Exhibit 99.1

Alpha and Omega Semiconductor Reports Financial Results for the Fiscal Second Quarter of 2021 Ended December 31, 2020

SUNNYVALE, Calif.--(BUSINESS WIRE)--February 4, 2021--Alpha and Omega Semiconductor Limited (“AOS”) (NASDAQ: AOSL) today reported financial results for the fiscal second quarter of 2021 ended December 31, 2020.

The results for the fiscal second quarter of 2021 ended December 31, 2020 were as follows:

GAAP Financial Comparison
Quarterly
(in millions, except percentage and per share data)
(unaudited)
	Three Months Ended
	December 31, 2020			September 30, 2020			December 31, 2019
Revenue	$	158.8		$	151.6		$	117.9
Gross Margin	30.7		%	28.1		%	20.7		%
Operating Income (Loss)	$	13.6		$	10.3		$	(3.4)
Net Income (Loss) Attributable to AOS	$	12.9		$	9.6		$	(1.0)
Net Income (Loss) Per Share Attributable to AOS - Diluted	$	0.47		$	0.36		$	(0.04)

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

	Three Months Ended
	December 31, 2020			September 30, 2020			December 31, 2019
Revenue	$	158.8		$	151.6		$	117.9
Non-GAAP Gross Margin	31.4		%	29.0		%	28.3		%
Non-GAAP Operating Income	$	18.5		$	15.4		$	7.6
Non-GAAP Net Income Attributable to AOS	$	17.8		$	14.5		$	5.8
Non-GAAP Net Income Per Share Attributable to AOS - Diluted	$	0.65		$	0.55		$	0.23

The non-GAAP financial measures in the schedule above and under the section “Financial Results for Fiscal Q2 Ended December 31, 2020” below exclude the effect of share-based compensation expenses in each of the periods presented, legal costs related to government investigation for the three months ended December 31, 2020 and September 30, 2020, production ramp up costs for the three months ended September 30, 2020 and December 31, 2019, as well as amortization of purchased intangible for the three months ended December 31, 2020 and September 30, 2020. 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, 2020

Revenue was $158.8 million, an increase of 4.8% from the prior quarter and an increase of 34.8% from the same quarter last year.
GAAP gross margin was 30.7%, up from 28.1% in the prior quarter and up from 20.7% in the same quarter last year.
Non-GAAP gross margin was 31.4%, up from 29.0% in the prior quarter and up from 28.3% in the same quarter last year.
GAAP operating expenses were $35.2 million, up from $32.2 million in the prior quarter and up from $27.8 million in the same quarter last year.
Non-GAAP operating expenses were $31.5 million, an increase of $2.9 million from last quarter and an increase of $5.8 million from the same quarter last year.
GAAP operating income was $13.6 million, up from $10.3 million in the prior quarter and up from $3.4 million loss in the same quarter last year.
Non-GAAP operating income was $18.5 million as compared to $15.4 million for the prior quarter and $7.6 million for the same quarter last year.
GAAP net income per share attributable to AOS was $0.47, compared to $0.36 for the prior quarter and $0.04 net loss per share for the same quarter a year ago.
Non-GAAP net income per share attributable to AOS was $0.65 compared to $0.55 for the prior quarter and $0.23 for the same quarter a year ago.
Consolidated cash flow provided by operating activities was $36.1 million, compared to $9.8 million in the prior quarter. Operating cash flow provided by AOS alone (excluding the JV Company) was $35.7 million, compared to $12.7 million in the prior quarter.
The Company closed the quarter with $181.0 million of cash and cash equivalents, including $38.6 million cash balance at the JV Company.

AOS Chairman and Chief Executive Officer Dr. Mike Chang commented, “Our fiscal second quarter marked an impressive finish to calendar year 2020, as solid shipments across most of our product categories drove strong financial performance in the quarter. We grew revenue by 35% year-over-year, achieved higher utilization and operational efficiency at our manufacturing facilities, and continued to be disciplined with our spending. All of this led to records in non-GAAP gross margin of 31.4% and non-GAAP EPS of $0.65.”

Dr. Chang continued, “Our mission is to become a leading designer, developer, and global supplier of a broad portfolio of power semiconductors, and I am proud of what our team has accomplished and the groundwork we are laying for long-term and sustainable success. Obviously, we faced tremendous challenges in calendar year 2020, including the COVID-19 pandemic, trade conflicts, and political and social unrest in different parts of the world. Despite these challenges, we made significant progress toward our calendar year 2021 target of $600 million in annual revenue. We did this by focusing on disciplined execution and developing a healthy pipeline of new products, new design wins, and new customers.”

Business Outlook for Fiscal Q3 Ending March 31, 2021

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 2021 are as follows:

Revenue is expected to be approximately $157 million, plus or minus $3 million.
GAAP gross margin is expected to be approximately 28.7% plus or minus 1%. Non-GAAP gross margin is expected to be approximately 29.5% plus or minus 1%. Non-GAAP gross margin excludes $0.8 million amortization of acquired IP and $0.5 million of estimated share-based compensation charge.
GAAP operating expenses are expected to be in the range of $33.8 million plus or minus $1 million. Non-GAAP operating expenses are expected to be in the range of $29.5 million plus or minus $1 million. Non-GAAP operating expenses exclude $3.3 million of estimated share-based compensation charge and $1.0 million of estimated professional fees related to the government investigation.
Income tax expense is expected to be approximately $0.7 million to $1.0 million.
Loss attributable to noncontrolling interest is expected to be approximately $0.2 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, 2020 today, February 4, 2021 at 2:00 p.m. PT / 5:00 p.m. ET. To listen to the live conference call, please dial 877-683-1095 (or 647-689-5445 if dialing from outside the United States and Canada). The conference ID number is 5785406. 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, statements relating to expected growth rate, our product portfolios, projected amount of revenue, gross margin, operating income (loss), income tax expenses, net income (loss), noncontrolling interest, and share-based compensation expenses, non-GAAP gross margin, non-GAAP operating expenses, tax expenses, and non-GAAP loss attributable to noncontrolling interest, our objectives to achieve long-term success, our ability to gain new customers and design wins, and other information under the section entitled “Business Outlook for Fiscal Q3 Ending March 31, 2021”. 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; our ability to successfully operate our joint venture in China; 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 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, 2020 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 income (loss), net loss attributable to noncontrolling interest, net income (loss), diluted earnings per share ("EPS") and EBITDAS. These supplemental measures exclude, among other items, share-based compensation expenses, production ramp up costs related to the JV Company, legal and profession fees related to government investigation, as well as amortization of purchased intangible. We also disclose certain non-GAAP financial measures in our guidance for the next quarter, including non-GAAP gross margin, operating expenses and loss attributable to noncontrolling interest. 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 (loss) 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 personal and 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 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, 2020			September 30, 2020			December 31, 2019			December 31, 2020			December 31, 2019

Revenue	$	158,830		$	151,551		$	117,860		$	310,381		$	235,662
Cost of goods sold		110,081			109,028			93,454			219,109			184,324
Gross profit		48,749			42,523			24,406			91,272			51,338
Gross margin		30.7	%		28.1	%		20.7	%		29.4	%		21.8	%

Operating expenses:
Research and development		15,423			14,691			12,147			30,114			24,515
Selling, general and administrative		19,736			17,505			15,629			37,241			30,814
Total operating expenses		35,159			32,196			27,776			67,355			55,329
Operating income (loss)		13,590			10,327			(3,370	)		23,917			(3,991	)

Interest expense and other income (loss), net		(381	)		(549	)		(635	)		(930	)		(1,462	)
Income (loss) before income taxes		13,209			9,778			(4,005	)		22,987			(5,453	)

Income tax expense		669			1,011			568			1,680			978
Net income (loss) including noncontrolling interest		12,540			8,767			(4,573	)		21,307			(6,431	)
Net loss attributable to noncontrolling interest		(363	)		(807	)		(3,568	)		(1,170	)		(6,435	)
Net income (loss) attributable to Alpha and Omega Semiconductor Limited	$	12,903		$	9,574		$	(1,005	)	$	22,477		$	4

Net income (loss) per common share attributable to Alpha and Omega Semiconductor Limited
Basic	$	0.50		$	0.38		$	(0.04	)	$	0.88		$	0.00
Diluted	$	0.47		$	0.36		$	(0.04	)	$	0.84		$	0.00

Weighted average number of common shares attributable to Alpha and Omega Semiconductor Limited used to compute net income (loss) per share
Basic		25,672			25,340			24,701			25,506			24,620
Diluted		27,353			26,314			24,701			26,834			25,362

Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance Sheets
(in thousands, except par value per share)
(unaudited)
	December 31, 2020			June 30, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	180,966		$	158,536
Restricted cash		230			2,190
Accounts receivable, net		24,934			13,272
Inventories		144,307			135,528
Other current assets		10,833			8,807
Total current assets		361,270			318,333
Property, plant and equipment, net		430,808			412,340
Operating lease right-of-use assets, net		34,395			32,948
Intangible assets, net		15,090			16,770
Deferred income tax assets		4,852			4,766
Restricted cash - long-term		2,143			1,978
Other long-term assets		4,607			5,804
Total assets	$	853,165		$	792,939
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	83,859		$	86,181
Accrued liabilities		60,483			54,986
Income taxes payable		2,166			1,360
Short-term debt		43,574			30,114
Finance lease liabilities		16,535			15,258
Operating lease liabilities		4,896			4,159
Total current liabilities		211,513			192,058
Long-term debt		93,096			99,775
Income taxes payable - long-term		921			903
Deferred income tax liabilities		860			496
Finance lease liabilities - long-term		20,821			26,842
Operating lease liabilities - long-term		31,102			30,254
Other long-term liabilities		20,196			10,723
Total liabilities		378,509			361,051
Equity:
Preferred shares, par value $0.002 per share:
Authorized: 10,000 shares; issued and outstanding: none at December 31, 2020 and June 30, 2020		—			—
Common shares, par value $0.002 per share:
Authorized: 100,000 shares; issued and outstanding: 32,394 shares and 25,765 shares, respectively at December 31, 2020 and 31,944 shares and 25,305 shares, respectively at June 30, 2020		65			64
Treasury shares at cost: 6,629 shares at December 31, 2020 and 6,639 shares at June 30, 2020		(66,097	)		(66,184	)
Additional paid-in capital		254,980			246,103
Accumulated other comprehensive income (loss)		1,481			(5,127	)
Retained earnings		141,289			118,833
Total Alpha and Omega Semiconductor Limited shareholder's equity		331,718			293,689
Noncontrolling interest		142,938			138,199
Total equity		474,656			431,888
Total liabilities and equity	$	853,165		$	792,939

Supplemental disclosures of financial information:
(in thousands)

	As of December 31, 2020							As of June 30, 2020
	AOS		CQJV			Consolidated		AOS		CQJV			Consolidated
Cash and cash equivalents	$	142,326	$	38,640		$	180,966	$	110,346	$	48,190		$	158,536
Bank borrowings liabilities	$	28,538	$	146,676	*	$	175,214	$	32,708	$	140,652	*	$	173,360
Inventory	$	97,795	$	46,512		$	144,307	$	97,593	$	37,935		$	135,528
Property, plant and equipment, net	$	168,120	$	262,688		$	430,808	$	162,833	$	249,507		$	412,340

* AOS is not a guarantor of CQJV's (Chongqing Joint Venture) debts.

	Three Months Ended December 31, 2020							Three Months Ended September 30, 2020								Three Months Ended December 31, 2019
	AOS		CQJV			Consolidated		AOS		CQJV				Consolidated		AOS		CQJV				Consolidated
Net cash provided by (used in) operating activities	$	35,678	$	407		$	36,085	$	12,701	$	(2,853	)		$	9,848	$	12,470	$	(3,532	)		$	8,938
Purchase of property and equipment, net of government grant	$	6,779	$	6,533		$	13,312	$	7,944	$	3,393			$	11,337	$	12,062	$	3,307			$	15,369
EBITDAS	$	25,332	$	5,950	**	$	31,645	$	22,156	$	4,609		**	$	27,572	$	12,538	$	(2,214	)	**	$	13,892

** CQJV EBITDAS includes amounts attributable to noncontrolling interest.

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, 2020			September 30, 2020			December 31, 2019			December 31, 2020			December 31, 2019

GAAP gross profit	$	48,749		$	42,523		$	24,406		$	91,272		$	51,338
Share-based compensation		383			385			404			768			840
Amortization of purchased intangible		811			812			—			1,623			—
Production ramp up costs related to joint venture		—			275			8,486			275			14,477
Non-GAAP gross profit	$	49,943		$	43,995		$	33,296		$	93,938		$	66,655
Non-GAAP gross margin as a % of revenue		31.4	%		29.0	%		28.3	%		30.3	%		28.3	%

GAAP operating expense	$	35,159		$	32,196		$	27,776		$	67,355		$	55,329
Share-based compensation		2,841			2,491			2,083			5,332			4,016
Legal costs related to government investigation		843			1,107			—			1,950			—
Non-GAAP operating expense	$	31,475		$	28,598		$	25,693		$	60,073		$	51,313

GAAP operating income (loss)	$	13,590		$	10,327		$	(3,370	)	$	23,917		$	(3,991	)
Share-based compensation		3,224			2,876			2,487			6,100			4,856
Amortization of purchased intangible		811			812			—			1,623			—
Production ramp up costs related to joint venture		—			275			8,486			275			14,477
Legal costs related to government investigation		843			1,107			—			1,950			—
Non-GAAP operating income	$	18,468		$	15,397		$	7,603		$	33,865		$	15,342
Non-GAAP operating margin as a % of revenue		11.6	%		10.2	%		6.5	%		10.9	%		6.5	%

GAAP net income (loss) attributable to AOS	$	12,903		$	9,574		$	(1,005	)	$	22,477		$	4
Share-based compensation		3,224			2,876			2,487			6,100			4,856
Amortization of purchased intangible		811			812			—			1,623			—
Pre-production expenses related to joint venture		—			—			(25	)		—			24
Production ramp up costs related to joint venture		—			135			4,319			135			7,368
Legal costs related to government investigation		843			1,107			—			1,950			—
Income tax effect of non-GAAP adjustments		(1	)		(8	)		(2	)		(9	)		(7	)
Non-GAAP net income attributable to AOS	$	17,780		$	14,496		$	5,774		$	32,276		$	12,245
Non-GAAP net margin attributable to AOS as a % of revenue		11.2	%		9.6	%		4.9	%		10.4	%		5.2	%

GAAP net income (loss) attributable to AOS	$	12,903		$	9,574		$	(1,005	)	$	22,477		$	4
Share-based compensation		3,224			2,876			2,487			6,100			4,856
Amortization and depreciation		13,200			12,489			10,850			25,689			21,754
Interest expense (income), net		1,649			1,622			992			3,271			772
Income tax expense		669			1,011			568			1,680			978
EBITDAS	$	31,645		$	27,572		$	13,892		$	59,217		$	28,364


GAAP diluted net income (loss) per share attributable to AOS	$	0.47		$	0.36		$	(0.04	)	$	0.84		$	0.00
Share-based compensation		0.12			0.11			0.10			0.23			0.19
Pre-production expenses related to joint venture		—			—			(0.00	)		—			0.00
Production ramp up costs related to joint venture		—			0.01			0.17			0.01			0.29
Legal costs related to government investigation		0.03			0.04			—			0.07			—
Amortization of purchased intangible		0.03			0.03			—			0.06			—
Income tax effect of non-GAAP adjustments		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Non-GAAP diluted net income per share attributable to AOS	$	0.65		$	0.55		$	0.23		$	1.20		$	0.48

Shares used to compute GAAP diluted net income (loss) per share		27,353			26.314			24,701			26,834			25,362
Shares used to compute Non-GAAP diluted net income per share		27,353			26.314			25,594			26,834			25,362

Contacts

Investor and media inquiries:
In the United States: The Blueshirt Group
Ralph Fong
+1 (415) 489-2195
[email protected]

In China: The Blueshirt Group Asia
Gary Dvorchak, CFA
+86 (138) 1079-1480
[email protected]

Exhibit 99.2

Alpha and Omega Semiconductor Limited

Prepared Remarks for the Investor Conference Call

for the Fiscal Quarter Ended December 31, 2020

February 4, 2021

Gary Dvorchak (Moderator)

Good afternoon, everyone, and welcome to Alpha and Omega Semiconductor’s conference call to discuss fiscal 2021 second quarter financial results. I am Gary Dvorchak, Investor Relations representative for AOS. With me today are Dr. Mike Chang, our CEO, Yifan Liang, our CFO, and Stephen Chang, our President. 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. 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 question-and-answer session.

The earnings release was distributed over wire services today, February 4, 2021, after the close of market. The release is also posted on the company's website. Our earnings release and this presentation include certain 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, Mike, to provide strategic highlights. Mike?

Mike Chang (Chief Executive Officer)

Thanks, Gary. I would like to welcome everyone to today's call. I am excited to be speaking with all of you again today and to report an excellent quarter and finish to calendar year 2020.

In the December quarter, we saw solid shipments across most of our product categories, leading to results ahead of expectations. We grew revenue by 35% year-over-year to $159 million. We achieved higher utilization at our manufacturing facilities. We continued to be disciplined with our spending. All of this led to records in non-GAAP gross margin of 31.4% and non-GAAP EPS of $0.65. Yifan will go into more details on our financial performance later. I am really pleased by our team's execution. The operational controls and efficiencies that we have implemented are positively impacting our bottom line.

Page 1

For investors who may be new to our story, our mission is to become a leading designer, developer, and global supplier of a broad portfolio of power semiconductors. This mission drives our strategic focus and the work we do.

Computing has been a core market for us, but we have successfully diversified our business by expanding into other market segments, including Consumer, Communications, Power Supply and Industrial. Our strong engineering team and technical expertise enable us to develop a broader variety of power discrete and power IC technology platforms. This positions us to expand our product offerings and deliver complete power solutions for more targeted applications.

On the manufacturing front, we continue to ramp our capacity at our JV fab in Chongqing. This provides us with flexible capacity management and geographically diversifies our supply chain, which is critical to supporting our growth for years to come. Yifan will update you on the progress of the JV fab in a few moments.

I am proud of what our team has accomplished and the groundwork we are laying for long-term and sustainable success. Obviously, we faced tremendous challenges in calendar year 2020, including the global COVID-19 pandemic, trade conflicts, and political and social unrest in different parts of the world. Despite these challenges, we made significant progress toward achieving our target of $600 million annual revenue for calendar year 2021. We did this by developing a healthy pipeline of new products, new design wins, and new customers.

Now, I will turn the call over to Stephen for an update on our business and a detailed segment report. As you know, we recently promoted Stephen to President. He will now be responsible for all day-to-day operations of AOS. My role will gradually transition to a higher-level leadership role, overseeing the company’s strategic direction. Stephen has done an outstanding job at AOS over the years, and I am fully confident in his ability to lead AOS in the next phase of rapid growth. Stephen, the floor is yours!

Stephen Chang (President)

Thank you, Mike, and good afternoon, everyone. I will start with an update on our business and then provide detailed segment highlights for the December quarter.

Our business momentum has accelerated over the past several quarters, due to our advanced product portfolio, marketing strategy, and growing production capacity. As we stated previously, our strategy is now to create advanced “total solution” products in close partnership with our customers. These products leverage our expertise in power, and move beyond commodity parts into multi-socket optimized solutions that make our customer products more reliable and efficient. For example, our recent design wins in a gaming system and in a new PC graphic card platform, as well as our high growth in home appliance applications and battery protection solutions, demonstrate how we have deepened strategic partnerships with tier-one global OEM customers. We expect to accelerate growth by winning new customer engagements with an expanding pipeline of new products and increasing BOM content.

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Of course, our large global customers would not partner with us if we could not deliver our solutions at scale. As you know, we have been ramping production at the JV fab in Chongqing. Supply from the JV fab has enabled us to win new large-scale customers, while also regaining market share at others that we were struggling to supply. We have crossed several milestones at the JV fab, which Yifan will elaborate on shortly.

In addition to the traction we are gaining from the successful execution of our strategy, we are also blessed with strong industry tailwinds. Industry-wide supply is tight as demand remains strong across various market segments, including Computing, Consumer, and Communications. We are on allocation as well, and are optimizing our operations, product mix and capacity allocation to key product lines. We are working closely with our strategic customers to meet their procurement needs. Our customers appreciate our commitment to enabling their growth and executing on our mission.

Now, let me now provide a detailed review of each of the business segments.

Let’s start with Computing. Revenue was up 32.9% year over year, representing 40.7% of our total revenue. Revenue was down 3.3% sequentially after an unusually strong September quarter. Graphics cards were strong, while demand for PC-related products declined seasonally as we passed the peak build for the western holidays. This momentum in Computing is a direct result of our strategy of partnering with our customers to create total power solutions, which increases our content. Looking ahead, we expect overall Computing revenue to return to sequential growth in the March quarter. We expect solid demand at our ODM customers, attributable to ongoing work-from-home and remote learning trends. This will be partially offset by a slight decline in graphics card shipments due to the Chinese New Year holiday. While we are on allocation, we expect to have sufficient capacity to resume sequential growth.

Moving on, the Consumer segment was up 67.3% year-over-year, representing 22.3% of total revenue in the December quarter. Like Computing, Consumer revenue also decreased sequentially by 3.4%, which was expected when comparing to the strong September quarter. Home Appliances drove growth in this segment, as a key strategic customer in Korea ordered high volumes of Intelligent Power Modules (IPM). In contrast, our new gaming console customer reduced its build plan in response to shortages of other system components. This enabled us to redirect some production to support other customers and products. Gaming is anticipated to resume growth in the March quarter. We are excited about this gaming customer, as it shows the strength of our “strategic supplier” approach. In their console, we have multiple sockets covering several of our products, including Power ICs and MOSFETs, a great example of how we can drive growth through greater percentage of BOM. We expect this segment to decrease double-digits primarily due to the seasonal decline of TV business and a decline in Home Appliances business due to a delay in supply. These declines will be partially offset by meaningful growth in Gaming.

Next, let’s move to the Communications segment, which was 17.0% of total revenue in the quarter, up 32.5% sequentially and up 27.9% year-over-year. This segment played out as expected, driven by the strong demand for battery protection during the peak build season for one of our global smartphone customers. We also grew revenue from China-based smartphone customers in the December quarter. As we pass the peak build, we expect a sequential decline in the March quarter. However, our long-term outlook is solid as we have broadened our battery protection design wins at multiple customers globally, and we are supporting this overall growth from our Chongqing JV fab.

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Finally, let’s discuss the Power Supply and Industrial Segment, which accounted for 18.2% of total revenue. This segment was up 15.4% sequentially and up 14.3% year-over-year. The solid growth was due to two factors. First, quick chargers were exceptionally strong, due to demand for travel adaptors used for tablets as well as the shift in China from 60V to 100V. Sequentially, we doubled shipments of 100V products. Meanwhile, we regained our market position in both cost-effective 60V quick-charger solutions and at a power tool customer. The recovery was due to our ability to supply those customers from the JV fab. Looking ahead, we see continued strength into the March quarter and expect this segment to be up single digits, as Quick Charger remains strong and AC-DC continues to grow.

Overall, I am excited by the momentum we are seeing in our business. We have a strong pipeline of design wins with our major customers. Our strategy to focus on more differentiated product solutions that have higher value and margins is paying off and our operational discipline is adding leverage to our model. I am very encouraged by our execution and the progress we are making towards a stronger future for AOS.

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

Yifan Liang (Chief Financial Officer)

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

Before I dive into the financials, I want to highlight some key milestones at the JV Company, which Stephen alluded to a few minutes ago. We started the construction of the JV Company four years ago as we anticipated additional capacity requirement based on our longer-term growth plan at that time. The 12” fab commenced its production in July 2019 and the assembly and test facility started a bit earlier. The JV Company’s production ramp in the past year has played a significant role in our recent business growth. In the December quarter of 2020, the JV Company achieved positive EBITDA for the third consecutive quarter. We are very encouraged by the progress the JV Company has made in its production ramp. Beginning in the December quarter, we no longer report the production ramp up cost as a non-GAAP item. We expect the JV Company to generate another sequential volume growth in the March quarter and approach the Phase I target run rate in the September quarter. Beyond Phase I, the JV Company will provide us with flexible capacity management and geographic diversification of our supply chain. As part of our next phase of the growth plan, we are planning the Phase II expansion, and will offer more details in the quarters ahead.

Now let’s turn to financial results.

Revenue for the December quarter was $158.8 million, up 4.8% from the prior quarter and up 34.8% from the same quarter last year.

In terms of product mix, DMOS revenue was $118.5 million, up 3.6% from the prior quarter and up 19.3% year-over-year. Power IC revenue was $37.4 million, up 8.5% from the prior quarter and up 122.2% from a year ago. Assembly service revenue was $2.9 million as compared to $2.7 million last quarter and $1.7 million for the same quarter last year.

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Non-GAAP gross margin for the December quarter was 31.4%, up from 29.0% in the prior quarter and up from 28.3% in the same quarter last year. The quarter-over-quarter increase in non-GAAP gross margin was mainly driven by the higher utilization and operational efficiency as well as favorable product mix. Non-GAAP gross margin excluded $0.8 million of amortization of purchased IP for both December and September quarters. In addition, non-GAAP gross margin excluded $0.4 million of share-based compensation charges for the December quarter and for the prior quarter as well as for the same quarter last year, respectively.

Non-GAAP operating expenses for the December quarter were $31.5 million, compared to $28.6 million for the prior quarter and $25.7 million for the same quarter last year. The quarter-over-quarter increase primarily reflected higher variable compensation accruals based on the better than expected results for calendar year 2020. Non-GAAP operating expenses for the quarter excluded $2.8 million of share-based compensation charges and $0.8 million of legal expenses related to the government investigation. This compares to $2.5 million of share-based compensation charges and $1.1 million of legal expenses related to the investigation for the prior quarter, as well as $2.1 million of share-based compensation charges for the same quarter last year.

Income tax expense for the quarter was $0.7 million, compared to $1.0 million for the prior quarter and $0.6 million for the same quarter last year.

Non-GAAP EPS attributable to AOS for the quarter was 65 cents per share as compared to 55 cents for the prior quarter and 23 cents for the same quarter last year.

AOS continued to generate positive operating cash flow. AOS on a stand-alone basis generated $35.7 million of operating cash flow in the December quarter, as compared to $12.7 million in the prior quarter and $12.5 million in the same quarter last year. In the December quarter, we received a $10 million customer deposit for securing supply.

The JV Company generated positive operating cash flow of $0.4 million in the December quarter, compared to $2.9 million and $3.5 million of cash flow used by the JV Company in the prior quarter and the same quarter last year, respectively.

Consolidated EBITDAS for the December quarter was $31.6 million, compared to $27.6 million for the prior quarter and $13.9 million for the same quarter last year. EBITDAS attributable to AOS for the quarter was $25.3 million as compared to $22.2 million for the prior quarter and $12.5 million for the same quarter last year. EBITDAS for the JV Company was $6.0 million in the December quarter, as compared to $4.6 million for the prior quarter and negative $2.2 million for the same quarter last year.

Now let’s look at the balance sheet.

We completed the December quarter with cash balance of $181.0 million, including $142.3 million at AOS and $38.7 million at the JV Company. This compares to $154.7 million at the end of last quarter, which included $112.7 million at AOS and $42.0 million at the JV Company. Our cash balance a year ago was $107.2 million, including $86.2 million at AOS and $21.0 million at the JV Company.

The bank borrowing balance at the end of December was $175.2 million, including $28.5 million at AOS and $146.7 million at the JV Company. During the quarter, the JV Company borrowed $7.7 million working capital loan. AOS and the JV Company repaid $2.1 million and $9.6 million of existing loans, respectively.

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Net trade receivables were $24.9 million at the end of the December quarter, as compared to $26.3 million at the end of the prior quarter and $33.9 million for the same quarter last year. Days Sales Outstanding for the December quarter was 21 days, compared to 18 days in the prior quarter.

Net inventory was $144.3 million at quarter-end, up from $137.7 million last quarter and up from $117.6 million in the prior year. Average days in inventory were 115 days for the quarter, compared to 113 days in the prior quarter.

Net Property, Plant and Equipment was $430.8 million, up from $421.6 million last quarter and up from $416.1 million last year. Capital expenditures were $13.4 million for the quarter, including $6.9 million at AOS and $6.5 million at the JV Company.

With that, now I would like to discuss the guidance for the March quarter.

We expect:

●

Revenue to be approximately $157 million, plus or minus $3 million.

●

GAAP gross margin to be 28.7% plus or minus 1%. We anticipate non-GAAP gross margin to be 29.5% plus or minus 1%. Non-GAAP gross margin excludes $0.8 million amortization of acquired IP and $0.5 million of estimated share-based compensation charges.

●

GAAP operating expenses to be in the range of $33.8 million plus or minus $1 million. Non-GAAP operating expenses are expected to be in the range of $29.5 million plus or minus $1 million. Non-GAAP operating expenses exclude $3.3 million of estimated share-based compensation charges and $1.0 million of estimated legal expenses relating to the government investigation.

●

Income tax expense to be approximately $0.7 million to $1.0 million.

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Loss attributable to non-controlling interests to be approximately $0.2 million.

As part of our normal practice, we are not obligated to update this information. With that, we will 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,; expectation with respect to ramp up activities and target run rate at the JV Company and timeline for production and operation; the ability of the JV Company to support market demand and growth; anticipated sales for each product segment; our ability and strategy to develop new products; projected mid-term annual revenue target; fluctuation in customer demand and market segments; 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 ability to successfully operate our joint venture in China; 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, 2020 filed by AOS on September 2, 2020. 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.

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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