Financial Data and Key Metrics Changes - Second quarter revenue reached $442 million, exceeding the high end of guidance, representing a 21% year-over-year growth and a 9% sequential increase [19][20] - Earnings per share (EPS) was $1.50, up 76% from the previous year, marking the highest level since 2022 [19] - Gross margin improved to 38.1%, up 20 basis points sequentially, despite increased tariff expenses [22][19] Business Line Data and Key Metrics Changes - Semiconductor revenue was $210 million, up 11% year-over-year but down 6% sequentially [20] - Data center computing revenue surged to $142 million, up 47% quarter-over-quarter and 94% year-over-year [21] - Industrial and medical revenue increased 7% sequentially to $69 million but was down 13% year-over-year [21] Market Data and Key Metrics Changes - The semiconductor market showed double-digit year-over-year growth, although it faced sequential declines due to customer delivery schedule shifts [10][20] - Data center computing market demand is expected to remain strong, with revenue growth projected to exceed 80% for 2025 [16][29] - Industrial and medical markets are showing signs of recovery, with total backlog growing for the first time since early 2023 [13][21] Company Strategy and Development Direction - The company is focused on a diversification strategy across three distinct target markets to mitigate cycle risk and enhance profitability [7][8] - Investments in technology and capacity are being made to support long-term growth, particularly in data center and semiconductor markets [8][18] - The closure of the last factory in China is expected to improve gross margins, targeting 40% by the end of 2025 [10][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining data center revenue growth into 2026, driven by high investment rates from hyperscalers [36] - The company anticipates overall revenue growth of approximately 17% for 2025, with specific growth expectations for data center and semiconductor markets [16][28] - Management highlighted the importance of mitigating tariff impacts through various strategies, including optimizing supply chains [10][27] Other Important Information - The company repurchased $23 million of its common stock during the quarter, reflecting a strong cash position with total cash and equivalents at $714 million [24][25] - Free cash flow grew 21% sequentially, indicating robust cash generation capabilities [25] Q&A Session Summary Question: Sustainability of data center demand - Management believes data center revenues are sustainable into 2026 due to continued high investment from hyperscalers [36] Question: Content per server for AI data centers - AI data centers have significantly higher power consumption, leading to increased revenue potential, although not on a linear basis [42][44] Question: Changes in semiconductor growth projections - The semiconductor growth projection was adjusted to mid-single digits for 2025 due to tariff impacts and market conditions [48][50] Question: Impact of new design wins in industrial and medical - New design wins are expected to contribute to revenue growth in the second half of the year, alongside market recovery [70] Question: Inventory levels and customer behavior - There is no significant overstocking observed in data center customers, with a cautious approach to inventory management in industrial and medical sectors [75]

Financial Data and Key Metrics Changes - Second quarter revenue reached $442 million, exceeding guidance and reflecting a 21% year-over-year growth, marking the third consecutive quarter of growth [5][18][19] - Earnings per share (EPS) was $1.50, up 76% from the previous year, the highest level since 2022 [18][19] - Gross margin improved slightly to 38.1%, with operating margin increasing by 110 basis points sequentially [18][21] Business Line Data and Key Metrics Changes - Semiconductor revenue was $210 million, up 11% year-over-year but down 6% sequentially due to customer delivery schedule shifts [19][20] - Data center computing revenue surged to $142 million, up 47% quarter-over-quarter and nearly doubled year-over-year [20][11] - Industrial and medical revenue was $69 million, a 7% sequential increase but down 13% year-over-year [20][12] Market Data and Key Metrics Changes - The semiconductor market showed solid year-over-year growth despite a sequential decline, influenced by tariff impacts and customer inventory management [19][51] - Data center demand is expected to remain strong, with projections for over 80% growth in 2025 [15][28] - Industrial and medical markets are showing signs of recovery, with increased backlog and improved customer inventory levels [12][20] Company Strategy and Development Direction - The company is focused on a diversification strategy across three distinct markets to mitigate cycle risks and enhance profitability [6][15] - Investments in technology and capacity are being made to support long-term growth, particularly in data center and semiconductor markets [7][16] - The closure of the last China factory is expected to contribute to gross margin improvements, targeting 40% by the end of 2025 [9][28] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining data center revenue growth into 2026, driven by high investment from hyperscalers [36] - The company anticipates modest sequential growth in industrial and medical markets, with a stronger order book driving higher revenue in the second half of the year [15][72] - Tariff impacts are being actively managed through various mitigation strategies, with expectations for continued operational improvements [25][26] Other Important Information - Total cash and cash equivalents at the end of Q2 were $714 million, with net cash of $147 million [22][24] - The company repurchased $23 million of common stock during the quarter [22][24] - Free cash flow grew 21% sequentially, indicating strong cash generation capabilities [24] Q&A Session Summary Question: Sustainability of data center demand - Management believes data center revenues are sustainable into 2026 due to continued high investment from hyperscalers [36] Question: Content per server for AI data centers - AI data centers have significantly higher power consumption, leading to increased revenue potential, though not on a linear basis [42][45] Question: Changes in semiconductor growth projections - The semiconductor growth projection was adjusted to mid-single digits for 2025 due to tariff impacts and market conditions [49][51] Question: Impact of tariffs on gross margin - Tariff costs are expected to remain at current levels, with mitigation strategies in place to offset impacts [53][55] Question: Design wins in industrial and medical - Recent design wins are expected to contribute to revenue growth in the second half, alongside market recovery [71][72]