Good afternoon, and welcome to Diodes Incorporated Q1 2022 financial results conference call. At this time, all participants are in listen-only mode. At the conclusion of today's conference call, instructions will be given for the question-and-answer session. If anyone needs assistance at any time during the conference call, please press the star key followed by the zero on your touchtone telephone. As a reminder, this conference call is being recorded today, Wednesday, May 4, 2022. I would now like to turn the call over to Leanne Sievers of the Shelton Group, investor relations. Leanne, please go ahead. Good afternoon, and welcome to Diodes' Q1 2022 financial results conference call. I'm Leanne Sievers, President of Shelton Group, Diodes' investor relations firm. Joining us today are Diodes' Chairman, President, and CEO, Dr. Keh-Shew Lu, Chief Financial Officer, Brett Whitmire, Senior Vice President of Worldwide Sales and Marketing, Emily Yang, Senior Vice President of Business Groups, Gary Yu, and Director of Investor Relations, Gurmeet Dhaliwal. Before I turn the call over to Dr. Lu, I'd like to remind our listeners that the results announced today are preliminary as they are subject to the company finalizing its closing procedures and customary quarterly review by the company's independent registered public accounting firm. As such, these results are unaudited and subject to revision until the company files its Form 10-Q for its 2022 fiscal quarter ending March 31, 2022. In addition, management's prepared remarks contain forward-looking statements which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore, we refer you to a more detailed discussion of the risks and uncertainties in the company's filings with the Securities and Exchange Commission, including Forms 10-K and 10-Q. In addition, any projections as to the company's future performance represent management's estimates as of today, May 4, 2022. Diodes assumes no obligation to update these projections in the future as market conditions may or may not change, except to the extent required by applicable law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. Including the company's press release are definitions and reconciliations of GAAP to non-GAAP items which provide additional details. Also, throughout the company's press release and management statements during this conference call, we refer to net income attributable to common stockholders as GAAP net income. For those of you unable to listen to the entire call at this time, a recording will be available via webcast for 90 days in the investor relations section of Diodes' website at www.diodes.com. Now, I'll turn the call over to Diodes Chairman, President, and CEO, Dr. Keh-Shew Lu. Dr. Lu, please go ahead. Thank you, Leanne. Welcome, everyone, and thank you for joining us today. The Q1 represented a continuation of outstanding execution by the Diodes team, especially considering the quarter is a typically low season and the recent COVID-related lockdown in China, most notably in the Shanghai area. We once again set new record across key financial metrics, including the sixth consecutive quarter of record revenue and the gross profit, record gross margin that exceeded 40% for the first time in the company's history, and the fifth consecutive quarter of record non-GAAP earnings per share. Before continuing, let me first take this moment to extend our best wishes to those affected by the lockdowns in China, in particular our employees and their families. We have been providing relief assistance for impacted employees, including sleeping and shower arrangements at our local facilities. In addition to providing four meals a day, we consider all our employees' family members, and it is important to the company to play a part in helping them get through those difficult times. Turning back to our results, our strong revenue and margin performance in the quarter continued to be driven by record achievement in the automotive end market, which reached 13% of revenue. The industrial market as well as for our power control products. Gross margin expanded 720 basis points year-over-year due to a greater mix of higher margin products, along with expanded factory utilization and loading. Another key factor to our ongoing success has been our content expansion initiatives and our total solution sales approach, resulting in expanded customer relationships and design-in momentum. When we combine it with our diligent expense management. We delivered an almost 90% increase in adjusted earnings per share over the previous year period. During the quarter, we were also pleased to announce the proposed acquisition of the onsemi South Portland, Maine wafer fabrication facility and the operation, which provided additional 200-millimeter wafer fab capacity for analog products to accelerate our growth initiatives in automotive and industrial end markets. We expect this transaction to close late in the Q2. The U.S.-based facility, together with our existing facilities in Asia and Europe, will further enhance our global manufacturing footprint and greatly increase our internal capacity to support our future growth. Looking forward, backlog and the demand for our products remain at high levels across all target end markets and geographies. We are guiding for our ninth consecutive quarter of growth and our seventh consecutive quarter of record revenue in the Q2, and also anticipating another solid year of strong growth and profitability for Diodes. With that, let me now turn the call over to Brett to discuss our Q1 financial results and our Q2 2022 guidance in more detail. Thanks, Dr. Lu, and good afternoon, everyone. As a part of my financial review today, I will focus my comments on the sequential change for each of the line items and would refer you to our press release for a more detailed review of our results, as well as the year-over-year comparisons. Revenue for the Q1 2022 was a record $482.1 million, an increase of 0.4% from $480.2 million in the Q4 2021. Gross profit for the Q1 was also a record at $196.7 million, representing a record 40.8% of revenue, increasing 3.1% or 110 basis points from $190.7 million or 39.7% of revenue in the Q4 2021. GAAP operating expenses for the Q1 2022 were $103.6 million or 21.5% of revenue, and on a non-GAAP basis were $99.5 million or 20.6% of revenue, which excludes $3.9 million of amortization of acquisition-related intangible asset expenses and $0.3 million of acquisition-related costs. This compares to non-GAAP operating expenses in the prior quarter of $100.1 million or 20.8% of revenue. Total other income amounted to approximately -$2.2 million for the quarter, consisting of $5.5 million of unrealized loss on investments, $1.1 million in interest expense, $1.9 million of other income, $1.7 million in foreign currency gains, and $800,000 of interest income. Income before taxes and non-controlling interest in the Q1 2022 was $90.8 million compared to $108.8 million in the previous quarter, due primarily to a couple of non-GAAP items that included the gain on the sale of a manufacturing subsidiary last quarter and unrealized loss on investments in the Q1. Turning to income taxes, our effective income tax rate for the Q1 was approximately 18.3%. GAAP net income for the Q1 2022 was $72.7 million or $1.59 per diluted share, compared to GAAP net income of $65.5 million or $1.43 per diluted share in the Q4 of 2021. Net income per diluted share in the Q1 increased 82.8% year-over-year from the $0.87 per diluted share in the Q1 of 2021. Share count used to compute GAAP diluted EPS in the Q1 2022 was 45.9 million shares. Non-GAAP adjusted net income in the Q1 was a record $80.3 million or $1.75 per diluted share, which excluded net of tax, $4.2 million non-cash mark-to-market adjustment of investments, $3.2 million of acquisition-related intangible asset costs, and $0.2 million of acquisition-related costs. This represents a 9.4% improvement from last quarter of $1.60 per diluted share or $73.3 million, and an 88.2% improvement from $0.93 per diluted share or $42 million in the Q1 of 2021. Excluding share-based compensation expense of $6.4 million for the Q1, both GAAP earnings per share and non-GAAP adjusted EPS would have increased by $0.14 per diluted share for the Q1. EBITDA for the Q1 was $118.2 million, or 24.5% of revenue, compared to $139 million or 28.9% of revenue in the prior quarter. On a year-over-year basis, EBITDA increased 44.8% from $81.7 million in the Q1 of 2021, highlighting our continued improvements over the past year. We have included in our earnings release a reconciliation of GAAP net income to non-GAAP adjusted net income, and GAAP net income to EBITDA, which provides additional details. Cash flow generated from operations was $72.3 million for the Q1 of 2022. Free cash flow was $33.8 million for the Q1, which included $38.5 million for capital expenditures. Net cash flow was a negative $60.8 million, which included the paydown of approximately $67.6 million of long-term debt, CapEx, and a deposit on the proposed acquisition of the onsemi wafer facility. Turning to the balance sheet. At the end of the Q1, cash equivalents, restricted cash, plus short-term investments totaled approximately $315 million. Working capital was $689 million, and total debt, including long-term and short-term, was $232 million. In terms of inventory, at the end of Q1, total inventory days were approximately 113, as compared to 107 last quarter. Finished goods inventory days were 34 compared to 32 last quarter. Total inventory dollars increased $21.4 million to approximately $370 million. Total inventory in the quarter consisted of a $24.3 million increase in raw materials, a $1.9 million decrease in work in process, and a $1 million decrease in finished goods. Capital expenditures on a cash basis for the Q1 2022 were $38.5 million or 8% of revenue, which is within our target model of 5%-9%. Now turning to our outlook. Backlog and demand remained very strong going into the Q2, but due to the COVID-related lockdowns in China, especially in the Shanghai area, capacity was impacted at our local facilities during the first month of the quarter until now. With our excellent execution and recent improvements, we are guiding for sequential growth and expect revenue to be approximately $500 million ±3%, and GAAP gross margin to be 41.0% ±1%. Non-GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets, are expected to be approximately 21.0% of revenue ±1%. We expect net interest expense to be approximately $1.2 million. Our income tax rate is expected to be 18.3% ±3%. Shares used to calculate diluted EPS for the Q2 are anticipated to be approximately 46.3 million shares. Please note amortization of $3.2 million after tax for previous acquisitions is not included in these non-GAAP estimates. With that said, I now turn the call over to Emily Yang. Thank you, Brett and good afternoon. Q1 revenue increased slightly quarter-over-quarter, which is better than typical seasonality and above the midpoint of our guidance, primarily driven by strong demand across all regions. We could have achieved even a higher level of performance if we had not been impacted by the China lockdown and COVID-related transportation challenges that limited the product delivered to the customers. Looking more closely at Q1 revenue, we achieved record worldwide POS revenue due to the strength in Europe and in America, both of which had record revenue. Asia also continued to have very strong demand, but POS was impacted slightly due to the China lockdown and the associated product delivery challenges late in the quarter. As a result, distributor inventory in terms of weeks increased slightly quarter-over-quarter due to our distributors not being able to ship product to our end customers, but yet remained at the low end of our defined range of 11-14 weeks. Overall, demand and backlog remained very strong across all regions and end markets. Looking at the global sales in the Q1, Asia represented 76% of revenue, Europe 13%, and North America 11%. In terms of our end markets, computing represented 27% of revenue, industrial 26%, consumer 18%, communication 16%, and automotive 13% of revenue. We achieved the record revenues in automotive, industrial, and communication markets. Our Pericom product also set a new revenue record, which is 7 consecutive quarters. I would also like to point out that our automotive industrial end markets combined total 39% of revenue, which is one step closer to our 2025 target of auto and industrial representing 40% of the total revenue. Now let me review end markets in greater detail. Beginning with automotive market, revenue increased 26% year-over-year and 9% sequentially to set a new record for the 7th consecutive quarter. This is particularly noteworthy, considering the extremely supply-constrained environment. Our ongoing success in this market can be attributed to our content expansion initiative over the past several years. Additionally, our design win momentum has also been a key contributor to our growth, in particular with our three focus application areas. That includes connected driving, comfort, safety and style, powertrain. I will share some highlights in each of these application areas. In the connected driving, which consists of ADAS, telematics, and infotainment system, we continue to expand our content demand with new design wins for oscillators, crystals, clock ICs, video switches, USB Type-C redrivers, LDOs, power switches, TVS, and DC-DC converters. Additionally, USB charging controllers, TVS, MOSFET, and bipolar product continue to see higher demand for in-vehicle USB Type-C charging ports and wireless charging applications. For the comfort, style, and safety, we continue to gain traction for LED drivers, SBR, and DC-DC converters for applications including headlights, daylight running lights, rear lights, exterior lighting, and side-view mirror detection in major automotive manufacturers. Also, during the quarter, our newly introduced high-side IntelliFET continued to gain strong interest for LED lighting, seat heating, window power lift, and infotainment subsystems. Diodes also continues to offer competitive HGBT MOSFET to support automotive brushless DC electric motor applications like power steering, fuel, oil, ABS pump, power seats, and mirrors. In powertrain, which covers conventional hybrid and electric vehicles, the increasing prevalence of 48-volt battery system is driving additional demand for our 80-volt and 100-volt MOSFET. We're seeing design wins for USB 2.0 switches and SBR products inside the central control unit and the EV inverters, along with rectifier and TVS in electric motors, lithium battery management system, and EV chargers. Now turning to industrial market. Revenue grew 38% year-over-year and 9% sequentially to set a new record for the fourth consecutive quarter. We saw a large number of design-ins for motor controls, home automation, industrial IoT applications, in particular for our high voltage non-isolated AC-DC converter family. We also continue to see broad design-in traction for industrial and commercial building lighting, power supply applications, as well as power tool, DC fan, brushless DC motor, window electronics, and industrial HVAC systems. Additionally, green factory automation and power distribution system drove rectifier and TVS sales higher in applications including sensor, control panels, power distribution, and charging system. Our Contact Image Sensor product line continued to see momentum from several applications such as check scanner, ID card scanner, document scanner, and few automated optical inspection or AOI. In the computing market, revenue increased 5% year-over-year, but declined 6% sequentially, primarily due to typical seasonality in the quarter and slower demand on the low-end PC market. We continue to gain strong traction in this market, especially for our Pericom product. We secure numerous design wins for signal switching and analog mux in server data center, workstation, AIO PC, and monitor, along with DisplayPort mux in the graphics cards. We also saw strong demand for SSD mux driven by enterprise high-capacity SSD modules and SSD controllers. We are also gaining momentum in the data center and high-performance computing applications with our PCI Express 5.0 clock generators and buffers, switches, and redrivers. Also, we expanded our wins in mobile stations, gaming, and laptop, notebook, desktop applications with our USB Type-C downstream facing port power switches, hub sensors, buck converters, as well as HDMI redrivers. Also, during the quarter, we continued to see increasing interest for combo switches and redrivers in the docking station, dongles, active cables, and TVM applications. Rectifier, TVS, and switching diodes product also posted higher revenue sales in DC fans and compact power supply applications for both notebook and desktop PCs. In the communication market, revenue grew 10% year-over-year and was up slightly from the prior quarter to set a new revenue record. PCI Express buffers are getting traction in 5G CPE applications. We also saw new design wins for our high PSRR LDOs in smartphone applications with solid revenue growth. We also saw strong design win momentum in optical modules, which has been the leading driver for our crystal oscillator business. Bipolar products also achieved new design wins in a variety of applications, including headsets, routers, IP phones, and IP cameras. Power TVS product sales increased in educational support product and safety critical communication system for hospitals, schools, and universities. Lastly, in the consumer market, revenue increased 11% year-over-year, was down 6% sequentially, primarily due to typical seasonality combined with slower consumer demand in China region. During the quarter, our linear LED driver won numerous designs as one of the largest consumer vendor for phone, smart home and IoT devices. We are also seeing adoption of HDMI 6 gigabit per second and 12 gigabit per second redrivers in major PC chipset reference design for IoT applications. Our DC to DC buck converter family continues to see strong demand from the consumer and home appliance market. While our stereo headphone drivers and pixel sound drivers receive increasing demand for smart speakers and Bluetooth tracker system applications. We also saw revenue growth from applications like smoke detectors, sensors, electronic home applications for our rectifier and TVS products. In summary, with another quarter of record results and high level of demand and backlog, Diodes is starting out a new year very well-positioned for continuous strong growth throughout the year. With the future addition of onsemi wafer fabrication facility and operations, we have the increased available capacity to meet this growing demand, which is proving to be a strong competitive differentiation for Diodes in this supply-constrained environment. With that, we now open the floor to questions. Operator. Certainly. Ladies and gentlemen, if you have a question at this time, please press Star then one on your touch-tone telephone. If your question has been answered and you'd like to remove yourself from the queue, please press the pound key. Our first question comes from the line of Matthew Ramsay from Cowen. Your question, please. Thank you very much. Good afternoon, everyone. Congratulations to the team on the results, especially given the operational challenges in China right now. I guess that's my first question for the team, Dr. Lu. Can you guys try to give us some sort of quantification of the impact that you've seen to your results both in the Q1 and the Q2 guidance, just given all of the COVID lockdowns in China and the operational situation over there. If there's any way to quantify that. I mean, it's pretty remarkable that you're able to have a beat-and-raise quarter given all that's going on over there, and I'd just like to understand that impact a bit better. Thank you. Okay. I probably cannot give you an exact number, okay? You know, Shanghai is one of our major operation, but it's not the only operation. You know, we have about some of our through the contract manufacturers to do packaging for us. We have Chengdu, another major site. Then we have other for Pericom products, crystal and oscillator factories for assembly. Then we have KFAB A&T. You know, Shanghai lockdown is not a major. It's a major A&T operation for us. Okay. Number two, for 4Q or 1Q, actually, virtually only started to lockdown about last week or the end of quarter. Therefore, the impact to us is not a major. That's why we are able to exceed our guidance and you know perform you know a record revenue, record profits. The impact's not there. Now, the Q2, we already go through April, the first month of the quarter, so we know how much impact for you know for us. That's why we are guiding instead of you know seasonality, typically at this time, 5%, we're guiding you know 3.7%, okay. The key thing is, for the future, we still not have clear picture yet. Even today, the Shanghai area still even at the reduced zone, is still about you know now 15 million people out of the 26 million people in Shanghai area. You can see it's not 100%. It's probably slightly better than, you know, 50%. Yes. Or sixty-seven, you know, sixty, sixty-five percent. Right. Okay, reduced. We have a very excellent execution team over there. When this lockdown announcement come out we immediately take in we so-called closed loop operation, and we are able to, you know, continue using the people we was locked down in the factory and aggressively go to production, produce the stuff. Then, you know, we watch out the piece part availability and try to, you know, get the government give us a special permission to be able to get some of the wafer, some of the piece part to come to the factory for continued operation. You know, I don't think we're going to have a major problem from our operation point of view. I think we are very good, outstanding, you know, execution team over there. Right. Now, we are more concerned will be our customer, you know. We don't know what's going to happen in their operations, okay? This is more concern from us, but from our own operation, our demand is still very strong, our backlog still very strong, okay? Therefore, we believe we can make our guidance. Yeah. You know, as you can imagine, right? The situation is extremely dynamic, so the team has been very creative as well as aggressive to minimize the impact. Right. I would like also put a more color on that is the, you know, the lockdown gonna be end someday in the future, okay? The key question is how can we come back very quickly? The employee over there is our priority, okay? We're taking care our employee, not only for employee himself, but also for their family. They appreciate the company's effort, and they work very hard to make our goal. This is the one thing I wanna put a note on that. Yeah. Thank all three of you for the color there. I understand it's a very fluid situation all the way around. My follow-up question, Emily, I think you touched on it at the very end of your prepared script, which is the ability to continue to add capacity. I know you guys are gonna be adding capacity at GFAB in Scotland over time, and now you've gotten the deal to acquire the fab from onsemi. Mm-hmm. that I guess that may support some of the products that they're walking away from in some parts of their business. So if there's any way we could get a quantification on magnitude and timing of the additional capacity you're gonna be able to bring online, sort of outside of Asia, that would be really, really helpful. Thank you. Okay. Well, let me separate into two. One is wafer fab, one is A&T. Because we both is very tight on the capacities, okay? If you look at from wafer fab perspective, I think either we can say we are lucky or we have a good planning. You know, if you look at the GFAB we purchased in year 2019, that facility, we supporting the Texas Instruments, and that support is come down 10% a year. The loading come down 10% a year. Therefore, we already start to qualify our product to ramp it up in that area. I mean, in that fab. You can see when Texas Instruments demand our commitment to Texas Instruments go down 10% each year, we can go up 10% to support our own demand, okay? Number there 10% and compare with our number there, then you know, the wafer is much more than you know, when we're talking about 10%, okay? That is GFAB. Obviously, you know, you already know our acquisition for the wafer from onsemi. Mm-hmm. Okay? That, we expect to close next month. End of. End of this month. That's what we expected, okay? Then we would start to move in our technology, and we may not be immediately available, but we think after one year, we should be able to again increase significantly of our wafer capacity, wafer fab capacities. This is our. Another one actually is SFAB 2, and we ramp it up, and we almost ramp up now. If you look at the continued output, then it will be much better than last year, because last year just start from very low to ramp it up. That's another one. The one in- ZK. In ZK fab, which we purchased from AOC, we continue increase their capacity because originally at the beginning of last year, we are only 50% loaded, then end of 4Q last year, we are go to the 90. At the same time, we continue adding the capacity. Overall, when I give you all this one, you can see we still have a potential continued growth for our own need. From A&T point of view, again, AOSMD A&T, you know, they are not fully loaded, and we're going to, you know, using that to loading it, and we start to offload some of the need, okay, go to this underloaded AOSMD capacities. At the same time, Shanghai A&T, our Shanghai fab and our Chengdu fab, we are continue adding capacity. Actually we're looking at the need and continue increase the capacity. Okay, so capacity is very tight, but I think we are able to continue increase and then supporting our strategic customers. At the same time, thereby this kind of support, we are able to develop a very strong relationship with our strategic customers. I think that's how we can, you know, we can continue grow for our own business. Did that answer your question? Our next question comes from the line of Tristan Gerra from Baird. Your question please. Hi, good afternoon. A quick follow-up question regarding your Fairchild South Portland, Maine fab. Could you remind us, is that four-inch, six-inch? Are you planning on making eight-inch upgrades? Also, are you into a foundry service commitment, or is the production going to go straight to your product? How long does it take to qualify your own product? If you could talk a little bit about the transition that you expect there. Okay. Hi, this is Gary. First, let me answer your question. The South Portland wafer fab actually is 8-inch equipment, okay? In the short term, we do have a plan to continue support on semi business, just like the case we did for the TI, go through our GFAB, okay? At the same time, we are qualifying our, you know, we're transfer our technology and the process from our internal wafer fab to the new wafer fab. Also we are qualifying our product, especially like analog, you know, those kind of advanced technology device into this wafer fab. To me, it probably take one and a half hour to get our product qualified and in production in that wafer fab. At the same time, okay, onsemi probably the servers, you know, dimensions are going down and then down. That's probably our plan. Well, we have the commitment to support onsemi, fully supported for one year. Our loading probably won't go down, but we will take that year and start to put in the process the technology to support our own product and give the customer notification. Mm-hmm. Start to ramp it. The timing is just right because we support them when they go down. Mm-hmm. We can start to go up ours. Right. This is like what we did with GFAB. You know, we committed to support TI and then come down 10%, so we ramp it up each year. We know how to do it. I think the GFAB acquisition come out to help us adapt, and I believe this fab in Maine should be help us similar way, like GFAB helping us. Yeah, definitely. Okay, great. How should we look at analog pricing trends? Obviously, there were a number of price increases last year industry-wide. Do you see those price increases slowing a bit later this year? How do you view that, you know, for your company relative to the whole industry? Yeah, I think, Tristan, overall, right, the market situation didn't change much from the last time we talked, right? The demand and backlog feel extremely strong, so there's still an imbalance between supply and demand overall, right? During this kind of market condition, usually you don't get much of the price pressure, but more on the supply pressure, right? We don't really expect the price pressure would come down. You know, what we talk about also, you know, with the price increase, Diodes always take a more strategic view. We want to work with the customers very closely, only pass down the cost to the customer. In return, we can expand our customer relationship. We can continue to grow our content within the brand, within the customer. We're seeing a lot of good traction and a lot of success, and that will continue to be the Diodes strategy moving forward. Great. Thank you very much. Thank you. Our next question comes from the line of William Stein from Truist Securities. Your question, please. Thanks for taking my questions. Congrats also on very good results and outlook considering all the disruptions that are going on. I wanna follow up on that topic. With regard to the COVID lockdowns, are you experiencing this effect on your business more as a matter of supply of materials and piece parts that's disrupting your ability to manufacture? Or is it just simply a disruption in capacity in the plant? Or is it more of a disruption in the ability to ship to customers or customers' ability to take the product in? I'm trying to figure out whether it's, you know, I guess, sort of more viewed as a buy issue or a demand issue. Well, I think the most affected is the people. None. Well, we are able to get the supply of building material because we look ahead, and we are able to, you know, negotiate a special permission with the government to get us the wafer shipment from our fab or building material, leadframe, molding compound from our supply. Today till today, I don't think we really get affected by the building material. Yeah. I think that should give the credit for our management team over there because they watch it very closely. They take a proactive action to get the building material way ahead of time to, you know, to prevent any shortage of manufacturing problem. The key thing is really the manpower. When you lock down, the people cannot come in, okay? The people, they work in there 40 days. Fortunately, we have two shift of the people. One shift working 12 hours, and then when they're off, they go to sleep in our cafeteria or office area. Meeting rooms. Okay? We build a shower room for them to take a shower. We provide them, each shift, we provide them two meals. They can. They working on 12 hours. After they come back, come down, they will rest 2 hours, and then after the shift, the other shift over, they go back. We don't have enough people, okay? Originally, you know, we only have about 50-60% of the people to come there to be there. When they start to loosen up, not all the area was released. You know, we start to look at who is in the release room, contact them, and then ask them to come back to work. Immediately when the zone was released from the COVID-19 lockdown, then we'll ask them to come back, and they will quickly come to work. In that way, we can continue to increase our manpower. Mm-hmm. Even today, we are not 100% have the people yet, but we are able to produce, you know. Mm. The majority of our need. Done. Yeah. Let me add additional. I would say both supply and demand, definitely there's some impact, right? From the supply side, just like Dr. Lu mentioned, the manpower, the labor definitely have impact on us. Definitely, there's a reduction, I would say output overall. On the other side, you look at the demand, I think I talked about it, the logistic challenges. Some of our customers also have reduced output capacity as well. That's actually the reason I talk about in Asia POS end of Q1. It was not a record, but still very, very good because overall as a company, we have a global record POS, that's also kind of impacted because the logistics on the inventory side, a little bit impact over there. I would say combination of both. What we've been doing is actually very aggressively and very creatively to finding different ways to overcome the challenges. Appreciate that. If I can have one follow-up. I would imagine factory utilization is extremely high right now, but I wonder if you can quantify that maybe across the network of factories that you have, if that's a sensible thing. Thank you. Well, I think, Will, one of the things that we're continuing to see is that, you know, as we mentioned across the fabs, we're running, you know, mid- to high 80%, which we call full. You know, some are higher than others. At the same time, in the A&Ts, our highest running A&Ts are in the mid-90s. As we address that, we're taking multiple prong efforts to increase capacity as Dr. Lu went through a little bit earlier. Well, one thing, you know, when we were talking about this, you know, one thing I do need to mention to you is I'm more concerned is our customer. Mm. You know, I just get the report, you know, first one was in Kunshan, which is close Guangdong, yeah, in Shanghai area, right? In Kunshan, they just announced they're going to shut down, lock down seven days from today. You know, that is more. I'm more concerned is- Yes. Well, our customer may not be able to. Right. Uh- It's very uncertain for us to manage our customer because if a government on our customer side announce a shutdown, and they have to shut down. In other words, they probably cannot use our product to build anything. I think we got flexibility to ship our, you know, backlog to different customer who is able to build. That's why we can reduce our risk, okay, to this kind of production. Mm-hmm. If I can squeeze one response question into that, does guidance contemplate the potential for these additional sort of ongoing shutdowns? Or if we see more news, such as what you just described, should we, you know, be more concerned about your guidance? Thank you. I would say we actually build in all the as of today what we know already into our guidance, right? If the lockdown situation in China get worse or the situation dramatically change overall, you know, but overall, we consider the strong backlog, we consider strong book-to-bill ratio and the strong results from Q1. That's actually the reason we still provide a really strong guidance for Q2 overall, right? Yeah. To be overall, what we assume is what we know. Mm-hmm. Till today. Right. We make assumption, you know, gradually. Shanghai area, like I said, at the beginning when they shut down, but at, like, beginning of this month, they start to release some- Right. from their total 16 counties, okay? They start from 1 county, 2 county- Mm-hmm. You know, and every two, three days, one more, two more. Till today, I just mentioned to you, it's about 15 million people out of 25 million. Mm. is in the release lock. Right. We tracking very closely every day. Right. The current assumption, our guidance is based on. What we know. What we see. Mm-hmm. -today. Right. And- The other thing, keep in mind that I also talk about it. Even China, maybe there's some slowdown, but we are extremely strong in Europe and North America. From the segment point of view, automotive, industrial continue to be very strong. All the capacity, a lot of devices can be actually used in multiple applications, multiple regions, and multiple customers. That's actually how we manage and, you know, diversify some of the risks that you talk about. I would say, you know, our guidance is definitely what we based on as of today to provide it to you. Thank you. Thank you. Once again, ladies and gentlemen, if you have a question at this time, please press star then one. Our next question comes from the line of David Williams from Benchmark. Your question, please. Hey, good afternoon. Thanks for taking the question, and congrats on the continued progress. I wanted to ask maybe first, Dr. Lu, if you've seen any changes in the customer order patterns or maybe any of the behaviors there. Are you seeing anyone that's being maybe a little more cautious or conservative in terms of their inventory stocks or what they're trying to produce? Just kinda given the backdrop that it seems like we're heading into with inflation and slower consumption. Yeah. David, this is Emily. Let me answer the question. First of all, from the order behavior point of view, we didn't really seen any significant change, right? Overall, like I mentioned, the backlog is extremely strong. Book-to-bill ratio, very high. All in all, if I look at the POS record revenue end of Q1, that actually has a good, you know, story to tell, right? The market is still extremely strong. There are some pockets of slowness, you know, the low-end PCs, I talk about it, maybe China consumer demand a little bit softer. Since, you know, like I mentioned, all the capacity is shared, so when we have really, really strong demand from the other areas, so it's not a concern for us overall. Okay. Fantastic. If I just kinda think about your revenue guidance, it's a fairly nice step up about, I guess, $18 million sequentially. Is that driven more by capacity that you're bringing on, or is this more pricing? 'Cause it seems like you've been fairly capacity constrained, and just kind of curious how that revenue, what the makeup is there. Right. I think if you think about it, you know, we talk about product mix, right? That's one of the strategy that we've been enforcing, continue to expand our product into the newer application, different customers. I would say really that's a key point. Capacity, we have ongoing expansion, just like Dr. Lu mentioned before, whether it's fab site or assembly site. We do ongoing increase in quarter over quarter, right? I would say all in all, together with the business, that's the reason that we provide a strong guidance for Q2. Okay, fantastic. Then maybe just one last quick one for Brett. As you think about the margin progression, particularly now that you're north of that 40% kind of the longer term target, how do we think about the margin trajectory here, and should we maybe expect a more aggressive target range as we head through the year? David, let me answer that question as well. You know, when the margin improvement, one of the key things that driving factor for that is actually product mix improvement, right? If we continue to execute what we've been doing and continue to show the result, I do believe you will continue to see margin continue to improve over time, right? You know, we talk about how sticky these products are. I think it's more than ever more stickier than now, especially we start building very, very strong customer relationship. You know, David, one thing I think you're talking about referring to is we are very, we've represented our 2025 plan very openly, and that plan was modeled on essentially to get to a goal of $1 billion of gross profit. We said, "Hey, a reasonable model is $2.5 billion of revenue and 40% margin." I think what we would say as we look at it now is that, you know, that plan is still very focused on gross profit of $1 billion, and we continue to expect our margin traction to exist, and we continue to think that, hey, well, you know, if you were to model it today, maybe that suggests that the revenue doesn't have to be as high. We will continue to be focused on our gross profit dollars and our goal. Very good. Thanks so much. I certainly appreciate the time. Thank you. Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Dr. Keh-Shew Lu for any further remarks. Thank you for your participation on today's call. Operator, you may now disconnect. Thank you. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.