The paragraph is an introduction to the MPS First Quarter 2025 Earnings Webinar, led by moderator Genevieve Cunningham. Key participants include Michael Hsing (CEO), Bernie Blegen (EVP and CFO), and Tony Balow (VP of Finance). MPS has released their earnings and commentary on their website, and the presentation may include forward-looking statements with associated risks, as noted in their SEC filings. Bernie Blegen notes a record quarterly revenue of $637.6 million, an increase from both the previous quarter and the same quarter last year, due to a diversified market strategy, innovation, and customer focus. Highlights include innovation in robotics, automotive, and other sectors, with a significant revenue increase in the storage and computing segment.

The paragraph discusses the company's strong growth and future strategies. Key highlights include continuous design wins with major enterprise data customers and a significant increase in automotive revenue for the third consecutive quarter. The company focuses on innovation, market expansion, and diversifying its supply chain to capture growth opportunities and remain adaptable. They are transitioning from a chip-only supplier to a full-service silicon-based solutions provider. During a Q&A session, it was mentioned that although enterprise data revenue met expectations, there is optimism for improvement later in the year, supported by broad-based design wins and qualifications.

In the conversation, Michael Hsing discusses the company's efforts to diversify its manufacturing and R&D activities globally, emphasizing local manufacturing for local customers. Over the past decade, especially in the recent years post-pandemic, the company has expanded its manufacturing capacities outside of China to better position itself in the global market, particularly considering the current tariff environment. The diversification strategy has been highlighted as focusing on both supply chain and front-end R&D efforts. Tore Svanberg and Tony Balow also contribute to the discussion, acknowledging these efforts and congratulating the company on its achievements. Genevieve Cunningham then transitions to the next question from Quinn Bolton.

In the paragraph, the speakers discuss the outlook for their enterprise data business. They express a more positive sentiment compared to earlier in the year, despite uncertainties about customer platform changes. While they acknowledge concerns over potential impacts on market share due to these changes, they emphasize their confidence in their wide range of products, which have recently been qualified by several customers. However, they refrain from making precise forecasts for the second half of the year, citing a lack of control over customers' project timelines and decisions. They hope the results will exceed expectations, despite having predicted a flat performance for the year earlier.

The paragraph is a discussion between Quinn Bolton, Bernie Blegen, Michael Hsing, and Ross Seymore about the company's financial outlook. They focus on a slight decrease in gross margin by 20 basis points in the second quarter, which Bernie attributes to a mix of factors rather than a specific event. The company aims to maintain margins close to the corporate average despite these small changes. In response to Ross Seymore's question, Bernie confirms that there are no significant segment variances expected in the second quarter, with all groups likely to experience only minor changes within a 5 percentage point range.

In this discussion, there is an analysis of the company's performance in relation to market dynamics, including pull-ins and push-outs, which are movements of demand within the supply chain. Michael Hsing and Tony Balow highlight the consistency in overall numbers despite minor fluctuations and emphasize the importance of diversification across manufacturing, R&D, and business areas like AI, PC, and gaming. Ross Seymore's questions probe the effects of tariffs and customer behavior, but Hsing notes that any shifts are small and not clearly understood. The general outlook for the company appears stable and positive entering the latter half of the year.

In the article paragraph, Rick Schafer from Oppenheimer questions Michael Hsing about the market opportunity and expected sales timeline for MPS's 400-volt rack power solutions, especially as the industry anticipates megawatt racks in the coming years. Hsing mentions that MPS is delivering 120-kilowatt module samples this month, with a potential to combine modules for up to 1 million watts of power. He anticipates significant revenue from these products by 2026, with preparations for production ramping and qualifications ongoing. Schafer also inquires about MPS's automotive sector developments, highlighting the 48-volt and 800-volt battery transitions and power isolation modules.

The paragraph contains a discussion involving several individuals, mainly focusing on the automotive segment and the storage and computing segment of a business. Michael Hsing mentions that model changes occur faster in China but are also happening in the U.S., Europe, and Korea. The changes involve moving from 400 volts to 800 volts and from 12 volts to 48 volts, though these are in early stages. Bernie Blegen highlights that despite concerns about unit volumes in North American and Chinese EVs, their second-half momentum is driven by past design wins, mainly in North America and Europe. Hsing predicts more changes in 800 volts and 48 volts systems by 2026 and 2027. The discussion shifts to Joe Quatrochi from Wells Fargo, who inquires about the storage and computing segment's outlook, particularly given strong first-quarter results. Hsing reflects on the company’s 21-year history as a public entity without providing a direct response to seasonality expectations.

The paragraph discusses the challenges and growth in the memory and power management sectors, noting that while forecasting numbers is difficult, delivering them is a strength. Bernie Blegen highlights the broad-based growth across various segments like DDR5, SSD, HDD, and notebooks, with DDR5 showing slightly higher growth. Tony Balow mentions that there won't be a significant decline in these segments in Q2. The conversation shifts to Joe Quatrochi asking about traditional server CPU demand, to which Michael Hsing responds positively, noting server upgrades to the latest Intel models and an anticipated increase in market share.

The paragraph involves a conversation between several individuals discussing their business operations and strategy, particularly in China. Bernie Blegen mentions consistent, steady growth in their business. Michael Hsing believes they will gain a higher market share, especially in the server market, in the next year. Gary Mobley from Loop Capital asks about their business size in China and how their China-focused manufacturing supply chain positions them against U.S. competitors. Michael Hsing explains their long-standing presence and production activities in China, their diversification efforts in Europe since 2016, and the balanced approach needed in manufacturing locations. He also mentions making adjustments post-pandemic and highlights the importance of balance in manufacturing locations across China, the U.S., and Europe. Gary Mobley further inquires about inventory and lead times, noting they appear to have significant inventory on their balance sheet.

In the paragraph, a conversation is taking place between Michael Hsing, Gary Mobley, Bernie Blegen, and others regarding inventory and lead times in manufacturing. Michael Hsing clarifies that while manufacturing capacity isn't infinite, they have substantial availability. Bernie Blegen discusses inventory levels being below the company's target range of 180 to 200 days, noting that both their inventory and channel inventory are lean. Despite this, lead times are stable, allowing flexibility in the market. Michael Hsing emphasizes their strategy of maintaining higher inventory levels than distributors for better management. The conversation is interrupted due to technical difficulties during a question from Joshua Buchalter.

The paragraph records a discussion involving Tony Balow, Joshua Buchalter, Michael Hsing, and Bernie Blegen during a Zoom conference call. Joshua inquires about a significant 38% growth in a typically sub-seasonal quarter for PCs, seeking assurance that this isn't due to inventory buildup. Michael indicates that such numbers aren't surprising and attributes the growth to various segments like DDR5 and notebooks. Bernie notes that the growth aligns with anticipated seasonal upticks in storage and compute, contrary to past trends. Tony and Michael further emphasize that the growth isn't solely driven by notebooks but also involves other segments such as desktops, with dynamic market shifts across various sectors like storage, compute, auto, and enterprise over recent quarters.

The paragraph involves a discussion about enterprise data, wherein Michael Hsing and Bernie Blegen highlight their growing confidence in the segment, particularly as they approach the second half of the year. This confidence stems from both their main customer and other customers who are working with shorter lead times, improving their visibility into design wins and qualifications. They emphasize optimism about upcoming platform ramps and suggest that both large and small customer contributions are significant. The conversation transitions to William Stein from Truist querying about the impact of tariffs on unit costs, pricing, and demand concerning Q2 guidance, to which Bernie Blegen responds that there is no direct or indirect impact from tariffs on their guidance.

In this paragraph, William Stein questions the company's focus on developing unique, finished products, such as sonograms and building automation systems, rather than just semiconductor components. Michael Hsing responds by explaining that the company aims to leverage its expertise in silicon and programmable technology to create comprehensive solutions, integrating software and hardware to offer higher-value products. This strategy shifts the sales dynamic from selling low-cost individual components to more lucrative complete solutions or modules, allowing them to engage with larger companies and higher-level decision-makers.

The paragraph discusses a company's shift from being a silicon-only provider to offering broader solutions, engaging customers at various levels including chip, module, and system levels. This transition is welcomed by large companies who are interested in collaborative solutions. The company aims to lead in AI innovation by offering products with higher power and smaller footprints, setting itself apart from competitors. The market, previously dominated by one major customer, is expected to see new entrants in the latter half of the year, opening more opportunities for engagement and growth.

The paragraph features a discussion involving Christopher Caso, Michael Hsing, Bernie Blegen, and others about financial performance and business confidence. Christopher Caso asks about the increased confidence in enterprise data now compared to the start of the year, questioning whether it relates to platform qualifications or market share improvements. Michael Hsing notes that perceptions can change as conditions evolve, while Bernie Blegen mentions they have positive data but remain focused on possible outcomes. Jack Egan then inquires about the margin outlook for new accelerator ramps in the upcoming years, asking about structural differences in margin profiles between different products like custom ASICs, TPUs, and GPUs.

The paragraph features a discussion between Bernie Blegen, Michael Hsing, and Jack Egan about Monolithic Power Systems' (MPS) market strategy and performance. Blegen states there hasn't been a structural change in their margin model but notes opportunities within the market. Hsing emphasizes MPS's focus on high-margin products rather than high-volume, low-margin business, and highlights the success of recent product releases. Egan queries about end demand trends in markets like automotive and industrial. Blegen indicates that MPS's growth is driven by new product ramps rather than broader market demand, pointing to optimism for the company's future performance despite macroeconomic challenges. Hsing notes MPS's consistent annual growth over 21 years, except for one year.

In the paragraph, Jack Egan thanks the speakers, and Kelsey Chia from Citi Research asks about the prospects for gross margin expansion given the decline in legacy wafer pricing and new developments in enterprise data and the automotive sector. Bernie Blegen and Michael Hsing respond that while there is potential for gross margin expansion, it won't occur in the second half of the year as they are not planning to increase prices, but the outlook for next year is positive. Kelsey also inquires about the communications market influenced by AI infrastructure build-outs. Bernie Blegen describes a balanced performance across the communications segment, including network telecom, router wireless modems, and optical fiber optics, over the last two quarters and the outlook for the next quarter. The Q&A session concludes with Genevieve Cunningham handing the webinar back to Bernie for closing remarks.

The speaker looks forward to the next conference call for the second quarter of 2025, which is expected to occur in early August, and expresses gratitude before ending the conversation. Michael Hsing acknowledges this with a brief response.

This summary was generated with AI and may contain some inaccuracies.