Ladies and gentlemen, thank you for standing by, and welcome to the Alpha and Omega Semiconductor Report Financial Results for the fiscal second quarter 2020 conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and an answer session. To ask a question during the session, you will need to press star one on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, So-Yeon Jeong. You may begin.
Thank you. Good afternoon, everyone, and welcome to Alpha and Omega Semiconductor's conference call to discuss fiscal 2020 second quarter financial results. I am So-Yeon Jeong, Investor Relations Representative for the company. With me today are Dr. Mike Chang, our CEO, Yifan Liang, our CFO, and Stephen Chang, our Executive Vice President. This call is being recorded and broadcasted live over the web and can be accessed for seven days following the call via the link in the investor relations section of our website at www.aosmd.com. Yifan will begin with a review of financial results for the quarter, then Mike will review the business highlights, followed by Stephen, who will provide a detailed segment report. After that, Yifan will conclude the guidance for the next quarter. We'll have the question and answer session.
The earnings release was distributed by Business Wire today, February 5th, 2020, after the close of the 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 our earnings release. We remind you that during the course of the conference call, we'll make certain forward-looking statements, including discussions of 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 more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC. We assume no obligation to update the information provided in today's call. I'll turn the call over to our CFO, Yifan, to provide an overview of the second fiscal quarter financial results. Yifan?
Thank you, So-Yeon. Good afternoon, everyone, and thank you for joining us. Revenue for the December quarter was $117.9 million, flat when compared to the prior quarter and up 2.6% from the same quarter last year. In terms of product mix, MOSFET revenue was $101.5 million, up 0.9% sequentially and up 8.8% year-over-year. Power IC revenue was $14.7 million, down 6.8% from the prior quarter and down 24.4% from a year ago. Assembly service revenue was $1.7 million as compared to $1.6 million for the prior quarter and $2.2 million for the same quarter last year. Regarding the segment mix, computing represented 41.3% of the total revenue, consumer 18%, power supply and industrial 21.3%, communications 17.9%, and service 1.5%. non-GAAP gross margin for the December quarter was 28.3%, unchanged from the prior quarter and down from 29.2% for the same quarter last year.
Non-GAAP gross margin excluded $0.4 million of share-based compensation charge for the December quarter as compared to $0.4 million for the prior quarter and $0.5 million for the same quarter last year. Non-GAAP gross margin also excluded $8.5 million of production ramp-up costs related to the Chongqing joint venture for the December quarter as compared to $6 million for the prior quarter and $3.5 million for the same quarter last year. Non-GAAP operating expenses for the December quarter were $25.7 million compared to $25.6 million for the prior quarter and $25.1 million for the same quarter last year. Non-GAAP operating expenses excluded $2.1 million of share-based compensation charge as compared to $1.9 million for the prior quarter and $3.9 million for the same quarter last year.
Both GAAP and non-GAAP operating expenses included $3 million of digital power team expenses for the quarter as compared to $2.8 million for the prior quarter and $3.1 million for the same quarter last year. Our digital power controller team continues to engage with customers in product designs and is making steady progress toward our product roadmap. Non-GAAP EPS attributable to AOS for the quarter was $0.23 per share, as compared to $0.26 for the prior quarter and $0.30 for the same quarter last year. AOS generated $12.5 million operating cash flow in the December quarter as compared to $4.2 million net cash used in operating activities and $22.1 million operating cash flow generated in the same quarter last year.
Cash flow used in operations attributable to the JV company was $3.5 million for the December quarter, compared to $3 million provided by operating activities for the prior quarter and $9.1 million used in operating activities for the same quarter last year. Consolidated EBITDA for the December quarter was $13.9 million, compared to $14.5 million for the prior quarter and $13.5 million for the same quarter last year. EBITDA attributable to AOS for the quarter was $12.5 million as compared to $13.8 million for the prior quarter and $15.7 million for the same quarter last year. Let's look at the balance sheet. We completed the December quarter with cash and cash equivalents of $107.2 million, including $86.1 million at AOS and $21.1 million at the JV company.
This compares to $103.1 million at the end of last quarter, which included $88 million at AOS and $15.1 million at the JV company. Our cash balance a year ago was $146.6 million, including $93.6 million at AOS and $53 million at the JV company. Bank borrowing balance at the end of the December quarter was $148.5 million, including $36.9 million at AOS and $111.6 million at the JV company. In the December quarter, AOS and the JV company repaid $4.1 million and $16.4 million of the existing loans respectively. The JV company also borrowed $30.9 million working capital. Net trade receivables were $33.9 million as compared to $39.3 million at the end of last quarter and $33.9 million for the same quarter last year. Day sales outstanding for the quarter was 28 days, compared to 25 days in the prior quarter.
Net inventory was $117.6 million at the quarter end, down from $118.6 million last quarter and up from $103 million in the prior year. Average days in inventory was 114 days for the quarter, flat as compared to the prior quarter. Net property plant and equipment was $416.1 million as compared to $404 million last quarter and $380.8 million last year. Capital expenditures were $15.4 million for the quarter, including $12.1 million at AOS and $3.3 million at the JV company. We estimate that the capital expenditure for AOS core business to stay at 6%-8% of the total revenue for the fiscal year 2020. Before I turn the call over to Mike, I would like to update you on the progress of our JV company. During the December quarter, the 12-in fab and assembly and test production continued to make progress as expected. Our goal remains the same.
That is to ramp up the phase one of the 12-in fab to approach the target run rate by the September quarter of this calendar year, subject to general and overall market conditions. With that, now I would like to turn the call over to our CEO, Dr. Mike Chang, who will provide the business highlights for the quarter. Mike?
Thank you, Yifan. Despite the challenging conditions, we remained focused and continued to execute well during the December quarter. Our revenue came in within the guidance range, achieving both year-over-year and sequential revenue growth. Meanwhile, our gross margin benefited from improved operational efficiency. Most importantly, AOS reported healthy non-GAAP earnings and our core business generated strong operating cash flow. Looking ahead to the March quarter, we expect weaker than normal seasonality in our business. I'll speak to one factor that is creating a headwind, and Yifan will provide more details on the total outlook in his comments. There has been wide coverage of the coronavirus outbreak in China. Our employees' wellbeing is our top priority. I'm grateful that all our employees are safe. In addition to the mandatory extended Chinese New Year holiday, we have implemented additional travel bans, screening procedures, as well as self-quarantine measures.
While we maintained partial production throughout the holiday, we anticipate that it will take longer for our factory to return to full production during the March quarter. We have factored the impact of this disruption into the guidance we are providing today. As you can imagine, this is a developing situation, and so is its potential effect on the global supply chain. We will continue to evaluate the impact on our business as further developments warrant. We have been consistently pushing forward with our plan to create demand with a differentiated product across key market segments. At the same time, we have been accelerating the penetration and the diversification into multiple global brand customers. For computing, our customers increasingly value high-performance products as underlying trends such as artificial intelligence, big data, and the Internet of Things are reshaping the computing industry.
With our highly efficient products, we were able to penetrate every single key PC OEM, maintaining a strong position at all of them. Coming to the IGBT business, we demonstrate a solid traction by posting 40% year-over-year growth once again in calendar 2019. We continue to expand our footprint at a broad base of home appliance customers with both discrete and module solutions. Our mobile business, including smartphone, battery pack, and quick charger applications, was the fastest-growing business in percentage terms last year. As we ramp the high-volume production for multiple global OEMs. We secure additional layers of business at multiple OEMs and ODMs, we remain confident about the strength of our mobile business. In order to address this growing demand from global brand-name customers, we carefully planned the supply chain expansion, which is centered on the 12-in fab and assembly and test facility in Chongqing.
Our customers appreciate our commitment to enabling their growth and support our goals. Looking beyond March quarter, we think that we are well-positioned to capitalize on the demand we have created. Last year, although we garnered meaningful design wins, we were not able to fully satisfy peak season demand due to supply constraints at our Oregon fab. As a result, we had to make difficult allocation decisions as to which customer and applications to support, this hindered our growth last year. This year, with added capacity at Chongqing JV, we are in a much better position to supply our customers as they ramp up their production volumes. Especially since both smartphone and PC applications are expected to hit their usual seasonal peak in the September quarter. We still expect to approaching the phase one target run rate by the September quarter this year.
This expanded capacity will allow us to better capture potential growth opportunities and fuel our diversification effort as we benefit from the momentum seen across a broad array of growing applications. We have the right strategy in place and the outstanding teams to execute. We have demonstrated remarkable progress, especially in three key areas: creating demand, penetrating top-tier global OEMs with value-added solutions, and expanding production capacity to fulfill demand. This, in return, is building great momentum with ever-increasing design wins in the pipeline and share gains at multiple customers across key market segments.
Which validates our confidence in driving sustainable growth. We remain encouraged by the opportunities ahead of us and are fully committed to moving forward with our growth plans and navigating the headwinds and the volatilities we are facing in the short term. Now, I will turn the call over to Stephen for a detailed segment report. Stephen.
Thank you, Mike, and good afternoon. Let me start with computing. It represented 41.3% of our total revenue in the December quarter. Revenue was up 5.4% sequentially, and down 12.8% year- over- year. During the quarter, the CPU supply eased a bit, but it was still not enough to fully satisfy the market demand. However, the ramp of high-end tablet application and the continued migration into high-value products such as Vcore and graphics cards, enabled modest growth in this segment business. The CPU shortage is anticipated to persist at least through the first half of calendar 2020, especially with small core. This has been compounded by the impact of coronavirus on our PC customers. As a result, we are estimating a mid-single digit sequential decrease in the computing segment. Now turning to the consumer segment, which represented 18% of total revenue in the December quarter.
Revenue decreased 1.3% sequentially and was up 13.8% year-over-year. We had originally expected to see a double-digit sequential decrease due to TV seasonality. We saw healthier demand for various consumer applications during the quarter. As Mike mentioned earlier, strong customer momentum with our leading portfolio of IGBT solutions continued, especially with home appliance applications. Bolstered by high performance and reliability required by these applications, our IGBT product line posted a 40% annual increase in calendar year 2019, after growing 43% in calendar 2018 year-over-year. As we expand our customer base in home appliances and accelerate production ramp at global OEMs, we expect the IGBT business to increase another 40% in calendar year 2020. Looking into the March quarter, we expect a moderate seasonal decline in the consumer segment. Let's discuss the power supply and industrial segment.
This segment accounted for 21.3% of total revenue, down 7.6% sequentially and up 13.5% year-over-year. While we grew in applications such as solar power and industrial fans, the seasonal decrease in other AC-DC power supply applications was sharper than anticipated. As one of the key suppliers of quick charging solutions, we believe that we are well-positioned to benefit from the introduction of 5G phones with larger batteries paired with higher wattage power supplies. However, entering into what is typically the seasonal low point for our quick charger business, we expect to see a double-digit revenue decline in this segment during the March quarter. Finally, let's move on to the communication segment, which was 17.9% of revenue in the quarter, down 1.1% and up 32.5% year-over-year.
Our highly efficient battery protection business continues to be strong during the December quarter, and we maintained this segment's revenue similar to the peak level. Since each global smartphone OEM launches new models at different times throughout the year, serving multiple global OEMs helps us offset some seasonality. For the March quarter, we expect the recovery in 5G telecom to drive growth on top of continued strength in the battery pack protection products. Therefore, we anticipate a modest increase in the communication segment in the March quarter. With that, I will now turn the call over to Yifan for additional comments and guidance.
Thank you, Stephen. As disclosed in our press release, we are cooperating with federal authorities in their recent investigations of our export control practices with Huawei and its affiliates. We have maintained an export control compliance program and have been committed to fully complying with all applicable laws and regulations. In connection with this investigation, we have suspended shipment of our products to Huawei based on the order issued by Department of Commerce. This suspension is expected to reduce our revenue for the March quarter by approximately $4 million- $5 million. We are working with DOC to resolve this issue. Currently, we do not know when we will be able to resume shipment to Huawei, if at all.
In addition, we expect to incur $1 million- $2 million of professional fees during the March quarter in connection with the ongoing government investigation. Please note that the DOC order applies to only our shipments to Huawei. Our sales to other customers are expected to continue and grow beyond the March quarter, unaffected by the order. Since this is a pending and confidential matter, we will not be making additional comments beyond the facts that we have shared with you on this call, in our press release, and the related financial impact that we can assess at this time, except as required by law. Future inquiries will be directed to these statements. Based on this development and estimated production loss in China due to the coronavirus outbreak and extended Chinese New Year holiday, our expectations for the third quarter of fiscal year 2020 are as follows.
We expect the revenue to be between $106 million and $110 million. In addition to the impact of suspended shipment to Huawei, this guidance also reflects an estimate of $6 million- $7 million reduction in revenue due to the production loss resulted from the coronavirus outbreak and extended Chinese New Year holiday based on the information we have as of today. We expect a GAAP gross margin to be 17.3%, ± 1%. We anticipate non-GAAP gross margin to be 26%, ± 1%. Gross margin guidance reflects the inefficiency caused by production disruptions due to the coronavirus, as well as suspended shipment to Huawei. Note that non-GAAP gross margin excludes $0.4 million of estimated share-based compensation and $8.5 million of estimated production ramp-up costs relating to the JV company.
We expect GAAP operating expenses to be in the range of $29 million ± $1 million. Non-GAAP operating expenses are expected to be in the range of $25.5 million ± $1 million. Both GAAP and non-GAAP operating expenses include $3 million-$3.3 million of estimated expenses relating to the development of our digital power business. Non-GAAP operating expenses exclude $1 million-$2 million of estimated professional fees related to the investigation, and $2 million of estimated share-based compensation. Tax expense should be approximately $0.4 million-$0.6 million. We anticipate a loss attributable to non-controlling interests to be around $4.7 million. On a non-GAAP basis, excluding estimated production ramp-up costs relating to the JV company, this item is expected to be approximately $0.3 million. As part of our normal practice, we're not assuming any obligations to update this information.
With that, we'll open up the floor for questions. Operator?
At this time, if you would like to ask a question, please press star then the number one on your telephone keypad. We do have a question from the line of David Williams.
Good afternoon, and thanks for taking my question. I certainly appreciate it. Quickly, I guess if we're kind of thinking about the different moving pieces here, obviously Huawei is a drag. If I can recall correctly, previously that was a fairly negligible part of the business. Can you kind of talk about how that has trended, I guess, since we've started the process of the ban until now and kind of has the revenue changed much in that time? Has it come down or are you shipping about the same as you were previously? Just kind of how those revenues have trended, I guess, for the last several quarters?
Sure, David. As we mentioned, we have maintained an export control compliance program. We have been committed to fully complying with all applicable laws and regulations. Right now, we are cooperating with the government agencies in their investigations right now. Because this is a pending and confidential matter, we said we do not intend to make additional comments beyond the facts that we have shared on this call and our earnings release, except as required by law. We'll stop there. Our March quarter guidance, we factor in those impacts, and we have already said about $4 million-$5 million revenue impact for our March quarter. Some expense impact we also disclosed there.
To me, this is near-term, short-term headwinds. We'll get through it. We'll press on with our growth plan longer term so that we'll continue to grow and diversify our customer base and the applications we serve. You know our models. Those models are still there. They're in the shooting range even now with some additional challenges. Now we'll face it and marching on.
This is Stephen. I just want to speak on behalf of the overall, our push towards diversification. Our biggest markets right now are PC and smartphones. In the past few years, there's been a big push by the company to actually diversify our customer base within those core segments. We've been pretty successful at expanding that customer base geographically also in order to reach all the major customers in each of those spaces. We are encouraged by that progress, and that helps us also as we move forward because of that base is wide.
Okay. Fantastic. Thank you. If I'm thinking about the segment that is the largest contributor, or we should actually be thinking about that $4 million coming from, is it dispersed amongst the different units, or is it more heavily related to one or the other?
We can't comment specifically, again, about Huawei specifically. Our guidance overall, as well as in each of the segments, is reflecting the impact of that.
Okay. Thank you. Just thinking about from an OpEx perspective, understanding some of the lumpiness at the moment, and it looks like the $25 million guide for the next quarter is coming down from the prior quarter. Can you talk a little bit about what you're doing in terms of the OpEx, what those trends are, cost containment strategies, anything of that sort that might help us get a better handle on the OpEx longer term?
Sure. This March quarter's OpEx guidance, non-GAAP guidance, $25.5 million, is pretty much flattish compared to the December quarter's actual numbers. That's our current view, that we'll maintain our OpEx at this level, and then we'll continue to invest in certain strategic initiatives, such as digital power product line. We'll continue to do that. Right now, we are at full speed to pursue our growth plan.
I guess if I do the math here, and I look at the numbers that are being taken out for Huawei and then of course for the coronavirus impact, that would add about $10 million-$10.5 million to the total from your guidance. If I'm looking at that 110, that puts it about 120-121. Is it fair to say that you're seeing that same level of demand through the business, or is there anything that I'm missing? Just thinking about that growth trajectory is a fairly nice step?
Yes. That's in the ballpark number. Seasonally, the March quarter is our lowest quarter normally. We are seeing some good design wins and the gains at the various customers. Our March quarter's guidance reflected that despite the near-term headwinds. You subtract it out. Yes. Right now, that's where we are.
Okay. One more, if I can, and Stephen, maybe you can answer this. If we're thinking about the allocation and where you're still on allocation amongst your customers, can you parse that out for us where, I guess, is the greatest demand? I know at one point that the PC had been taken out of the drive and slipping in other higher margin products in. Are you still doing the same type of strategies, or is there anything in terms of the different allocation mix that you could point to?
Sure. I can talk about that. Last year, calendar year, was a bit of a struggle for us because we were on allocation. As I mentioned before, we're ramping in all these major customers in PC and smartphone especially. Both of these all usually peak at the same time during the September quarter. Last year, we had to be very optimal and optimized in our loading, in our preparation for that to make sure that we could keep all the key customers happy and matching our priority. This year, we're actually encouraged because we have been working on expanding our supply chain. We've been talking about our Chongqing 12-in expansion with that joint venture. This is already beginning to ramp, and we believe that this is going to help us to provide a lot more flexibility in the way that we support our customers.
Yes, I believe that we'll still have some allocation issues to deal with, but we have a lot more options now with Chongqing in order to address not only the peak demand that's coming during the peak season, but also to support all the new business that we've been working to expand and get into.
Got it. Thanks so much, and best of luck on the quarter and the investigation. I'll jump back in the queue.
Thank you.
Thank you.
Thank you.
Our next question comes from the line of Craig Ellis.
Harlan Sur on for Craig. Thanks for taking my question. I just wanted to start with the joint venture and the ramp there. Obviously, the coronavirus is an unwelcome headwind, but I think there was last quarter, you had said that there was going to be roughly $7 million in revenues, in this past quarter. Looking out to the September quarter, obviously that $150 million run rate, we get to $37.5 million in revenue per quarter. As we think about the dynamics past this March quarter, what end markets are going to be driving that big leg up at the joint venture? Is it going to be coming from smartphones? I am just curious as how we think about post-March quarter getting to that $150 million run rate off of what obviously is a little bit of a lower rate than may be hoped, in the March quarter.
Okay. I'll address your questions. First part of your question, Stephen can talk about the product mix. What we have been saying is, we're targeting to ramp up the 12-in fab joint venture, to approach the target run rate, quarterly run rate in the September quarter. Well, it doesn't mean that it's a linear progression from last year's September quarter to this year's September quarter. We anticipated around a year, 12 months or so ramp-up time for the new fab, it's not linear. Right now, even given the near-term headwinds will still remain to target the September run rate to get to that run rate. That's our overall goal at this point. I'll let Stephen talk about what type of products we will run over there.
Sure. Regarding the applications that we're serving for Chongqing, we're actually moving several of our technology platforms over there in order to help support the growth, especially in PC and smartphones. Those will probably come first. We have a lot of high runners that we're planning to move over there in order to help to balance out the loading within our whole supply chain. We'll be targeting those first, but we also are going after other applications as well too. The fab has several platforms, again, that will be supported from the 12-in Chongqing joint venture. Again, we have a lot more flexibility to support that. Not only for existing business to help balance the load, but also to support new business.
Got it. Just to put a fine point on it, that means that we could expect maybe in the June and September quarter, we could see above seasonal growth, or growth above what we've seen historically, just given how much more capacity you guys have to fill demand versus say, last year or two years ago where you were still incredibly supply constrained. Is that fair?
That's correct. To be fair, we will still be on allocation for certain areas, but with Chongqing, we have a lot more ability to support that peak season.
Got it. Turning to the digital power side, obviously, OpEx has bounced around between, looks like $2.8 million and $3.1 million per quarter. Two questions there. One is that are we now at a steady $3 million per quarter in operating expense, so $12 million a year? On the second, can you touch on just what the demand has looked like, in terms of breadth of customers? Where are we in terms of, is it one big customer, a few big customers? Just where are we with that rollout? Any color there would be great.
Okay. I'll comment on the OpEx portion first, and then I'll let Stephen comment on the progress. In terms of OpEx related to our digital power team, yes, right now it's running around $3 million also per quarter. These expenses could fluctuate from quarter to quarter depending on the engineering activities. I would think probably in the range of $3 million-$3.5 million per quarter, that type of range. I'll let Stephen comment on the progress.
Sure. We're pretty pleased with the progress so far in digital power. Last year was definitely mainly a product in development and early engagement with customers. As we reached into the end of last year, this has stepped up quite a bit, and we are getting deeper into customer engagement as several customers, and we're happy with what we see. We expect to start to turn some of these opportunities into design wins and convert them into revenue soon. We will be providing some more guidance on this in the coming quarters. We are happy with what we see so far.
Got it. Then just two more for me, quick ones, and then I'll jump back in the queue. On inventory dynamics, it was good to see days of inventory rise a little bit quarter-over-quarter, because I know you guys had said before that you guys were running a bit lean. Can you touch on some of the channel inventory dynamics, both for you guys and any color about industry broadly? I know you had said that Intel CPU supply remains tight. Any kind of color what you're seeing in terms of inventory destocking? Obviously, we just had this long period where things kind of destocked pretty rapidly?
Okay, sure. For our own channel inventory, yes. Right now is at the low end of our target range, which is two to three months. For us now it is on average, and so we're still at pretty tight inventory level. In terms of channels, right now, the overall channel inventory and the overall market conditions, I think right now we need to reassess after Chinese New Year because of this coronavirus outbreak. This one could potentially hit the global supply chain. Right now, this virus' situation is very fluid and is still evolving, so we need to closely monitor its impact on the global supply chain and overall market conditions.
Just to clarify that, how has some of the China coronavirus impacted supply and demand dynamics within the last two weeks or so? How has that changed the situation?
Well, last couple weeks has been Chinese New Year. A lot of the China, Taiwan, a lot of Asian countries, they are on holiday. Right now it's hard to say. This is still pretty dynamic. Need time to closely monitor and evaluate, because there are some productions from our customer side and whether or not they can resume their productions to the full capacity, how soon they can get to that point. Also on our supplier side, we also need to evaluate how soon they can start their productions. For our own factories in China, pretty much our entire assembly and test and back-end productions are all in China. Then, we also need to evaluate once those workers come back on February the 10th. That's when one is supposed to come back. Given the current coronavirus situation, we also implemented a self-quarantine policy.
Even they come back, they may have another 14 days in their self-quarantine time. All those things are kind of still evolving and developing. We need to keep close eyes on those situations.
Got it. All right. Thanks, guys. I'll hop back in the queue.
We have a question from the line of Craig Ellis.
Yeah, thanks for taking the question, and appreciate all the transparency on the things that are going on in the business. I wanted to really follow up on some of the things related to guidance, and some of this may have been covered earlier. I was on a different call. Harlan was doing a great job following up on some of the specifics. As I look at guidance, it looks like there is an $11 million revenue impact for two reasons, and I want to understand them much better. First, with respect to the China coronavirus allowance that you are making of $6 million-$7 million, how much of that is simply on the supply side and some of the things you just mentioned in Chongqing, Yifan, versus any of the demand-side disruption that you may be seeing?
Maybe to put that first question in context, you can tell us how much Chongqing-related revenue you had in the December quarter, and with the $6 million-$7 million adjustment, how much is embedded now in guidance, or if all of the Chongqing's fabs revenues are excluded from guidance?
Okay, sure. Right now, the $6 million- $7 million I would estimate is primarily we estimate based on our production situation. With this extended Chinese New Year holiday, that's another seven days that we lost. With the 14 days quarantine and the policies we implemented and so on, that potentially will have some other additional disruptions on our production. That $6 million- $7 million, that's reflected there. Overall, our backlog and bookings are healthy at this point. Depending on the customer's check after Chinese New Year, after they come back, probably you expect gradually we'll learn more from our customers at this point. That's $6 million- $7 million or more I can estimate based on our own production situation.
This is Stephen. On the end demand side, we haven't seen any major impact yet. We do see that our direct customers, they also have operations running in China as well too. They're dealing with the same issues that we are as well. We do see some impact there, but right now it's also overlapping with our own production delays because of the labor force taking a little longer to come back. We are reflecting that in our guidance, where we have confidence that the current demand actually is still looking very healthy. We will have to work temporarily through this challenging time for China as we deal with the situation.
Okay. The two follow-ups are, one, Stephen, it sounds like then you're saying that share loss risk is mitigated given that this is a headwind that your customers are accounting, but can you speak to any share loss risk that might be out there if you're unable to fill existing demand with products your customers accounted on? Yifan, what gives you confidence that the fab will be up and running and delivering output so that it could, in the calendar second quarter or fiscal fourth quarter, be able to get back to a revenue level that would meet the phase one ramp target you have for the September quarter? That's more of an operational question.
Regarding the demand question, right now we're not anticipating any share loss as a result of that right now. We believe that it's mostly affecting right now this return to work. Certainly if things change, it could be a different story, but it probably won't be just us that's affected as well. On the demand side, that's what we see right now.
Okay. From the estimate, this overall, right now that's not what we can see and what we estimated based on the information we have as of today. This coronavirus, potentially it could last into June quarter. Nobody knows. We'll give an update in the future if needed. Generally, this virus is what, based on current information, is more like will fade away when you have a hotter temperature weather. That's when using some comparison with SARS, like 15 years ago, it was an outbreak in the springtime and then went away in the late spring and early summer timeframe. That's our current information we have. In terms of September run rate, and that's of course subject to the overall market conditions.
Right now, based on our design wins pipelines and then our customers' ramp-up schedule, we are expecting PC customers and phone customers on ramping to the peak season in the September quarter at the same time. That's where we need the capacity the most. We're marching forward, and we have our longer-term growth plan, and then we'll press on it.
This is Mike Chang. Talk about a long term, which in just few years, it might be too long. Okay. This company have a clear roadmap to go beyond billion-dollar company, as we've been talking about in last year or so. The main because this company has the determination to build out the company, build the infrastructure to expand our product technology and the application all across, wider and deeper. Also we migrate in the upper application area and become more application-specific.
The momentum is there. The strength is there, the capability is there. Yes, we're facing a short-term headwind, but however, this headwind will be over, and then our course will not be changed. With this company, we have full confidence to pursue our original goal.
That's helpful, Mike, appreciate the color. I wanted to switch gears and just make sure I understood the Huawei situation. Can you please identify when you were notified by the DOJ about the inquiry? Is there any revenue that's included in the fiscal third quarter guidance associated with Huawei? Can you just put the $4 million-$5 million allowance that you called out in your press release, as a headwind to the quarter in the context of what you would have shipped to Huawei, say, in the December quarter and the September quarter for us? Thank you, guys.
Sure. Craig, first of all, this DOC order applies only to our shipments to Huawei. Our sales to other non-Huawei customers are expected to continue and grow beyond the March quarter. Given that, since this is a pending and confidential matter, we do not plan to make any additional comments beyond what we shared with you on this call and in our press release. Unless it's required by law, any future inquiries about this case and this instance will be directed to those statements.
All right. Well, I wanted to give it a try. Thanks, Yifan.
All right. Thank you.
We have no further questions, and I'll turn the call back over to your speakers.
Sure. This concludes our earnings call today. Thank you for your interest in AOS, and we look forward to talking with you again next quarter. Thank you.