AOS(US:AOSL)2020-02-06 01:48Financial 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]