, China, with a combined floor space of **over 455,000 sq. ft.**[227](index=227&type=chunk) - The new joint venture facility in Chongqing, China, is a large-scale property for wafer fabrication and assembly/testing, with a land size of approximately **2.46 million sq. ft.**[227](index=227&type=chunk) [Item 3. Legal Proceedings](index=39&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - As of the report date, the company is not a party to any material legal proceedings[230](index=230&type=chunk) [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[231](index=231&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=40&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on NASDAQ; it retains earnings and has an active share repurchase program - The company's common shares are traded on the NASDAQ Global Select Market under the symbol **AOSL**[233](index=233&type=chunk) - No cash dividends have ever been declared or paid, and the company intends to **retain future earnings** for business operations[234](index=234&type=chunk) - During fiscal year 2019, the company repurchased 111,509 shares for approximately **$1.5 million** at an average price of $13.43 per share[239](index=239&type=chunk) - As of June 30, 2019, **$13.4 million** was still available for future repurchases under the approved program[239](index=239&type=chunk) [Item 6. Selected Financial Data](index=42&type=section&id=Item%206.%20Selected%20Financial%20Data) The company presents five-year financial data showing revenue growth but a decline in net income for FY2019 Selected Consolidated Statements of Operations Data (in thousands, except per share data) | Fiscal Year Ended June 30, | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $450,920 | $421,553 | $383,337 | $335,661 | $327,935 | | **Gross Profit** | $115,378 | $111,928 | $91,821 | $65,822 | $60,482 | | **Operating Income (Loss)** | $(7,020) | $8,420 | $13,144 | $1,510 | $(4,218) | | **Net Income (Loss) attributable to AOS** | $1,861 | $14,263 | $13,829 | $(2,928) | $(7,763) | | **Diluted EPS** | $0.08 | $0.57 | $0.56 | $(0.13) | $(0.29) | Selected Consolidated Balance Sheet Data (in thousands) | As of June 30, | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Cash and cash equivalents** | $121,893 | $131,535 | $115,708 | $87,774 | $106,085 | | **Working capital** | $117,334 | $130,532 | $130,566 | $118,450 | $147,351 | | **Total assets** | $739,394 | $667,049 | $398,408 | $318,505 | $347,904 | | **Total AOS shareholders' equity** | $291,024 | $278,594 | $270,770 | $242,142 | $276,639 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=44&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue grew in FY2019, but gross margin and operating income declined due to JV ramp-up costs [Results of Operations](index=48&type=section&id=Results%20of%20Operations) FY2019 revenue grew 7.0%, but higher operating expenses led to an operating loss of $7.0 million Revenue by Product Type (FY2019 vs FY2018) | Product Type | FY2019 Revenue (M) | FY2018 Revenue (M) | Change (%) | | :--- | :--- | :--- | :--- | | Power discrete | $371.8 | $342.1 | +8.7% | | Power IC | $70.2 | $67.1 | +4.7% | | Packaging and testing services | $8.9 | $12.3 | -28.0% | | **Total** | **$450.9** | **$421.6** | **+7.0%** | - Gross margin decreased from **26.6% in FY2018 to 25.6% in FY2019**, primarily due to production ramp-up costs related to the Chongqing joint venture[285](index=285&type=chunk) - Research and development expenses **increased by 24.3% to $46.4 million** in FY2019, mainly due to increased headcount to ramp up the digital power business and higher product prototyping expenses[287](index=287&type=chunk)[288](index=288&type=chunk) - Selling, general and administrative expenses **increased by 14.8% to $76.0 million** in FY2019, largely due to costs for the new 12-inch fab facility in the JV Company and increased headcount[290](index=290&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains adequate liquidity despite significant capital expenditures for its JV Company Cash Flow Summary (in thousands) | Fiscal Year Ended June 30, | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $31,421 | $3,480 | $42,648 | | **Net cash used in investing activities** | $(112,435) | $(194,127) | $(55,585) | | **Net cash provided by financing activities** | $75,099 | $206,953 | $40,809 | - Cash and cash equivalents decreased to **$121.9 million** at the end of FY2019 from $131.5 million at the end of FY2018[315](index=315&type=chunk) - Capital expenditures for property and equipment in FY2019 totaled **$112.1 million**, with a significant portion ($76.0 million) allocated to the JV Company in Chongqing[321](index=321&type=chunk) - As of June 30, 2019, net assets of China subsidiaries restricted from transfer amounted to approximately **$209.5 million**, or 64.4% of total consolidated net assets[313](index=313&type=chunk) [Critical Accounting Policies and Estimates](index=58&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting policies involve revenue recognition, inventory reserves, and income tax valuation - The company adopted ASC 606 on July 1, 2018, which **changed the timing of revenue recognition** for two U.S.-based distributors from point-of-sale by the distributor to point-of-shipment to the distributor[333](index=333&type=chunk)[335](index=335&type=chunk) - Inventory reserves are established based on periodic reviews of inventory levels against sales forecasts, historical usage, and aging, which involves **significant estimation**[337](index=337&type=chunk) - The company maintains a **valuation allowance against certain deferred tax assets**, particularly for state R&D credits and net operating losses of the JV Company, if it is more likely than not they will not be realized[341](index=341&type=chunk)[563](index=563&type=chunk) - Share-based compensation expense is calculated using models like Black-Scholes and Monte Carlo, which require **subjective assumptions** about stock price volatility and expected term[345](index=345&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to foreign currency, interest rate, and commodity price risks - The company's primary market risks are foreign currency exchange rates (especially USD vs. RMB), interest rate fluctuations on its debt, and commodity price changes (e.g., gold)[350](index=350&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk) - A hypothetical **10% increase in interest rates** could result in an additional **$0.6 million** in annual interest expense[351](index=351&type=chunk) - A hypothetical **10% change in the cost of raw materials** like gold would impact net earnings by approximately **$0.4 million**[352](index=352&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=62&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements and supplementary data for FY2019 - This section includes the full audited consolidated financial statements and supplementary data, including reports from independent registered public accounting firms BDO USA, LLP and Grant Thornton LLP[354](index=354&type=chunk)[365](index=365&type=chunk)[388](index=388&type=chunk) Selected Quarterly Data for Fiscal Year 2019 (in thousands, except per share data) | Quarter Ended | Sep 30, 2018 | Dec 31, 2018 | Mar 31, 2019 | Jun 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $115,072 | $114,925 | $109,067 | $111,856 | | **Gross Profit** | $32,611 | $29,502 | $25,629 | $27,636 | | **Net Income (Loss) attributable to AOS** | $2,416 | $(1,545) | $(1,555) | $2,545 | | **Diluted EPS** | $0.10 | $(0.06) | $(0.06) | $0.10 | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=62&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants - None reported[357](index=357&type=chunk) [Item 9A. Controls and Procedures](index=62&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective - Management concluded that **disclosure controls and procedures were effective** as of June 30, 2019[358](index=358&type=chunk) - Management's assessment concluded that **internal control over financial reporting was effective** as of June 30, 2019, based on the COSO framework[360](index=360&type=chunk) - The independent auditor, BDO USA, LLP, provided an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting[361](index=361&type=chunk)[365](index=365&type=chunk) [Item 9B. Other Information](index=65&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[371](index=371&type=chunk) Part III [Items 10-14](index=66&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Details on governance and compensation are incorporated by reference from the 2019 Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is **incorporated by reference** from the forthcoming 2019 Proxy Statement[371](index=371&type=chunk)[372](index=372&type=chunk)[373](index=373&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=67&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the annual report - This part includes the consolidated financial statements, financial statement schedules, and a list of exhibits filed with the Form 10-K[378](index=378&type=chunk)[379](index=379&type=chunk) - Key exhibits include the company's bye-laws, equity incentive plans, material contracts with foundries and distributors, and certifications from the CEO and CFO[609](index=609&type=chunk)[610](index=610&type=chunk)[611](index=611&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q4 2019 was $111.9 million, up 2.6% sequentially and up 1.8% year-over-year [7] - Non-GAAP gross margin for Q4 was 27.4%, compared to 27.0% in the prior quarter and the same quarter last year [9] - Non-GAAP EPS for Q4 was $0.35, compared to $0.22 in the prior quarter and $0.31 year-over-year [12] - For the fiscal year 2019, revenue was $450.9 million, up 7% year-over-year [8] Business Line Data and Key Metrics Changes - MOSFET revenue was $96.4 million, up 7.1% sequentially and up 7.8% year-over-year, while Power IC revenue was $13.8 million, down 21.8% sequentially and down 21.4% year-over-year [7] - Computing segment represented 44.0% of total revenue, down 5.1% sequentially but up 2.3% year-over-year [22] - Consumer segment accounted for 18.7% of total revenue, increasing 1.3% sequentially but flat year-over-year [24] - Power Supply and Industrial segment represented 20.5% of total revenue, up 8.1% sequentially and up 3.7% year-over-year [25] - Communications segment accounted for 15.3% of revenue, up 25.4% sequentially and up 10.4% year-over-year [26] Market Data and Key Metrics Changes - The company noted a robust design-in pipeline and strong design wins, particularly in mobile and home appliance applications [19] - The demand for battery protection products in the Communications segment is rising, driven by increasing smartphone battery capacities [26] Company Strategy and Development Direction - The company aims to achieve a target of $600 million in annual revenue by calendar 2021, with a focus on diversifying its product portfolio and customer base [19][20] - The production ramp of the Chongqing Joint Venture is expected to align with the company's growth strategy, with small mass production starting in July 2019 [17][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market challenges, including trade tensions and economic uncertainty [19] - The company anticipates continued growth in the Consumer segment, particularly in home appliances, and expects a modest growth in the overall Consumer segment [24] Other Important Information - The company generated $15.2 million in operating cash flow for Q4, compared to $9.5 million in the prior quarter [13] - Cash and cash equivalents at the end of Q4 were $121.9 million, down from $139.1 million in the prior quarter [15] Q&A Session Summary Question: Can you provide more color on the $600 million target? - Management clarified that the target run rate of $600 million is expected to be approached by the June 2020 quarter, focusing on capacity readiness and technology [30][33] Question: What is the status of channel inventory health? - Management indicated that channel inventory is healthy, within the target of 2 to 3 months, and adjustments are being made to manage production according to customer demand [41] Question: How is the demand environment in China? - Management noted that demand is dynamic, with some pull-ins and push-outs due to trade tensions, but overall, the situation is being managed diligently [42][43] Question: What is the expected revenue contribution from digital power initiatives next year? - The expected revenue contribution from digital power initiatives is projected to be between $5 million to $10 million [46] Question: How will gross margins track towards the 30% target? - Management expects gross margins to gradually increase to the 28% to 29% range as new products are introduced, with a target of 30% margin when reaching $600 million in revenue [55][57]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________ FORM 10-Q _________________________________ (MARK ONE) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number 001-34717 __________________________ Alpha and Omega Semiconduct ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________ FORM 10-Q _________________________________ (MARK ONE) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2018 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number 001-34717 __________________________ Alpha and Omega Semicond ...