Diodes Incorporated

Good afternoon, everyone, and welcome to DIODES Incorporated's first quarter 2023 financial results conference call. At this time, all participants are in a 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 star followed by zero on your touchtone telephone. As a reminder, this conference call is being recorded today, Tuesday, May 9th, 2023. I would now like to turn the floor over to Leanne Seavers of Shelton Group Investor Relations. Leanne, please begin.

Good afternoon and welcome to DIODE's first quarter 2023 financial results conference call. I'm Leanne Seavers, president of Shelton Group, DIODE's investor relations firm. Joining us today are DIOD's Chairman, President, and CEO, Dr. Kashi Liu, Chief Financial Officer, Brett Whitmire, Senior Vice President of Worldwide Sales and Marketing, Emily Yang, Chief Operating Officer, Gary Yu, and Director of Investor Relations, Gurmeet Dhaliwal. Before I turn the call over to Dr. Liu, 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 fiscal quarter ending March 31, 2023. 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 9, 2023. GADS 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. Included in 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 this time, a recording will be available via webcast for 90 days in the investor relations section of DIODE's website at www.diodes.com. And now I'll turn the call over to DIODE's chairman, president, and CEO, Dr. Kexu Liu. Dr. Liu, please go ahead.

Thank you, Leanne. Welcome, everyone, and thank you for joining us today. Our first quarter results were highlighted by continued strength in our gross margin performance, which was at the high end of our guidance, despite the seasonally low revenue and economic slowdown in the consumer, communication, and computing market. In fact, gross margin has remained at over 41% of the past four quarters. and above our target model of 40%, underscoring our execution on new product initiatives and the product mix improvements. A key contributor to our improved mix has been our success expanding into the automotive and industrial markets. which together represented a record 47% of total product revenue in the quarter. Another contributing factor to our consistent margin improvements is our manufacturing cost reductions and operational efficiency, which has also allowed us to maintain healthy margins despite the COVID-related disruptions and the Chinese New Year holiday during the quarter. Over the past several years, we have taken significant steps to transform our business as well as our customer and the market position based on a total solution sale approach. extensively pipeline of new product introductions and the design wins. Today, DAO has a diversified business across product groups, end market, and applications, as well as Geographics that are further supported by a flexible manufacturing model and a team that is highly focused on consistent execution and a sustainable quarterly performance. Those fundamental factors position us well to not only sustain our margin profile during an economic slowdown, but also continue driving even higher probability and cash flow in more favorable economic environment. With that, let me now turn the call over to Brett to discuss our first quarter financial results and our second quarter guidance in more detail.