Ladies and gentlemen, thank you for standing by. And welcome to the Power Integrations' Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. I would now like to hand the conference over to your speaker today, Joe Shiffler, Director of Investor Relations. Thank you. Please go ahead.

Thank you, Mike. Good afternoon, everyone. Thanks for joining us. With me on the call today are Balu Balakrishnan, President and CEO of Power Integrations; and Sandeep Nayyar, our Chief Financial Officer. During this call, we will refer to financial measures not calculated according to GAAP. Non-GAAP measures exclude stock-based compensation expenses, amortization of acquisition-related intangible assets, and the tax effects of these items. Reconciliation of non-GAAP measures to our GAAP results is included on our press release. Our discussion today including the Q&A session will include forward-looking statements denoted by words like will, would, believe, should, expect, outlook, forecast, anticipate, and similar expressions that look toward future events or performance. Such statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected or implied. Such risks and uncertainties are discussed in today's press release. And in our form 10-K filed with the SEC on February 7, 2020. And our most recent quarterly report on Form 10-Q filed with the SEC on October 29, 2020. This call is the property of Power Integrations. And any recording or rebroadcast is expressly prohibited without the written consent of Power Integrations. Now, I'll turn the call over to Balu.

Thank you, Joe, and good afternoon, everyone. Fourth quarter revenues comfortably exceeded our expectations, increasing 32% year-over-year to $151 million. The growth was broad-based, with all foreign markets up double digits from the prior quarter. Non-GAAP operating margin expanded to 25%, and non-GAAP earnings were $0.60 per diluted share. We generated $46 million in cash from operations. Reflecting our strong cash flow and healthy balance sheet, our Board of Directors has increased the quarterly dividend to $0.13 per share. This marks our third dividend hike in the past four quarters, with a total increase of 37% over that time. For the full year, while revenues for the analog semiconductor industry grew just 3%, our revenues grew 16%, with growth in all four end market categories. The consumer category, our largest end market entering this year, grew about 10% in 2020 and finished strong, up nearly 20% year-over-year in the fourth quarter. Appliances were the main growth driver reflecting robust demand, as well as continued share gains at a broad range of customers in Europe, China, Korea, Japan, and the US. The impact of share gains continues to be magnified by rising dollar content in household appliances driven by features such as network connectivity, LED lighting, and other electronic intelligence as well as tighter energy efficiency standards. Our InnoSwitch products, which are gaining significant traction in appliances, drive dollar content even higher by providing a greater level of integration than earlier products. We're also seeing strong interest in our GaN products and our bridge switch motor driver chips at many appliance customers, which points to continued growth in dollar content going forward. In the industrial category, demand for high power products was constrained in 2020 by pandemic-driven delays in infrastructure projects. The lower revenues in high power were offset by growth in home and building automation, battery-operated tools, and broad-based industrial applications, resulting in low single-digit growth for the overall category. Going forward, we expect our industrial business to benefit from a broad range of secular trends such as renewable energy, high voltage DC power transmission, electrification of transportation and tools, smart homes and buildings, and fixed USB charging receptacles. The communications category provided the largest incremental revenue contribution in 2020, growing more than 30% for the year. The smaller computer category grew even faster, up nearly 50%. The common denominator across these categories is the rapid adoption of advanced chargers for smartphones, tablets, and notebooks. Over the past couple of years, Power Integrations has demonstrated a commanding lead in terms of technology and product design for advanced chargers. And that advantage is now translating into rapid growth in market share and revenue. Adoption of advanced chargers accelerated last year and shows no sign of slowing as the 5G rollout continues. Even as 5G phones require higher power chargers due to their larger batteries. Many OEMs are pushing power levels even higher to offer much faster charging as a way to differentiate their products. Meanwhile, thanks to new technologies like USBPD, and the move to an accessory model at certain OEMs, we are seeing an unprecedented wave of innovation in charger designs at OEMs and aftermarket suppliers. This includes an increasing number of chargers designed to power two or more devices and a robust pipeline of designs with our GaN products, including our GaN-based industries products, as well as our MinE-CAP ICs, which use GaN technology to reduce the size of the charger by enabling smaller input capacitors. We won several designs with MinE-CAP in Q4, including a 65-watt design utilizing MinE-CAP along with GaN-based InnoSwitch and our energy-saving CAPZero ICs. While not necessarily typical, such high value designs exemplify the sea change that has occurred in the charger market over the past several years. Not long ago, chargers for commodities and costs were the only variable that mattered. Today, OEMs are thinking strategically about chargers, either as a value-added feature or revenue-generating accessory, and a wave of third-party aftermarket brands has emerged as well. We have seen this change coming for quite some time and we were ready for it thanks to R&D investments we have made in technologies like GaN and revolutionary products like InnoSwitch. Our investment in GaN, which began almost a decade ago, is a great example of our long-term thinking that has been a cornerstone of our success. Our approach to managing through challenges of the pandemic is another. While some of our industry peers reduced headcount or cut salaries in the early stages of the pandemic, we continued to invest in our people, giving normal salary increases and expanding our workforce by 4% last year, with the largest increase coming in R&D. In fact, we hired a number of highly capable people that our industry peers let go in the early stages of the pandemic. We also invested in capacity and infrastructure, spending more than $70 million in capital last year, including nearly $50 million on construction of new facilities for our European operations, and updates to our San Jose headquarters. We also built inventory as demand softened in the early stages of the pandemic, rising to 178 days at the end of the June quarter. Building inventory is something we can afford, knowing that our products have long shelf life and are fungible across applications and customers. It brings stability to our foundry relationships, helping to preserve our capacity, and enables us to satisfy customers when demand surges, as we are seeing today. While lead times have extended for some of our newer products, and the distributor inventories are below normal, we've been able to keep customer production lines running, despite an unprecedented surge in bookings in recent months. Finally, before I turn it over to Sandeep, I'd like to acknowledge Raja Petrakian, who is leaving Power Integrations for personal reasons, after six years as our VP of Operations. Taking over for Raja is Sunny Gupta, who was previously in charge of operations at Renesas, and also at Intersil before their acquisition by Renesas. He has more than 25 years of experience in operations and quality engineering in the semiconductor industry, and he is the ideal person to lead our operations team going forward. We thank Raja for his contributions to our success and his help in ensuring a smooth transition as Sunny takes over. And now I'll turn it over to Sandeep.

Thanks Balu and good afternoon. As usual, I will focus my remarks primarily on the non-GAAP results, which are reconciled to GAAP in our press release tables. Fourth quarter revenues were $151 million, up 24% sequentially, with all four market categories growing double digits as Balu noted. Communications were up mid-30s driven by the ongoing strength in fast charging for smartphones. Computer revenues were up more than 20% driven by continued growth in tablets, as well as monitors and servers standby power supplies. Consumer revenues were also up more than 20% reflecting the strong demand in the appliance market, while industrial's revenue grew low double digits sequentially driven by home and building automation, as well as broad-based industrial applications. Revenue mix for the quarter was 34% communication, 31% consumer, 26% industrial, and 9% computer. Mix was a slight headwind with respect to gross margin, which fell by 20 basis points to 50.1% on a non-GAAP basis; non-GAAP operating expenses were $37.9 million, up $2 million from the prior quarter and modestly above our expectations, primarily reflecting the timing of R&D projects. Non-GAAP operating margin for the quarter was 25%. For the full year, non-GAAP expenses were only up slightly, setting aside the impact of last year's litigation settlement, which was recorded as a negative expense. Other income for the quarter was about $600,000, down from the prior quarter due to the lower interest rate environment. The non-GAAP effective tax rate for the quarter was 5%, resulting in non-GAAP earnings of $0.60 per diluted share. Cash and investments in the balance sheet increased by $5 million from the prior quarter, ending the year at $449 million. Cash flow from operations for the fourth quarter was $46 million, while capital expenditures were $35 million. The higher CapEx reflects the need to pull forward some capacity additions, especially in assembly and test, as a result of the ongoing surge in demand. That bought our total CapEx for the year to just over $17 million, including roughly $15 million for building construction. For 2021, I expect our base CapEx to return to the normal run rate of 5% to 6% of revenue, plus an additional $12 million to $15 million for the completion of our construction projects. The other notable use of cash in the fourth quarter was $7 million for dividends. As Balu noted, the dividend will go up by $0.02 per share in the first quarter, which is an increase of 18%. Internal inventories fell slightly in terms of dollars, and were down 33 days from the prior quarter to 122 days. Channel inventories also fell during the quarter as sell-through once again exceeded sell-in. We ended the quarter at 3.2 weeks, a level which we consider to be unsustainably low, and we expect some level of replenishment to occur in the March quarter. Looking ahead, we expect first quarter revenues to be flat compared to the fourth quarter plus or minus 5%, with the continued strength in cell phones offsetting seasonal declines in computer and industrial categories. We do believe that the current strength in cell phones reflects some level of build-up by OEMs, looking to capture the Huawei handset business, and that a slowdown is likely to materialize at some point, perhaps as early as the June quarter. Nevertheless, we believe that when the dust settles on the Huawei situation, our OEM customers will have increased their share of the handset market, magnifying the share gains we are achieving through our success in advanced chargers. For the March quarter, we expect communication to increase as a percentage of the mix, with industrial revenues being seasonally low, resulting in a lower gross margin. Specifically, I expect non-GAAP gross margin in Q1 to be approximately 49%. However, I expect the March quarter to be the low watermark for the year, as mix should improve in a more favorable direction beginning in Q2. The stronger Japanese Yen versus the Dollar will be a headwind in the second half of the year, though I expect this impact to be largely offset by cost reduction initiatives. As a result, I expect our full year gross margin to be around the 50% mark. Q1 operating expenses should decline modestly compared to the fourth quarter to about $37.5 million on a non-GAAP basis. After a very modest expense growth in 2020, I expect a rebound in 2021 with travel and events resuming at some point during the year, and with a full year impact from the hiring that was deferred to late 2020 and early 2021. Other income should remain around $600,000 in Q1 and stay at a similar level going forward. The non-GAAP effective tax rate for Q1 and the full year should be around 7%, barring any potential changes in tax law under the new administration. Finally, I expect the diluted share count to rise by roughly 200,000 shares per quarter throughout the year. And now operator, let's begin the Q&A session.

Your first question comes from Karl Ackerman from Cowen.

Yes, good afternoon, gentlemen. Appreciate your taking my question. Sandeep, for my first question, it's on the industrial business. Given how important that is to the mix and the gross margin leverage as we go throughout the year, could you talk about the visibility for the high power area of the business over the next few quarters?

So as we had talked about earlier, because of the pandemic, things had kind of slowed down a bit. And I think that seems to be the theme. We still are very well positioned. But I think the projects resuming because of the pandemic may not be at the same pace. It'll be slower. We still expect our industrial segment to grow. In fact, for the year we expect all our four segments to grow in the coming year.

Let me also add in the longer term, the high power business has a very bright future. Because when you look around the world, there are a lot of investments being made in renewables and electrification. For example, China just recently announced a zero-carbon plan, and they are planning to invest something like $16 trillion to get the country to zero carbon by 2060. With the new administration in the US, we believe renewables and energy efficiency will become center stage. That will also help. Of course, Europe has always been the leader in pushing renewables and electrification, so all of those in the long term are very good drivers. In the short term, we have a challenge because of the pandemic, which continues to impact our ability not only to design the products, but even where we are designed in, the infrastructure projects are delayed due to the pandemic.

Yes, appreciate that. For my follow-up, we've heard several suppliers across the supply chain having raised prices, particularly given the shortage across foundry. I know comm's mix plays a role. But is your margin outlook also a function of higher prices of wafers or other input costs? And if so, could you talk about your strategy regarding the trade-off between pricing and volume commitments from your customers? Thank you.

We have not increased our prices because we have long-term customers. However, our prices have firmed this year. We haven't had the normal yearly decline to the same extent, so that will definitely help. In terms of our costs, it has gone up slightly because when you try to push the capacity to the limit, there's always some extra costs. But at the moment, we're not passing it on to the customers. As I said, we're not decreasing the price as much as we normally do.

Your next question comes from Tore Svanberg from Stifel.

Yes, thank you, and congratulations on the strong results. Balu, you talked about more and more of these chargers now supporting multiple devices. We're seeing with USBPD that you can now have as many as two, three, four interfaces to charge devices. How does that really impact the dynamics for the business? Because I assume in a device like that, you would have quite a bit more content.

Thanks, Tore. Yes, the advantage of multiple ports for us is that typically each port will require one of our InnoSwitch products. So if you have two ports, there will be two InnoSwitch products. That's actually the most efficient way to build a multi-port design, and that is the benefit. Our average selling price essentially doubles if it's two ports and triples if it's three ports. So that's a huge benefit. The other benefit is when you go to multiple ports and you want to keep the size reasonable, you end up having to increase the efficiency significantly. That means you have to use our GaN-based products. Typically, multiple port chargers are also higher power, so by definition, they will have to use GaN, which has a much higher average selling price than our silicon-based InnoSwitches. So that also helps. The last one is our MinE-CAP product, which reduces the size of the input capacitor; that also becomes very important in multiple designs, again for size. In addition to all of this, by the way, MinE-CAP also uses GaN to reduce the capacitor size. But in addition to this, we typically also have a CAPZero, because once you get to something like 65 watts or higher, the input current becomes an issue. So you have to use CAPZero to meet the normal consumption. We get to sell something like four different chips, three of which could be GaN in a two-port design. So that's a huge increase in average selling price for us.

That's great context there. I'm starting to see some adapters at 200 watts. I mean, I don't know if that's just a marketing approach by some charger manufacturers, but my understanding is PD is limited to 100 watts. Is that perhaps a proprietary standard, and is that something that you would be shipping into?

The 200-watt charger is actually a two-port charger; each one is 100 watts, which is within the USBPD standard. However, some of the OEMs, especially in China, do not use USBPD; they use their own protocol, which we don't care about whether they use USBPD or not, because we are orthogonal to any protocol. So it is true that some OEMs are working on 200-watt two-port designs. The phones that connect to them can handle the 100-watt input, reducing the charge time quite dramatically.

Very good. One last question for Sandeep; Sandeep, inventory days at 125, do you think you'll be able to get those up a little bit this quarter, or will things be so tight that that's going to be pretty tough?

So I think with weeks in the channel being so low, and the demand still being there, if you remember, I talked to you about the Q4, Q1, Q2 dynamics before, which is exactly playing out as I thought. You thought you were turning a little hot. So I think it'll take a little longer to do, but we've got absolute capacity. And we are making sure that we meet all the demands of our customers. It'll take a little while, but it's within our model. And going up 10 to 20 wouldn't be a problem in terms of days. So if we can, we'd like to keep it that way so that we can meet any more upside demands.

Your next question comes from Ross Seymore from Deutsche Bank.

Hi, guys, congrats on a really strong year and an even smarter close to the year and beginning of this one. So the supply side of the equation doesn't seem to be impacting you guys at all. I know you're very strategic about how much supply you hold. But the channels lean now, your inventory and your books are a little bit leaner. Is there any supply constraint issues that you see limiting the revenue growth within the next quarter or two quarters?

From everything we know, we believe we can meet the actual demand of the customers. They are obviously talking very closely with us because they want to make sure they get the parts. They are actually very surprised we are able to meet their demand. And they said the demand had to be very careful, not necessarily everything they want to build inventory. But what their actual demand is? How much inventory they can build, the safety stock inventory will depend upon the demand going forward and how quickly we expand our capacity. Our goal is to make sure that we don't hurt any customer. We've been able to do that for multiple reasons. One is we built a lot of inventory; if you remember, we were at 178 days at the end of June, that's really, really helping us. The second benefit of that is we kept our foundries running even during the downturn, so we were able to preserve the capacity. If there is an area where we are expanding capacity, that's in the backend—these are the testers and assembly equipment. Those take much shorter lead times. We can expand that as the demand increases, and we are doing it as we speak. We think we'll have more than enough capacity on the back end by the end of this quarter. Our goal right now is to keep as much inventory with us so that we can serve all the customers. As soon as we allow our customers to build inventory, our inventory is spread around the world, which does not allow us to serve all customers well. Our goal is not to do that. We will only allow them to build inventory once we have satisfied all of the underlying real demand. We've been able to do that in Q3 and Q4, and our customers are very happy. We will continue to do that until our ability to ship is significantly higher than the demand.

Thanks for the detailed answer there, Balu. And then just on the handset side of things, the wireless side. Can you talk a little bit about how seasonality shifts? Is seasonality even a useful framework, but how it shifts now that we're talking out of the box, kind of a la carte chargers, whether they be multi-port or otherwise?

Well, there is only one OEM who has gone out of the box in a broad sense. There are two other OEMs who have gone out of the box only on the high end of the phones. In fact, one of them, which is in China, they went out of the box and they said that if you want the charger, they'll throw that in for free. In other words, you can buy a phone without a charger at the same price as the one with the charger. So guess what the customers are going to do? In the short term, the impact is relatively small and unknown. But in the long term, it is not clear that it's going to be a negative for us. The reason I say that is even if everybody shifts to out of the box, the number of units will go down. But we have exposure to the entire product line; even the low-end will have the ability to use a faster charger. We believe most people will end up buying faster chargers. In some sense, the attachment rate of the fast charger will be a lot higher relative to the slower chargers that are cheaper. The second aspect is that out of the box is really promoting, or the aftermarket guys are taking advantage of it, and the aftermarket volume is growing very rapidly. It's amazing how fast it's happening. That means OEMs are saying they want to have as attractive a charger as the aftermarket so they can capture the gross margin on these accessories. There is now a strong incentive for OEMs to build attractive chargers that compete directly with aftermarket chargers in terms of size, power, and multiple ports, which means that our average selling price is going to be much higher in these out of the box chargers, because now they are competing with aftermarket chargers. Overall, we think our content will go up; our dollar profit will go up, and we actually think this is good for us long-term. This also means that the higher power chargers will become a larger portion of the business, a cell phone charger of the segment, if you will.

So Ross, what Balu indicated is the trend for the future in the short term. I think the dynamic that I talked about the Q4, Q1, and Q2 with the Huawei situation will definitely play. That's why we talked about the impact of seasonality. The changes can happen because of that dynamic. But what Balu indicated is that long term, the out of box is actually a very good thing for us with the move to the power level, high power level.

Thanks, Sandeep. One clarification just on that topic that you just mentioned; what is it that you're monitoring that gives you the pause to kind of caution people about that? Multiple people go on for multiple shares, etc. Is it that different versus seasonal buying patterns, just the sheer magnitude that these customers are buying, just gets a little bit of color without obviously mentioning customer names about what's leading you to give that incrementally cautious commentary and otherwise awesome report and guide?

We know exactly the total number of cell phones at each and every major OEM, which is well-known information available in the open market. It's easy for us to look at how much share Huawei is losing. We know that total number is going to multiple people, so it's easy to figure out how much of that will likely go to different people. We don't know exactly how much share gains each one of the OEMs we serve will take, but we know the total. We can manage that reasonably well.

Your next question comes from David Williams from Loop Capital.

Yes, congrats on the quarter and thanks for taking the question. I wanted to see if maybe you could touch a little bit on the importance of the GaN products within your portfolio and how much business do you think that you've been able to capture because of the GaN? And then maybe if you could just kind of mention the magnitude of the ASP differential between a silicon-based and the GaN-based.

It is very clear to us that GaN is on an extremely fast growth rate ramp right now. In 2020, we roughly doubled slightly more than doubled the revenue versus 2019, and this year it'll be more than double; it could be as much as triple the revenue for GaN products. A large portion of our GaN designs are revenue from aftermarket chargers. But we're finding that increasingly, the OEMs, for the reasons I mentioned earlier, are beginning to use GaN to differentiate their products in terms of size, efficiency, weight, and so on, and multi-port to compete with the aftermarket guys so they can get the lucrative accessory business. This year we will make significant inroads into OEM business where they are building high-end chargers for accessories. Beyond that, we have customers in 20 different applications outside of cell phones that we're shipping into. Currently, as of Q4, we are shipping to about 100 different customers with our GaN products. But I believe that GaN will replace silicon above a certain power level. Our GaN is very cost-effective; it's proven to be very reliable in the field. We haven't had a single failure related to GaN in the field so far, even though we've shipped a lot of GaN. We think that around 30 watts, GaN becomes more attractive than silicon for all of our products. Almost all of our new products now will use GaN, and they are using GaN as we speak. We are building a significant capacity because we think GaN will offer us a differential advantage over our competitors, as is already proven in the cell phone market, but also in the consumer market like TVs and appliances, and also in the industrial market.

Great, thanks for the color there. It is very helpful. Lastly, if I can, just kind of thinking about the automotive segment. I know that's a long tail design cycle. But have you seen maybe any acceleration in qualifying force in automotive, just kind of given the constraints that we're seeing within the market today? Has that helped you at all or any difference there?

Actually, those short-term issues won't make any difference because the design cycles are so long in automotive. We are working with multiple OEMs. We will know probably next year where we are in terms of design wins, and it will be something like 2024 before we actually see revenue from the traction part of it driving the motor, because driving the motor takes much longer to qualify than if you had a power supply within the car. We expect to start seeing some revenue this year gradually increasing, but the big increase will come when we are in the drive train.

Your next question comes from Gus Richard from Northland Capital Markets.

Yes, thanks for taking the question and let me offer my congratulations on a strong quarter and year. Just on GaN products, what percentage of revenue are they now and sort of what is the growth rate of that product family?

Last year, we mentioned in 2019 that it was mid-single-digit millions. In 2020, it was just over $10 million, and this year we expect it to be more than double, probably as much as triple the revenue, which will be somewhere in the $20 million to $30 million range. You can calculate what ratio it is to the total revenue.

Got it. And then just in terms of the supply of epi wafers to the product, are you well situated for the base wafers?

Absolutely. We have no constraints at all on the base wafers.

Okay. Your vendors don't need to add any capacity.

No.

Got it. And then in terms of seasonality for the year, I know Ross asked about cell phones. Could you talk about your overall thoughts on how the year will play out? Do you expect seasonality to behave as one would expect in a normal seasonal year or will they have similar types of impacts excluding cell phones?

There are a lot of dynamics happening. First of all, 5G is driving power levels up, which is good for us. The fast charging is taking off, which is good for us, requiring even more power. That distorts seasonality. We are gaining share from our competitors and our OEMs are gaining share from Huawei. To the best we can estimate, our cell phone revenue will grow and after that, it really depends upon how this Huawei situation resolves itself. We will know in Q2 whether it will continue to grow or maybe show a little bit of softness. The second half is always more challenging to predict. We have to believe the total bookings we see right now is higher than the underlying long-term demand. In the short term, there is obviously an increased demand. Just like the reports you have read, we also believe the second half could have some adjustment once we are over this demand bubble. That said, we are very confident that we are gaining share like we always do during downturns, and we are very confident that we will grow well above the market this year, but I cannot tell you the exact seasonality in the second half.

Your next question comes from Christopher Rolland from Susquehanna International.

Hey, guys, it's David Haberle on behalf of Chris Rolland. Thanks for taking our question and congrats on the terrific quarter here. I guess you guys haven't seen the supply constraints that other guys have. But has there been any kind of knock-on effect where you have a customer who can't ultimately build a device because they can't find other components? Is there any way to gauge that, or pretty much what you're seeing is good to go on the customer side that you're meeting real demand at this point?

No, you're absolutely right. Many times they can't procure other components. That's why we monitor that very carefully. We don't want to ship whatever the customer asked for because then all it's going to do is sit in their inventory, since they can't get other components. We've lost our ability to serve other customers. Surprisingly, the customers have been extremely cooperative; we are telling them we will definitely make sure you will get the parts you need, but please don't build inventory. We manage it on a daily and weekly basis, which is a lot of hard work, but that's the only way to manage it so that all customers are taken care of. They understand that, and we've been successful in making sure that this upswing surge has been served well for our customers. In fact, many customers have told us they’ve had more challenges with other IC companies than with us. They say we are the best supplier. But it takes a lot of work.

Got it. And then for my follow-up, I think it's a very prudent approach, by the way. Do you guys have visibility into when you think you'll allow customers to start building inventory and replenishing the channel? It seems like a nice tailwind at some point for you. Do you have any visibility as to when demand might slow down a little bit, and you might be able to replenish that channel?

To the best we can estimate, we think we may be able to replenish the channel a little bit in Q1. It really depends upon what happens to demand after Lunar New Year. There is always a concern that after the New Year, there could be some push-outs and so on. But we are taking all of that into account when we project the guidance that we're saying, which is $150 million plus or minus 5%. If demand continues, it's going to be difficult to build inventory either at our customers or in our channel. What we don't know is whether our customers have inventory of finished goods that they might have overbuilt. That's our concern in the second half; they might have built too many appliances, too many cell phones, in anticipation of gaining more share, which may or may not happen. Yes, there might be softness in the second half. But on a relative basis, we believe we will outperform the analog semiconductor market this year again.

Okay, thanks everyone for listening. There will be a replay of this call available on our investor website, which is investors.power.com. Thanks again for listening and good afternoon.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.