Good afternoon. Thank you for attending today's Alpha and Omega Semiconductor fiscal Q1 2024 earnings call. My name is Cole, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Yujia Zhai. Please go ahead. Good afternoon, everyone, and welcome to Alpha and Omega Semiconductor's conference call to discuss fiscal 2024 first quarter financial results. I am Yujia Zhai, Investor Relations representative for AOS. With me today are Stephen Chang, our CEO, and Yifan Liang, our CFO. This call is being recorded and broadcast live over the web. A replay will be available for seven days following the call via the link in the investor relations section of our website. Our call will proceed as follows today: Stephen will begin with business updates, including strategic highlights and a detailed segment report. After that, Yifan will review the financial results and provide guidance for the December quarter. Finally, we'll have the Q&A session. The earnings release that was distributed over the wire today, November 6th 2023, after the market closed. The release is also posted on the company's website. Our earnings release and this presentation include non-GAAP financial measures. We use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors in conjunction with the GAAP measures. The reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the earnings release. We remind you that during this conference call, we will make certain forward-looking statements, including discussions of the business outlook and financial projections. These forward-looking statements are based on management's current expectations and involve risks and uncertainties that could cause our actual results to differ materially. For a more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with SEC. We assume no obligations to update the information provided in today's call. With that, I will now turn the call over to our CEO, Stephen Chang. Stephen? Thank you, Yujia, and good afternoon, everyone. I will begin today with a high-level overview of our results and then jump into segment details. We delivered fiscal Q1 results in line with our guidance. Revenue was $180.6 million, non-GAAP gross margin was 28.8%, and non-GAAP EPS was $0.33. These results were driven by strong shipments across notebooks, desktop computing, and smartphones for fall device launches and the Q4 holiday season. I am pleased that our team delivered solid execution amid macroeconomic headwinds and inventory corrections in some end markets. We have been managing our business through various cycles and coping with an ever-changing business environment, but our principle remains unchanged. AOS is committed to building towards long-term growth. We are steadily extending the reach of our business into the future and new applications and broadening our product portfolio to address increasing global power trends. As an example, we are leveraging our core technology IP and strength in advanced computing, battery, motor, and power supply, and continue to invest in new adjacent markets like data centers for AI, automotive, and energy generation. In addition, we are taking products deeper into our existing core markets with more integrated solutions that will drive higher BOM content. By investing in new adjacent markets, as well as going deeper into our core markets, we believe we will be well- positioned to emerge stronger than ever on the other side of this cycle. The rebound in PCs and smartphones is encouraging following multiple quarters of inventory correction. However, we remain cautious about a sustained, broader recovery as we are seeing signs of demand constraints in other end markets, which are feeling the effects of the persistent high interest rate environment and geopolitical uncertainties. Moreover, gaming, which has been a significant revenue driver for us, is now going through an inventory correction, as we indicated last quarter. While we cannot be immune to the macroeconomic headwinds, it is important to reiterate that our core fundamentals remain strong. Many of our strategic investments over the past years have better positioned us for sustainable growth. We are excited to have a record number of Tier One customer partnerships and growing market share in strategic applications across many of our end markets. We continue to expect to navigate the current environment better than the broader market that we serve. With that, let me now cover our segment results and provide some guidance by segment for the next quarter. Starting with computing, September quarter revenue was down 21.2% year-over-year, but up 35.1% sequentially and represented 38.9% of total revenue. These results were driven by solid recovery in shipments across notebook, tablet, and desktop computing applications. The recovery has been driven by high-end driver ICs and MOSFETs for powering CPUs. Looking forward into the December quarter, we expect this segment to be down low single- digits following a strong September quarter. Turning to the consumer segment, September quarter revenue was down 31.3% year-over-year and down 28.9% sequentially and represented 17.2% of total revenue. As we indicated last quarter, gaming is going through an inventory correction after an extremely strong 12 months of shipments into the number one console manufacturer. Similar to what we saw in PCs and smartphones earlier this year. Given the speed of the current correction, we believe demand will revert back to a new normal in a couple of quarters, factoring in that the console is now in its mid-life part of the platform cycle. However, we do see opportunities to increase BOM content within the current console platform as part of its refresh next year. Longer- term, our relationship with this customer is very strong, and we are already engaged in discussions for their next model design. For the December quarter, we anticipate a further mid-20% decline in this segment. Next, let's discuss the communication segment. Revenue in the September quarter was down 1.3% year-over-year, but up 80.2% sequentially, and represented 17.2% of total revenue. These results were driven by strong shipments to the number one U.S. smartphone manufacturer for their fall phone launch and continued strong demand from Chinese smartphone OEMs for their high-end devices. Looking ahead, we anticipate this segment to remain at current healthy levels, driven by continued strong shipments to Chinese OEMs ahead of their winter and spring launches. Now, let's talk about our last segment, power supply and industrial, which accounted for 23.1% of total revenue. September quarter revenue was slightly below our prior expectations, increasing 2.1% year-over-year and 0.5% sequentially. These results were driven by strong shipments for quick chargers for peak season to our tier one U.S. smartphone customer, but offset by weakness in power tools. For the December quarter, we expect this segment to decline in the low teens sequentially, mainly due to reduced quick chargers following the peak season and lower solar demand. In closing, we delivered a solid fiscal Q1. We are closely monitoring market dynamics and macro headwinds. However, our fundamentals are strong, and we are focused on positioning the company towards growth beyond our $1 billion revenue target on the other side of the cycle, driven by our leading technology, more diversified product portfolio, tier one customer base in all our business segments, and expanding manufacturing capability and supply chain. With that, I will now turn the call over to Yifan for a discussion of our fiscal first quarter financial results and our outlook for the next quarter. Thank you, Stephen. Good afternoon, everyone, and thank you for joining us. Revenue for the quarter was $180.6 million, up 11.8% sequentially and down 13.4% year-over-year. In terms of product mix, DMOS revenue was $121.5 million, up 27% sequentially and down 16% over last year. Power IC revenue was $52.7 million, down 10.5% from the prior quarter and 15.4% from a year ago. Assembly service revenue was $0.7 million, as compared to $0.6 million last quarter and $1.6 million for the same quarter last year. License and engineering service revenue was $5.6 million for the quarter, versus $6.3 million in the prior quarter. Non-GAAP gross margin was 28.8%, compared to 28.5% in the prior quarter and 35.4% a year ago. The quarter-over-quarter increase in non-GAAP gross margin was mainly driven by the mix improvement. Non-GAAP operating expenses were $40.8 million, compared to $39.1 million for the prior quarter and $36.6 million last year. The quarter-over-quarter increase was primarily due to higher R&D engineering expenses and professional service fees. Non-GAAP quarterly EPS was $0.33, compared to $0.19 last quarter and $1.20 a year ago. Moving on to cash flow. Operating cash flow was $13.8 million, including $8.6 million of repayment of customer deposits. By comparison, operating cash flows was -$28.2 million in the prior quarter and $36.7 million a year ago. EBITDA for the quarter was $23.3 million, compared to $17.7 million last quarter and $45.5 million for the same quarter last year. Now, let me turn to our balance sheet. We completed September quarter with a cash balance of $193.6 million, compared to $195.2 million at the end of last quarter. Net trade receivables were $34.4 million, compared to $22.4 million at the end of the prior quarter. Days sales outstanding were 18 days for the quarter, versus 19 days for the prior quarter. Net inventory was $187.8 million at quarter end, compared to $183.2 million at the end of the prior quarter. Average days in inventory were 129 days, compared to 140 days in the prior quarter. CapEx for the quarter was $12.5 million, compared to $19.2 million for the prior quarter. We expect CapEx for the December quarter to range from $10 million-$15 million. Now, I would like to discuss the December quarter guidance. ... We expect revenue to be approximately $165 million, $±10 million. GAAP gross margin to be 27.1%, ±1%. We anticipate the non-GAAP gross margin to be 28.5%, ±1%. GAAP operating expenses to be in the range of $48 million, $±1 million. Non-GAAP operating expenses are expected to be in the range of $40.3 million, $±1 million. Interest expense to be approximately $1.1 million, and income tax expense to be in the range of $0.8 million-$1.2 million. With that, we will open the call for questions. Operator, please start the Q&A session. Thank you. We will now begin the Q&A session. If you'd like to ask a question, please press star, followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press star, followed by two. Again, to queue for a question, please press star one. We'll pause here briefly as questions are registered. Our first question is from Jeremy Kwan with Stifel. Your line is now open. Yes, good afternoon, and thank you. Maybe a first question on, you know, the gaming market that you, you talked about, you know, maybe potentially hitting a new normalized run rate. Can you just help us understand, you know, how big is gaming, as a percentage in, of the consumer revenue? You know, what it was at the peak, and maybe where you expect that to kind of settle out. And finally, where you might see this new normalized run rate, you know, where could it go, I guess, you know, as we approach the mid to end of this gaming cycle? Sure. Jeremy, yes, gaming is an important segment for us, and, you know, we're excited about the segment in general because there's quite a bit of content going into these systems, and pretty much like a, you know, specialized PC. So all the solutions we have going into PC also goes into gaming. On the console that we sell into, generally has a lifetime of up to about seven years, and right now we're in about year four of that on a seven-year life cycle. And it's about the time, if you look at the previous consoles, that, you know, the annual shipments start to drop some, and, that correction, you know, it was taking place now. Just like, you know, we saw a correction in some of the other markets that we're in, even gaming has to go through that correction. But right now, it's in the middle of that correction. So when we say that, it's gonna revert back, you know, we believe that it's gonna, you know, it'll be above the current rate, but and below the peak from a few quarters ago. So it's, I would say somewhere in between is probably about right. And, you know, we continue to work closely with this particular console maker and, you know, with opportunities also to design in more content. But overall, I think at the peak, to answer your question, it was up to maybe about, you know, almost half of our total consumer segment. Right now, maybe it's somewhere around 30% or something in that range, 20%-30% of the consumer business. But that's just during the correction. We do expect it to bounce back up again. Our next question is from David Williams with Benchmark. Your line is now open. Hey, good afternoon. Thanks for taking the question, and congrats on navigating this challenging environment. Thanks, David. Yeah, so a couple of quick things. You talked a little bit about the data center and AI opportunity there in your script, and I know this is an area you've been working on for some time, but just, you've talked about having good controllers and a power stage to address this market. Just wondering if there's anything new there that you can share, or just generally, how you're seeing your opportunity in that market? It's how we're seeing it. You know, we're getting some business today. The type of applications, in terms of the, you know, the circuit topologies that AI addresses, is very similar to that being used in graphics cards, and actually any kind of point of load, such as, you know, for the CPU, but especially for graphics cards, because you're basically powering a, you know, a highly parallel processor. And we have, you know, good solutions from the controller to the power stage that can address high computing applications, including artificial intelligence type of hardware. So for us, you know, we do have some small business now. You know, we do see the potential for a lot more going forward. You know, for us, we're also working on transitioning from addressing client side to moving over to the data center AI side. So that and all those efforts are in process. Great, thanks for that. That helped. Then, maybe just on the PC side, on the client side, can you talk a little about the content increases between Raptor Lake and Meteor Lake, and if you should begin to see those benefits pull in during the December period, as we get ready for that next release, slated for the end of the year? Generally, yes, we're starting to see. As Intel is rolling out their platforms, we are seeing more opportunity for sure, for more dollar content. And as you mentioned before, you know, we are in the process of deploying our new controller solutions into the marketplace, and that it will take some time for our customer base to adopt those, but, you know, when once adopted, yes, we believe the dollar content, you know, what used to be $2-$3 is climbing up to $3-$4, and even on some certain platforms, going above $5 a content. And PCs themselves, you know, we are pleased to see the bump up in the September quarter. There will be seasonality at play, you know, as the ecosystem goes through another, you know, just seasonal pattern. But in general, you know, we are excited about the additional BOM content that comes with these new platforms. Great. And then the last one here for Yifan. If you could help me just a little bit on the gross margin side. And during the peak part of the cycle, margins had a nice lift from the optimization efforts that you had there. And is mix still the biggest driver of the margin? If we're kind of looking back at last quarter, it seems like the discretes were lower than the Power IC, and were really the largest percentage of revenues we've seen in some time. But we saw a slight improvement this quarter, and I guess we've had a kind of reversion where your Power IC business is lower, but your discretes came up. I'm just trying to understand and maybe square how the power discrete business compares to the power ICs in terms of margin, and how we're getting that lift, kind of, given the balance sequentially. Thank you. Sure. Yean, in general, the Power IC products carrying at a higher margin for us. But, given that, and it doesn't mean then, you know, we don't have higher margins in the products in the discrete segment. So, you know, in the September quarter, yeah, the product mix improved slightly, and then, I mean, few basis points up. And then, even though the Power IC revenue got hurt by the gaming drop, so but on the other hand, we shipped more to Vcore, you know, in those areas, and so generally, which provided some higher margins for us. So, I mean, overall, then, I mean, yeah, then, I mean, mix is a big portion of our gross margin improvement. Okay, great. Great. Was utilization better this quarter? Was that a tailwind? It's in the similar range as last quarter, 'cause for our internal productions and, you know, generally, you know, then our Oregon fab, and is at a pretty good utilization level. Our back-end is a little bit lower. So, you know, on the mix, overall, then, I mean, then utilization is at roughly the same as last quarter. Thank you. Our next question is from Craig Ellis with B. Riley Securities. Your line is now open. Yeah, thanks for taking the question, guys. Stephen, I wanted to go back to a comment in the prepared remarks regarding demand. It sounds like you retain a pretty cautious stance overall, and I understand it's a really challenging macro, but what I was hoping you could do is talk a little bit about the environment that you see as you look into the first quarter calendar, fiscal third quarter. You know, qualitatively, where are things looking more encouraging, where more challenging? And can you talk about where you're more confident that inventories are now back to normal levels versus being in excess outside of maybe gaming, which is going through a pretty visible correction? Sure. You know, seasonality, I think, in terms of, you know, affecting the segments, you know, more, impacts the PCs and smartphones a little more. The PC market, as we mentioned, you know, this September quarter was a strong quarter, and we saw a resumption of orders for products, including ICs and other, you know, higher performance sockets that we didn't see in the first half of the year. And so that's, you know, kind of, clear signs that the inventory correction is starting to die down. You know, I can't say that we're out of the woods yet, but it's great and very encouraging to see the fresh orders for some of our good products. Going into the, you know, looking two quarters out, as you're suggesting, into the March quarter, yes, you know, we do expect to see some seasonality at play. Typically, that March quarter is, you know, the lowest season for PCs in any kind of year. And, you know, so we do believe that there will be some correction, but nothing, nothing like the big correction that we saw at the beginning of this calendar year. So, you know, we, you know, we believe that, you know, PCs will take a little longer overall to get back to a fuller recovery, but we're already in a much better state than what it was just, you know, a quarter or especially two quarters ago. So going forward, you know, we, you know, PCs will go through seasonality, but, you know, we believe it's heading back towards a little more of a normal seasonal pattern. It sounds like you're starting to see some encouraging signs of life in the Android smartphone market within communications, and obviously, great to see your lead customer from the U.S. performing well. But can you talk about the potential for next year to see better growth if you get more of a recovery out of the Android market, and when will we see that and how big could it be? Sure. Now, the great thing about our smartphone business is that, you know, we are in multiple, and all the big end customers here in the U.S., in Korea, and in most of the China customer base as well, too. And right now, you know, it's launch season on the U.S. side. On the Korea side, they're preparing for a launch for February. And even in China, you know, there's still been quite a bit of decent demand for the high-end phones, which we are participating in. So, I think it's good to see the diversification at play. Overall, smartphones is still, you know, system shipments are still in the recovery mode, but overall, on, on, you know, and we, you know, we do play fairly well in all these high-end phones. So that helps to give us some, some, I guess, momentum, or at least going into the March quarter. You know, again, it's just like PCs, there will be some seasonality at play, but at the same time, you know, right now we do see a strong demand, or decent demand, I would say, coming from the China base. That's helpful, Stephen. Thank you. For my last question before hopping back in the queue, I'll just direct it to Yifan. Yifan, oftentimes in the first quarter, we see either Lunar New Year or I think annual maintenance impacts to fab utilization and therefore, gross margin. As we look ahead to calendar 1Q, would those historic dynamics be in play, or for some reason, would things potentially play out differently early next year? Thank you. Sure, Craig. I would expect, yeah, and then, I mean, the March quarter is a typical Lunar New Year season, and then, and also, we also arrange some maintenance around it. So then I would expect utilization will be a little bit lower than the September quarter, even lower than the December quarter. That's helpful. Then maybe I could sneak in one more that relates to gross margin. TI seemed to indicate that, that pricing was normalizing, so picking up a little bit, but not getting aggressive. How would you characterize the pricing environment, that's out there right now, guys? Yeah, this calendar year, I would say, yeah, the pricing environment returned to historical normal trends, I would say, after last couple of years, a favorable environment. Yeah, I would characterize as a traditional, yeah, then, pricing environment. Thank you, Yifan. Thanks, Stephen. All right. Thank you. Thank you. We have a follow-up question from Jeremy Kwan with Stifel. Your line is now open. Yes, thank you. And maybe a quick follow-up to that pricing question. Just wondering, a couple of things. First, I guess, you know, a couple of quarters ago, I think maybe even a year ago now, you mentioned increased local competition from Chinese suppliers on your low to mid-end of your portfolio. I was wondering if you could give us an update on that and kind of how that's, you know, has that how much of that has impacted pricing? And secondly, you know, how often do you and your customers renegotiate pricing? Is this something that is set at the beginning of the year, or is it kind of an ongoing basis? Any insight you can offer would be helpful. Thanks. Sure. Pricing is always ongoing, and it's always up to, you know, where we are in the balance of supply versus demand in the overall global economy. So certain customers will, you know, will negotiate every quarter. Certain ones, we can negotiate once for the whole year. But it really just depends on how the overall, you know, industry is faring. In terms of competition, you know, it's really good to see, again, the resumption of some of the high-performance sockets, and that kind of gives us a lot more room in terms of leverage in the face of competition. There's basically less competition for high-performance products. So that helps to kind of normalize the situation. You know, I would say competition, local competition, is fierce. So when we engage with them, we also have to be aggressive as well, and which we are, but, you know, they're not also, they're not everywhere. You know, we will, you know, adjust our pricing based on where we need to be to be competitive. Great. And maybe if we could just look at China again, you know, with the JV there. Can you tell us, you know, what insight you may have in terms of your, I guess, your how much capacity you have at the JV available to you? Maybe talk about some of your, the pricing trends that you're seeing from them. Any insight you can offer would be very helpful. And Sure ... and lastly, also funding requirements. Okay, sure. Yeah, CQ JV, you know, they have already ramped up their production, you know, a couple of years ago. So then right now, they are in the process of raising additional funds to further expand their capacity. And, you know, on the EBITDA level, they already achieved breakeven. So, even though in the September quarter, we recorded our portion of their June quarter's loss, but on the cash side, and right now, they are self-funded. In terms of capacity, yeah, we still have the same capacity than as before, so nothing changed there. Got it. And I guess if we could just look at your CapEx, I know you guided for $10 million-$15 million for the December quarter. Can you? I think this is, you know, most of your, you know, enhanced capacity CapEx funding that, that you talked about about a year ago. Can you just give us a quick update where we are in that process? You know, how much more do you, you still have left? And maybe even, you know, what guidance you can offer for fiscal 2025. Okay, sure. I mean, CapEx-wise, I mean, right now, I would characterize as you know, we were in the normal CapEx spending period. And then, I mean, normally, we would target 6%-8% of our revenue. And the Oregon fabs expansion had completed, so right now, there's not a whole lot of CapEx payment remaining. So right now, we don't have a major project for any factory expansions at this point. Great. And just one last question: The licensing revenue, it's nice to see that come in, you know, pretty steadily here. How much of... Can you give us, like, you know, how much is baked into the guidance for the December quarter? And also, if you could help walk us through, you know, the impact on gross margin. You know, is there engineering costs associated with the license revenue and how, you know, that just kind of flows through the financial team? That would be great. Okay, sure. This is revenue recognition for the licensing and engineering service, is more depends on the actual engineering hours and our teams spend versus expected the total hours for this 24-month period. So that it's fluctuating from quarter to quarter, so it's hard to say. Well, right now, for the December quarter guidance, you know, we estimated a similar level of licensing and engineering revenue. And the impact to gross margin? Oh, sure. Yeah, the margin for the licensing and engineering service, yeah, it is definitely at a higher margin than our product margins. We don't break down, you know, by specific in the product line or product elements here. Got it. Thank you. We have a follow-up question from David Williams with Benchmark. Your line is now open. Hey, thanks, for letting me get back in here. Just, curious on the appliance side. Stephen, I know you've talked about that being an area of opportunity for you and, but it's largely greenfield today. Just kind of curious what you're seeing in the appliance market. Has that improved or worse, or anything, in particular there you should, you'd be optimistic about? Right now, it's still a bit slow because it's tied to the overall housing and real estate market globally, and that's slowed down quite a bit in the past, you know, year or so. So overall, you know, we're not expecting too much in the shorter- term. Overall, in the longer- term, this is still a core part of our business. Again, the key thing here is we're selling our IGBTs, as well as our modules based on those IGBTs, and we can do it, you know, we have a solution that is smaller than the competition. But you know, it does have to contend with the overall macro, at least for that subsegment. So in the shorter- term, yeah, I don't see too much, too exciting in the shorter- term. But in the longer- term, you know, this is a $2 billion-plus market, and we're just scratching the surface. Okay. All right, great. And then just the last one for me here is just the cadence of orders through the quarter. Was there any change, maybe between the beginning and the end of the quarter or of the order? Backlog, I think this quarter, has been steady, and then, I mean, some fresh orders came in and, you know, after a period of time of, inventory correction. And, I mean, by and large, and, you know, order positions, has been reflected in our, December quarter guidance. Okay, great. Thanks again for the time. Thank you. Thanks. We have an additional follow-up from Jeremy Kwan with Stifel. Your line is now open. Thank you. Just one last follow-up. On the operating cash flow, it included the customer deposit repayment. So if we exclude this, would it be, you know, $22.4 million operating cash flow for the quarter? Correct. Correct. Got it. Um- How much remaining is in your customer deposits at this point? We still have about $75 million-ish in customer deposits at this point. Yeah, then we would expect the next calendar year will probably return around $30 million also. Great. Thank you. All right. Thank you. There are no additional questions waiting at this time, so I'll pass the conference back to the management team for any closing remarks. This concludes our earnings call today. Thank you for your interest in AOS, and we look forward to talking to you again next quarter. Thank you. Thank you. That concludes today's conference call. Thank you for your participation. You may now disconnect your line.