Monolithic Power Systems, Inc. (NASDAQ:MPWR) Q1 2024 Earnings Call Transcript

Michael Hsing: Yes. As we see AI, but we still continue to grow.

Bernie Blegen: Yes.

Michael Hsing: And grow at very fast rate.

Quinn Bolton: Great, thank you.

Operator: Our next question is from Rick Schafer of Oppenheimer. Rick, your line is now open.

Rick Schafer: Hi, thanks. I was having trouble with my mute button. Hi, my congratulations guys and I just had a couple questions. The first one just since we’re talking about power and I sort of have a pointed one on server CPU power some of the new x86 platforms that are due out later this year are pushing 500 watts. I mean, is there an expectation just like the call you made back in 2016 maybe that was a little premature, but is there expectation that x86 is eventually going to move to 48 volts still and if so I guess, where are we in that transition how far off do you think that is?

Michael Hsing: Yes. Okay. Now since you mentioned in 2016 I can go back earlier so in like 2014 when I invite we are outside the door and 2016 we are we can join. Okay. We are we’re invited as a guest and we give us some tokens and again and so you can play it and again and so the transitions and from VR 13.5 to 14 then this type at this time when these are new CPU powers we have a significant market shares that will keep and it’s not reflected into a revenue yet and once those are CPU release we will gain a significant amount of shares.

Rick Schafer: In any comment Michael on the transition to 48 volt power for x86?

Michael Hsing: That we don’t know, that probably and the higher powers is over 700 watt. I think those will transition to vertical powers and which were ready and other ones below that we believe is still using a traditional rack powers and okay man and use a 12-volt supply.

Rick Schafer: Got it. Thanks and just as a follow-up but shifting gives a little bit to auto, I was just curious what your expectations are for your auto business this year obviously that market is under a little bit of pressure near-term but I believe you guys have been pretty open about some of your material share gains for instance with China ADAS also with some of your top auto, you want your top auto customer, you’ve also got some pretty significant share gains. I believe ramping later this year, but I was curious if you could provide any update there?

Michael Hsing: We saw — go ahead.

Rick Schafer: Oh, no. I was just was curious if you could add in there, what your expectations are from — I know you had a couple of launches, that some OEMs delayed in the second-half last year and I didn’t know if you still expected to benefit from those this year. I know that’s kind of a lot in one question but there’s a lot going on in your auto business.

Michael Hsing: Oh, yes, certainly. We actually care less with the share gain. What the revenue expectations, of course, we have to prepare all the inventory so now came in that and that’s the only thing we care, whatever it is, whatever it is. Okay, we want to do, if we’re not the best, we will not win those market segments. Okay. And particularly these are new applications and new features. So far, we can tell you like and in this year’s or end of the last years and Chinese EV makers they produce a lot more and with those features that we are we are in, they export it in not to U.S. by the two other possible world, they increase the sum of somewhere five to six million units million cars and that’s where we see the upside so far.

Rick Schafer: Got it. Thanks.

Operator: Our next question is from Ross Seymore of Deutsche Bank. Ross, your line is now open.

Ross Seymore: I’ll echo the congratulations on the stability. Just a question on the visibility into the second-half, I understand the caution especially given what everything going out in the broader market, but you also said that your bookings are improving. The order rates, the engagements et cetera, et cetera. So, is the visibility improving, it’s just not as good as it used to be I’m just trying to reconcile the booking side improving, but the visibility, not.

Bernie Blegen: Sure, Ross. If we can kind of reflect that over the course of about the last six quarters ordering patterns have been well below whatever we call normal and when we’re seeing improvement doesn’t mean that we’re seeing that they’ve necessarily stabilized or that they’re as predictive as when you have like five or six consecutive quarters of strong ordering patterns. So, all we’re trying to do right now is remain cautiously optimistic.

Tony Balow: And hey, Ross, it’s Tony. The only thing I’d probably add on that right is really focused on the design win engagement making sure that pipeline is healthy because it’s difficult to call when the market would come back as Bernie said it’s still pretty choppy, but if we have that strong design win pipeline as well as having the supply chain diversification we were talking about, we’re set to take advantage when the markets do come back.

Ross Seymore: Thanks for that Tony and Bernie. I guess is my one follow-up a near-term question for you. Any outliers in the growth that you’re guiding to in the second quarter by end market segments, any versus a 7% total?

Michael Hsing: No. Outliers, I mean, the stuff. Yes, so we still couldn’t — we still see a lot of growth that came in. We are getting was trying to get all the inventory radius start to go even further and I even have a lot more up sight.

Bernie Blegen: Okay. Yes, if I look sequentially between Q2 and Q1, we do see the continuing demand profile for enterprise data and I think we see also some contribution from automotive, but the rest of our end markets are pretty flattish.

Ross Seymore: Thank you.

Bernie Blegen: Okay.

Operator: Our next question is from William Stein of Truist. William, your line is now open.

William Stein: Great. Can you hear me?

Michael Hsing: Yes.

William Stein: Great. Thanks for a question. Congrats on the good results and thanks for the change in format it’s a breath of fresh air.

Michael Hsing: Yes, and this is — you appreciate it, like, we try to make a life and then make it easy for you.

William Stein: Thank you. I’m hoping you can update us on the progress you’ve pursued to try to diversify your manufacturing geographic footprint and both on the front end and back end and then a follow-up.