Alpha and Omega Semiconductor Limited

Good afternoon. Thank you for attending today's Alpha and Omega Semiconductor Cisco Q2 2023 Earnings Call. My name is Tamiya, and I will be your moderator for today. 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 1 on your telephone keypad. I would now like to pass the conference over to your host, Yuji Ozai, with Investor Relations. Please proceed.

Good afternoon, everyone, and welcome to Alpha and Omega Semiconductors conference call to discuss fiscal 2023 second quarter financial results. I am GSI, investor relations representative for AOS. With me today are Dr. Mike Chang, our CEO, Stephen Chang, our president, and Fang 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. Mike will begin with strategic highlights. Then, Stephen will provide business updates and a detailed segment report. After that, Yifan will review the financial results and provide guidance for the March quarter. Finally, we will have the Q&A session. The earnings release is distributed over the wire today, every 6, 2023, after the market closed. The release is also posted on the company's website. Our earnings released in 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 comparable GAAP measures is included in the earnings release. We remind you that during this conference call, we will make certain form of 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 from such expectations. For a detailed description of these risks and uncertainties, please refer to our recent and subsequent findings of the SEC. We assume no obligations to update the information provided in today's call. Now, I will turn the call over to our CEO, Dr. Mike Chang. Mike?

Thank you, Ujie. Happy New Year, everyone. and welcome to today's call. It is good to speak with all of you again. Before I go over our results, I'd like to begin today by saying that I am proud to be speaking to you for the last time as the Chief Executive Officer of AOS. 22 years ago, I founded this company with a vision and a dream. While this vision never ends, Today, we are one of the most successful and well-recognized fast-growing power semiconductor companies in the world. I am proud of all that we have accomplished together. It is with great confidence and pleasure that I now turn the chief executive position to Stephen, who has already demonstrated his leadership skills and business acumen since his appointment as AOS president two years ago, leading AOS to achieve record revenues and profitability. I want to thank each and every one of the AOS team for your dedication and hard work. It has been an honor to walk alongside you and see this company grow and thrive. Thank you all for the memories and opportunities. We are in the midst of an incredible journey, and I'm grateful for every moment that has led us to this point today. I will continue to be deeply involved in AOS as Executive Chairman and plan on focusing more on strategic matters such as the key relationships with critical partners and customers of AOS. and the technology development essential to ensure sustained and long-term growth. Now, moving on to the results, our Q2 results were below our expectations. Revenue was $108.8 million. Non-GAAP growth margin was 29.5%, and the non-GAAP EPS was 67 cents. Last quarter, we indicated that we expect an industry-wide inventory correction to impact us over the coming quarters, particularly in PC and smartphones. However, the magnitude of this inventory correction for certain customers was larger than we expected. Inventory levels across many of the consumer markets that we serve remain high, are working to bring supply chain inventory level back into balance as quickly as possible. As a result, we forecast March quarter revenue to be approximately $130 million, plus or minus $5 million. We expect to recover a good portion of the sequential decline in the June quarter, and even more so in the second half of the year. especially with the reopening of China. As we stated last quarter, our business is not immune to macro challenges and the industrial cycles. We have been through many of these cycles over the past 22 years and do not make decisions based on just a couple of quarters of data. Every cycle since the beginning of our industry has eventually ended and give way to a new leg of growth. And this one is no exception. We are confident that given our strong fundamentals, we are in the best position we have ever been to continue our growth momentum once this downturn is past us. Looking back on the year, Currently, 2022 was one of the most successful years in our history, despite the many challenges. We set records across almost every metric. Revenue was a record $794 million, up 9% year over year. And the non-GAAP earnings per share was a record $4.16, up 5% year over year. Further, we closed the year. with record tier 1 customers and market share across most product segments. In our two largest product segments, PC and smartphones, we grew significantly faster than the market. This was due to our success in gaining market share, increasing bump content, and deliberately improving our product mix toward more premium tier products. Gaming was an outstanding success for us in 2022. We won leading share with the number one gaming console manufacturer. And this business for us more than doubled year over year. And it's now a major revenue contributor for AOS. And it's expected to continue to grow even in a weakening consumer demand environment. are just a few examples out of many achievements that demonstrate our fundamental strengths and the competitiveness of our products and the traction that we have gained. Stephen will provide more details during his section of the call. But our business has never been stronger, which is why I'm confident that Our outlook is largely due to macroeconomic factors rather than anything specific to fundamentals. As channel inventories are consumed and the broader economy recovers, we expect to see a rebound in revenue. In closing, demand for more and better power management is being driven by what we call the electrification of everything. We believe this tailwind is here to stay, and we are in the best position we have ever been to continue to win in this market. We exit 2022 with a strong balance sheet, which enables us to navigate the current economic environment while keeping our eyes on achieving our $1 billion annual revenue target. in the next couple of years. Thank you. I will now turn the call over to our future CEO, Steven, for an update on our business and a detailed segment report.