Alpha and Omega Semiconductor Limited (AOSL) 6 Feb 232023 Q2 Earnings call transcript

Good afternoon. Thank you for attending today's Alpha and Omega Semiconductor Fiscal Q2 2023 Earnings Call. My name is [Tamiya] [ph], 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. [Operator Instructions]

to with conference Investor like host, to now Zhai Yujia Relations. would pass over the your I Please proceed.

Good afternoon, quarter call for Chang, to am everyone, our Semiconductor's Zhai, AOS. discuss Omega and Yujia call Chang, are fiscal welcome With replay our to CEO; me via XXXX Dr. our Relations Stephen second days live Investor over broadcast financial being today I Alpha results. recorded representative and Mike President; and and the seven in Yifan link website. for Liang, web. the our will A Investor CFO. following of available the This call is section be conference the Relations

After today. Then, financial the Yifan and call proceed business will provide a provide results Our March the guidance begin report. with and Mike Stephen as quarter. that, will strategic highlights. follows review updates will for segment will detailed

Q&A on have today, close. earnings Finally, posted also February the website. XXXX, was wire The after X, we session. the market the distributed is over The will company's release release

Our information GAAP earnings because these provide conjunction by the non-GAAP in they financial reconciliation we A comparable performance believe and in non-GAAP useful include We investors use earnings non-GAAP included measures. release. our should be measures the measures operating with that considered measures this of to GAAP measures. about release presentation is

management's differ discussions on the actual results outlook based and our business We such remind These materially uncertainties expectations you forward-looking statements that that from expectations. during risks this and are conference of cause certain statements, financial call, we and to will including could make forward-looking involve projections. current

SEC. assume the subsequent refer of uncertainties, no filings obligations description in and with call. information detailed today's provided please a update to our For risks to recent and We the these

call Now, over CEO, Mike turn I the Chang. Mike? to Dr. will our

everyone of Year to good speak is to again. Happy call. welcome you with Thank you, all today's It New and Yujia.

years to be am that and with Before vision begin to this you Officer time as today I ago, saying XX to results, our over last proud by for the company Executive speaking I dream. go I the AOS. founded a Chief I’d like a of

never world. one of well-recognized the we vision the in fast-growing this most and semiconductor power ends, companies While successful are today,

of we pleasure am I the years It ago, Chief now his leadership skills is acumen confidence I position to who achieve demonstrated since President AOS’ that record accomplished great appointment have all with revenues has his AOS together. that Executive and proud to business Stephen, and and as already turn leading two profitability.

been your one and thrive. want and and the all of I hard dedication every this see for work. opportunities. the for alongside you Thank team the and It to thank each work grow to AOS company and you has an to memories honor

that this for moment We are in of the has journey, am point an and I incredible led every us today. to grateful midst

I to customers sustained key essential deeply more focusing in on as and will AOS development strategic as partners be and and AOS on to such growth. with continue critical involved relationships technology long-term plan ensure Executive and matters of Chairman

moving Now, results. to the on

was Revenue in non-GAAP impact to inventory quarter, expectations. gross over million. was below and $XXX.X margin coming us QX fiscal Our our quarters, the was industry-wide and correction $X.XX. that results indicated XX.X%, EPS an expected were particularly smartphones. Non-GAAP we we Last PCs

quickly balance, that and high across was magnitude for back markets expected. larger we of remain serve supply into bring our than to customers certain possible. levels levels inventory as consumer many of chain correction inventory are working customers the as the However, we this Inventory

a forecast $X As revenue be minus to quarter plus we approximately March result, million, or $XXX million.

China. quarter sequential of decline of the the second and portion with year, in the so a recover more good half in especially to We even the June re-opening expect of the

challenges macro stated we our As last not cycles. to quarter, is and immune industry business

data. We and cycles one through eventually leg couple many since beginning based these quarters not to a on just have of do years given no a cycle way this growth, make new of of has decisions our and is exception. the been ended industry XX past Every over and of the of

We are the are continue ever past our have strong this growth been position best confident we given we us. to that fundamentals, once is our momentum in downturn

most market a million, product set Tier year-over-year, the was Looking one year, back records challenges. metric. $X.XX, despite X% X% share per We we earnings year across the across years customers was non-GAAP in year-over-year. on and almost up calendar X record successful many was record most XXXX $XXX of history, our every segments. record the up a the with share and Further, closed Revenue

we largest us market. towards more in two premium and Smartphones, the improving content, for XXXX. in due outstanding our gaining faster share, deliberately This grew increasing mix to our product segments, products. our BOM than an PC market significantly gaming product and was success success Further, was In tier

console is with gaming [traction] and in These gained. many even us continue few examples to that leading products, now more X of and to are a weakening achievements just out doubled we contributor our the revenue strength, expected manufacturer for AOS that have share won and for of fundamental demonstrate business environment. consumer grow competitiveness [ph] a and the our demand Number and We major than the is year-over-year this a

call, Stephen our macro-economic outlook section to of details than our is largely has that to is anything am but during I stronger, will confident the factors rather fundamentals. provide his due never which more specific why business been

inventories in channel we As see consumed and the rebound broader recovers, economy are expect to revenue. a

of exited couple years. next with $Xbillion which continue our best enables believe we power is on electrification what here the for and management to eyes of environment win by the We more have demand we economic balance in stay this to In while annual current and we sheet, this in to achieving market. are position to in been We a everything.” “the us XXXX tailwind target navigate call is better strong keeping revenue being our ever driven closing, the

I segment call the will to you. on and Stephen CEO, over for Stephen? now update future an report. our turn a our business Thank detailed

pleased good we Overall, everyone. business China’s global with performance it and past very across constraints, we restrictions, disruptions achieved I'm this afternoon, our of all year, headwinds. Mike, of zero environment we challenging COVID very record delivered with chain supply segments. you, revenues Thank a and this, while from and Despite navigating calendar inflationary the significant achieved all

share, XX.X% revenue our $XXX.X were results million. X.X% X.X% million. much more product XXXX consumer, diversified broader as customer year a partnerships end million, total industrial market to across $XXX.X use portfolio to markets, as Power $XXX.X well Consumer Industrial that’s serving made to calendar possible solutions increased by segment million. and XX.X% our increased record a Tier Communications X of grew to cases. Our These and $XXX.X commercial, and set increased and Computing Supply year-over-year

and we significantly While our demand for indicate other a benefit on side: sentiment environment there general inventory near-term to correction make XXXX, a weaker couple positioned the outlook are factors that believe and market us uniquely

of One, that customers where by slowdown is a portion we leading driven experiencing are we our share. the good have Tier X

our are with ever and their remain has unchanged best and customers the devices However, BOM been. in it these our relationship sockets content

categories grown. demand are for certain experiencing their slowdown us back are their normalized. more time are makers confident devices customers is premium as be in only and to that inventories why These will behind over This leading we the these are demand in has device the are products world come we for this once

products have navigate environment, drive leading investments R&D Two, market focus strategically returns. where be and to spending will the to can, leadership stabilizing market we once current our on while continuing the

data as In areas addition, infrastructure, automotive accelerating and our we development are such applications. new center, in industrial, growth

example, and XXXV Carbide recently infrastructure to applications. charging, Silicon For XXXV MOSFETs include inverters, our Silicon on-board Carbide for car traction we expanded portfolio and

at renewable and will to automotive level. an their right of broader portfolio product now range and solution industrial, power that energy, customers even higher performance Our a wide select efficiency the supports have available levels

now represented cover and me for our down year-over-year results quarter by revenue segment and revenue. Let and the was Starting Computing. sequentially XX.X% provide XX.X% some quarter. total guidance of December XX.X% with next segment

business in our quarter reduced Looking shipments our closely, but more our quarters off year, year grew December the customers PC in aggressively back the of inventories. demand dropped first the rapidly on PC three as for

significant drop, in PC compared to increasing according This content, BOM a units to was deliberately decline towards gaining product Digitimes. X%, was and up XX% PC due this our to tier improving full-year with Even products. mix revenue share, premium our our success in more

with March quarter, decline help conversations customers depleted our anticipate to latest our season. March resuming they on quarter, the some significant the orders and Based recover will June customers’ the expect ahead for some forecasts, peak will we of quarter inventories of of which in and be demand

showed area of performance of areas medium by segment, there the as In voltage Computing strength significant with this Cloud centers and in December notable our particularly our growth providers. quarter, data leading adoption were low high MOSFETs year-over-year some

and be to In strong. tablets addition, continued cards, graphics

Looking March actively Computing ahead, as with XX% we sequentially work down to we total about the in right-size revenue customers segment inventory. to our expect quarter, their be

again and gaming Turning our XX% increasing XX.X% X.X% December and by grew year-over-year with once volumes, driven quarter to expectations XXX% represented were These which revenue revenue. set XX.X% records segment, the record total Consumer sequentially year-over-year of results and sequentially. in-line

to ahead, a segment mid-single-digits December Gaming quarter. by very anticipate sequentially shipments in seasonal a strong slowdown after Looking Consumer decrease our we driven

total and to increased quarterly Now, to results These shipments China. revenue. X also let’s year-over-year to were higher set our discuss customer, well smartphone of record the Communications Number as XX.X% than and it segment, expectations the sequentially anticipated XX.X% than which stronger revenue due U.S. represented as as significantly XX%

XX.X% Smartphone by XXXX, full-year the smartphone decline shipments For grew global XX% estimated estimated despite year-over-year, in an revenue as Digitimes.

driven to to protection This with the market models. was due strong our partnerships our as premium by as well share battery customers. with growth high-end high-performance smartphone serve in ability Our our products, the tier gains is

we help sell-through of customers to decline levels headwinds In a of expect inventory sequential China this and after quarters as of XX% two a inflationary shipments lower spending correction that to to we fully their the end didn’t due segment result zero-COVID normalize about record March steep face as quarter, discretionary consumers restrictions. our

quarter our that welcome consumption. to quarter Internally, the business smartphone the season. peak start in June reopening also we for expect development China’s a preparation September to improve in is recover should

The Now, gains of and PC increase our revenue. up phone in records slightly This total which XX.X% supplies at Power maker Supply the and accounted let’s year-over-year chargers sequentially. talk X.X% to also segment Industrial, with adapters. in up U.S. was power and revenue for gaming leading share segment, quick due about and growth set last

anticipate sequentially, the we XX% quarter, segment March around the to inventory For correction. decline this due to

R&D slowdown, closing, earnings, leading and In corrections market year are market our experiencing are ultimately for a and number with a industry. share record technology manufacturing many XXXX We was a healthy strategic of Calendar and with product we revenues, for roadmaps, a record-breaking cutting-edge inventory diverse XXXX enter promising temporary relationships customers. strong with customers. record Tier with while cycles offering, and strengths: growing us, capabilities, X

appointed newly the leading ability focused faster growing our the am CEO, rate and market. in on forward AOS confident at As I than to a am continue overall

areas while growth will infrastructure, centers, our We investing and such execute successful industrial. new as also data maintain in strategies and automotive,

With for the next turn quarter our Yifan over call second that, discussion and the will financial quarter. to a of outlook fiscal I results now for our

afternoon Thank down Good you, X.X% quarter us. the for sequentially year-over-year. everyone and joining down was and thank million, Revenue you Stephen. X.X% $XXX.X for

down year product and was $XX and X.X% year. from XX.X% DMOS IC million, down down sequentially X.X% of revenue $XXX.X prior a over revenue Power XX.X% the mix, terms million, quarter ago. was last from In up

The Assembly for was industrywide favorable to service a the less by prior margin $X.X compared XX.X% correction. mainly quarter an same in and Non-GAAP million, year $X.X and and revenue reserve, driven to gross in quarter last increase last product quarter-over-quarter margin the ongoing decrease million was compared year. quarter XX.X% inventory non-GAAP gross the ago. reflecting mix inventory in $X.X million was XX.X%, as

was this Non-GAAP were and for variable million, quarter. $XX.X the $XX.X compared prior due compensation to year. $XX.X The million operating quarter-over-quarter accruals million last primarily quarter expenses decrease lower to

per share, compared $X.XX and such, ago. $X.XX a quarter non-GAAP year EPS quarterly last was to As

$X.X deposits. million flow cash was customer cash in which repayments to comparison, on operating included included million of $X.X was $XX.X operating million, flow. flow of prior customer By GAAP quarter which million, deposits. $XX.X the net cash Moving repayments

Operating was ago million, cash included $XX.X a net customer $XX.X which flow deposits. year million

$XX.X deposits Consolidated to year and $XX.X $XX We was refund million, million million EBITDAS around calendar quarter last compared customer in to $XX.X XXXX. million last year. expect

the of completed days. $XXX.X the to balance reduced turn a ago end both XX quarter sheet. and me $XX.X last to to million with compared were million, Sales Let our trade prior the receivables at was We compared cash balance December for Days cash of were $XXX.X last $XX.X at The balance December Outstanding million the Net quarter quarter. to million. year $XXX.X million, the a of quarter end quarter.

slightly million were Net days days, days year. from in the down $XXX.X up inventory prior last XXX was million and $XXX.X at sequentially $XXX.X quarter-end, XXX million last in from compared Average quarter inventory quarter. to

Finally, million, $XX million million. quarter. a Property, $XXX up last Plant million. was was was fixed The balance $XXX.X year quarter the ago for from and Equipment $XXX.X assets CapEx

expect drop We to $XX quarter. the CapEx million to $XX in million to level March

Our expansion ramp Oregon to to is in expected XXXX. fab start March

like to would I guidance. Now, March discuss quarter

approximately million, million. $X minus $XXX be or to revenue plus expect We

the or GAAP margin Our seasonality guidance minus the factors ongoing be industry-wide the March quarter. for X%. inventory in correction plus XX.X%, and gross to

product quarter-over-quarter decrease absorption $XX.X and minus expected mix in plus to reflects anticipate to due the gross We current be operating factory production inventory impact margin correction. expenses the plus the GAAP be of million. XX.X%, changes or The to $X X%. lower range of mainly the minus non-GAAP million, or

expenses in the million. $X.X expense or to expected minus be expense operating in to Interest plus Non-GAAP of range tax to $X.X be range and are approximately $XX.X to million, income million. the $X.X be million of $X million,

With the will please open now questions. call start that, the session. for we Operator, Q&A

Absolutely. Benchmark. comes Our first with David from [Operator Instructions] Williams question

proceed. may You

guess, good hear there. on evening and the Stephen, more you for question. great thanks hearing from forward congrats to the transition, first taking Hey, looking I and it’s to off,

in recovery I but that that Secondly, you what's June know the about there and type things, I I'm like confidence some the to of guess it gave if confidence? kind few in expecting maybe much color and larger, giving sounds talk of have revenues you talked a in And about June. for curious you're guess, a I rebound as you could the you just

Sure.

we a but depend are a we year, chance largely, June. will is us, end general, For in September for that seasonal This but the are that and that towards quarter in signs tracking of some on it there's markets. for bottom is think we in good our some why quarter do for guidance March normal that, also macro overall shipments a peak recovery seeing we the of environment, give

inventory already we severe is We're market a starting correction, some still see different position portion but inventory some Even the are that. levels them different have from for the that if for replenishment to of positioned share you still the seeing what more place that’s find customers and of orders June quarter.

kind of indicates That's even PC the stabilization So, this some kind for the impact. market. bigger of

of are So, other with end markets working in our their right we inventory in to size PC, but course, only levels. not closely customers

is China that revenue demand for maybe the then June that. based very broad and That's you recovery helpful. rebound in guidance And much you recovery? just do Okay. more Thank of thinking about how related think in to a versus

but of of our also being That portion customers within China, business The who can China also good the affect not by a will impacts global of spending help consumer a China have certainly. purchased only consumers. opening lot

too. that help can So

And so, yes.

then side. Okay. maybe, you All right, Yifan fantastic. one on margin And the for gross

of some takes that the and headwinds and curious a give today felt Just a you're recovered more the if an just maintained are of think of maybe impact would then do there us kind the what biggest that how you year? negative versus could think idea And the of puts in environment, maybe mix those little I be volume this where through there. discuss stabilizes? margins bit even facing but higher kind and you you

correction of correction. inventory got it by to March the And increase, the inventory mean this mix. the is bigger because to In was the of portion product I December tied because of I quarter, inventory especially. a also quarter, primarily And was margin impacted Sure. smaller portion mean, which reserve in the

decline. quarter, seeing factory For product top utilization line of are mix we the March yes, some the and because

production. our also are scaling we So, back

mean, [ph] to I quarter's changes. margin March So, basically product and both [utilization] contributed the mix

it I luck of so on best appreciate Thanks much. the certainly and quarter.

you. Thank

you. Thank

The Securities. Craig from with next you. Ellis Thank Riley question B. comes

You may proceed.

just taking touch earlier great Mike question to to events. and congratulations and start, wanted the And to Stephen, company. an for way. a question. look you to you will staying Chang, with on go you while on Yes. And different all in built other calls these CEO, frame Stephen accomplished forward just maybe I a back Thanks it

would fiscal you potential quarter If most look, that around to helpful? second which you could the looked and end rebound would fourth your and any color [different quarter, be at March and from out to them you the if lows how materially quarter, confidence by look [ph] were that rank here calendar markets] in as ranking in

– also that this specific is correction would the the a to potential some greatest that to as quarter. guidance, is fiscal level that in that now is in computing territory. that quarter. that Again, I definitely of believe recover point and that inventory the we – are to that's a signs saw I for And Sure. fourth giving starting grow correction the segment inventory already not there at mentioned but that we're as is we most not

quarter to to A are segments [ph], ramping has – for power good after for the think more itself supply along smartphones. but segment. towards adapters] still [PD time the will of the portion seasons supplies So, the the follow working follow other the to also with then And business I for to computing. have also prepare grow the that the peak power room that. tends competing segment We're too. And and no opportunity be fourth recover, usually fiscal

seasonally we consumer that release believe noted is gaming also our that earnings We low. in within

from well. as expected recovery quarter starting to fourth the there's be So, fiscal

Okay.

of compute, PC and of did power of part then was consumer, I [ph] get cycles, other product Stephen? part [comps] ahead gaming right, that that the industrial So

Yes.

Yes.

All great. right. Okay,

towards, move So, way change we quickly not levels can a commensurately can related in be, flow moving things we just or change on that revenues How in delay the gross see a revenues of gross recovery translate will could given through quite a to a second inventory? margin? back in kind saw a in fiscal there if maybe into to quarter, Yifan, question. margins but the

fiscal mean You for quarter, then right? fourth the

fourth fiscal for Yes, Thank quarter. you.

right. we we recovery line expect recoveries. would once margin have the All some mean, gross I top Yes, in line

hard the also, product is depending but inventory – channel which I to our utilization and the mix on own I say, right and to now mean I mean, inventory, So, tied relationship would the say. inventory. the both

So, by-and-large, some recovery you margin gross had I would the expect that for line.

loosening of Got it. more of year? now at up aggressive good Are holding competitors seeing year longer-term out agreements, those availability – capacity we ASP competitors over How is I is with And that are course your your because this relatively are there? you you Tier pricing? you Xs the foundry about last get what how saw imagine you seeing up? versus pricing should are think calendar dynamic the some but

last mean, it I in of it I we now pricing pricing the environment. mean was favorable inventory yes, Yes. and was couple correction mode. wise years, are in

expect XXXX than erosion] or trend. to would the worse didn't the normal for historical expect calendar I [ph]. [price year So, that [ph] we [in erosions even probably would impact] some ASP again back

have X Okay. normal it's And we a since or levels years few should we how points that? is been normal since think or percentage X about

that's then erosion back your mean before than for. you reset I game basis. year-over-year, or we'll to products years, expect the only then and products – functionality sell high-single-digit years. X R&D providing for I there. of new and the products traditionally same yes, before the same mean, rolled be the and and we to efficiency more by per Yes. products erosion we there, I year in name is meant and And if But that's would more mean mean, those I ASP then we some price new The out out X

yes. Absolutely,

new point, of price resets a year, out that the have you about totally history a dynamic. getting which exactly get products I does so XXX think that

what versus structurally or to model, mostly things are Lastly, about product in least in you expected. as at favorable anything the with ahead belt tightening various you expense even came Is you in doing reduce talked quite I that programs, automotive? my push operating tactical including OpEx

so December variable quarter certain the it up an quarter, then overall variable [COGS] because for reduced OpEx because of year guidance comp. we December compensation of largely performance [ph], calendar was the the for XXXX was not there,

Stephen. Got so Thanks, it. Thanks Yifan. much

Alright.

Thank you.

next you. Thank The with Stifel. comes question Kwan Jeremy from

line open. Your is

end give month the as update to a changing the and Yes, well good know churns in terms newer the of is What it Mike and Thank you let a year and pretty quarter, the and afternoon, shaped next or have congratulations be color the as in first business terms me you’ve just also, move both took in two. in you. sounds or of And the and Can I in of of quarters? how performance last year? March in into pause any more it you my question also meaningful it especially add prior you linearity might things roles. I out quarters that your of like guess as few the it of us kind this orders sense quarter, the done? kind on throughout was last Stephen where in into

Sure.

and the products ODMs. through this consumer personal of chain [indiscernible] picture coming changing adjustment the kind the address reduce, address see Yifan seen adjustment to the of since tied can to both, talked and was OEM, me maybe and And smartphones demand. There second a the a overall throughout last type kind more part, further of was and slowdown significant the inflation the the spending. we supply release. Let mainly did and earnings in the from on but time first PC this we essentially part, is macro And

overall demand industry. were in So, last we in years, few the quite strong this

right some will So, customers for our to unwind size to take that and their inventories. it of from time some

are our markets. relationships I happy have still forge to our So, that that's X mainly with them want end to affecting and customers. and the customers stronger Tier strong. again in those position our areas products particular We're reiterate

this well market importantly for next to positioned during And very especially products. their very is important this for us share protect our or and, of as getting rebounds time versions as when the

So, in have better customers previous are still positions good the industry years. our with deal overall than we to but and slowdown, our work

but mean, regarding now on grab the pretty current other can mean situation. hand and is we depending And and Jeremy, I this on cannot dynamic have the then are yet there. we do if right catch all involved question then whatever then happen we then business [indiscernible] and business Yes, is this yes, I to dynamic we on Yes, And we your market so the we then current have on than and – want. current the Yes. and and serve, production business. mean inventory I we hand, pretty thing is cycles that backlog we as the that's can, but

to, you That's the ask Maybe changed potential you little of [ph] facing into orders bit seeing like? have or quarters? cancellations that? on couple of you you. times looked another Are way clarity the relative your past would also, a further know beyond give you to any quarter, helpful. the bit of much And in us June as this Thank much very much about what in how backlog, ask topic, can find customers rebound are you. be a the Thank finally, the as currently question talked, know you we and outlook mentioned how [churns] more to a is how backlog clarification. Maybe lead

adjustment in inventory mix mean push the replacement. correction. December and Overall the of the reflecting decreased, quarter, yes, product we And Sure. and I I Yes. the cancellation] quarter mean then shuffling more mean some industry-wide I a level backlog, lot normal the out And backlog there. that's a [in [ph] then changes did than then, And thing. backlog experience

So, guidance. I backlog overall, reflected quarter, has been yes, March our already in mean, for our the

For commented some some just June for customers as we placing quarter saw on, recovery sign June started quarter, the and the Stephen some already. orders of

we'll So, see.

it. Got

utilization. or back Can of turn of us or capacity utilization terms you give you I supply internal on touch needed? Thank the side obligations you bring you have know, to you have you. last Okay. flexibility what also, now may your is maybe quarter? [internalist] Are contracts and foundry kind where And can partnership? know, switching and in your the was [indiscernible] or the more and if to, where JD currently And between there, capacity that there could your [ph] on if you

have priority we our is is, where utilize Oregon. of we our our in products. And own internal And yes. mean developed fab new Nationwide Sure. most I to first, that's fab our

mean, portion, utilization. Even So, pretty expect March, fab. ramp still come a right up we of running for level Oregon expect fab the start is naturally, I high at the of for we the in now to month Oregon expansion to online a the

yes, demand actually, portion, expansion actually we the for – we So, have to portfolio.

quite dynamic a in So, – I the bit. mean, mean, mix changing pretty that. I a product that's right now, of it's kind

sometimes back-end, lower or factory a we two. also joint load or between and I For can to own it's some venture utilization. foundries and subcontractors our as third-party use have switch do much quarter as – do again, hard we we pretty but the mean, to first,

dynamic right now. pretty a of kind is this So,

Got remaining? sheet, I you quarter. to give us the And just it. turning about you. million – how much much have I've how guess I XX That's deposits understood, customer the balance September what in helpful. you Thank think you can from have

prior million quarter. in this X about the of December of XX million that and repaid quarter past that You

have I the customer deposits? XX in do that left that there's So, million about right,

Yes, yes, is. it

Was expect you Is this repayment clarity worked of you how you of some through? there? around? much be Okay. can those And deposits Is fulfill they time the dynamic as capacity? do to the saying guess And it just that some is kind the – deposit taking as or the I of terms don't are they capacity in need of give back? arrangements us

mentioned level purchase. with repayment I as Yeah, those a XXXX. about certain in million year And those $XX script, the – we expect earmarked deposit of typically then in in calendar

Got it.

on bit a [indiscernible] I – this do you quarter. know up was a And that inventories, internal Okay. the little have

kind of to you dollars to maybe get and that Thanks. low Next a [ph]. the XXXs] inventories keep Do are maturity quarter, flat. holding? have, comfortable at want of kind target to inventory you're the [X, These you where are

support mean to normally half a now yet out second we peak the to need do right situation. year. of Difficulty] capacity year I balance [indiscernible] and And rebound the [Technical expect to Well, of in we the and half market adjust according some then second can the June level quarter season the

level. we'll then I current probably it's So, that largely that. see in maintain mean, level,

level? Is a dollar amount that… Largely in current the maintain

Yes, dollar.

Okay, great. That's all I Thank you. had.

you. Thank

Thanks.

this no [Operator questions you. at Instructions] time. are Thank There

is Chang. Mike thing. me thick and that. is it thank these [Recession with I [ph] you I'm comes [indiscernible]. your to Unfortunately, end years appreciate really one support This it and not through of will I soon. goes, this a thin. each and gap] be do sure good And all want and for

or thing believe important we believe which The is, I technology. is That's long-term.

take three and both or of to dynamic gradually AOS things available waiting cash, as R&D we exciting well things really our last capability, good the there years, shine. of [keep-up] the in [ph] advantage In a as lot with

all God [indiscernible] So, and very tomorrow. we support your confident bless. very, the are for best. for thank you And wish you

your for the Thank concludes call. you This participation. conference

may disconnect lines. You now your