Good afternoon, everyone, and welcome to Alpha and Omega Semiconductor's Conference Call to discuss Fiscal 2023 Fourth Quarter and Fiscal Year-End Financial Results. I am Yujia Zhai, Investor Relations representative for AOS. With me today are Stephen Chang, our CEO; and Yifan 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 Web site. Our call will proceed as follows today. Stephen will begin business updates, followed by a detailed segment report. After that, Yifan will review the financial results and provide guidance for the September quarter. Finally, we will have the Q&A session. The earnings release was distributed over the wire today, August 9, 2023, after the market close. The release is also posted on the company's Web site. Our earnings release and 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. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the earnings release. We remind you that during this conference call, we will make certain forward-looking 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 more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with 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, Stephen Chang. Stephen?

Thank you, Yujia, and good afternoon, everyone. I will begin today with a high-level overview of our results and then jump into segment details. Our team executed well and delivered an excellent quarter. Our fiscal Q4 revenue was above the mid-point of our guidance, and gross margin was above the high-end of our guidance, which resulted in a solid bottom line. Revenue was $161.5 million, down 16.7% year-over-year, and up 21.9% sequentially. Non-GAAP gross margin was 28.5%, and non-GAAP EPS was $0.19. These results were driven by solid recovery across notebook and desktop computing applications and strength of our diversified customer base and product portfolio in Power Supply and Industrial end markets. Recall from our prior quarter call, we said our calendar Q1 results reflected our efforts to bring customer inventory levels back into balance as quickly as possible. We were confident then that due to our resilient fundamentals, we would see a swift recovery in Q2 and continued recovery in Q3 as we go into our peak season. I'm happy to report that it is playing out in line with our expectations. As for the broader market, end consumer demand continues to be soft; however, we are optimistic that the worst phase of this cycle is behind us. We anticipate further recovery in our September quarter, which seasonally has been our strongest quarter, driven by fall smartphone launches and back-to-school. While we remain cautious, we expect to navigate the current environment better than the broader market that we serve, thanks to our robust Tier 1 customer partnerships, leading market share, as well as a much more diversified total solutions product portfolio serving a broader set of end markets across consumer, commercial and industrial applications. In terms of our operations, our near-term focus is on maintaining close collaboration with our customers while gearing up for our peak season to provide the best customer service possible. As we see repeatedly, by ensuring our products remain highly competitive, prioritizing long-term customer relationships, and consistently upholding our commitment to excellence and reputation as a reliable supplier, we become a favored partner of our customers. As a result, they entrust us with more share. This approach has served as a cornerstone of our growth. It has helped us expand our Tier 1 customers across all our end markets, which in turn, creates a positive flywheel and marketing effect that propels us towards achieving our long-term goals. With that, let me now cover our segment results and provide some guidance by segment for the next quarter. Starting with Computing, June quarter revenue was down 41.8% year-over-year but up 36.8% sequentially and represented 32.2% of total revenue. These results were driven by a solid recovery in shipments across notebook and desktop computing applications following the sharp correction in the March quarter, which drew down inventories at our key customers. Looking forward into September, which is our seasonally strongest quarter, we continue to see encouraging recovery and expect further sequential growth in the high teens. Turning to the Consumer segment, June quarter revenue was up 18.8% year-over-year and down 1.9% sequentially and represented 27.1% of total revenue. Our year-over-year growth in this segment was driven by strong shipments into Gaming, E-Scooter and wearable applications. These results reflect our diversified product portfolio. Over the last couple of years, we strategically focused on these consumer applications, targeting leading customers with our highly competitive low-to-medium voltage products. These initiatives broadened our revenue streams in this segment and enhanced our performance and helped us diversify our more traditional consumer areas such as TVs. For the September quarter, we do anticipate a 30% pull-back in this segment as Gaming begins an inventory correction after an extremely strong 12 months of shipments into the number one console manufacturer. Next, let's discuss the Communications segment; revenue in the June quarter declined 42.4% year-over-year and declined 10.7% sequentially, and represented 10.7% of total revenue. The drop in revenue was primarily attributable to the inventory correction in smartphones and 5G telecom infrastructure. Fortunately, based on conversations with our customers and channel partners, we believe the inventory correction in smartphones is starting to abate, particularly in the premium tiers, and we anticipate a solid recovery in the second half of 2023 driven by our U.S. smartphone customer fall launch and further share gains with them. In the September quarter, which is our seasonally strongest quarter, we are expecting over a 70% recovery in revenue sequentially in this segment. Now, let's talk about our last segment, Power Supply and Industrial, which accounted for 25.7% of total revenue. June quarter revenue was better than our prior expectations, increasing 16.1% year-over-year and 57% sequentially. These results were driven by strong demand for high performance medium voltage MOSFETs used in quick chargers by our Tier 1 U.S. smartphone customer and China's high-end smartphone OEMs. In addition, we saw stronger demand from other applications such as Solar and Power Tools. For the September quarter, we expect this segment to continue to be solid and be up low-single-digits sequentially. In closing, as we stated last quarter, we believe the worst of the inventory correction in PCs and Smartphones has passed and we look forward to a solid second half of 2023. While we remain cautious beyond our near-term visibility, our fundamentals have never been stronger, driven by our leading technology, more diversified product portfolio, Tier 1 customer base in all our business segments, expanding manufacturing capability and supply chain. As such, we are confident we will emerge as an even stronger company on the other side of this cycle. With that, I will now turn the call over to Yifan for a discussion of our fiscal fourth quarter and fiscal year-end financial results and our outlook for the next quarter.

Thank you, Stephen. Good afternoon everyone, and thank you for joining us. Revenue for the quarter was $161.5 million, up 21.9% sequentially but down 16.7% year-over-year. In terms of product mix, DMOS revenue was $95.7 million, up 18.2% sequentially but down 30.8% over last year. Power IC revenue was $58.9 million, up 24.2% from the prior quarter and 9.8% from a year ago. Assembly service revenue was $0.6 million, as compared to $0.6 million last quarter and $2.0 million for the same quarter last year. License and engineering service revenue was $6.3 million for the quarter versus $3.6 million in the prior quarter. Non-GAAP gross margin was 28.5%, compared to 25.1% in the prior quarter and 33.8% a year ago. The quarter-over-quarter increase in non-GAAP gross margin was mainly driven by the mix improvement and higher license and engineering service revenue. Non-GAAP operating expenses were $39.1 million, compared to $36.2 million for the prior quarter and $36.7 million last year. The quarter-over-quarter increase was primarily due to higher R&D engineering expenses and last quarter's reversal true-up in variable compensation accruals. Non-GAAP tax expense was $0.8 million versus $2.5 million last quarter and $1.2 million in the prior year. The quarter-over-quarter decrease was mainly resulted from higher actual R&D credit and the withholding tax paid last quarter related to the $18 million license fee we received. Non-GAAP quarterly EPS was $0.19, compared to negative $0.21 last quarter and $0.95 a year ago. Revenue for fiscal year ended June 30, 2023 was $691.3 million with non-GAAP EPS of $1.86, as compared to revenue of $777.6 million and non-GAAP EPS of $4.56 for the prior fiscal year. The decrease in financial performance was largely due to the industry-wide inventory correction. Moving on to cash flow, operating cash flow was negative $28.2 million, which reflected $3.8 million of repayment of customer deposits, an $11.3 million deposit that we made to secure SiC wafer supply, and fluctuation in working capital. By comparison, operating cash flow in the prior quarter was positive $11.6 million and $25.7 million a year ago. We expect to see a positive operating cash flow for the September quarter. EBITDAS for the quarter was $17.7 million, compared to $6.5 million last quarter and $36.9 million for the same quarter last year. A couple of other items that impacted our cash balance this quarter worth mentioning are that during the quarter, we repurchased 441,000 shares of our stock for $10.8 million under our previously announced share repurchase program. In addition, we also repaid back $16.3 million of debt under bank loans that matured during the quarter. Now, let me turn to our balance sheet. We completed the June quarter with a cash balance of $195.2 million, compared to $265.9 million at the end of last quarter. Net trade receivables were $22.4 million compared to $19.4 million at the end of the prior quarter. Day sales outstanding were 19 days for the quarter versus 30 days for the prior quarter. Net inventory was $183.2 million at quarter-end compared to $179.8 million at the end of the prior quarter and $158.0 million last year. Average days in inventory were 140 days, compared to 152 days in the prior quarter. We expect average days in inventory to continue to improve along with our revenue recovery. CapEx for the quarter was $19.2 million. We expect CapEx for the September quarter to range from $15 million to $20 million. We expect to complete our Oregon fab expansion in the September quarter. Now, I would like to discuss September quarter guidance. We expect revenue to be approximately $180 million, plus or minus $10 million; GAAP gross margin to be 27.2%, plus or minus 1%. We anticipate non-GAAP gross margin to be 28.5%, plus or minus 1%; GAAP operating expenses to be in the range of $48.0 million, plus or minus $1 million. Non-GAAP operating expenses are expected to be in the range of $40.0 million, plus or minus $1 million; interest expense to be approximately $1.2 million and income tax expense to be in the range of $0.8 million to $1.2 million. With that, we will now open the call for questions. Operator, please start the Q&A session.

Thank you. We will now begin the Q&A session. Our first question is from David Williams with Benchmark. Your line is now open.

Hey, good afternoon. Thanks for letting me ask the question, and congrats on the execution and really solid results here.

Thanks, David.

I wanted to congratulate Chang on the logo refresh and Web page; it was really good.

We appreciate it, thanks.

Yes. So, it looks like you guys did a really good job on depleting the channel inventories over the last couple of quarters. Do you get a sense that now you're shipping to consumption or is there a chance that we're seeing some pull-in for replenishment rather than for sell-through?

Currently, our channel inventory is more aligned with our revenue levels following the adjustments made in the March and June quarters. As a result, we are effectively responding to market demand based on what we can observe.

Okay, great. And maybe if you could just talk about the cadence of orders through the quarter, how those progressed? I know there's some periods, a point or two strong market or May, with a meaningful decline in June. But wonder if you are seeing the same dynamics or if you're positioning it maybe just differently, and you're not seeing those same impacts?

We're relatively steady in terms of revenue throughout the quarter, without any significant spikes in either direction. Overall, as we anticipated, the business is beginning to recover as the inventory correction improves. This is reflected in the June numbers, which show a partial recovery. As we move into September, we expect to see further improvement as well. Overall, things are unfolding as we expected. While we hope for a stronger and faster comeback, we are encouraged by the progress and the return of some business that had been paused during the March quarter.

Okay, appreciate the color there. And then just one last one if I can real quick, you talked about the deposit for silicon carbide wafers. Just can you talk maybe about the traction you're seeing within the Silicon Carbide market, where you're seeing the most activity, and how you think about that opportunity over the next few years?

We are enthusiastic about our Silicon Carbide business and the licensing deal is also promising, but our main focus is on developing and expanding our own Silicon Carbide initiative. Currently, we are in the early stages of this business. We have been working on product development, portfolio release, and promotion for several years. While we are beginning to see some revenue, it's still relatively small. Our goal is to penetrate the automotive sector, particularly with the newer EV battery-powered vehicles. Our initial products are aimed at onboard charging, which involves longer design cycles for critical applications. Although we are starting to generate some revenue, it will take additional time to achieve a more substantial impact on our business.

Thanks so much.

Thank you, David. Our next question is from Craig Ellis with B. Riley Securities. Your line is now open.

Yes, thanks for taking the question and congratulations on the execution, guys. I want to start off with questions on the fiscal fourth quarter. So, when I look at compute and industrial, we had expected those would be up, but they were both up significantly more than what I would have expected. So, can you just clarify what the driver was for the upside strength in each of those end markets?

Sure. Let's discuss them partially. The computing segment was mainly affected by inventory correction. During the peak period, several of our customers aggressively built up their supply, which now requires them to reduce that excess in order to align with current demand. We anticipated this adjustment when we assessed the situation back in March as we entered the June quarter, and it has unfolded as expected. Specifically, the improvement in inventory correction is evident as we have started to receive and fulfill orders for products that were previously on hold since March. We've particularly noticed recovery in the computing market, especially with notebooks and even in the desktop motherboard segment.

And what about industrial, Stephen?

In the industrial sector, while there is some connection, I believe the main contribution is actually coming from quick chargers. The smartphone market is still somewhat sluggish in terms of global shipments, but premium-end phones are performing better, which positively affects our business. Specifically, we've noticed an increase in orders for high-end quick chargers, particularly strong compared to the March quarter. This is why we observed an increase in the power supply and industrial segments. Additionally, there are two other sub-segments within that sector that also experienced growth alongside quick chargers: power tools and solar power, contributing to a lesser extent, but the significant growth is primarily from the quick charger segment.

That's really helpful color, Stephen. The second question I wanted to ask is related to comments that the company feels like the inventory correction is moving along, and we're behind it. It seems like in many cases we are, but I wanted to ask the question this way. If we look beyond the fiscal first quarter to the fiscal second quarter, what are some of the gives and takes for growth across the businesses, because when I look at some of our first quarter color, with consumer off significantly as gaming console orders correct and inventory corrects, couldn't we be at risk for that same thing happening in PCs and smartphones as we move beyond their peak seasons? Can you just talk about the gives and takes there, and what it means as you're looking beyond the fiscal first quarter to the fiscal quarter for growth gives and takes?

Sure. Each specific end application has its own situation. In the case of game consoles, gaming actually did not experience a correction; it had about four consecutive quarters of very strong performance. It's important to note that these consoles can vary. In the initial phase after their platform launch, they faced production challenges due to difficulties in sourcing all the necessary components. However, as the market began to slow and the supply chain improved, they swiftly caught up on production in the past year. Looking ahead, they are approximately halfway through their product cycle or the console's lifetime, and they have not needed to make any production corrections before. This upcoming quarter marks the first time they will need to implement some production adjustments. This explains why we see their correction for gaming occurring later than expected; previous quarters did not show any adjustments. On the other hand, for segments like computing or smartphones, the inventory correction has already taken place, starting at the end of last calendar year and continuing into the March quarter of this year. Now, we're focusing more on market visibility. We are currently in the midst of a significant launch for a major U.S. phone manufacturer, as well as the back-to-school period and preparations for the holiday season. Therefore, we are now concentrating on the end markets, with less impact from inventory control in the computing and smartphone sectors.

And so, with that being said, Stephen, does that mean since you feel like the business is recovering from inventory correction, that the business should actually be up quarter-on-quarter in the December fiscal second quarter or would you expect seasonal dynamics to be more at play, and for the business overall to be down sequentially in fiscal 2Q?

It's too early to provide a definitive answer. Our current visibility is focused on this quarter, and we need to assess how well the phones are received and the expected strength of the holiday season. Even in a typical year, the fourth quarter can vary significantly; it may remain strong, become even stronger, or start to decline, especially since the March quarter is generally a seasonally low period. Seasonality is indeed a factor, but for December, it will depend on the performance of key drivers like back-to-school sales and the phone market.

Got it. So, we'll keep our eye on in demand. That's helpful, Stephen. And then Yifan, I want to just close out with you. So, great to see the significant gross margin upside in the quarter and it's guided to a high level. But it is flat when revenues were up significantly. So, I would have expected a volume benefit to gross margin sequentially. Can you just talk about the gives and takes in gross margin quarter-on-quarter and fiscal 1Q? Thank you.

For the September quarters and March, we have observed that the incremental revenues are consistent with those from the June quarter. However, utilization has been somewhat subdued compared to the June quarter, as we were in the process of ramping up our Oregon fab's expansion during that time. Overall, we anticipate our production levels for the September quarter to remain relatively stable compared to the June quarter.

Okay. So, does that mean we'd need to see revenues materially above $180 million a quarter before we get that volume and utilization health to gross margin from here, Yifan?

For our Oregon fab utilization, it was relatively strong in the June quarter, and then it was okay afterward. The incremental benefit may not be as pronounced as the revenue recovery you mentioned.

All right, thank you, Craig.

Thank you, Craig. Our next question is from Kyle Smith with Stifel. Your line is now open.

Hey, everyone, Kyle Smith on for Tore Svanberg and Jeremy Kwan here at Stifel. Kind of going off that, I had a question on CapEx. So, you mentioned, last quarter, your expectation is to see your CapEx gradually decline. And it looks like you're guiding for the September quarter to be roughly similar to the June quarter. So, do you have any update here as you think about the rest of the fiscal year?

For the September quarter, we anticipate CapEx to be in the range of $15 million to $20 million, which is slightly lower than the June quarter, but still within that range. Regarding our Oregon fab expansion, we are nearing the end of the payment process. Moving forward, maintenance and de-bottlenecking will depend on our product requirements. Overall, our goal is to keep our CapEx between 6% and 8% of our revenue, which is our typical target.

Great, thank you.

There are currently no further questions registered. Our next question is from David Williams with Benchmark. Your line is now open.

Thank you for the opportunity to ask a follow-up question. Yifan, regarding the mix this quarter, the Power IC business saw a significant sequential increase. I'm curious about how much of the improvement in gross margin can be attributed to that mix and how you expect that mix to impact the next quarter, considering the potential sector mix changes.

Sure. Our Power IC product line generally has a higher margin. In the June quarter, Power IC revenue showed a significant recovery compared to the March quarter. This was partly due to last year's supply constraints, which led us to optimize our shipment and product mix. As a result, those products accumulated more inventory at various levels, both at ODM and OEM levels. The March quarter helped correct this situation, improving the mix alongside the revenue recovery. This ultimately contributed significantly to the gross margin improvement in the June quarter.

Okay, understood. And then just one last one, from a geographic perspective, can you talk a little bit about what you're seeing coming out of Asia? And is China better or worse, maybe neutral? There's been some mixed messaging, I think, around that market in terms of whether it's improving or still down? So, any color around what you're seeing would be very helpful. Thank you.

Sure. Many people have looked at China's reopening as a possible boost not only for China but potentially for the entire world. So far, there appears to be increased activity there, and traveling to China feels like it did before the pandemic. However, I'm not convinced this has led to a significant rise in retail spending. Although spending is up, the expectations were for a greater increase. For AOS, we see that China, like other regions, experienced a correction in the March quarter but rebounded in the June quarter. Therefore, they are part of that recovery. We are optimistic about growth in China and the rest of the Asia region, particularly in Taiwan, Korea, and Japan moving forward.

Thank you.

There are no additional questions waiting. So, I will pass the conference back to the management team for any closing remarks.

This concludes our earnings call today. Thank you for your interest in AOS, and we are looking forward to talking to you again next quarter. Thank you.

Thank you.

That concludes today's conference call. Thank you for your participation. You may now disconnect your line.