Welcome everyone to the MPS second quarter 2022 earnings webinar. Please note that this webinar is being recorded and will be archived for one year on our investor relations page at www.monolithicpower.com. My name is Genevieve Cunningham, and I will be the moderator for this webinar. Joining me today are Michael Hsing, CEO and founder of MPS, and Bernie Blegen, EVP and CFO. In the course of today's webinar, we will be making forward-looking statements and projections that involve risk and uncertainty, which could cause results to differ materially from management's current views and expectations. Please refer to the safe harbor statement contained in the earnings release published today. Risks, uncertainties, and other factors that could cause actual results to differ are identified in the safe harbor statements contained in the Q2 earnings release and in our latest 10-K and 10-Q filings that can be found on our website. MPS assumes no obligation to update the information provided on today's call. We will be discussing gross margin, operating expense, R&D, and SG&A expense, operating income, other income before income taxes, net income, and earnings on both a GAAP and a non-GAAP basis. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. A table that outlines the reconciliation between the non-GAAP financial measures to GAAP financial measures is included in our Q2 2022 earnings release, which we have furnished to the SEC and is currently available on our website. Now, I'd like to turn the call over to Bernie Blegen. Thanks, Jen. MPS achieved record second quarter revenue of $461.0 million, 22.1% higher than the first quarter of 2022, and 57.2% higher than the second quarter of 2021. This broad-based year-over-year revenue growth was a result of consistent execution against our strategies. Turning now to the second quarter 2022 revenue by market. In our enterprise data market, second quarter 2022 revenue of $65.2 million increased 53.4% from the first quarter of 2022, primarily due to an accelerated ramp in our data center and workstation computing sales. Second quarter 2022 revenue was up 117.9% year-over-year. Enterprise data revenue represented 14.2% of MPS's second quarter 2022 revenue, compared with 10.2% in the second quarter of 2021. Storage and computing revenue of $122.3 million increased 26.6% from the first quarter of 2022. The sequential revenue improvement reflected higher commercial notebook and storage sales. Second quarter 2022 revenue was up 111.6% year-over-year. Storage and computing revenue represented 26.5% of MPS's second quarter 2022 revenue, compared with 19.7% in the second quarter of 2021. Second quarter consumer market revenue of $97.3 million increased 21.7% from the first quarter of 2022. The sequential quarterly revenue improvement was broad-based, with particular strength noted in home appliances and gaming. Second quarter 2022 revenue was up 27.9% year-over-year. Consumer revenue represented 21.1% of MPS's second quarter 2022 revenue, compared with 25.9% in the second quarter of 2021. Second quarter 2022 industrial revenue of $55.9 million increased 15.1% from the first quarter of 2022, reflecting increased sales of products for power source and security applications. Second quarter 2022 revenue was up 28.9% year-over-year. Industrial revenue represented 12.1% of our total second quarter 2022 revenue, compared with 14.8% in the second quarter of 2021. Second quarter automotive revenue of $61.0 million increased 11.9% from the first quarter of 2022, due primarily to increased sales of applications for advanced driver assistance systems, the digital cockpit, and lighting products. Second quarter 2022 revenue was up 25.3% year-over-year. Automotive revenue represented 13.2% of MPS's second quarter 2022 revenue, compared with 16.6% in the second quarter of 2021. Second quarter 2022 communications revenue of $59.3 million was up 6.7% from the first quarter of 2022. Most of this sequential revenue increase was related to 5G infrastructure. Second quarter 2022 revenue was up 58.3% year-over-year. Communication sales represented 12.9% of our total second quarter 2022 revenue, compared with 12.8% in the second quarter of 2021. Moving now to a few comments on gross margin. GAAP gross margin was 58.8%, 90 basis points higher than the first quarter of 2022, and 280 basis points higher than the second quarter of 2021. Our GAAP operating income was $141.9 million, compared to $96.1 million reported in the first quarter of 2022, and $60.6 million reported in the second quarter of 2021. Non-GAAP gross margin for the second quarter of 2022 was 59.0%, up 70 basis points from the gross margin reported for the first quarter of 2022, and 270 basis points higher than the second quarter from a year ago. The quarter-over-quarter and year-over-year increases in both GAAP and non-GAAP gross margin is attributed largely to operational efficiency gains and a more favorable sales mix. Our non-GAAP operating income was $179.4 million, compared to $133.6 million reported in the first quarter of 2022. Let's review our operating expenses. Our GAAP operating expenses were $129.1 million in the second quarter of 2022, compared with $122.7 million in the first quarter of 2022, and $103.6 million in the second quarter of 2021. Our non-GAAP second quarter 2022 operating expenses were $92.7 million, up from the $86.6 million we spent in the first quarter of 2022, and up from the $70.3 million reported in the second quarter of 2021. The differences between non-GAAP operating expenses and GAAP operating expenses for the quarters discussed here are primarily stock compensation expense and income or loss on an unfunded deferred compensation plan. For the second quarter of 2022, total stock compensation expense, including approximately $1.2 million charged to cost of goods sold, was $42.9 million, compared with $39.8 million recorded in the first quarter of 2022. Our second quarter 2022 GAAP other income, other expense was $5.1 million, compared with $634 thousand in the first quarter of 2022. Our second quarter 2022 non-GAAP other expense was $7 thousand, compared with non-GAAP other income of $1.6 million in the first quarter of 2022. The decrease is due to a $2 million dollar increase in charitable contributions, partly offset by the favorable impact of currency exchange rates. The difference in non-GAAP other income and GAAP other income is the income or loss on an unfunded deferred compensation plan. Switching to the bottom line. Second quarter 2022 GAAP net income was $114.7 million, or $2.37 per fully diluted share, compared with $79.6 million or $1.65 per share in the first quarter of 2022, and $55.2 million or $1.16 per share in the second quarter of 2021. Second quarter 2022 non-GAAP net income was $157.0 million or $3.25 per fully diluted share, compared with $118.3 million or $2.45 per fully diluted share in the first quarter of 2022, and $86.5 million or $1.81 per fully diluted share in the second quarter of 2021. Fully diluted shares outstanding at the end of Q2 2022 were 48.3 million. Now let's look at the balance sheet. Cash, cash equivalents and investments were $814.1 million at the end of the second quarter of 2022, compared with $775.9 million at the end of the first quarter of 2022. For the quarter, MPS generated operating cash flow of approximately $105.2 million, compared with Q1 2022 operating cash flow of $107.4 million. Accounts receivable ended the second quarter of 2022 at $125.5 million, representing 25 days of sales outstanding, which is four days lower than the 29 days reported at the end of the first quarter of 2022, and one day higher than the 24 days in the second quarter of 2021. Our internal inventories at the end of the second quarter of 2022 were $359.6 million, up from the $311 million at the end of the first quarter of 2022. Days of inventory of 172 days at the end of the second quarter of 2022 were 6 days lower than at the end of the first quarter of 2022. Historically, we have calculated days of inventory on hand as a function of current quarter revenue. We believe comparing current inventory levels with the following quarter's revenue provides a better economic match. On this basis, you can see days of inventory of 162 days at the end of the second quarter of 2022, which were 13 days higher than- Than the 149 days at the end of the first quarter of 2022. Forty-four days higher than the 118 days at the end of the second quarter of 2021. I would like now to turn to our outlook for the third quarter of 2022. We are forecasting Q3 revenue in the range of $480 million-$500 million. GAAP gross margin in the range of 58.4%-59.0%. Non-GAAP gross margin in the range of 58.7%-59.3%. Total stock-based compensation expense in the range of $42.8 million-$44.8 million, including approximately $1.3 million that would be charged to cost of goods sold. GAAP, R&D and SG&A expenses between $136.2 million and $140.2 million. Non-GAAP, R&D and SG&A expenses in the range of $94.7 million-$96.7 million. Litigation expense in the range between $2.3 million and $2.7 million. Interest and other income in the range from $1.3 million-$1.7 million before foreign exchange gains or losses. Fully diluted shares in the range of 47.9 million-48.9 million shares. In conclusion, we are continuing to execute on our growth strategies, including expansion and diversification of our R&D centers and manufacturing partnerships in multiple countries. I will now open the webinar up for questions. Thank you, Bernie. Analysts, I would now like to begin our Q&A session. As a reminder, if you would like to ask a question, please click on the participant's icon on the menu bar and then click the Raise Hand button. Our first question is from Rick Schafer of Oppenheimer. Rick, your line is now open. Well, thanks. Congratulations you guys, another great quarter. This may seem like a silly question given the guidance, but I'm just curious, are you seeing any impact from the delayed launch of Sapphire Rapids? I mean, I know your accelerator content is a lot higher than your CPU core power content. I think 48-volt, and please correct me if I'm wrong, I think our math shows 48-volt tracking to sort of $100 million this year. I guess I'm just looking at sort of the puts and takes. I know this is a pretty much a monster guide, but I just was curious if you were seeing any drag there from that delayed launch. So far, we see, for the next year or so, all our growth is these. As you know, these are all greenfields, and again, I mean, all the products that were designed in the last few years, and again, I mean, for whatever the version of it, okay. If there's a delay, the one thing is that we actually care less. It's all MPS controlled, but overall, we have a new higher power processor, and MPS can provide a much higher benefit to those market segments. It's all for about half a year and a year, and we don't notice it as an issue in this period. We gain more market shares and we grow from the existing business that we have plenty of it to grow. Oh, thanks. Thanks a lot, Michael, for the color. If I could follow up maybe with a supply question. You know, majority of your wafer supply is still in China. You know, plus you've got your big Chengdu backend facility. I guess, how concerned are you with trying to de-risk, you know, supply chain as we keep watching headlines with the U.S. government trying to tighten restrictions, et cetera, on equipment and everything in China? Just curious your thoughts there. Maybe as part of that, if you could talk about where things stand now with TSMC and give a sense maybe of timing and capacity plans there. Thanks. Yes. Just like any other companies, clearly we're transitioning sort of from the last 20 years of manufacturing from China to other places. All this infrastructure had to be built up. We're just like other companies, like we're in the transitions. Actually, we started transitioning earlier. We first started from our engineering manpower, and again, we transition out of six, seven years ago. The manufacturers, we started like tools about 3 years ago. As you know, we always use a leading edge of a D-RAM fabs, okay, or a digital fab. Three or four years ago, clearly, with these higher nodes like 60 nanometers and the 40 nm and fabs, okay, they're all engaged with the MPS, okay? As we have a reputation, so we will fill up all these fabs. Now it opens up in Korea and, I mean, Taiwan and these other places now, so we're only talking about a fab, this one now. In the next few years, we'll be more out of China. We'll need still bigger capacities. We have a large market segment. 30% of our revenue is still from China. In the next year or couple years later, so next year, we probably will be very diversified. Just to add to that, as the capacity restrictions are becoming less of a concern for the market in general, customers are asking for diversification as in a China plus one strategy. We're working along those lines in conjunction with expanding our overall capacity. Yeah. They all require each regions, and they require their local suppliers. That's where we play in the games, and like, I mean, that's our customer request. We are fully aware of that. We engage with all these fabs, okay, across the South Asia and Europes and Korea and Japan. That's how I see it. Okay. Thanks a lot for the color. Congrats again. Our next question is from Matthew Ramsay of TD Cowen. Matt, your line is now open. Thank you very much, guys. Hopefully you can hear me okay. Congratulations on the results. I had two questions, and I'll just go ahead and ask them both at the same time, because I think we got multiple calls going tonight. The first one, Michael, both in the server business, the new enterprise data segment and in the PC business, could you give us some indication of how far ahead of the unit sales do your power, your core CPU power or accelerator power products actually sell in versus the unit shipments that get reported by the end customers? Bernie, the second question, completely unrelated, like $800 million in cash, give or take, if you could just kind of walk us through some of the uses of cash there, I'm sure Michael would like to build some inventory, which is kind of always the case. If you have any new things to say there, that'd be really helpful. Thanks, guys. Well, firstly, your first question, honestly, I say I don't really know. Okay. I mean, it's difficult. Okay. As you know, so like, we sell these are building blocks and for more or less in the server and data centers areas. Okay. These are more generic parts, and they can be used multiple ways. It's hard to track. Frankly, we don't really care. As long as our revenue goes up, right? For very high powers, and these are powers like 48-volt powers, okay, we do have pretty good dominant players, okay, in the segment. I think the ramp hasn't really just started recently. In the future, we'll be a lot more. You're making about notebooks. Okay. We're mostly in high performance gaming or mostly in the commercial notebook. Number of sets and versus the CPU versus the CPUs is also hard to match and because we're selling these power devices. They can be two-phase, they can be three-phase, they can be four-phase, okay. We don't quite know. Okay. Also we care less. It's difficult to answer it. All these notebooks are the high-end, again, high-end gaming, and the gaming notebooks and the commercial. These are the ones that they have a variety of a use. On the issue as far as our cash position, which let's put it on the table, it's sort of an enviable position to have over $800 million of cash and cash equivalents. There's probably three things that we look at. The first is we've been consistently paying out a routine dividend. This year it's $0.75 per quarter, $3 for the full year. We're evaluating the sustainability at an even higher level. We generally announce dividend increases in February in conjunction with our Q4 operating results, and we'd expect to do so again this year. Another area that we found is very key and strategic to us is building our capacity. We're looking, as Michael said earlier, for different avenues in order to build out additional capacity. In some cases, that may require additional investment. Finally, as you also added, is working capital, making sure that we have adequate inventory on hand in order to sustain our customers' demand profile. Right now we're still below our target of 180-200 days of inventory. We'll continue to be investing in inventories as well. Yeah. I might as well. All these are Bernie and all the expenses, they are small. Yeah. Compare relatively the cash that we generate every year. That's probably MPS knows the best to be consistent. We give an increase in our revenue yearly. That's what we have been doing in the past few years. We'll continue to do so. Also, we will do some acquisitions, but not acquisitions for revenue. Our next question is from William Stein of Truist. William, your line is now open. Great. Thanks for taking my question, and congrats on the great results and outlook. Something I tend to ask about is traction in the module business, because I know that this is something that's helping boost the revenue growth and the margins. I'm hoping you can maybe update us on, you know, the traction in that business, please. Yeah. The modules is doing well. I mean, the revenue is still quite small. It's $100-some million. I know the next few years will grow double or triple it. That's what we've seen in the pipeline, in the design win activities. As we said, I mean, a few years ago, we do e-commerce and we do programmable modules. These are showing true benefits to our customers. Our customers truly have realized it in the end. Yeah. I'd say that particularly as we had this supply demand imbalance, and our customers were also looking for enabling technologies, that the decision process for earning a design win, where historically had been just on the lowest cost provider, now things like the programmability, the flexibility, the time to market, the total cost of ownership, are taking a larger weighting in the decision process. We feel like we're very strategically positioned to take advantage of that change in the market. That's great. As a follow-up, if I can, I'm wondering if you can talk about your lead times now and how they might have changed in the last couple of months, and to the degree to which that's been a competitive advantage. My understanding is that you're offering lead times that enable customers to switch away from competitors' products that have lead times that are so long that it suddenly makes sense to switch. Any sort of comment or update on that would help a lot. Thanks, guys. Our lead time really hasn't changed that much. We're still under a lot of delinquencies, okay? That's a good thing, okay? Because as Bernie said earlier, all the benefits of our product technologies, okay, finally our customers realize it. It became a high demand. I think it's due to the new design win activities. They all switch to this type of a new technology or new design methodologies. That really benefit MPS. At the same time, we had to increase our capacities, okay? I mean, not only from China, so like, but globally, that's what our customer demand. Yeah. Just to top off that answer is that I don't think our lead times were necessarily different from anybody else necessarily in the industry. But we had the advantage of having so many new products coming on the market, greenfield opportunities, that we invested ahead of the curve, and that's where we were able to have product availability when others didn't. Thanks, guys. Yeah. Our next question is from Quinn Bolton of Needham. Quinn, your line is now open. Hey, guys. Congratulations on the nice results. I guess I would love to ask, obviously we've seen some in the compute space, Intel and Micron offering much more subdued outlooks for the second half. I think there's clearly some inventory purge going on in the channel. I'm just wondering, obviously, your September guidance is very strong. But as you look at the order book, have you started to see any changes in the notebook or compute and storage and enterprise data center segment that might echo some of the comments we've heard from folks like Intel and Micron in the broader market? I've got a follow-up. For the notebooks, okay, and for our side, still demand still pretty good and still good. Look, I think the orders slowed down than before. We still have a delinquency. For memory side, there's a lot of new format, okay, starting. We're still facing shortages now. Yeah. If I could just add to that is that we are looking at any areas of our business that might be susceptible to either backlogs that are canceled or pushed out. Keep in mind that cancellations are always a part of all semiconductor companies. It's not just a one-time or new event. The fact of the matter is that any influence relative to the size of our overall backlog today is very minor. That's what's given us very, you know, confident outlook for the second- The rate of a booking and the rate of a cancellation, so like, I would say they're very similar in the last few years. Yeah. I mean, last few quarters. Yeah. Yeah. No noticeable uptick in cancellations or pushouts, it sounds like is what you're saying? Yes. Got it. The second question is just enterprise data showing very strong growth, and I think that's gonna be one of the biggest drivers for the business over the next couple of years, given the greenfield opportunities. Just can you guys size for us, is the accelerator card and 48-volt opportunity larger than the share gain on CPU power? Do you think they're both equally, you know, sort of driving the growth? I'm just sort of what's the biggest driver, do you think, for the enterprise data segment? I think it's both. Not only, you know, the CPU size for the servers, and we gain the market share. We step into that game, and like a couple of years ago, but a very small percentage. We start to ramp, but we're still far distant from these bigger suppliers. That's from the server side. The 48s, as you know, we talk about it since 2017 or 2018. Yeah. We said that this is the inevitable trend. You have to go and move up to 48-volt. We are now the forefront of, and we're not replacing anybody. It's like, okay, we set up this market trend. Also in the data center and the rack power, rack itself, there's a big opportunities. Like MPS is ramping revenue from there. From the AC powers, and these are 380 volts and, okay, 240 volts input convert into 48-volt. Also, the battery backup. We provide like the same solutions for battery management and also cooling side. MPS is almost a one-part, one-stop shopping place for data center. Thank you, Michael. Yeah. Our next question is from Tore Svanberg of Stifel. Tore, your line is now open. Yes, thank you. First one for Michael. Michael, you're known for driving a lot of new innovative business models. As we now start to think about, you know, adding capacity to get to $4 billion, you know, given the geopolitical dynamics and so on and so forth, and I know you've talked a little bit about this, but, you know, are you thinking or working on new business models, you know, to try and secure more capacity for your continuous growth? Well, there's one thing, right? Like we do of course we have to the fab, we have to move our and we will have increase more capacities outside of China. We started about a couple years ago or some more than a couple of years ago. Like, I mean, now we engaged with some bigger DRAM fabs, okay, that we will fill that up in the next couple of years. But going forward, MPS actually require less semiconductors. Because a lot of products are more programmable and we can use it for multiple use. Again, same time, we're growing our revenues. Okay. We're selling a lot more than semiconductor. We're selling power solutions, more modules. We kind of move up the food chain, okay, as the new requirement comes in, and okay, we play in a market that we're not competing with anybody, and we just provide the solutions. Those are manufactured. These are clearly different. They're different. They're building modules. We sign up partnerships, okay, for assembling these new modules. It's unprecedented. A lot of testing, a lot of qualifications. MPS designed the whole system from ground up. These are the. It's and there is no such facility out there. We had to invent it that way. Yeah, I think just to echo a point, there is if you look at our revenue for the quarter, we grew 57%. Keep in mind that we've had one price increase, and that was in February this year for 5%. If you actually look at where the source of the revenue growth came from, about half of it is volume related, and the other half is higher ASPs because of higher value products that we're selling. That means that we've differentiated our supply chains. We're not just dependent on silicon-based products. It's on making total solutions. These are the biggest effect and hasn't really taken place yet. That would be a couple of years or couple years down the road, you will see much bigger effect. There is a lot of new work to do ahead of us. These are particularly new type of a module. Nobody else has built that kind of a thing. Okay, we're ground up, but we developed it, and we even have developed it, done manufacturing and as well as testing the qualifications part of it. That's great. Great perspective. Thank you for that, Michael. As my follow-up, and this is related to what you just mentioned there, Bernie, which is pricing. I know you're obviously growing by adding more value and higher ASP products, but you know, you mentioned that 5% price increases. I think it's well documented that your competitors have raised prices by more than that. I guess my question is just simple that, are you gaining a lot of share because you didn't engage in as aggressive price increases as some of your customers, I mean, your competitors, sorry? Gaining share is difficult to count because gaining share, if it's equals product, is gaining shares and in a similar product. Our price is better, our performance is better, we're gaining shares. Okay. Now we're talking about completely different things. Those market segments we want to get into are less price sensitive, but quality, performance a lot more important. We offer some things that can do a lot more than that. Ten years ago, we said, "Who do we compete with?" A lot of companies sell controller and a power MOSFET. They're separate. MPS is integrated. Now you're talking about MPS, our product, okay, even on the silicon side, and we have microcontroller, we have a memory, we have a digital, we have a power, and very unique. What do we, who do we displace is difficult to say it. Now it's getting to we use these type of silicon-based technology, we migrate out, we become a provider of total solutions. How do we, who do we displace it and, okay, how we gain market share is very difficult to say. Yeah. No, sounds like you're displacing more companies now than before. Just one last quick one for you, Bernie. Most companies' DSOs were up this quarter because of the China lockdowns, you know, shipments being later in the quarter. Your DSOs actually went down this quarter. Can you just talk a little bit about how the China lockdown impacted you? I mean, obviously it didn't impact you the same way, but, you know, any other color you can share with us, that'd be great. Thanks. No, we really didn't have much impact from the China shutdown. Obviously, we're able to record, you know, revenue growth that is well above the industry average. The concern we might have had is if our customer supply chains got impacted. We continue to hit our delivery schedules and if there was an impact, I'm sure we felt some of it, but it was very marginal. Great. Thank you, and congrats on the strong results. Thank you. Thank you. Our next question is from Ross Seymore of Deutsche Bank. Ross, your line is now open. Thanks, guys. If I could ask a question. First question is really kind of a high-level one. Over the years, you guys have generally outperformed the analog market by maybe 10 or 15 percentage points of growth, and gain share, et cetera, et cetera. Even last year wasn't terribly outside of that range, but this year it seems like that delta, you know, probably doubles at least, maybe something more. I do get investors that are concerned that your increased availability versus the peers allows you to ship, and then it can be double shipping, in response to the double ordering, and so it's a cyclical phenomenon that's widening that gap. Can you just talk about the reasons you think that gap is sustainable? Looking forward, do you think that gap will continue to grow despite the fact that you're operating off of a larger base? Yeah, I think what you said partially is correct. The other company couldn't ship. We have the inventories and we have a capacity to ship. This year particularly, we see things are very different. A lot of product and especially we ship to these tier one companies from industrial side, from automotive side, and again, even the data centers. They didn't intend to have MPS as a majority, as a bigger supply to where they give us as a backup and to test it out. In the last years, we ship all these units. Our PPM failures, we're far better than everybody else. That's one thing, the quality of quality is everything. But they took a chance when they have a shortage. We proved that. We give us a bigger opportunity. We proved it. These products is as better again as good as better than our whatever the parts they designed them out. In the last year and this year, all the new product or the new segment start to grow. As our product, we can change it, we can reconfigure it, and that will continue to grow. As we see it, I mean, we cannot handle all the projects. In the foreseeable future, so like, these product will continue to grow. Keep in mind that we're still facing large delinquencies ourselves. We've had to be very cautious and opportunistic as far as how we allocate our wafer starts in order to meet real customer demand. I think we've been clear that during the first half of the year, we did a cleanup of double orders and have confirmed, as I said earlier, that the MPS's backlog still remains very healthy. When you look at the inventory in the channel, we're at lows. It's very lean. We believe, you know, we don't have perfect insight, but that the inventory on our customer shelves is likewise very lean, because we've only been doing partial shipments there. As far as the markets, we feel reasonably confident. Obviously, notebook or some of the consumer could give us. We're trying to stay very close to that and evaluate its impact. As Michael said, a lot of our new growth opportunities are in these large tier one opportunities, and it's that secular growth that's really driving it, and that's different from just building up in the channel or on customer shelves. Yeah. Come back to your questions. Okay. Now, you said that you're growing at a large base, so you grow. Okay. It's difficult to grow. That's kind of built in everybody's mind. Okay. In my mind, I don't have a limit. The limit is within yourself, what you do. People told me, so like early on, $200 million, it's your barrier. Okay, $500 million barrier. $200 million at the time, it was a barrier at one time. It happened. $500 million, it wasn't. Okay. People tell me, "Okay, you're gonna grow to $1 billion, you're gonna slow down." Okay. At the time, seriously, that was 2017. 2017 or 2018. Yeah, 2017. I actually said it, like, when we get to $1 billion, we're gonna accelerate it. That's at the time, that's how I see it. Like, MPS, we're not selling silicon anymore. We're selling a lot more than silicon. Why not accelerating the growth? It's, of course, I'm not saying that now, it's like, a lot of things still depend on our execution. Only thing is that the mindset, we're not dwell on selling semiconductors, okay. Selling semiconductor is limited. You have a lot of service, engineering manpower. We can. Okay, our customer can benefit from it. That's not. That's unlimited, almost. Supporting Hsing's point there, you might remember six or seven quarters ago, we made the statement that by the end of Q2 of 2022, that we would have capacity to support a $2 billion revenue run rate. I think that the key there is the execution and the focus, and that's exactly what we've done. Great. Thanks for all that color, guys. I guess, hopefully quicker follow-up to all of this, as you expand beyond the semiconductor side, you get into, I don't wanna say systems, but more solutions in general. Some of the stuff you talked about with the entire rack, the AC to DC, the cooling, all the above. What do we look at the gross margin doing in that? That sounds like higher gross margin business, and I know consistency of gross margin expansion is the mantra that you guys have lived by and delivered on, but it seems like mix would be a big tailwind for you going forward from a gross margin perspective. So just talk about what the change in your revenue mix means, whether it's end market or system solutions versus chips to your gross margin. Yeah. That's kind of the things that we're going to. I want to state, okay, we can charge as much as our customers can bear. So okay, that's kind of a half BS, okay? But the reality is, okay, I think that we'll comfortably stay around this mid- to high 50s and 55%-60%, again, in the range. I think that's a sweet spot for us. We're not gonna paint the corners for us to grow to over 70%, again. When we get there, we get there. Okay. So far, we don't have any headwinds, again. I think the opportunity drives the model itself. In the next couple of years, okay, I think that we're gonna stay around this and as we are now. Again, maybe move up slightly later, again. At least we don't have headwinds. After three or four years, we'll see how we change our models. I would just add that, I think that, we reported a gross margin of 59.0%. As Michael said, you know, somewhere in that area is, you know, the sort of the sweet spot for our model that allows us also to accelerate our rate of revenue growth. It's something that we'll continue to evaluate, but I think right now we're very comfortable with this being our model. Yeah. Thanks, guys. Congrats again. We're not. Actually, MPS is not good at chasing a volume. These are manufacturing, okay. Actually, MPS doesn't manufacture anything. Again, the high volume things, that's not MPS forte. Thank you. Our next question is from Melissa Fairbanks of Raymond James. Melissa, your line is now open. Hi, guys. Thanks very much. I will echo the congratulations on another great quarter. I just had two really quick ones for you. First, could you remind us what your inventory target or ideal levels of inventory would be in order to maybe clear some of the delinquencies? Then second, on a somewhat related note, what should we be thinking about for CapEx this year, either as percentage of revenue or absolute investment? Then what's the longer term requirements you need in order to meet your demand or your growth plans? Good questions. As far as inventory, keep in mind that being so much of our positioning is around growth, that as sort of a risk management decision, we believe that 180-200 days of inventory is what's needed so that we can manage an upside in customer demand. Also, if we end up in an unfortunate situation where we have lots of inventory that aren't sellable, that we can compensate for that without having any disruption to our customers' production lines. I think that it's been difficult to manage delinquencies while increasing inventories in order to support our model, but I think we've done a pretty good job in these really unusual times. Then as far as the capital requirements, I think, you know, we've talked in the past as far as what our spending rate is. It tends to be, you know, on a quarterly basis, somewhere between $14 million and $18 million per quarter, with a lot of that being testing equipment or even if we are purchasing buildings. You know, we purchase our own office space. The first half of this year was a little bit lighter than our normal run rate. I think $14 million-$18 million, absent a big, you know, building purchase, is probably a good run rate. Okay, great. Thanks very much. That's all for me. Yeah. Our next question is from Alessandra Vecchi of William Blair. Alex, your line is now open. He's not there. If there are any follow-up questions, please click the Raise Hand button. Sorry, it was muted. Apologies. I'll start over. Bernie, can you hear me? Michael, can you hear me? Yes. Yeah. Hi, Alex. Apologies about that. User error here. I was saying apologies again if someone's already asked this question, but I wanted to expand a little bit on Ross's question. Just in terms of the competitive dynamic and your products being, you know, sort of being superior to those of the competition as well as more of the solution sale. How do we think about power management in particular, and your positioning within the customer as these products become more complicated, you take up more space on the board? I would assume that those conversations are becoming more tightly coupled, and that you guys are becoming more important to the customer in terms of conversation. Yes. Okay, I mean, we, as a matter of fact, from the beginning, MPS is, so we don't sell, so like in point-to-point comparables. Okay. When in a similar product, and like we offer the. Actually, we always offer far better product and much more compact, much higher efficiencies and also cost-effective without charge on the list. That's what is known for MPS. Okay. At one time in the early period in times, MPS is like a price warrior, okay, kind of company and that. We actually which meant that we left a lot of dollars on the table. Of course, we're not competing in that market segment anymore. Now, okay, we offer total solutions and if you're talking about any applications, they need power. You're talking about electric car, MPS can build the whole car, okay, and they use electronics. You wanna build the data centers, MPS provides the entire product for data centers. We are mostly there, and that's how we sell value. We're not competing on this product competes with that product. We have all software behind it, and we have a user interface, okay, software, and okay. That changes the game, okay. We're not competing, okay, with the product per se anymore. I think an interesting dynamic that we've been observing is that power management was always an afterthought. It was the last thing after you designed your board, and you came up with the least bad solution. Now, we are introduced at the very front end of the development of an application. The reason is because our power solutions enable our customers to be able to develop higher power solutions than they would otherwise. That's an interesting twist in the relationship, where we're being introduced more earlier to the process and able to jointly come up with the development of shared solutions. As you see, as you remember, MPS, like 4 years ago, we actually built a car. Built a very advanced car, far advanced than any car that you see in the market. With the battery management and same time all the motor controls. A lot more complex than the existing EV. Just for the purpose, so we can demonstrate we can do it. Now we can do it, and 4 years later, actually, we can do a lot more now. That's kind of examples, okay. That's extremely helpful. Bernie, just one last quick question. In terms of the guidance, any end market that we should think of, or how should we think about the end markets in terms of strength versus strongest versus weakest or any notable things to call out? Yeah, I think that the themes that you're gonna be seeing for the next 2-3 years are the enterprise data and automotive. Automotive had a relatively slow first half, but that was exactly what we had in expectations. There was no new surprise there. We believe that, you know, the second half looks very healthy, as does the data center. Yeah. As we see it, okay, we don't want to. Okay, what will we provide, not customer asked for it? Yes, we will do that. What customer do that. We should lead the customer, so what you should need. That's the game we are really playing. Okay, we're playing ahead of games. I think that all the power stuff, like 48-volt, we said that this is like we said it in 2017, okay, this is the future. We anticipated that. Electric cars, we anticipated that. We can in the next few years, and we'll see the very similar things. All of these will happen. Perfect. Thank you so much. Congratulations again. Thank you, Alex. Thank you. If there are any follow-up questions, please click the Raise Hand button. As there are no further questions, I would now like to turn the webinar back over to Bernie. Great. Thanks, Jen. I'd like to thank you all for joining us on the webinar, and look forward to talking to you again during the third quarter, which will likely be at the end of October. Thank you. Have a nice day.