Earnings Call: Q4 2020

Feb 16, 2021

Good afternoon, and welcome to Diodes Incorporated 4th Quarter and Fiscal 2020 Financial Results Conference Call. At this time, all participants are in a listen only mode. At the conclusion of today's conference call, instructions will be given for the question and answer session. As a reminder, this conference call is being recorded today, Tuesday, February 16, 2021. I would now like to turn the call over to Leanne Sievers of Shelton Group Investor Relations. Leanne, Please go ahead. Good afternoon, and welcome to Diodes' 4th Quarter and Fiscal 2020 Financial Results Conference Call. I'm Leanne Sievers, President of Shelton Group, Diodes Investor Relations firm. Joining us today are Diodes' Chairman, President and CEO, Doctor. Keh Shew Lu Chief Financial Officer, Brett Whitmire Senior Vice President of Worldwide Sales and Marketing, Emily Yang and Director of Investor Relations, Laura Merle. Before I turn the call over to Doctor. Lu, I'd like to remind our listeners that the results announced today are preliminary as they are subject to the company finalizing its closing procedures and customary quarterly review by the company's independent registered public accounting firm. As such, these results are unaudited and subject to revision until the company files its Form 10 ks for its 2020 fiscal year ending December 31, 2020. In addition, management's prepared remarks contain forward looking statements, which are subject to risks and uncertainties, and management may make additional forward looking statements in response to your question. Therefore, the company claims the protection of the Safe Harbor for forward Statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore, we refer you to a more detailed discussion of the risks and uncertainties in this company's filings with the Securities and Exchange Commission, including Forms 10 ks and 10 Q. In addition, any projections as this company's future performance represent management's estimates as of today, February 16, 2021. Diodes assumes no obligation to update these projections in the future as market conditions may or may not change, except to the extent required by applicable law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in GAAP and non GAAP terms. Included in the company's press release are definitions and reconciliations of GAAP to non GAAP items, which provide additional details. Also throughout the company's press release and management statements during this conference call, we refer to net income attributable to common stockholders as GAAP net For those of you unable to listen to the entire call at this time, a recording will be available via webcast for 90 days in the Investor Relations section of Diodes' website atwww.dios.com. And now I'll turn the call over to Diodes' Chairman, President and CEO, Doctor. Keishu Liu. Doctor. Liu, please go ahead. Thank you, Lianne. Welcome, everyone, and thank you for joining us today. We ended the year achieving the highest quarterly revenue in company's history. Even excluding The revenue contribution from our acquisition of Nye Ohm Semiconductor that Across on November 30, total organic revenue grew 7.8% sequentially and 10.7% year over year, demonstrating the continued success And the automotive market also reached record levels, with automotive revenue growing 24% sequentially and 40% year over year, both of which contributed to our solid market share gains in the quarter. Following the successful completion of AOC acquisition, the integration process On December 1, we initially announced The new operation structure for the commanding companies and named Gary Yu, Senior Vice We have been actively working to qualify Diodes product Expectation of XM2021 with significant momentum in In regard to the product, customer and end market synergy, Those are multiyear efforts that span the product development process by working closely with our Customer and serving them with our per mandate product portfolio. As mentioned In our earnings release today, the LAC business was immediately accretive to our results, As I just mentioned, we believe LEC also offers The repurchasing of 14.7 percent of Diodes' share that was With sequential growth projected both organically and on a consolidated basis in This anticipated growth has been driven by record POS Revenue in the Q4. We look forward to reporting our ongoing progress and are demanding focus on integrating the LC business, while capitalizing on the long term opportunities With that, Let me now turn the call over to Brett to discuss our Q1 financial results and our Q1 2021 guidance in more detail. Thanks, Doctor. Lu, And good afternoon, everyone. As part of my financial review today, I will focus my comments on the sequential change for each of the line items and would refer you to our press release for a more detailed review of our results as well as the year over year comparisons. Revenue for the Q4 2020 was a record $350,400,000 which included $16,900,000 of 1 month of revenue from LSC, an increase of 13.2% on a Consolidated basis and 7.8 percent on an organic basis from the $309,500,000 in the Q3 2020. Gross profit for the 4th quarter was also a record At $122,700,000 and included $2,500,000 from LSC or 35.0 percent of revenue on a consolidated basis and 36.0 percent of revenue for diodes only. This compares to $111,100,000 or 35.9 percent of revenue in the Q3 2020. GAAP operating expenses for the Q4 2020 We're $82,900,000 or 23.7 percent of revenue and on a non GAAP basis were $75,000,000 or 21.4 percent of revenue, which excludes $4,000,000 of amortization of acquisition related intangible asset expenses, dollars 2,500,000 restructuring costs and $1,500,000 of other acquisition related costs. This compares to non GAAP operating expenses in the prior quarter of $73,200,000 or 23.7 percent of revenue. Total other expense amounted to approximately $3,700,000 for the quarter, including $4,000,000 in interest expense, dollars 3,700,000 in foreign currency loss, partially offset by $3,500,000 of other income and $487,000 of interest income. Income before taxes and non controlling interest in the Q4 2020 was $36,100,000 compared to $33,300,000 in the previous quarter. Turning to income taxes, our effective income tax rate For the Q4 was approximately 16.7%. GAAP net income for the Q4 2020 was $29,700,000 or $0.59 per diluted share, which included $0.03 per share from LSC and compared to GAAP net income of $27,200,000 or $0.51 per diluted share In the Q3 2020, the share count used to compute GAAP diluted EPS for the Q4 2020 was 50,400,000 shares, which reflects a reduction in the weighted average share count due to the repurchase of approximately 7,800,000 Diodes shares from LSE for the 1 month since closing. As mentioned in our press release today, we expect the share count for the Q1 to be approximately 45,700,000 shares. Non GAAP adjusted net income for the 4th quarter was $37,300,000 or $0.74 per diluted share, which excluded net of tax $4,000,000 of acquisition Related financing and other acquisition related costs, dollars 3,300,000 of non cash acquisition related intangibles expense $2,000,000 of restructuring costs and a $1,700,000 gain in value of certain LSC Investments. LSC contributed $0.02 per share to 4th quarter non GAAP earnings. Non GAAP adjusted net income in the Q3 2020 was $32,800,000 or $0.62 per diluted share. Included in the Q4 2020 GAAP net income and non GAAP adjusted net income was approximately $5,100,000 Net of tax of non cash share based compensation expense. Excluding share based compensation expense, Both GAAP earnings per share and non GAAP adjusted EPS would have increased by $0.10 Per diluted share for Q4 2020 and $0.09 for the Q3 2020. EBITDA for the Q4 was $67,100,000 or 19.1 percent of revenue compared to $63,300,000 or 20.5 percent of revenue in the prior quarter. We have included in our earnings release a reconciliation of GAAP net income to non GAAP adjusted net income and GAAP net income to EBITDA, which provides additional details. Cash flow generated from operations was $60,800,000 for the Q4 2020. Free cash flow was $33,500,000 for the Q4, which includes $27,300,000 for capital expenditures. Net cash flow in the 4th quarter was a negative $319,300,000 which included the purchase of Lydon Semiconductor during the quarter for approximately $453,400,000 Turning to the balance sheet. At the end of 4th quarter, cash, cash equivalents, restricted cash plus short term investments Total approximately $327,000,000 Working capital was $514,000,000 and total debt, including long term and short term, was $451,000,000 In In terms of inventory, at the end of 4th quarter, total inventory days decreased to approximately 114 in the quarter on a consolidated basis and 110 days for Diodes only as compared to 120 last quarter. Finished goods inventory days also decreased to 31 from 32 in Q3 2020. Total inventory dollars Increased $45,100,000 to approximately $305,400,000 which reflects the addition of LSC. Total inventory in the quarter consisted of a $17,100,000 increase in work in process, a $15,700,000 increase in finished goods and a $12,300,000 increase in raw materials. Capital expenditures on a cash basis For the Q4 2020 were $27,300,000 or 7.8 percent of revenue, which remains within our target model of 5% to 9%. Now turning to our outlook. Building on our growth momentum in the Q4 and record PLS results, we expect revenue in the Q1 of 2021 to increase to approximately $400,000,000 plus or minus 3%, which represents a record on both an organic and consolidated basis for a combined increase of 14% sequentially at the midpoint. This guidance Represents organic growth significantly better than the typical seasonality of sequentially down 5% on average in the same prior 2 year periods. We expect GAAP gross margin on a consolidated basis to be 33.6%, plus or minus 1%, which includes an approximately 3% impact due to a full quarter of LSC. Non GAAP operating expenses, which are GAAP operating expenses adjusted for amortization Of acquisition related intangible assets are expected to be approximately 22% of revenue, plus or minus 1%. We expect net interest expense to be approximately $3,300,000 Our income tax rate is expected to be 18%, plus or minus 3%, and shares used to calculate diluted EPS for the Q1 are anticipated to be approximately 45,700,000 shares. Please note that purchasing accounting adjustments of $3,300,000 After tax for Pericom and previous acquisitions is not included in these non GAAP estimates. With that said, I now turn the call over to Emily Yang. Thank you, Brett, and good afternoon. In the 4th quarter, revenue increased 13.2 percent quarter over quarter on a consolidated basis and 7.8% organically, which is at the high end of our guidance, primarily due to better than expected demand in Asia, followed by North America and Europe. Looking more closely at the Q4 revenue, QS revenue reached record level, which is driving our Expectation for the continued growth in the Q1. Distributor inventory in terms of weeks decreased quarter over quarter, which is slightly below our defined normal range of 11 to 14 weeks. We expect distributor inventories to return to our normal range in the near term. Looking at the global sales in the Q4, Asia represented 81% of revenue, Europe 11% and North America 8%. In terms of our end markets, computing represents 23 percent industrial 23 percent consumer 22% of revenue communication We achieved record revenue in automotive and computing end markets. With computing being driven by record quarterly revenue for our Pericom products. Now let me review the end market in greater details. Starting with automotive, Diodes continues its strong growth momentum, achieving record quarterly revenue and reaching 12% of the total revenue. This represents a growth of almost 24% sequentially and 40% year over year. There are 3 areas where Diodes continue to gain significant traction, including connected driving, which consists of ADAS Telematics and infotainment systems, comfort, style and safety, including lighting and Brussels DC motors, as well as powertrain, Tupper's conventional, hybrid electric vehicles. In connected driving, we saw demand for our new product in infotainment, Lighting control system, speedometer, horn, alarm systems, more specifically Diodes automotive grade switching, TVS, Zener diodes and crystal oscillators contributed to the growth in this application. In comfort, style and safety, we have strong success with our MOSFET brushless DC motor Styling, instrument lighting as well as gate driver ICs in interior wireless charging. Our LED drivers and our power transistors are also gaining market share in this space for taillights, interior illumination and exterior lighting applications. Our unitholder haul effect switch family is also gaining strong market traction for seatbelts, Seat position, sunroof as well as trunk and window openers applications. In vehicle powertrain, Diodes supplies into conventional internal combustion engine powertrain as well as for hybrid electric vehicles. Our SBR rectifier has been designed into many of these applications. We have also secured multiple design wins and for switching and Zener diodes, rectifier and discrete MOSFETs in battery manning system for electric vehicles as well as emerging applications like mini electric vehicles, Micromile Hybrid and e scooter systems. In the industrial market, revenue increased 18% sequentially as we continue to Then our momentum in applications including solar power inverters, power distribution system and smart metering system, all of which We're the main contributors in driving growth for our products. We also continue to see strong demand for our high voltage Ratify products in smart infrastructure solutions as well as adoption of our PCI Express packet switch in the industrial applications to connect multiple PCIe endpoints with the CPU. Also during the quarter, we began to see increasing new design ins for LED drivers in UVC lighting applications as well as numerous design in and design wins for our YVLDO product family. We also saw rapid growth for our newly released DC DC converters in LED lighting, e meter, power tools and charging applications. Additionally, our series of voltage regulators and SVR devices continue to gain traction In the consumer market, shipments for the adapter power IC continued to grow throughout the year. We also saw high demand in the gaming and high resolution display market as end user increasingly require high quality video provided through BMI and DisplayPort. As a result of this trend, our HDMI and DisplayPort redrivers are gaining traction with key We're also seeing an increased number of design ins for our LED drivers as well as demand for larger monitor Also in the consumer, we continue to see strong interest for our discrete products, including bipolar transistors, Ultra small sized transistors and Schottky barrier diodes in applications like amplifiers, Bluetooth headphones and drums. Turning to communication market. Wireless communication applications continue to expand, driving revenue generations for Zener TVS Diodes in Bluetooth earbox, smart speakers and smart lighting as well as point to point and point to multipoint links. Our HiSearch TVS for smartphone power line protection has gained strong growth momentum in new fast charging applications along with video cameras, access control panels and audio broadcasting system. We're also seeing more design ins and design wins in mobile phones, cable modems, optical network terminals, 5 gs CPE routers, radio remote units and base stations applications for our MOSFET, low saturated high voltage transistors, low voltage Hall Sensors and RF LDO products. Bipolar Junction Transistors SVR and Schottky products are also Gaining traction in applications like 5 gs outdoor access points, CPE, access point routers, power over Ethernet switches, Cable Modems, WiFi Routers, IoT Gateways and Mobile Battery Applications. Lastly, in Computing, We reached record quarterly revenue driven by record quarterly revenue for our Pericom products. Due to COVID-nineteen shelter in place Continue to drive demand for new and upgraded laptops, tablets and other related products. We're also seeing strong demand for power management, ESE protection for USB Type C in the notebook and portable devices also continue to be a strong area for our TVS, SDR, Also during the quarter, growth momentum continues in server applications, along with good momentum in our Timing product family to support PCI Express Gen 4 and Gen 5 requirements. This provides flexibility to our customers with seamless migration from PCI Express Gen 4 to PCI Express Gen 4 in the future without changing the timing path design. In summary, we ended 2020 achieving the highest quarterly revenue in the company's history and are guided for other quarter of growth in the 1st quarter, both organically and on a consolidated basis to set a stage for a strong year in 2021. This growth reflects the success we've been achieving with our total solution sales approach and demand creation effort to increase the content and share across new and existing customers and applications. We look forward to the capitalizing on the synergies and opportunities that LION Semiconductors offers to Diodes across our end markets, product offerings, customers and manufacturing footprint. With that, we now open the floor to questions. Operator? Thank And our first question comes from the line of Gary Mobley with Wells Fargo. Hey, everyone. Hope you're staying warm in frigid Dallas. I wanted to start out by asking some questions about LiDOT now that you've had A couple of months with the company under your belt. I know in your prepared remarks, you talked about qualifying Some of your existing Diodes products on some of the Lydon manufacturing facilities, but could you just speak about the timeline for some of the sales synergies To be rung out of the acquisition. Hi, Gary. Yes. We are We are going to qualify the product in the, we call ZK fab, okay? And Currently, we are almost done and probably one more quarter, We should be completed to finish the qualifications, okay? But it takes time to do the PCN to notify the customer to get customer accept the size change. And so we are looking at probably ramp up the ZKF Web currently It's about 50% loaded. We are looking at somewhere around 70% in End of Q3 and probably 80% by end of the year, because it takes Time for customer to accept our change notice and for the And take some of them take even much longer. So we are looking at that kind of schedule. Right. So Gary, this is Emily. So just to add a little bit color related to the sales synergy, I think this is really On the market segment and also the customer qualification schedule, I think for that area of synergy, it's probably going to take somewhere between, I would say 6 months, the best scenario to maybe a couple of years, right? So again, it's really down to the market segment and also the customer specifics. Okay. I wanted to I had a follow-up question as well related to Lydon. In an industry with an issue backdrop where a lot of your competitors are capacity constrained, in what ways can Diodes benefit From having this underutilized manufacturing capacity at line on assuming all the qualifications go according to plan. In other words, How easy, given those circumstances, will it be for you guys to take some market share from your competitors who are again capacity constrained? Okay. Gary, let me address that question. I think overall, right, the current global short haul for semiconductor supply actually helped Diodes, right? If we just look at the 4Q, We did have a record revenue with 7.8% sequentially and 10.7% year over year growth, which is really a strong evidence of our continued success in the product content and customer expansion initiatives, right? So if we just look at the Q1 guidance, we actually guided 14% quarter over quarter growth at the midpoint. And compared to our seasonality slowdown in average we talked about for the last two quarters about 5% drop, This is again a significant sign of the continued success, right? So we do see some of the constraints. So other than the MOSFET, We actually see some of the tightness, but what we've been doing is actually aggressively working with the customers and understand their true demand and we're able to resolve some of the bottlenecks, right? I think for the MOSFET, we've been very aggressively working with our foundry partners to really kind of resolve the out of balance problem. And at this moment, we are working also if you remember the SFAB 2 8 inches extension as well as the GFAB that we acquired more than a year ago to expand our capacity in both of this fab in Both of these areas, right? So I think in the longer term, we do have enough wafer fab capacity. That's actually again the G fab, right, majority is 8 inches also some of the 6 inches fab capacity. And also with the LightOn Semiconductor acquisition that we recently closed in November and that will also give us additional 6 inches capacity at the JK fab that Doctor. Lu mentioned. So I think with all of this, right, so I think we are well positioned for our future growth. And this is really focusing on the Additional business with our internal capacity to support it. Appreciate it. Thank you. In addition To what Emery talking about, we actually ramped it up on our Shanghai fab, S fab Thanks, Doug. Thank you. And our next question comes from the line of Matt Ramsay with Cowen. Hi, this is Josh Buckhalter on behalf of Matt. Thanks for taking the question and congrats on the great results. I guess asking the previous question a little differently, are you able to help us understand a little bit how much of The significant above seasonal first quarter guidance is indeed being driven by you guys being in a pretty unique situation of having some Back in your own internal capacity and able to fill orders that some of your peers aren't? Well, I think that that's exactly right. Some of that seasonality strength that we have It's a couple of things. One, it's the fact that we have capacity that we're continuing to be able to take advantage of through All the various avenues, meaning LSC, GFAB expansion as well as SFAB, on top of that, it's the continued Strength we're seeing across a broad market and actions we've been taking across time to make sure and be prepared for that. So I think it's a blend of those things that allow us to Enjoy the above seasonal growth in the Q1. Got it. Thank you. And then I guess given the above seasonal Q4 and Q1 and I realize you're not guiding the full year, but Anything you can provide us on visibility into the Q2 and the rest of the year or how we should think about the seasonality of the So this is Emily. Let me maybe start by making a few comments. So we don't usually provide guidance beyond the Q1. I think Doctor. Lu mentioned before, overall, the markets feel extremely dynamic, right? So we just need to monitor the situation closely. I think overall, this is not specific to Diodes. I think everybody expects 2021 to be an up market. I think we're definitely not in the position to All the percentage will provide guidance at this moment, but we'll keep you posted as we progress throughout the years. Got it. Thank you. Thank you. And our next question comes from the line of William I'm with Truist Securities. Great. Thank you for taking my question. I want to add my congratulations, especially on the very strong Q1 guidance. There's one aspect of it though that's a little surprising. The OpEx that you're guiding to looks Like it's more than what the standalone companies would have delivered combined together sort of almost a dissynergy. I think, Doctor. Liu, you've talked about this as related to incremental R and D required. And perhaps that's to qualify The diode products on the light on production line. Can you maybe quantify that a little bit, what that investment is? And perhaps as a follow-up, you can talk about what, if any, incremental costs are required to develop the Lydon portfolio to a level where it's something that you can effectively cross sell to the heritage diode customers. Thank you. Well, the R and D expense in LHC It's lower than the level of diodes. So I intend to do is Increase their R and D to about the same level as Diodes currently has. So that is what we intend to I intend to do. Secondary is we need to start to Focus of introduce the differentiate type of product. Currently, Their product, most of them is a commodity type of product. And my intention is driving The focus drive the product definition and to introduce differentiate Type of product using their special technology. And What's another question? I was asking about the effort to cross sell The light on product into your traditional customer base. I think you referred to an incremental R and D investment to make that happen. Perhaps you can discuss that a bit. Is it a matter of just proving out the quality of these products to your heritage Customers or is it in developing new products altogether? Well, yes, no, it's not just that. But it's not just that. Number 1 I think we are talking about 3 synergies we're talking about. 1 is Market synergy, because they are very weak in the industrial and automotive market segment. So we intend to do the introduce their product into those two Those market segment, number 2 is customer synergies. They Typically cannot design in to the multinational customers. And that's another focus we're going to do to improve the focus improve the design in those Major customers. Number 3 is the product portfolio. We are focused on solution sales instead of component sales and that solution sales is adding the product portfolio Through different acquisition inside Diodes in the past. And LSC is the DAS Acquisition we had and we're going to 18 their product line into our total Product portfolios and to introduce them into solution customer solution requirements. So those is what we intend to do other than qualify their product good Enough for the major customer. That's just one of the action, but the key one will be the 3 Thank you. Our next question comes from the line of David Williams with Loop Capital. Pardon me, David, please check your mute button. My apologies there. I I had inadvertently pressed mute, but congrats on the quarter and thanks for letting me hop on and ask a question. Certainly appreciate it. I wanted to ask a little bit about maybe some of the share gains that you're seeing today and how sticky you think those may be just in terms of Picking up new customers from maybe where your competitors maybe have been unable to supply. Do you think that's fairly sticky in Right. So David, I think this is Emily. Let me address that question, right. So anytime there is a market change always create So one of the key focus for us is really focused on the content expansion and customer expansion that we talked So I believe that new opportunity, new doors open to us and that will be a long term opportunity to diagnose is not going to be a short term. So I think again the total solution sales that we've been focusing on and continue to expand our technology what Doctor. Lu just mentioned earlier and continue to drive the content expansion. So we just need to capture the opportunity when it's present and make sure we continue to support the customer and build a strong customer relationship. So that will be a long term business instead of short term. Okay. Thanks. And then maybe in terms of the gross margin, Brett, if you kind of think about how the utilization rates come up in the next Couple of quarters, how do you think the gross margin benefits and when can you get the LSC margin profile maybe more in line with the corporate average or Maybe the diode legacy kind of average. Yes, David, I think that What you'll see and I think what you'll see in the guide is that we're consistently improving the diodes organic margin Consistent to what we had said and we're basically bringing in the LSC business consistent to what we had imagined the impact would be. The immediate thing we're working on, as Doctor. Lu talked about a little bit, was the qualification of the Diodes products in the LSC factories, which will help the LSC margins, we expect to be able to start making those starts middle of the year, which Gives us a decent amount of momentum as we come out of the year. And then the other synergies that were listed, these are more multiyear Areas of synergy and so the real key as Doctor. Lu mentioned, invest more in the product line, immediately start getting traction with design in and design win. And so some of those longer lead time synergies, we can get some traction on that quickly. But I think this is going to be a gradual Multi year activity to bring the LSC margins in line with our expectations for continued growth. Thanks so much. Thank you. And our next question comes from the line of Tristan Gerra with Baird. Yes. Hi, everyone. This is Dustin speaking for Tristan today. Thanks for taking our questions. For our first question, I know you guys talked earlier about some supply constraints and MOSFETs. First, just want to clarify that that's mostly in automotive and maybe if you guys can just give an expectation on When those supply constraints may disappear. And then secondarily, are you able to tweak mix given the tightness? And do you plan on raising ASPs. Then I have a follow-up after. Right. So let me address that question. I think for the overall shortage in the industry, this is really no surprises driven a lot by the 8 inches shortage that we've seen, right? So I don't think we are in position to predict when this is going to be over. What Diodes has been focusing is really expanding Some of our internal capacities to support our future growth, right? So we talked about the GFAB being acquired more than a year ago. And by the second half of the year, we're going to ramp up some significant capacity in both 8 inches and also in 6 inches Doctor. Lu talked a little bit about the SFAT 2 8 inches capacity increase as well and with the LION Semiconductor acquisition increased more 6 inches capacity for us, right? So overall, I think what we focus on is really position ourselves to really support the customers' true demand and be able to continue to So the second question you have is related to the product mix. So changing the product mix, Improving margin has been an ongoing focus for Diodes throughout the last few years and you can definitely see some of the results that we demonstrated to you guys already and that will continue to be the focus. So we want to continue to focus on driving good new products with better margin profile to really support the customers' need. So that strategy will not change. It fitted really well with our total solution sales strategy. So I think that's really your second part of the question, right? So again, price increase is definitely Not the key focus for Diodes, again, we really want to focus on the product mix improvement as well as the total solution sales on demand creation and also the content expansion. Got it. Great. Thanks, Emily. And obviously POS Has been very strong. I think you guys just said it was a record. Just wondering overall how pricing has been acting recently and if there's been Significant changes, maybe you guys could quantify them. And then finally, have you seen any evidence of double ordering at either Tier 1 or Tier 2 customers? Thank you. Right. So definitely in my Speech that we have a record revenue of POS. We're definitely seeing strong momentum actually across all the regions, Which is the reason we actually guided really strong 1Q 14% growth at the midpoint, right? So when the Demand supply I mean, the demand is getting tight. Definitely, we've seen pricing is holding more firm than before, which is normal That we've seen overall. I think again, Diodes' focus is really more focusing on working with the customers, understand their true demand, So we can actually provide a better support with them and build a long term relationship with them to continue to expand our Portfolio, right. So that's always been our focus and will continue to be our focus. Thank you. Thank you. I'm showing no further questions. So with that, I'll turn the call back over to Chairman, President and CEO, Doctor. Lu for any closing remarks. Thank you for your participation on today's call.