Monolithic Power Systems (MPWR) 28 Oct 222022 Q3 Earnings call transcript

Welcome everyone to the MPS Third Quarter 2022 Earnings Webinar. Please note that this webinar is bring 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, VP 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. Safe contained the release the to today. published refer Harbor in statement earnings Please other could be statements factors to and XX-Q and uncertainties Risks, that XX-K latest our identified QX earnings and the website. in the our differ that cause in Safe on in Harbor can contained filings XXXX release found are results actual information MPS assumes call. today’s no obligation provided to on update the

with net and non-GAAP income non-GAAP non-GAAP table between be in will SEC for discussing taxes, which the currently and have We reconciliation should before measures GAAP. financial our considered outlines release, a we or measures expense, income, in income, to other basis. are to not in operating both furnished A R&D gross QX on of as superior and that prepared operating is substitute SG&A the measures expense, GAAP financial a to income available with a website. financial income earnings the financial and GAAP performance accordance earnings be not on margin, included our GAAP is XXXX measures These accordance and prepared

over Now Blegen. the I’d call to like turn to Bernie

Gen. Thanks,

Board from our today of greeting First third meeting We Barcelona Directors you I’m our held quarter office. all, of in Europe.

We operations facility the here. Board have the our Members and oversee tour of

revenue result XX.X% our than higher growth was million, Now, revenue in to higher executions the This of financial the the XXXX, results. broad consistent against third of quarter than XXXX. revenue X.X% and year-over-year quarter MPS of $XXX.X third record the strategies. revenue based achieved second quarter of in

revenue by quarter third market. our XXXX at Looking

second platform increase XXXX, million launches. quarter of new primarily quarter Third due revenue automotive $XX.X XX.X% to from of the

XX.X% XX.X% XX.X% the automotive year-over-year. in revenue revenue of third with compared was represented Third quarter third of quarter quarter XXXX XXXX. XXXX MPSs revenue Automotive up

the continued increase $XX.X up to communications from Third revenue quarter sequential of the revenue communications the quarter ramp. XXXX. was Most XX.X% second is XXXX million related of of infrastructure

quarter compared XX.X% XX.X% communications XX.X% enterprise primarily to revenue $XX.X XXXX. our data of the the XXXX and third revenue quarter continued in Communication quarter XXXX quarter XXXX our total sales up of revenue XXXX, represented increased was from with workstation second due XX.X% In Third market, center data quarter year-over-year. strength third sales. of in our computing million third

compared Third quarter in revenue, the XXXX revenue third quarter XXXX with of third XX.X% MPSs quarter represented of XXXX. X.X%

quarter second XXXX of the XXXX. revenue quarter Third million industrial increased $XX.X from X.X% of

in XXXX revenue XXXX sequential revenue from compared primarily with year-over-year. of second decreased XXXX. notebooks. was XX.X% quarter from due Third the of of decline demand revenue XXXX. and $XXX.X XX.X% Storage revenue XX.X% quarter the Industrial customer X.X% third million The softening to quarter represented of our up revenue third quarter industrial was of computing

and revenue computing revenue with in of storage and quarter represented XX.X% year-over-year. Third the quarter Storage revenue compared third XX.X% MPS’s XXXX computing of XX.X% up was XXXX. quarter third XXXX

Third due quarterly quarter $XX.X of of X.X% was the primarily revenue sequential quarter from The XXXX. softening demand. overall consumer decreased revenue to million second of decline

with year-over-year. revenue, the XX.X% of represented up Consumer XXXX Third MPSs was quarter XXXX revenue third XX.X% of consumer quarter quarter compared revenue XX.X% XXXX. third in

business Let's the talk conditions. about general

have storage product in shortages, prior computing. and faced we six the especially For quarters, consumer,

order our near This patterns in see have we not push the past. future. in might similar Now out the and us. to to their patterns shipments. experienced a started is surprise anticipate We’ve customers reduce oscillate orders We

of to change our XXX ordering target As our XXX will possibly a in higher patterns, near level result catch of term. this be days up and in to the inventory

target. our applications. carrying to support are eight shortage thousands managing MPSs so development. long-term better which focus lifecycle can position products now level in than our of concerned business we have Rather average, product with On is we years, not problems, addition, above we are today. six In business different product to customers' over on a succeeds X,XXX an required inventory

For have extended longer products effort multiple like cycle, infrastructure investments significant the applications. made and and and our joint of in MPS business and automotive, development coms industrial, customers leading both enterprise edge data,

As a ramp the years result, we over revenue next secured we have which several believe business driving growth. will

For customers' shorter to continue consumer related our cycle support business, we proactively will needs.

cycle MPS shortages. support customer established period Accordingly, with product We we excellent and have MPS supplier believe a of longer strategic as this partner. as shorter extended a customers during value both reliable

We the past. to macroeconomic MPs export conditions we have been similar have and been believe to list. and we control market done added in swiftly as are cautious successfully business have overall the additional rules There about changes changes during the can adapt changes to recent companies

impact, As restrictions. from or of trade we indirectly immaterial see those revenue today directly new

Our products XX in restrictions. excess utilize nodes which the nanometer, well outside a process falls current

comments margin operating Moving gross now to and on few a income.

second Third XXX XX.X%, quarter and the lower of quarter the XXXX of than was quarter points higher gross GAAP XXXX, margin points XXXX. XX basis third than which basis was

GAAP $XXX.X third flat for GAAP operating higher was margin XXXX. the points than from XX.X%, the gross in from year income margin a $XXX.X the Our XXXX and XXX million basis to gross reported quarter quarter the of third ago. in compared of Non second the essentially quarter second percentage quarter was XXXX reported million of

the was million income reported million compared of $XXX.X in quarter XXXX. $XXX.X operating second non-GAAP to Our

our review expenses. operating Let's

compared $XXX.X in XXXX. XXXX, of were expenses operating of $XXX.X quarter million quarter the in in GAAP the the and $XXX.X second third quarter Our with million third million of XXXX

quarter are compensation operating XXXX from operating The expense operating third quarter $XX.X between were the million or quarter GAAP $XX.X Our stock compensation and for expense expenses deferred non-GAAP non income the GAAP in here reported up expenses primarily in up from million expenses an third XXXX. and quarters from million, the of unfunded $XX.X differences second discussed XXXX of plan. and the

million fully in QX, $X.XX XXXX of in outstanding of $XX.X third or and XXXX, and share was was million with of or XXXX shares Fully QX $XX.X quarter per second quarter quarter the income in share $X.XX charged million diluted income fully net $XX.X third per in $X.XX the compared million $XXX.X For million, XXXX. of to share XXXX recorded or expense, second million GAAP per compensation non XXXX. including quarter XXXX. bottom quarter second cost or compared share $X.X XXXX in was share $XXX.X the or per the share stock sold with the per approximately $X.XX end net per GAAP were quarter $XX.X the with or goods total the quarter million. $XX.X compared $X.XX diluted the third of $X.XX of diluted third at XXXX, of million of $XXX.X to Switching line, million million $XXX

quarter Now, XXXX let’s the equivalents end compared at were $XXX.X of $XXX.X million and look second million to at the balance sheet. the the the quarter XXXX. Cash, third at of end cash of of investments

cash million in the at representing operating quarter, compared six end the quarter of XXXX prepaid XX XXXX third the which with flow made quarter ended three was $XXX.X MPS flow operating of $XXX higher second a other and than payment operating assets to of QX, of of than the days reflected long quarter quarter sales in of the during generated about the of million. commitment. Accounts of the end and outstanding, receivable long at term cash XXXX. higher a purchasing decline flow XX term $XXX.X increase XXXX, XX million, days million The $XX.X For cash secure days days at days reported third the the

XXX third million at days of Historically, the a million, XXXX. of of levels XXXX internal of function $XXX.X inventory second of days XX days, were the On have at $XX.X Inventory the of inventory you calculated second XXXX fourth current revenue. quarter’s to our five inventories see quarter of at the $XXX.X third quarter the the now believe of which end to days at better like of XXXX the end inventory the end days days, would this end days up lower comparing million match. on the represented and of end hand of the I represented provides the can the higher XXX of following outlook for Our end third XXXX. the third days end than revenue reported turn quarter the of higher second of the XXXX the XXX at of basis, we order the quarter from than of quarter were XX current the quarter quarter XXX We XXXX. of at with quarter a than at as XXXX. economic

of QX forecasting the revenue $XXX million. are range $XXX million in We to

million $X.X on income are $X.X $X.X reflecting diluted expected should million for high of of secure in our share We design million be the range Non-GAAP and also of the In from XX.X%; $XX.X of million. GAAP to R&D $XX.X to $XX.X range up though XX.X to Total webinar be in charged and range We and the expected million. softening, $XXX to business and million stock-based now questions. gross expand including million focus GAAP term the approximately in million, Fully expenses range expected XX.X the range even that gross of $X.X market compensation would wins. to to of XX.X%. to will XX.X% million. of I in SG&A following: $X.X $XXX growing our to $XX.X be expected million margin shares. expense cost the business. long now are conditions margin in goods can expenses to the be our shares Interest be in conclusion, expect are in gains to to between to continue million. non-GAAP to customer and million ability the XX.X% expense sold. Litigation engagement range R&D million be is be to SG&A open

Thank you, line first Q&A your our is now Matt [Operator Bernie. Our question open. Matt begin Ramsay Analysts, of like now session. Instructions] to is Cowen. I from would

much. evening Thank if you're in Europe. guys guess you very I good

okay. hear you can Bernie Michael, me, So

Yeah, buenos noches.

Thanks guys.

to questions topic. two model and different related the the different the me. a on from term one sort near and of other So One

bit could bit, talked conditions, Bernie, of the concentrated the was about So us in help and macro the mean some first and a little weakness it you if was I guidance seemed but the segment. question, you like a computing light storage

by guidance on implies segment. a So talk what things maybe you're and basis quarterly about if segment you by could

up. you. I I think and a be that follow would then helpful Thank have

seeing both computing and we're that softness the well is that clarify in to as storage the as just consumer. Sure,

are show QX that of learn runrate to of only The of and still QX. to and the strength the qualifier trying positioned about still that growth between communications sort The other segment. we're segments the

is how So we've a we've very, very been comfortable little feel we've what but the our expected communicating done outlook. we added I results, with to think both, conservatism

four come or that. the weeks guess since thank of question two over on my of Michael, And a first restrictions with relation base last, place, you company say China. Great! and second is to I've a this topic fronts. topic BIS China, and in it. employee has getting three about the into of being, I significant MPS the have commerce some Got been new I’d ton investor the on questions your

because maybe percentage restrictions example, part could these Korea. companies quantify for in restrictions things? some it’s anybody, spread China, in footprint. needing increasingly on your relocate in employees functions these you've of know China, any employees second what other need the cap those the of And kind to you be maybe in stories semi any from and employees Taiwan, from then pull If that of what I is actually of are places your on new question of manufacturing restrictions. those heard heard to and out SMIC if of We've across could there

that all China capacity disrupted your restrictions outside of how now in be at along operations far might the the because of anything China. of or of your So maybe are some you and mix guys that's manufacturing

the frequent over nature You but pretty get weeks. four been the of this last three a they've or questions, and acute

would if could just Thank be address topics. it of So, kind some great you. you those of

leave government okay, for China. office all. a subject and that's presence, in an have the people is think and regulation And sanction five, at questions. it This of moved manufacturing not local team whatever with we nice is already what very MPS large list, have sanction the on And don't in totally the we companies, here couple MPS Also, about I and and XXXX, about at we I the talk started most entity we’re of people to the mention China a starting the not very We’ve of all years Michael, We we ago. are list. leave China last U.S. I'm and the one within Barcelona the we do have engineering glad talked to is now. entity should to six Yes, – presence a We’ve not we quarters, manpower. other diversified it. your concern within out is. have in support. a This that misconstrued we’re a that you have sanctions asked, Americans large in are

of Geometrically different time outside China, because we we’ll into – grow we that's region, of in zones, wherever sanctions, will to diversify. the want – are better our We give We a because not the same we and because want. support. customers we

to finish technology up not and restrictions. be are to just subject our there, perfectly our And clear, Michael's on comment to products

much. No, very thank you

China inside products follow-up. What the you really, of much a it. say is versus guys, sourced outside. for I percentage manufacturing of my thank And indulging actually very footprints Michael the appreciate revenue quick or that you question Just really would today the from

is convoluted current the clear the But wafer answers, don't XX technologies, question packaging’s we it's is figures and process It nanometer now. to a using we're also above and convoluted and nanometer manufacturers, back below. it very is of our have Bernie’s very the XX and very Bernie’s and convoluted, going and sanction a

far that the – mentioned using Bernie as edge. in script, in way from we the far the are We are trading sanctions

the using equipment. of fab really are trading We a edge

business relationships, within next diversify where be just as years, invest mode billion about going two be we being about we $X can normalized, able imbalance in three supply from if to our follow-up which is two production talked quarters billion of point to frees quick And that from as to go here, we're our I just to able and currently script expand demand actually made capacity, to pure the one three time up on ago, to has us in in to $X years. the that capacity

these we of mostly, China. are planned outside These

Yeah.

is open. Our from of Quinn, Needham. next question Bolton Quinn is line your

export want Matt have control I pile to asked, one the was on don't I but Thanks. questions other clarification. just that

nanometer some But has affected. that at You're nodes, XX below is directly facility, some my not and a above extent in facility nanometer and manufacturing you're that affected. the facility XX China mixed-use to multiple and above understanding XX a process would so be that nanometer

So XX by the you below produce equipment and restrictions. for XX above, I'm fabs therefore are Chinese facilities, any do of those just might that you're manufacturing running and/or also and wondering and know, the affected support nanometer fab-by-fab, they be nanometer

below, No. outdated above, These these okay, using fab are advanced did nanometer. and – where primarily usually, they okay. fabs, I share don't like XX-nanometer these are fabs We're XX nanometer XX not

are these different totally fabs. So

That's on guiding that there right just I this been know as on obviously tough said, pretty Maybe not because but I you're Bernie. orders. for the But I topic. know wanted now, December questions right, have to Matt Michael. Thanks one beyond quarter. is especially yeah, the environment lots of clarify

us if any continues meaningful some and can not pretty, some look share see server than you normal share I has this market to in you seasonality think would year? well to data as guess into give GPU back seasonal I less offset gains, side. you gains I thoughts side, normal on in And December, When the seasonal the CPU of whether both you out would think as Monolithic might kick those than center would so March be, as weakness that Power as guess beyond And next patterns. you get start as the to better

Sure.

here. more longer-term for you Quinn, – strategic So and issues focusing and thank again on

receiving likely far quarter few thinking And as of are has data growth just we are how I apply expect gains I track. to quarter occurring at XXXX. the very the next think look in in weighted the all that easy changed far that And more be think as to cautiousness then indicators half on after opportunities that. all. share Again, anything we as center to the it's any we as the the at second in everything, could QX, we're that when quarters. – and next caught about there Nothing been get

experience. guess that's that's And well as might Yes, and our I add. our

react the mentioned more lot the you enterprise ones, the as in shortage mean everybody centers you and - of – we predict is data kind then other things I overnight. better continue those CPUs at than the last the related ones have cannot These communication and all They and and we all and few power, aware greenfield Bernie’s, to to and and centers softening. look and other is grown, kind these know. guys And the it oversupplies to are have automotive are MPS will of, things, of know except years you You data the still, these and CPU MPS business, that. fast, read type ramp. We from our start a probably swings communications, almost they than in to data the are ramp them of just the products gaming, overall will are consumer you predict. of notebooks, script

Michael, Sorry didn't to it the shortchange opportunity. center focusing data by on want only I

So, for thanks that color.

you. Thank

next open. your Stein Our Truist. is line from now question William of William is

how have backlog question, changing versus on have then I Hey! a pricing I'm please. near-term a taking near-term of so can today hoping a of Thank talk have you follow-up of one. for From perspective, sort And might one one and your books much be I terms the in the we've recently? been questions. where longer-term trends you then and longer-term you also about duration what again,

shorter For name this. I and can terms

products and questions the it In no they or are another project okay? that’s got There's we, will all see even the cycle, ones we these said start the products, the to to notebooks quarter have years related business earlier, the I And the – okay, electronics, pricing. Because will for five we question, will emerge. And cycles. that’s ramping in in okay, longer, personal cycle in don't a pricing the like shorter they is oversupplied. that a shortest – come where design, or last related, long gamings there later, – four, question because later, cycle, is and continued. are will in, probably consumer any be questions longer new these pricing what and Here is other price, no I’ve about as what questions

well, overall. historical norms, the sort we're of remain backlog, historically, know still this to we you – than backlog an And the and higher customers. opportunity mentioned condition but have our to address – given us relative much And in been also very you with we has

In these several what demand engaged we've conversations be. to real fact, now, for expect on been in quarters they

that as is think I healthy. business of our very ahead, So looking book remains it far as

you're the and in then given that the I And or then uptake quarter less some about you question, you same e-commerce, MPS the to or I of products know traction thing current of the you. the seeing the that whether has, given services more tend environment? longer-term wonder more each ask seen products changing And those differentiated of either of about environment. falter modules with have like Thank particular. and expand demand

we and okay, are and more business. don't the the all be just than e-commerce we're and the diversified any MPS' future even products, and current would where business and see MPS changes they that's Yes, continuing modules business

is interesting concentrated far not pretty any And I any distributed our as market. It modules. against in market as of one markets. the It's acceptance it's actually – really evenly think all for

in with that is clear a to strategy. well that So diversification indicator our me fits it real

that me if of and beauty module you where these it. we ask frankly ideas have is goes, the Yes, don't

Thank you.

open. comes your now from Jeremy Jeremy of Stifel. question line is next Kwan Our

Can me Yes, you good okay? evening. hear

Yes.

questions. a couple Great! Just of

it just it anything that that looks increase to had in can sequentially at call First, lighting looking want the quarter. of some like out business. a I nice this the just business, there understand dynamics you Is there?

Automotive.

oh! lighting automotive. the – sorry, It’s I'm

been driving it. Okay. That's what's

Yes.

probably launched, prepared the that areas, three that year in there said lighting uplift were one them XXXX really contributed automotive were the QX. new of in in most were we and the to tied to that them As being comments, of there are platforms the model

something from is or each sort as expect model new steady at look should this ramp step functions of So of we a new that can here? kind here with like and a more the baseline we

is lighting in Well, the – a lighting automotive have variety.

indicators, light, of down You you you signals, okay. have then the have you the have all kind a indicators, have headlight,

the ramp. last of, to automotive the Greenfield couple is stepping content up that's the that's kind and in you of this and of So content. the quarters growing see we're cars, The product part start

the have a and we at okay, will here, continue beginning, it of very just cars the number grow. small, For to we small have market still so

little more And Great! the in that term you the the things, may just bit size about it. agreement the magnitude this, on turning long purchasing is you or from us deal this Bernie, past. know Got talked maybe to of this details you done how can you give and different have business a way the

be and behind detail understand know that more this, helpful. very strategic us any your would Just help you to thinking

Sure.

and So incremental that have than of when of, came didn't chain supply-demand market they that a competitive we in allowed about our actually that the supply you availability we us our superior part imbalance the for because allowed competition, invested out when earlier position share think had and to had we period gains.

order expand purchasing that existing well instance was. So regardless wanted gave with in economic as and – what we we new capacity looking so to new us this agreement we're capacity, as opportunities that and with for the in secure dedicated as fabs, continue a of to environment

supply it, you. there modules. here? you can you terms well? again managed just just things differences the call one there as or Are last us then the be whether give of footprint. on manufacturing know you it's to Can whether any in sourcing geographic And terms needs into of insight thank it's in the question, that the And other Got chain that touching

way. answer is Most Most of of it our let China. that assembly – outside it of me modules

very you Thank much. Great!

Oppenheimer. Rick your line now Rick, Our of open. Schafer next question from is is

hear can us? Rick, you

muted. me now, sorry you I hear Bernie? was Yes, Can

Yes.

question. my Well letting me a ask guys! on just Thanks supply. hey Great. one you for first Maybe

us newest kind You where capacity of process, you curious in if know you of maybe guys of was ramp, and sort them level they of at just foundry obviously even I get how eventual partner, the might a Just terms on much know set better TSM, your are a eight how going you get you could that ultimately be handle for versus of sense partner. much as are capacity have trying to a on to qualification XX-inch?

China use XX-inch them is these most what of course do do more in ramp use to the a for now and we lot Yes, now are type thing capacities that of and for and gives a we these lot of the a these and is very and product a and not also at grow. all use microcontrollers, the these are have so advanced that nodes are TSMC. product new process gaming so room it these the all. are products. of Mostly at us we advanced And automotive We of beginning modes, the for communications in winning of that

is TSM Michael, I – year's too of quickly is kind could a just to of sort get say contributor of sense. that think a of time this to capacity to ramp? XX% So mean, could aggressive in kind a be they how or

we as side now. lower see the On

talked it what engaged the now like know be with might sort discrete anything of about Michael, MPS curious on to all just I but kind when particularly remind I'm inverters. past we of follow-up, that be and for subsystem, initial assuming or it looks a dollar customers content then just that and would you're you've I'm revenues? And I us lot silicon progress, traction ex-EV? would get an carbide would see update And be how but module/subsystem? of in mean a to expect many Thanks sort

does excited. silicon Yes. set first sell question. me high-power ask Thank as of and a that going as MPS modules to that kind like a it's a that the you the intend power Yeah, We do things, okay, qualification product carbides our device work the working. and very through power have now; much not to only power device, only. gets

will these sell BMS, engaged car with as silicon things, revenue of well we charging in will automotive, we our and in years. have using few the don't sections okay, customers but We the And our it automotive be any large modules. next and energy many small yet, stations within technology the and combined as also storage those produce kind do have

Michael, to a just content it in of reminder vehicle? potential sort And you a or guys a does what or just for car content

of dollars think enormous, I be – will in have opportunity would - a a have even don't a content these I a conservative a It's and estimate. the that I don't be billion, okay? couple very billion of is smaller.

not driver it, Just to about charging all is MPS entire going the okay, sell only, thinking make the power systems. all trains trains, stations, and a chip we’re the selling

all for lot the a Thanks color. Great!

your now Alex, from open. is question Alex is Vecchi William of line next Blair. Our

my for have consumer thought notebooks reason elaborate gross would gross down only given just on around The housekeeping lower market a mix. for little weakness bit I'm Hey is margin question everyone! Bernie, margins. and sequential? I taking one a you questions. you on Thanks maybe in asking end is the the Can

to on So from of like think here. can and help it that anything to do you how

Sure, Alex.

into So there's lot a that gross a part market the of by certainly of ingredients is the margin direct margin it. play and significant end outlook

to unused necessarily same isn't don't fixed amount Another volume. like is that the by capacity. necessarily of I it absorbed - call cost The the

that's cost pressure of So putting the downward mix bit margin. as sales opposed a really little fixed the on gross it's to the issue

partners? view eventually then questions being Chinese that just accretive versus Do your And extent, Rick's relationship gross margin to expand Okay. you regarding similarly partner that on dilutive or the TSMC. new or fab

that digital a territories microcontrollers, Well, and is these therefore – and are and the there gross that product. – margin highly issues. We events note products and content are more the moving towards in these we're more different no it's

that price. in we compete down All values more These software more. the case that don't side. the with So products go in the add are is we

them, expansion with include new in you we're TSMC, China fabs, same that time I both an these Korea whereas products as doing when advanced that from well at think as are And away diversification developing other we're Taiwan. and and would in and look at the that South

really back Thank that go into you. helpful. With queue. that’s I’ll Okay,

Our next open. question is line from Melissa, Raymond Melissa now Fairbanks of your is James.

$X saw revenue, And in then maybe weakness little the get saw more much. for needed just demand give to guys! planning, capacity of – longer-term Hi the but Thanks We that when on TSMC, near-term an you. CapEx cadence what's question impact you the not in longer-term plans? a We those quarter. we're Maybe investment the with the update dip third a us and very little there? path getting longer-term billion ramp your could broadly? at to to Does looking CapEx

Well, – always look our at past. if it's you – we a

look not eight, our you it, capacity, at and same how We're you we next to four, the investment, okay. what And invest going past pattern as going our the If the look years, nine, if is at invest. less to expand we're five years. XX it's not over

the at it. you So look trend, if

also years, years, and really years, or whatever the you it is rate you same four our the – plotting and percentage you're the past use the of also pattern can growth growth should the and growth different kind have the in the four next we remain in rate, years previous the the range. use can from plotting XX years, three years four past in and two in OpEx constant last eight If pretty in

expenditures keep partners And us. borne our expansion, in the by directly mind when not do are by that Melissa, capital the fab we

It so rate why fluctuate when $X is year, lot happens that's per million earlier and that to you million between in more investments quarter a So at from $XX those quarter. which concentrated run test can Michael made lower. of equipment, heavily that the referring in we just anywhere per we're look our to, that's

The other buy that and can of nature. we material we be thing in that any is no invest there our we facilities and develop those own investments on layered do are or currently

than more, Yes, a rather let me you this give clarify little model. a

of it the is process, we we fab capacity one large MPS, qualify the with associating the don't to of qualify the own expansion, You and know to products. portion equipment, we our and fab, is cost own have don't

about down, we through have and – to okay, We qualify product slow and slows – over costly have X,XXX, cost the will demand we so products, cost, be if the nine That months. a that's that's to we qualification, out. takes and don't very down to go well as don't and fast if X,XXX eight so spread that each

those And costs line. borne expenditure are our in R&D

much Okay very guys. great, that’s clear. very Thanks

Instructions]. [Operator

no back As now are turn Bernie. would to further over there webinar the questions, to like I

the for early this conference I'd look thank all call is call, and forward held day! us February. be again nice to during to quarter and Jen. Thank you to to like Thanks talking you likely in have fourth which conference joining for you a