Financial Data and Key Metrics Changes - Total revenue for Q2 2026 was $162.3 million, down 6.3% year-over-year and down 11.1% sequentially [4][18] - Non-GAAP gross margin was 22.2%, compared to 24.1% last quarter and 24.2% a year ago [18] - Non-GAAP EPS was a loss of $0.16 per share, compared to a profit of $0.13 last quarter and $0.09 a year ago [20] - Operating cash flow was negative $8.1 million, down from positive $10.2 million in the prior quarter [20][21] Business Line Data and Key Metrics Changes - Computing segment revenue was $80.5 million, representing 49.6% of total revenue, down 17.1% sequentially but up 5.9% year-over-year [10][12] - Consumer segment revenue was down 14.9% year-over-year and down 18.3% sequentially, accounting for 11.8% of total revenue [13][14] - Communication segment revenue was flat year-over-year and increased 1.1% sequentially, representing 20.4% of total revenue [15] - Power supply and industrial segment revenue was down 22.5% year-over-year and down 3% sequentially, accounting for 16.7% of total revenue [16] Market Data and Key Metrics Changes - Demand for PCs is expected to be constrained due to memory shortages, but data center investments are providing an offset [11][57] - The smartphone market is seeing uneven demand from China, while the U.S. market remains strong [15] - The company is experiencing growth in high-performance, medium-voltage solutions for AI data centers [10][9] Company Strategy and Development Direction - The company is transitioning from a component supplier to a provider of application-specific total solutions, focusing on higher performance markets [6][7] - Increased R&D investments are being made in areas with strong customer engagement and clear differentiation [7][40] - The company is monetizing a portion of its equity interests in a joint venture to support strategic investments [8] Management's Comments on Operating Environment and Future Outlook - Management expects the March quarter to be a near-term low point for revenue and margin, with growth returning in the June quarter [17] - The company anticipates modest growth in 2026, with stronger growth expected in 2027 and beyond as new platforms ramp up [17][57] - Management is confident in the ability to penetrate further into the PC and smartphone markets despite memory supply challenges [57] Other Important Information - The company repurchased approximately $13.9 million of shares during the December quarter [5] - CapEx for the quarter was $15 million, with expectations for the March quarter to range from $15 million to $18 million [21] Q&A Session Questions and Answers Question: AI opportunities and GPU track - The AI opportunity is expanding beyond initial expectations, with the company addressing medium-voltage MOSFETs for power conversions [25] Question: Operating expenses normalization - Operating expenses are expected to increase by about $4 million in the March quarter, primarily due to R&D investments [27] Question: Capacity and gross margin - The company is investing in CapEx to prepare for growth in 2026, which may help improve gross margins [30] Question: Gross margin guidance - March quarter guidance reflects lower utilization due to seasonal factors, with expectations for margins to rebound in the June quarter [36] Question: R&D investment specifics - Increased R&D will focus on areas with competitive leverage, including AI applications and smartphone battery protection [40] Question: Revenue return on investment - AI-related revenue could potentially increase to 50% of the computing segment, depending on market penetration [52]