Exhibit 99.1

Alpha and Omega Semiconductor Reports Financial Results for the Fiscal Second Quarter of 2023 Ended December 31, 2022

SUNNYVALE, Calif.--(BUSINESS WIRE)--February 6, 2023--Alpha and Omega Semiconductor Limited (“AOS”) (NASDAQ: AOSL) today reported financial results for the fiscal second quarter of 2023 ended December 31, 2022.

The results for the fiscal second quarter of 2023 ended December 31, 2022 were as follows:

GAAP Financial Comparison
Quarterly
(in millions, except percentage and per share data)
(unaudited)
	Three Months Ended
	December 31, 2022			September 30, 2022			December 31, 2021
Revenue	$	188.8		$	208.5		$	193.3
Gross Margin		28.1	%		34.1	%		35.4	%
Operating Income	$	8.8		$	25.5		$	27.7
Net Income Attributable to AOS	$	6.3		$	26.0		$	383.0
Net Income Per Share Attributable to AOS - Diluted	$	0.21		$	0.88		$	13.54

Non-GAAP Financial Comparison
Quarterly
(in millions, except percentage and per share data)
(unaudited)

	Three Months Ended
	December 31, 2022			September 30, 2022			December 31, 2021
Revenue	$	188.8		$	208.5		$	193.3
Non-GAAP Gross Margin		29.5	%		35.4	%		36.7	%
Non-GAAP Operating Income	$	22.8		$	37.1		$	37.4
Non-GAAP Net Income Attributable to AOS	$	20.0		$	35.2		$	34.0
Non-GAAP Net Income Per Share Attributable to AOS - Diluted	$	0.67		$	1.20		$	1.20

The non-GAAP financial measures in the schedule above and under the section “Financial Results for Fiscal Q2 Ended December 31, 2022” below exclude the effect of share-based compensation expenses, amortization of purchased intangible, legal costs related to government investigation, income tax effect of non-GAAP adjustments in each of the periods presented, and equity method investment income from equity investee for the three months ended December 31, 2022 and September 30, 2022, and gain on deconsolidation and changes of the equity interest in the JV Company for the three months ended December 31, 2021. A detailed reconciliation of GAAP and non-GAAP financial measures is included at the end of this press release.

Financial Results for Fiscal Q2 Ended December 31, 2022

Revenue was $188.8 million, a decrease of 9.5% from the prior quarter and a decrease of 2.4% from the same quarter last year.
GAAP gross margin was 28.1%, down from 34.1% in the prior quarter and down from 35.4% in the same quarter last year.
Non-GAAP gross margin was 29.5%, down from 35.4% in the prior quarter and down from 36.7% in the same quarter last year.
GAAP operating expenses were $44.3 million, down from $45.6 million in the prior quarter and up from $40.6 million in the same quarter last year.
Non-GAAP operating expenses were $32.8 million, down from $36.6 million from last quarter and down from $33.5 million in the same quarter last year.
GAAP operating income was $8.8 million, down from $25.5 million in the prior quarter and down from $27.7 million in the same quarter last year.
Non-GAAP operating income was $22.8 million as compared to $37.1 million for the prior quarter and $37.4 million for the same quarter last year.
GAAP net income per diluted share attributable to AOS was $0.21, compared to $0.88 net income per share for the prior quarter, and $13.54 net income per share for the same quarter a year ago.
Non-GAAP net income per share attributable to AOS was $0.67 compared to $1.20 for the prior quarter and $1.20 for the same quarter a year ago.
Consolidated cash flow provided by operating activities was $0.3 million, as compared to $36.7 million in the prior quarter.
The Company closed the quarter with $287.8 million of cash and cash equivalents.

AOS Chairman and Chief Executive Officer Dr. Mike Chang commented, “While our business was negatively impacted by the industry-wide inventory correction and reduction of customer demand, we are proactively implementing measures to ensure that we emerge from this downturn stronger and more successful than ever. Even as we project a decline in our March quarter revenue, we expect to recover a good portion of the sequential decline in the June quarter, with further recovery in the 2nd half of calendar year 2023, especially with the re-opening of China.”

Dr. Chang continued, “While this temporary slowdown is disappointing, the fundamentals of our business are the strongest that they have ever been, which will enable us to meet this challenge. In 2022, we set records across almost every metric. Our annual revenue was a record $794 million and non-GAAP earnings per share was a record $4.16. These successes were driven by many critical achievements, including a significant increase in record Tier 1 customers and market share across most of our product segments.”

“AOS has been in business for over two decades and inventory corrections and market cycles are a natural and healthy part of our industry. Demand for more and better power management is being driven by what we call the ‘electrification of everything’. We believe this tailwind is here to stay despite this temporary headwind, and we are in an excellent position to continue to win and thrive in this market. We enter 2023 with many strengths: growing product offerings, promising technology roadmaps, diverse and expanding manufacturing capabilities, strong relationships with strategic customers and a robust balance sheet, which will enable us to navigate the current economic environment while keeping our eyes on achieving our one-billion-dollar annual revenue target in the next couple of years.”

Business Outlook for Fiscal Q3 Ending March 31, 2023

The following statements are based on management's current expectations. These statements are forward-looking, and actual results may differ materially. AOS undertakes no obligation to update these statements.

Our expectations for the third quarter of fiscal year 2023 are as follows:

Revenue to be approximately $130 million, plus or minus $5 million.
GAAP gross margin to be 22.5%, plus or minus 1%. We anticipate non-GAAP gross margin to be 24.5%, plus or minus 1%.
GAAP operating expenses to be in the range of $45.5 million, plus or minus $1 million. Non-GAAP operating expenses are expected to be in the range of $35.5 million, plus or minus $1 million.
Interest expense is expected to be approximately $1.2 million, and
Tax expense is expected to be in the range of $1.3 million to $1.5 million.

Conference Call and Webcast

AOS plans to hold an investor teleconference and live webcast to discuss the financial results for the fiscal second quarter ended December 31, 2022 today, February 6, 2023 at 2:00 p.m. PT / 5:00 p.m. ET. To listen to the live conference call, please dial +1 (844) 200-6205 or +1 (929) 526-1599 if dialing from outside the United States and Canada. The access code is 529922. A live webcast of the call will also be available in the "Events & Presentations" section of the company's investor relations website, http://investor.aosmd.com. The webcast replay will be available for seven days after the live call on the same website. In addition, a copy of the script of management's prepared remarks and a live webcast of the call will also be available in the "Events & Presentations" section of the company's investor relations website, http://investor.aosmd.com.

Forward-Looking Statements

This press release contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of future performance based on management's judgment, beliefs, current trends, and anticipated product performance. These forward-looking statements include, without limitation, market trends in the semiconductor industry; our ability to navigate economic downturns and expected recovery timeline; anticipated earnings power and non-GAAP EPS on an annual basis, our growth opportunities and new markets, our annual revenue target, projected amount of revenue, gross margin, operating income, income tax expenses, net income, and share-based compensation expenses, non-GAAP gross margin, non-GAAP operating expenses, tax expenses, our objectives to achieve revenue target, our ability to continue to win and acquire market share and other information under the section entitled “Business Outlook for Fiscal Q3 Ending March 31, 2023”. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These factors include, but are not limited to, the impact of COVID-19 pandemic and government policies on our business operations in China; our lack of control over the joint venture in China; difficulties and challenges in executing our diversification strategy into different market segments; tariffs on goods from China; ordering pattern from distributors and seasonality; changes in regulatory environment and government investigation; our ability to introduce or develop new and enhanced products that achieve market acceptance; decline of PC markets; the actual product performance in volume production; the quality and reliability of our product, our ability to achieve design wins; the general business and economic conditions; the state of semiconductor industry and seasonality of our markets; our ability to maintain factory utilization at a desirable level; and other risks as described in our SEC filings, including our Annual Report on Form 10-K for the fiscal year ended June 30, 2022 filed by AOS with the SEC and other periodic reports we filed with the SEC. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today's date, unless otherwise stated, and AOS undertakes no duty to update such information, except as required under applicable law.

Use of Non-GAAP Financial Measures

To supplement our unaudited consolidated financial statements presented on a basis consistent with U.S. GAAP, we disclose certain non-GAAP financial measures for our historical performance, including non-GAAP gross profit, gross margin, operating expenses, operating income, net loss attributable to AOS, net income, diluted earnings per share ("EPS") and EBITDAS. These supplemental measures exclude, among other items, share-based compensation expenses, legal and profession fees related to government investigation, amortization of purchased intangible, income tax effect of non-GAAP adjustments, equity method investment income from equity investee, and gain on deconsolidation and changes of the equity interest in the JV Company. We also disclose certain non-GAAP financial measures in our guidance for the next quarter, including non-GAAP gross margin and operating expenses. We believe that these historical and forecast non-GAAP financial measures provide useful information to both management and investors by excluding certain items and expenses that are not indicative of our core operating results or do not reflect our normal business operations. In addition, our management uses non-GAAP measures to compare our performance relative to forecasts and to benchmark our performance externally against competitors. Our use of non-GAAP financial measures has certain limitations in that such non-GAAP financial measures may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as non-GAAP net income or non-GAAP operating expenses, do not have a standardized meaning. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. In addition, we included amount of income tax effect of non-GAAP adjustments in the non-GAAP net income of reconciliation table for all periods presented as the management believes that such non-GAAP presentation provides useful information to investors, even though the amounts are not significant. We seek to compensate for the limitation of our non-GAAP presentation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable U.S. GAAP measures both in the text in this press release and in the tables attached hereto. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures.

About Alpha and Omega Semiconductor

Alpha and Omega Semiconductor Limited, or AOS, is a designer, developer and global supplier of a broad range of power semiconductors, including a wide portfolio of Power MOSFET, IGBT, IPM, TVS, HVIC, GaN/SiC, Power IC and Digital Power products. AOS has developed extensive intellectual property and technical knowledge that encompasses the latest advancements in the power semiconductor industry, which enables us to introduce innovative products to address the increasingly complex power requirements of advanced electronics. AOS differentiates itself by integrating its Discrete and IC semiconductor process technology, product design, and advanced packaging know-how to develop high performance power management solutions. AOS’ portfolio of products targets high-volume applications, including portable computers, graphic cards, flat panel TVs, home appliances, smart phones, battery packs, quick chargers, home appliances, consumer and industrial motor controls and power supplies for TVs, computers, servers and telecommunications equipment. For more information, please visit www.aosmd.com.

The following unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP.

Alpha and Omega Semiconductor Limited
Condensed Consolidated Statements of Operations
(in thousands, except percentages and per share amounts)
(unaudited)

	Three Months Ended									Six Months Ended
	December 31, 2022			September 30, 2022			December 31, 2021			December 31, 2022			December 31, 2021

Revenue	$	188,760		$	208,476		$	193,319		$	397,236		$	380,354
Cost of goods sold		135,719			137,348			124,954			273,067			247,422
Gross profit		53,041			71,128			68,365			124,169			132,932
Gross margin		28.1	%		34.1	%		35.4	%		31.3	%		34.9	%

Operating expenses:
Research and development		21,468			21,389			16,516			42,857			34,328
Selling, general and administrative		22,788			24,205			24,132			46,993			45,938
Total operating expenses		44,256			45,594			40,648			89,850			80,266
Operating income		8,785			25,534			27,717			34,319			52,666

Other income (loss), net		(903	)		(16	)		473			(919	)		457
Interest expense, net		(397	)		(608	)		(541	)		(1,005	)		(2,717	)
Gain on deconsolidation of the JV Company		—			—			399,093			—			399,093
Loss on changes of equity interest in the JV Company, net		—			—			(7,641	)		—			(7,641	)
Net income before income taxes		7,485			24,910			419,101			32,395			441,858

Income tax expense		1,659			1,374			34,096			3,033			35,416
Net income before income from equity method investment		5,826			23,536			385,005			29,362			406,442
Equity method investment income from equity investee		511			2,502			—			3,013			—
Net income		6,337			26,038			385,005			32,375			406,442
Net loss attributable to noncontrolling interest		—			—			2,007			—			20
Net income attributable to Alpha and Omega Semiconductor Limited	$	6,337		$	26,038		$	382,998		$	32,375		$	406,422

Net income per common share attributable to Alpha and Omega Semiconductor Limited
Basic	$	0.23		$	0.95		$	14.40		$	1.18		$	15.35
Diluted	$	0.21		$	0.88		$	13.54		$	1.10		$	14.53

Weighted average number of common shares attributable to Alpha and Omega Semiconductor Limited used to compute net income per share
Basic		27,511			27,391			26,593			27,451			26,479
Diluted		29,576			29,423			28,287			29,499			27,963

Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance Sheets
(in thousands, except par value per share)
(unaudited)
	December 31, 2022			June 30, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	287,805		$	314,352
Restricted cash		288			299
Accounts receivable, net		53,223			65,681
Inventories		163,823			158,040
Other current assets		12,004			11,220
Total current assets		517,143			549,592
Property, plant and equipment, net		350,950			318,666
Operating lease right-of-use assets		23,474			23,674
Intangible assets, net		8,389			10,050
Equity method investment		365,115			378,378
Deferred income tax assets		566			592
Other long-term assets		20,008			17,677
Total assets	$	1,285,645		$	1,298,629
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	65,799		$	87,377
Accrued liabilities		98,107			116,893
Payable related to equity investee, net		21,570			28,989
Income taxes payable		5,620			4,248
Short-term debt		25,045			25,563
Finance lease liabilities		835			802
Operating lease liabilities		4,553			3,850
Total current liabilities		221,529			267,722
Long-term debt		44,101			42,486
Income taxes payable - long-term		2,227			2,158
Deferred income tax liabilities		27,136			28,757
Finance lease liabilities - long-term		3,658			3,932
Operating lease liabilities - long-term		19,713			20,878
Other long-term liabilities		67,607			78,603
Total liabilities		385,971			444,536
Equity:
Preferred shares, par value $0.002 per share:
Authorized: 10,000 shares; issued and outstanding: none at December 31, 2022 and June 30, 2022		—			—
Common shares, par value $0.002 per share:
Authorized: 100,000 shares; issued and outstanding: 34,181 shares and 27,565 shares, respectively at December 31, 2022 and 33,988 shares and 27,371 shares, respectively at June 30, 2022		68			68
Treasury shares at cost: 6,616 shares at December 31, 2022 and 6,617 shares at June 30, 2022		(65,990	)		(66,000	)
Additional paid-in capital		316,141			288,951
Accumulated other comprehensive income (loss)		(12,904	)		1,080
Retained earnings		662,359			629,994
Total equity		899,674			854,093
Total liabilities and equity	$	1,285,645		$	1,298,629

Alpha and Omega Semiconductor Limited
Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures
(in thousands, except percentages and per share data)
(unaudited)

	Three Months Ended									Six Months Ended
	December 31, 2022			September 30, 2022			December 31, 2021			December 31, 2022			December 31, 2021

GAAP gross profit	$	53,041		$	71,128		$	68,365		$	124,169		$	132,932
Share-based compensation		1,748			1,788			1,709			3,536			2,278
Amortization of purchased intangible		811			812			811			1,623			1,623
Non-GAAP gross profit	$	55,600		$	73,728		$	70,885		$	129,328		$	136,833
Non-GAAP gross margin as a % of revenue		29.5	%		35.4	%		36.7	%		32.6	%		36.0	%

GAAP operating expense	$	44,256		$	45,594		$	40,648		$	89,850		$	80,266
Share-based compensation		11,343			8,808			6,838			20,151			10,904
Legal costs related to government investigation		110			142			293			252			724
Non-GAAP operating expense	$	32,803		$	36,644		$	33,517		$	69,447		$	68,638

GAAP operating income	$	8,785		$	25,534		$	27,717		$	34,319		$	52,666
Share-based compensation		13,091			10,596			8,547			23,687			13,182
Amortization of purchased intangible		811			812			811			1,623			1,623
Legal costs related to government investigation		110			142			293			252			724
Non-GAAP operating income	$	22,797		$	37,084		$	37,368		$	59,881		$	68,195
Non-GAAP operating margin as a % of revenue		12.1	%		17.8	%		19.3	%		15.1	%		17.9	%

GAAP net income attributable to AOS	$	6,337		$	26,038		$	382,998		$	32,375		$	406,422
Share-based compensation		13,091			10,596			8,547			23,687			13,182
Amortization of purchased intangible		811			812			811			1,623			1,623
Gain on deconsolidation and changes of the equity interest in the JV Company		—			—			(391,452	)		—			(391,452	)
Equity method investment income from equity investee		(511	)		(2,502	)		—			(3,013	)		—
Legal costs related to government investigation		110			142			293			252			724
Income tax effect of non-GAAP adjustments		122			119			32,800			241			32,801
Non-GAAP net income attributable to AOS	$	19,960		$	35,205		$	33,997		$	55,165		$	63,300
Non-GAAP net margin attributable to AOS as a % of revenue		10.6	%		16.9	%		17.6	%		13.9	%		16.6	%

GAAP net income attributable to AOS	$	6,337		$	26,038		$	382,998		$	32,375		$	406,422
Share-based compensation		13,091			10,596			8,547			23,687			13,182
Amortization and depreciation		10,804			9,352			11,938			20,156			25,660
Gain on deconsolidation and changes of the equity interest in the JV Company		—			—			(391,452	)		—			(391,452	)
Equity method investment income from equity investee		(511	)		(2,502	)		—			(3,013	)		—
Interest expense, net		397			608			541			1,005			2,717
Income tax expense		1,659			1,374			34,096			3,033			35,416
EBITDAS	$	31,777		$	45,466		$	46,668		$	77,243		$	91,945

GAAP diluted net income per share attributable to AOS	$	0.21		$	0.88		$	13.54		$	1.10		$	14.53
Share-based compensation		0.44			0.36			0.30			0.80			0.47
Amortization of purchased intangible		0.03			0.03			0.03			0.05			0.06
Gain on deconsolidation and changes of the equity interest in the JV Company		—			—			(13.84	)		—			(14.00	)
Equity method investment income from equity investee		(0.02	)		(0.09	)		—			(0.10	)		—
Legal costs related to government investigation		0.00			0.01			0.01			0.01			0.03
Income tax effect of non-GAAP adjustments		0.01			0.01			1.16			0.01			1.17
Non-GAAP diluted net income per share attributable to AOS	$	0.67		$	1.20		$	1.20		$	1.87		$	2.26

Shares used to compute GAAP diluted net income per share		29,576			29,423			28,287			29,499			27,963
Shares used to compute Non-GAAP diluted net income per share		29,576			29,423			28,287			29,499			27,963

Contacts

Investor and media inquiries:

The Blueshirt Group
Gary Dvorchak, CFA
In US +1 323 240 5796
In China +86 (138) 1079-1480
[email protected]

Yujia Zhai
The Blueshirt Group
[email protected]
+1 (860) 214-0809

Exhibit 99.2

Alpha and Omega Semiconductor Limited

Prepared Remarks for the Investor Conference Call

for the Quarter Ended December 31, 2022

February 6, 2023

Yujia Zhai

Good afternoon, everyone, and welcome to Alpha and Omega Semiconductor’s conference call to discuss fiscal 2023 second quarter financial results. I am Yujia Zhai, Investor Relations representative for AOS. With me today are Dr. Mike Chang, our CEO, Stephen Chang, our President, 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 website.

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

The earnings release was distributed over wire today, February 6, 2023, after the market close. The release is also posted on the company's website. 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 that we provide. A reconciliation of these non-GAAP measures to comparable GAAP measures is included in the earnings release.

We remind you that during this conference call, we will make certain 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, Dr. Mike Chang, to provide strategic highlights. Mike?

Mike Chang (Chief Executive Officer)

Thank you, Yujia. Happy new year everyone and welcome to today's call. It is good to speak with all of you again. Before I go over our results, I’d like to begin today by saying that I am proud to be speaking to you for the last time as the Chief Executive Officer of AOS. 22 years ago, I founded this company with a vision and a dream. While this vision never ends, today, we are one of the most successful and well-recognized fast-growing power semiconductor companies in the world. I am proud of all that we have accomplished together.

It is with great confidence and pleasure that I now turn the chief executive position to Stephen, who has already demonstrated his leadership skills and business acumen since his appointment as AOS’s President two years ago, leading AOS to achieve record revenues and profitability. I want to thank each and every one of the AOS team for your dedication and hard work. It has been an honor to work alongside you and to see this company grow and thrive. Thank you all for the memories and the opportunities. We are in the midst of an incredible journey, and I am grateful for every moment that has led us to this point today.

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

Now, moving on to the results. Our fiscal Q2 results were below our expectations. Revenue was $188.8 million. Non-GAAP gross margin was 29.5%, and non-GAAP EPS was $0.67. Last quarter, we indicated that we expected an industry-wide inventory correction to impact us over the coming quarters, particularly in PCs and smartphones. However, the magnitude of this inventory correction for certain customers was larger than we expected. Inventory levels across many of the consumer markets that we serve remain high and our customers are working to bring supply chain inventory levels back into balance as quickly as possible. As a result, we forecast March quarter revenue to be approximately $130 million, plus or minus $5 million. We expect to recover a good portion of the sequential decline in the June quarter and even more so in the 2^nd half of the year, especially with the re-opening of China.

As we stated last quarter, our business is not immune to macro challenges and industry cycles. We have been through many of these cycles over the past 22 years and do not make decisions based on just a couple of quarters of data. Every cycle since the beginning of our industry has eventually ended and given way to a new leg of growth, and this one is no different. We are confident that given our strong fundamentals, we are in the best position we have ever been to continue our growth momentum once this downturn is past us.

Looking back on the year, calendar 2022 was one of the most successful years in our history, despite many challenges. We set records across almost every metric. Revenue was a record $794 million, up 9% year-over-year, and non-GAAP earnings per share was a record $4.16, up 5% year-over-year.

Further, we closed the year with record Tier 1 customers and market share across most product segments. In our two largest product segments, PCs and Smartphones, we grew significantly faster than the market. This was due to our success in gaining market share, increasing BOM content, and deliberately improving our product mix towards more premium tier products. Further, Gaming was an outstanding success for us in 2022. We won leading share with the number 1 gaming console manufacturer and this business for us more than doubled year-over-year and is now a major revenue contributor for AOS and is expected to continue to grow even in a weakening consumer demand environment.

These are just a few examples out of many achievements that demonstrate our fundamental strength, the competitiveness of our products and the traction that we have gained. Stephen will provide more details during his section of the call, but our business has never been stronger, which is why I am confident that our outlook is largely due to macro-economic factors rather than anything specific to fundamentals. As channel inventories are consumed and the broader economy recovers, we expect to see a rebound in revenue.

In closing, demand for more and better power management is being driven by what we call “the electrification of everything”. We believe this tailwind is here to stay and we are in the best position we have ever been to continue to win in this market. We exited 2022 with a strong balance sheet, which enables us to navigate the current economic environment while keeping our eyes on achieving our one-billion-dollar annual revenue target in the next couple of years.

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

Stephen Chang (President)

Thank you, Mike, and good afternoon, everyone.

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

Our calendar year 2022 Computing segment revenue increased 5.9% year-over-year to $332.6 million. Consumer grew 13.4% to $173.6 million. Communications increased 23.9% to $125.7 million, and our Power Supply and Industrial increased 7.8% to $155.5 million.

These results were made possible by our record Tier 1 customer partnerships and market share as well as a much more diversified total solutions product portfolio that’s serving a broader set of end markets, across consumer, commercial and industrial use cases.

While our near-term outlook and general market sentiment indicate a significantly weaker demand environment and inventory correction for 2023, we believe there are a couple factors that make us uniquely positioned to benefit on the other side.

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One, a good portion of the slowdown that we are experiencing is driven by our Tier 1 customers where we have leading share. However, our sockets and BOM content in their devices remain unchanged and our relationships with these customers are the best they have ever been. These customers are the leading device makers in their categories in the world and demand for their devices over time has only grown. This is why we are confident that this slowdown we are experiencing will be behind us as demand for these premium products are certain to come back once inventories are more normalized.

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Two, to strategically navigate the current environment, our focus will be on stabilizing spending where we can, while continuing R&D investments to drive market leadership and have leading products once the market returns. In addition, we are accelerating our development in new growth areas such as data center, infrastructure, industrial, and automotive applications. For example, we recently expanded our SiC portfolio to include 650V and 750V SiC MOSFETs for on board car charging, traction inverters, and infrastructure applications. Our industrial, renewable energy, and automotive customers will now have a broader portfolio available to select the right solution that supports their wide range of product power levels at an even higher performance and efficiency level.

Let me now cover our segment results and provide some guidance by segment for the next quarter.

Starting with Computing. December quarter revenue was down 27.3% year-over-year and 28.4% sequentially and represented 33.8% of total revenue.

Looking back on the year for our PC business more closely, our PC shipments grew in the first three quarters of the year, but demand dropped off rapidly in the December quarter as our customers aggressively reduced inventories. Even with this significant drop, our full year PC revenue, was up 3% compared to a 20% decline in PC units according to Digitimes. This was due to our success in gaining share, increasing BOM content, and deliberately improving our product mix towards more premium tier products. Based on our conversations with customers and latest demand forecasts, we expect some of our customers’ inventories will be depleted in the March quarter, and they anticipate resuming orders for the June quarter, which will help to recover some of the significant March quarter decline ahead of peak season.

In the December quarter, there were some notable areas of strength in our Computing segment, particularly data centers as this area showed significant growth year-over-year with the adoption of our high performance low and medium voltage MOSFETs by leading Cloud providers. In addition, graphics cards, and tablets continued to be strong. Looking ahead, in the March quarter, we expect total Computing segment revenue to be down about 30% sequentially as we actively work with our customers to right-size their inventory.

Turning to the Consumer segment, December quarter revenue once again set records increasing 21.3% year-over-year and 4.2% sequentially and represented 25.0% of total revenue. These results were in-line with our expectations driven by record Gaming volumes which grew 222% year-over-year and 19.5% sequentially. Looking ahead, we anticipate our Consumer segment to decrease mid-single-digits sequentially driven by a seasonal slowdown in Gaming shipments after a very strong December quarter.

Next, let’s discuss the Communications segment, which also set record quarterly revenue as it increased 38.0% year-over-year and 12.4% sequentially and represented 18.7% of total revenue. These results were significantly higher than our expectations due to stronger than anticipated shipments to the #1 U.S. smartphone customer, as well as to China. For the full year 2022, Smartphone revenue grew 24% year-over-year, despite an estimated 11.6% decline in global smartphone shipments as estimated by Digitimes. Our growth was driven by share gains in the premium tier smartphone models. This is due to our ability to serve the high-end market with our high-performance battery protection products, as well as strong partnerships with our customers.

In the March quarter, we expect this segment to face a steep correction of about 45% sequential decline as we help our customers normalize their inventory levels after two quarters of record shipments that didn’t fully sell-through to end consumers as a result of lower discretionary spending due to inflationary headwinds and China zero-covid restrictions. Internally, we expect our smartphone business to start to recover in the June quarter in preparation for the September quarter peak season. China’s reopening is also a welcome development that should improve consumption.

Now, let’s talk about our last segment, Power Supply and Industrial, which accounted for 21.8% of total revenue. This segment also set records with revenue up 9.3% year-over-year and up slightly sequentially. The increase was due to share gains in quick chargers at the leading U.S. phone maker and growth in PC power supplies and gaming adapters. For the March quarter, we anticipate this segment to decline around 30% sequentially due to the inventory correction.

In closing, while we are experiencing a temporary slowdown, inventory corrections and market cycles are ultimately healthy for our industry. Calendar 2022 was a record-breaking year for us, with record revenues, earnings, and leading market share with a record number of tier 1 customers. We enter calendar 2023 with many strengths: a growing product offering, cutting-edge R&D and promising technology roadmaps, diverse manufacturing capabilities, and strong relationships with strategic customers. As the newly appointed CEO, I am focused on leading AOS forward and am confident in our ability to continue growing at a faster rate than the overall market. We will maintain and execute our successful strategies while also investing in new growth areas such as data centers, automotive, infrastructure, and industrial.

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

Yifan Liang (Chief Financial Officer)

Thank you, Stephen. Good afternoon everyone and thank you for joining us.

Revenue for the quarter was $188.8 million, down 9.5% sequentially and down 2.4% year-over-year. In terms of product mix, DMOS revenue was $137.6 million, down 4.8% sequentially and up 2.3% over last year. Power IC revenue was $50.0 million, down 19.8% from the prior quarter and down 10.1% from a year ago. Assembly service revenue was $1.2 million, as compared to $1.6 million last quarter and $3.3 million for the same quarter last year.

Non-GAAP gross margin was 29.5%, compared to 35.4% in the prior quarter and 36.7% a year ago. The quarter-over-quarter decrease in non-GAAP gross margin was mainly driven by less favorable product mix and an increase in inventory reserve, reflecting the on-going industrywide inventory correction.

Non-GAAP operating expenses were $32.8 million, compared to $36.6 million for the prior quarter and $33.5 million last year. The quarter-over-quarter decrease was primarily due to lower variable compensation accruals this quarter.

As such, non-GAAP quarterly EPS was $0.67 per share, compared to $1.20 last quarter and a year ago.

Moving on to cash flow. GAAP operating cash flow was $0.3 million, which included $12.2 million repayments of customer deposits. By comparison, operating cash flow in the prior quarter was $36.7 million, which included $3.3 million net repayments of customer deposits. Operating cash flow a year ago was $50.8 million, which included $11.2 million net customer deposits. We expect to refund around $30 million customer deposits in calendar year 2023. Consolidated EBITDAS was $31.8 million, compared to $45.5 million last quarter and $46.7 million last year.

Let me turn to our balance sheet.

We completed the December quarter with a cash balance of $287.8 million, compared to $316.1 million at the end of last quarter. The cash balance a year ago was $269.3 million.

Net trade receivables were reduced to $53.2 million compared to $55.8 million at the end of the prior quarter. Days Sales Outstanding for both the December quarter and last quarter were 30 days.

Net inventory was $163.8 million at quarter-end, slightly down sequentially from $164.9 million last quarter and up from $129.1 million last year. Average days in inventory were 109 days, compared to 106 days in the prior quarter.

Finally, Property, Plant and Equipment was $351.0 million, up from $339.5 million last quarter. The fixed assets balance a year ago was $196.7 million. CapEx for the quarter was $28.0 million. We expect CapEx to drop to a $20 million to $25 million level in the March quarter. Our Oregon fab expansion is expected to start to ramp in March 2023.

Now, I would like to discuss March quarter guidance.

We expect:

•	Revenue to be approximately $130 million, plus or minus $5 million. Our guidance factors in the on-going industrywide inventory correction and the seasonality for the March quarter.

•	GAAP gross margin to be 22.5%, plus or minus 1%. We anticipate non-GAAP gross margin to be 24.5%, plus or minus 1%. The quarter-over-quarter decrease mainly reflects the impact of the expected product mix changes and lower factory production absorption due to the current inventory correction.

•	GAAP operating expenses to be in the range of $45.5 million, plus or minus $1 million. Non-GAAP operating expenses are expected to be in the range of $35.5 million, plus or minus $1 million.

•	Interest expense to be approximately $1.2 million, and

•	Income tax expense to be in the range of $1.3 million to $1.5 million.

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

Closing:

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

Special Notes Regarding Forward Looking Statements

This script contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of future performance based on management's judgment, beliefs, current trends, and anticipated product performance. These forward looking statements include, without limitation, statements relating to projected amount of revenues, gross margin, operating expenses, operating income, tax expenses, net income, noncontrolling interest and share-based compensation expenses, production ramp up costs and annual revenue and growth objectives; statements regarding expected financial performance of market segments; the macroeconomic conditions and our ability to mitigate economic downturns; the global capacity constraint; our ability and strategy to develop new products; the Oregon fab expansion project and anticipated timing; projected annual revenue target; fluctuation in customer demand and market segments; our share of Tier 1 customer, our ability to control and maintain manufacturing capacity; the execution of our business plan and strategies; and other information regarding the future development of our business. Forward looking statements involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These factors include, but are not limited to, the impact of COVID-19 pandemic on our business operation; our lack of control over the JV Company; our ability to develop and succeed in the digital power business; difficulties and challenges in executing our diversification strategy into different market segments; new tariffs on goods from China; ordering pattern and seasonality; our ability to introduce or develop new and enhanced products that achieve market acceptance; decline of the PC industry and our ability to respond to such decline; the actual product performance in volume production, the quality and reliability of our product, our ability to achieve design wins, the general business and economic conditions, the state of semiconductor industry and seasonality of our markets, our ability to maintain factory utilization at a desirable level; and other risks as described in our SEC filings, including our Annual Report on Form 10-K for the fiscal year ended June 30, 2022 filed by AOS. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Although we believe that the expectations reflected in the forward looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today's date, unless otherwise stated, and AOS undertakes no duty to update such information, except as required under applicable law.

Bermuda		001-34717		77-0553536
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares	AOSL	The Nasdaq Global Select Market

	Alpha and Omega Semiconductor Limited


	By:	/s/ Yifan Liang
	Name:	Yifan Liang
	Title:	Chief Financial Officer and Corporate Secretary