Monolithic Power Systems, Inc. (MPWR)

Investor/Analyst Day 2018

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Jun 7, 2018

Alright. Good day everybody. Welcome to the show. So I I think, I know quite a few people here. I look familiar. So if you remember, last time, last analyst last Analyst Day, I said one thing at the end. I say come back in 2, 3 years, and you guys will be surprised. Guess what? Even myself was quite surprised for whatever we have been doing and I some somehow I feel like the all the engineers working with me and the team. We're just like, a group of climbers. So we're climbing the the high mountains, and we're so focused and we work hard and we're climbing and climbing, and we didn't really have a chance to look back, see, Hey, what what's going on? What we have achieved? So I think today is a very good opportunity for all of us to look back and see, Hey, how we evolved to today and, what we are going to do next. Actually, it all starts with, 2 great innovations from MPS. And the first one, the first one actually go all the way back actually even even earlier than 2010. Well, I think we start a team start to work on this, in pallet face around 2008, 2009 time frame. And, we are working on as you remember, we tried to pick the best process available back then. I think it was the BCD3. Now we're BCD6, by the way. And we also try to optimize a lot of things like how we can run faster, how we can integrate more intelligence to the power device, how we can achieve the 1 nanosecond datum, things like that. Sorry. I I go too far, but Never never mind. The the the thing is we actually deliver the very 1st in telephase in 2010, and that was a great achievement. But we're under the spotlight for not too long, then we realized that just having the power stage, the entire faces, just not enough. To grab the market, to win all the big sockets, we gotta have our own controllers. And that's where the QS model was invented. 2 years later, we have our our first POS Smart controller, the digital controller, and works so well, so easy to use and was adopted right away. So in 2014, we successfully powered the 1st Intel Processor well, the the first, we we powered the Intel Grande platform in June 2014. That's, a big milestone. Okay. So from that point onward, we achieve a lot of things. And the next item I'm gonna tell you what exactly we did. So look at the slides. This is the slides I actually show you guys last time. If you still remember that. I want to reuse the slides to refresh the memory that the 2 technology how it impact the CPU use the power. If you look at this big market, the bucket has water in it, and the bucket is representative of capacitors. And the capacitor is providing all the energy to the CPU. And this is the intel processor. As you may all know, that processor power is going up like crazy. Nowadays, they're looking for 600 watt, 700 watt. I even got a customer asking for 1000 watt. Per silicon. Might not necessarily be Intel, but some ASICs 1000 watt peak peak power. And the interesting thing is that peak power doesn't stay there all the time. Sometimes this power will go down to a few watts. To save the power. How you do this dynamically and fast enough, accurate enough to make sure the processor can still operate in the most efficient, powerful way. The buckets serve that purpose. You bring the energy to the processor and you take it back from the processor. That's the idea. So as of for for today, most of the suppliers, the vendors. They're doing it the power delivery in a, discrete package format. So what does that mean? Well, it means like a fire truck So it's a big, big fire truck with a hose on the top and how you deliver the power to the bucket. Just turn on the valve. Turn on the valve. The water is shooting to the bucket. Right? So feed it up. The problem is how can you control the valve accurate enough and the fast enough to fulfill the processor dynamic needs That's a problem, and that's a challenge. So whatever they do, of course, they came up with some fancy digital processor, DSPs monitoring the water level, monitoring the CPU states, the temperatures, the current, everything, and But at the end, you still need to tell this big hose to shoot a big water, the analog water. That's most of our competitor doing. And, guess what? We we completely changed that story. We don't do it that way. We do it in a very different accurate way, and this is QS mark. But before we go there, I show you some animations, see how the water flows. It it's pretty hard, by the way. And this is this is our, QS map controller. Everybody's familiar with QS Smart. Right? Quang's, quang can state modulation So quantum state modulation means every time when you deliver energy, you deliver in a very accurate droplet. The total energy is still the same, but you deliver it drop by drop. Right? We we measure each droplet. We know how much energy we deliver each time. But we control the amount of the droplets. We the the process is counting all the numbers. So the minute I know I I shoot 1000 1000 droplets. I know where the water level is, and I see if you knows how much I need. So everything's in a closed loop. We don't really need a fancy algorithm to do this accurate thing. Actually, just the controller, the QS mod, together with our fully integrated power stage that works seamlessly to achieve that. So, again, let's show you some animations. That's the the regular loading. Okay. Now it's more droplets. If the CPU demand is higher, you see a lot more dropped it coming to the bucket. Okay. That's, the full speed coming to the bucket. Okay. One thing you might notice, if you pay attention to my slides, our bucket is much smaller. Compared to the previous one. And as I mentioned earlier, the Baku represent for capacitors. Everyone heard about the CAPT shortage recently in the industry. That's where we can really make a difference. We need much less capacitor to provide same amount of power to the processor in a much faster and accurate way. That's the story. I was trying to dare you. And, next slide is to answer a question why only MPS can do it. Right? Why only we can shoot the droplets versus a big big, hose of water. The concept actually is quite simple. You look at this picture, that's all the competitors are doing. The first thing you see is a big truck. And the first impression you got from a big chunk is start slowly, and it's very hard to break, and it's very also very hard to turn. Right? It's big. So the discrete driver mouse has that characteristic. You see that on the left side, the little picture, with 3 three dies inside the package. And those are the MOSFETs and the and the gauge drivers. Each fat only have one gate control. It's coming from the driver. Okay. So when you turn on the fat, you have to turn on the whole thing. When you turn off it, you have to turn off the whole thing. And what we do well, I like like this picture, 42 nice cars. Look at that picture. Also look at that, the device right here in pallet face. We actually have 42 power banks, and each power bank is like, racing car has their own drivers. And all those 42 blocks are synchronized. They can turn at the same speed and that they can you know, deliver the QSMART energy to the load. We can run faster. And not only that, it can be very accurate. Remember, I mentioned earlier our power stage, we do one nanosecond that time. That's how we do it. If you have if you have a big truck, you can't make a sharp turn. But if you have a small car, although you have 42, but each one of them can make very sharp. So we can do a 1 nanosecond that time. We can control it so fast and nimble. That's what we're winning. That's how we're winning. So those are great, right? Great technology. So what we actually do, we actually do. Look at the top line, the CPUs. So since since Granley, we debuted at 2014, we've been engaging with Intel, and we've been powering the Intel platforms for 3 generations now. 3 generations. If you think the Gramley platform, we're just born, and we actually went through a lot of growing pain at a pearly platform. But now we're fully grown. We're ready. So we actually are powering the with Lee, CRBs as we speaking. So the Wilson City, we are the leading power supplier for Wilson City coming out. And another thing I put a dollar number right there, see the good thing good news for us is the dollar amount keep going up. Intel is asking for more power and they're splitting all the rails. Now we have 5 rails for one process. And each rail need a power, need a controller. So the dollar amount almost like 50%. Increased. That's all good story for us. For Whitney, besides the Wilson City, we also beyond quite a few other key reference platforms with Intel. And you you guys would pretty much hear about this, in the near future. So that's the intel. Besides the intel because it's a great technology. It just grow by itself and, a lot of SOC vendors came to us asking for partnership. So as of today, we're having solutions for gaming is pretty successful. And we have, Graphic, GPU, vendors, FPGAs, of course. And we're also working with the ARM based, the server, and the tensor. Processes. So pretty much everything. Everything need a computing power. We have a solution, and we're engaging with them. Not to mention we're working with worldwide OEM and ODMs. And they start to realize, Hey, MPS is really a value provider and not just providing the technology, but also providing the service. Thanks to the worldwide apps team, and they respond really fast just like our device. Right? Really, really fast. So customer love that. So great technology win its own way, and pretty confident we can, going forward, and we'll commit it too, right, in this, in this place. Remember, I mentioned, pretty growing pain, growing pain. Here's the story. I wanna share with you. Look at the screen, there's 2 footprints, and they look exactly the same. Okay. So industry called the comma footprint. The comma footprint does have merit because it gives the the customers a solving the supply issues, solving the second sourcing issues. But to us, for MPS, it takes away our advantage of high density because we really don't need to make that big. We don't, right? As you can see here, on the left side, 3 dies, they have to make debit, but we don't. We are much, much smaller. It's a smaller design. But for us to access the market, we have to do it. So we did that. And, that's what the growing pain is. We learned that, and it the the our readout is coming come out pretty good. The good news, although we make the device bigger. We're not sacrificing the performance. So it's still a monolithic tie. It's still run really fast. So customer look at our device. Hey, great. It's come on footprint, but then they look at how come you can run so fast? It's it's kinda different from the other common footprint. Yeah. That's exactly what we do. So that's the good news. Once you mold it, nobody can tell. It's it's a monolithic or unless you use it and they will see it's really good. I think the common footprint, standard design can last for a while and, eventually, it will have a problem. The problem is you look at the current from Glenley to Pearly, the current is double, the picker. When the current double, you look at the processor, the size of the process is more than doubled because you you're consuming more power. You need more pins to bring the power into the device. And not only that, the because current increase, you have to push your VR, your power closer to your process to minimize the loss on the power delivery. Because of all that, the size of the power supply need to be shrink. The density becomes a key element of the design. And that's what we can do. We are moving the things further closer to the process. So we're even working with customers, the SOC vendors, put the power supply right on the package. And the red line here is available space. You see the current goes up, but available space is coming down. And, next question is why MPS can shrink the size, not everyone else. Besides the monolithic and you look at that curve, the frequency over the years, we're starting from 400, 500 k switching frequency, and we're now doing 3 Megahertz. 3 megahertz. Right. That's 5, 6 x within 4, 5 years. And you look at the competitors, they just saturate. They clamped there. The reason they clamped there is a big truck. Right? I just mentioned, it can run that fast. So because of all this, you look at the size comparison, the blue bars are the MPS solution. We continue to shrink to the size and the black one, the gray one is the competitors because they're clamped at the front frequency you don't have enough room to squeeze. They stop there. And guess what? The same available space applied to a competitor and to MPS. They're gonna hit the wall. That's the challenge, and it's real. It's very, very real. It's just this morning, I was talking to a big customer they bring this up and they say, how can I fit that much of current power solution in my server? Right? There's no way you can push it. They can squeeze the inductor. They can squeeze carry down the caps, but still the device, if you keep that 5 by 6, There's no room to push in. And we provide that solution right away. So that's good news. Okay. Here's another well, from this flight, going forward, I'm gonna tell you a a few stories, examples. The team is being working on, and we think that's really the future. Where MPS computing power is going. And the first thing, that's a real picture from, you guys probably see that, from a media GPU 2017 last year, and it was powered by MPS, a QS mod. It's a twin day phase design, very high current need a lot of dynamics and QS mark fit perfectly for the application. Perfect. Last year, this design was powered by a 12 volt bus. Because the the power need is barely enough using the 12 volt to power this thing. But going forward, 12 are gonna be a limitation. You need a much higher current go into the process, sir. So industry are talking about Forti Avo. Forti Avo is 4x the voltage. And it's one fourth of the current do the math for x. So when this current goes the input current goes down and with the 4 day able supply, we MPS is also committed. To that area. So we start actually started 2 years ago for the whole chipset for for Able solutions. And, next slide is just a very simple architecture, but we we this chipset can do a lot of other things. It doesn't necessarily have to be 2 stage approach. This is just a good example. I think this solution, this architecture will take off eventually. You're taking a 48 volt coming in with the DCX, our own resonant converter, unregulated, and come to a very low voltage intermediate voltage, 6 volt, which is perfect for our process. Because we optimize the monolithic process for a lower operating voltage. We can run even faster. So three makers You see the 3 Machertz mark right there. That's what we're doing right now. Okay. With the 506 volt input, 3 Machertz, You can easily deliver a 100 of 100 of current and also make that orange box super small, super small so you can put next to the process. Okay. That's the idea. Very simple. Scalable. Not to mention the transient because it's running at a high frequency. And you can interchange 1st stage and second stage. It doesn't have to be, you know, both as a chipset. You have to buy both. You can use vendor a for the 1st stage panel b for the 2nd stage. There are a lot of, flexibility. But the bottom line is efficiency is great. And we have a size and cost everything as advantage. And this is the solution we are looking at to power the mainly the GPU's and the AI chipset, which needs super hiker super hiker. So speaking of AI, AI needs data center, needed computers, the racks, and every time people are talking about AI and the data center is a big form, right, a lot of Just like this picture shows, but it might not be always like that. Right? So what if what AFMTS can make that picture on the top, the data center. 10x mark. We make a much, much smaller, denser. Okay? What if You can then put that portable data center along your freeway. Okay. The lot of things can do. So the key is we gotta change the way our current data centers look like eventually. We we need to focus on technology and use our advantage to help power the next gen processor, GPU's, GPU's, and they eventually become a super nice data center, and you can just distribute. And that's part of the, actually, autonomous driving. With that AI engine, distribute it, and that you can communicate with your Not to mention, we're also looking at all the processes inside the car. Right? There are a lot of CPUs in the car, and that's a good place to be We already have all the technology. We just need to focus the execution, and that's our step. Well, at the end, the computing Computing power is not just about computers. The computing power is about the computing ecosystems. You if you may have a computer, it doesn't work very nicely. You need to link everything together and you need a high speed highway to connect all the data centers. And that's what 5 g network come to a play, and that's what we are also working on the hyper converged computing. And all this, again, and you remember remember everybody need the density. If you have a huge computer, you can't do that. So MPS has been waiting for this, and it's the right time, right moment for us to thrive. So I feel I'm very grateful and very lucky to have a team, elite team here. Power team. And they work with me very, very hard for almost 10 years, and I think we achieved a lot. After this 10 years. So let me finish my talk. I would say come back to see us in 2, 3 years. You will be surprised again. Thank you. Any questions? Yeah. Great. Okay. Quinn Bolton with Needham. Thanks for the presentation. Two questions. 1, 1st start at 48 volt. When do you see that going to volume will Intel have a version of the Whitney, platform that that supports 48 volts. And then second with the, QS Mod solution, Did you say the intelliphase elements effectively have 42 individually controllable, gate drivers that that turn off on and on each bed individually so you get that, sort of quantum thing up. Yeah. The ability that that you talk about. Thank you. Alright. That was a lot. The first question, first, for the Abel, yeah, 48 volt is not just intel. Right? It's it's, pretty much like, GPU's, TPU's, and all the other stuff. Intel has their advantage by this fiber building, and they they're not in the very front end. Has the feel the need to to you know, see this huge current. And there's GPU's probably hit that wall first. And, we see that, 48 volt, in a 2 to 3 years, it will be in really a good good time. We'll see a lot of designs. And we are our MPS solution. We're we're being the prototype, all the stuff. We're working with a few key I would say not OEMs, but key SLC, the silicon vendors to provide the the total solution. So I will see in 2 to 3 years, it will really have an impact in the industry. Hi. Hi. Hi. It's Will Stein from SunTrust. I had a question also about 48 volt my understanding that, the data centers are, going to sort of allow 48 and 12 volts to coexist for some, perhaps, extended period of time. Does your product accommodate an architecture that would, operate with both, both voltage levels. Good question. And how do you expect that to progress? Eventually at some time, does the whole data center change to 48? And then are you more advantaged or, how does your How does your position relative to competitors change as as the architecture moves through this hybrid and then maybe moving entirely from the Yeah. Very, very good question. The for the hybrid, yes, we do see that the need and, actually, a lot of ODMs are asking 8. Do you have a 40 able to 12, then they can just use existing board. And the answer for that is, absolutely. We have the solution Actually, the chipset we developed right now can can do both. We can do a 48 volt down to 6 volt or even 4 volt, depend on transformer, or we can use the same chipset for the so called STC topology. The switching tank capacitor topology, and that was very efficient for a low step down ratio, like 4 to 1. It's perfect. So the same chipset, the different l and the c's, the same controller, different l and the c's. We can configure that as a intermediate solution for those guys looking for the hybrid. But if you ask me what is our technology, eventually, Len, what is the the the benefit we're getting, I would say the 2 stage approach I just showed you with the lower intermediate bus that really helps. And, to promote our advantage because the lower frequency, lower voltage, high frequency, second stage, not just soft the fully able problem. It also soft the CPU demand, the current, the power delivery problem. The last inch of the power delivery is the key and you want to minimize that. When we make the 2nd stage at 3 magnets as today and maybe 5 magnets, through to yes down the road. It can be so small, and you can see that literally next to the process. That's where those standard hybrid 12 solution cannot do. Oh, the the QS mark. Sorry. I'll ask a question, and I'll go back to Quinn. Tori's Farmer from Stifel. So the good news about Qs modern and Telephase is that they're very innovative technology. It's very unique. The the tough thing in the power management space is that, you know, new and innovative things, it, you know, it could be really difficult to convince customers to move in that direction And I know in the server area, for for monolithic power specifically, you know, there's been a learning curve for your customers to really adapt your technology. Can you maybe talk a little bit about where we are in that learning curve for your customers? And do you feel like now you are at a point where, you know, one of the cars technology is just gonna you know, spread, across all plat platforms? Well, I I was I would not say that we're still on the learning curve. I think we're pretty much down learning and, our customer learning about our technology. Well, we start with, all the SOC the silicon vendors, right? So the first the first target is we be on their reference design, and that's a really good tool. For a newcomer like us to be on all the leading platforms and all the customers start to see it. And they don't have to really spend the money and time to develop a board in order to evaluate us because Intel provides all the 2 to them with NPS solution on it, and they can see it. And once they see it, they come to us they say, hey. Tell me more about your QS model. Tell me more about your IntelliFACE. That's how the conversation start. And we see a lot of lot lot more momentum coming coming out. Right? But we can control the step, the the speed of intel because, you know, Intel push out the the ice lake a little bit, and, then we have to wait for that. Other than that, we really have a good moment. I guess, just the follow-up question on the IntelliF phase, is it that just just to discuss the architecture in the 42 individual controlled streams, if you will, is that 42 driver losses driving 42 individual fits? Well, the Intela phase, the key the key to to intelligence is intelligence. So when we divided all this to 42 or 50 or whatever, numbers on banks, So the gate delay the gate delay from one gate path to all the fat, eliminated. Because the driver is distributed. It's next to the fat. Okay. That allows us to do the transition from low side fat to high side low side fat turn off, high side turn on. There's a bad time. You have to keep certain amount of time to make sure it don't shoot through. But since we control those gate and fat individually accurately, and we can cut that time to 1 nanosecond. And just for your reference, most of the discrete guys are doing 8 to 10 nanosecond. That's 10x10x. Yeah. I would challenge to put the 10 nanometer program, if you can talk a little bit about how for more Well, that was actually was my dream, like, long time ago is, why can't we integrate everything power into the process, right? That's not the problem. And of course, the the industry is so big and the It it's not a easy job. So if if if someone were pick silicon, a power IC vendor to make that move. I think MPS is in the top of the list. Because we our technology is so suitable to be integrated code packaged through the process. But you're asking me it's happening right now. It's still early stage because, it's not an easy task. Okay. Thank you everyone. Okay. Alright. Hi, everybody. My name is Chris Spork. I'm the battery management product line director. I've never met any of you. I checked the name tags just to make sure. So I'm I'm new here at MPS. I've been here just over a year. I came from Qualcomm a little bit of background on myself. I was running the PMIC system design group for the the the battery chargers. So quick charge, these types of technologies, USB C, USB power delivery. So really from the engineering side, And now at MPS, I guess my title is marketing. So, that's interesting. But it's been very exciting. And I'm very pleased to be here. And, so thank you all for for coming and listening. So let's let's get started. Oh, I have the clicker. Yeah. I didn't even think about that. Forward. Okay. There's my name. Okay. So what I wanna do today, it's only, you know, 15 minute presentation, but I wanna spend some time and explain to you sort of the journey that we've been on and where we're going, how we're really gonna monetize and grow this business and what different markets we're gonna attack and how we're gonna win. So first off, on the screen here, you show a or I I have a variety of different market segments, or market verticals, and in in the order of, I believe, increasing value. So, on the left hand side, you know, these markets that are lower ASV p, high volume, are usually very a lot easier to enter. I mean, if you're comparing, you know, a power bank, for example, to an electric vehicle, It's a lot easier to design that chip and to get a design win. But you shouldn't discount it either because there's a lot of value there. So MPS, when we started in battery management, portable power was our first big hit, I would say. And what we did there is we looked at the system and we saw, okay. This device has an input. It's got an output, you know, for charging a cell phone. And they've got separate converters for all these things. So what can we do to make this system more efficient, smaller, and lower costs and higher value to the customer easier to design. So what we did is we introduced, a charger IC with an integrated, buck for charging the battery and a boost for providing power to the phone. And what that did is it allowed us not to only take the market the the revenue for the charger socket, but also the boost socket without having to provide both solutions. So, we saw that market grow. The revenue grew there a lot. And then what we did is, you know, we we you need to diversify. So we have other products such as linear chargers for growing into wearable devices. So our advantage is we have a very, very small device using our process technology. I believe one of the smallest in the industry that's programmable. And, we have some very nice design wins, at wearable, you know, fitness band, smartwatch, this type of thing, bluetooth headphones, which is another big area. You know, all the cell phones are removing the audio jack, which means you're either doing type c or you're doing wireless, which is great for us because wireless headphones means another battery, and we love charging batteries. So so a a couple of the other, adjacent markets so that non USB applications, this is, you know, high voltage stuff. So we we also have some very nice, high voltage, versions of our processes, And so we use those to create fully integrated solutions for, you know, portable vacuum cleaners, POS machines, this type of thing. And then finally, connected devices. I just loosely grouped this category. But what I'm thinking there is sort of, like, the IoT of of stuff. So it's like connected cameras, gaming controllers, Bluetooth speakers, this type of thing. So Bluetooth speakers is especially interesting to us because this market is is growing rapidly right now. And a lot of the times, it's very similar to the power bank You know, you've seen probably some of these devices actually have a charging port for your phone. So it it was a natural fit for us to attack that market because we already had a mature solution. So anyways, that's what we have now, and we're growing in those markets a a lot. But the question is, how are we really going to expand the business and increase the revenue, in a big way? And that's where these 2, categories on the right come into play. So first of all, mobile computing. Okay. Everyone knows this. It's like your cell phones, tablets, computers, you know, I think last year, there is 1,500,000,000 smartphone shipped globally. So this is a huge market, but it's also very difficult because you have system on chip providers like, Qualcomm, for example, who sell a reference design. So for a company like us who's just selling you know, a charger. We're not doing all the software for them. It's difficult to penetrate unless you have a very key new innovative technology. So the other thing I wanna say about mobile computing is that right now, we're also seeing sort of a revolution in that area where all these devices are changing over to the type c connector. So I I spent a lot of time working on that specification, doing the definition for parts, which integrates some of that functionality, and I really see that as a key point for growth. We have to understand that, the consumer electronics industry, wireless devices in particular, are gonna move to type c because it means universal charging. You know, anyone can charge anyone's device with any charger. You manufacturers don't even need to ship a wall charger with the product because the customer already has 1. So we're gonna take advantage of that trend. And then finally, battery management systems, BMS. So so what is this? This this term, is collectively refers to fuel gauge, cell balancing, cell protection, this type of thing. You know, I mean, portable devices have a minimum of one battery cell, but then the battery pack itself may actually have 16 cells in series, you know, stacked on top of each other to achieve a higher voltage. Every single one of these battery packs needs to have protection. What happens if there's a short circuit? How do the we don't want the battery to to blow up? Right? So this market, you know, I mean, we we can sit there and say, okay. Yes. Electric vehicles. That is that is the pinnacle of this market, but how do you get there? What do you do step by step to achieve those high value design wins, high ASP. Well, you have to look at the the other large markets in this category, which, for example, electric bicycles, think last year, it the the quantity of of ebike ship globally is over 10,000,000, and it's growing very quickly. You have power tools. You have cell towers. Just think about, the migration from 4 g to 5 right, there's projected to be something like 3 x, the number of towers in the US, because it has to be, like, physical eyesight, millimeter wave technology. So, I mean, that's 100 of 1000 of towers that all need a battery backup because if power goes out, you can't have your communication lines go down if there's disaster or something like that. So, anyways, these are the type of markets that, we are actively talking to customers right now and have product in development that are targeting. So what I'm gonna do after this is I want to focus on those last two categories and show you a little bit more about what that means and what we're going to do to grow into those markets. Okay. So, basically, 2017. Alright? So we have baseline revenue of around 16,000,000 for this this product line. Okay? I've separated the markets into different categories based on the topology of the chip. So, you know, BMS, we already discussed. That's that whole separate category. Linear charger, that's the small little things for, you know, wearable types, tiny batteries. So high volume, lower cost. Boost buck and buck boost chargers are all switching chargers. So, you know, very familiar with these types of topology. We have all of those solutions right now. We are working on releasing the Buckboost solution. And I'll explain to you why that's key. So, basically, the the point of this this slide is to show you, okay, how are we going to grow our revenue? Well, once the first step of that is diversifying our product portfolio and targeting these other markets, these other key markets that I'm talking about in addition to growing in the existing ones. So what you can see here is over the next few years, we are going to release 2 production, you know, buck boost chargers, BMS ICs, and also expand our existing charger product portfolio such that we can attack other markets such as, you know, notebook computing, 21, cell phones, this type of thing. So for us to to not be in those markets means that we have a huge growth potential ahead of us. Okay. So I think, you know, looking back at the previous Analyst Day presentation, I I saw a a similar theme to what I was thinking, with what the battery management product line presented, and that is integration. So what is our advantage as MPS? So, I mean, you've heard from the computing product line and DCDC and, that we have a really good power process. So, yes, we can build, a monolithic device that is sometimes twice as small as our competitors for the same RDS on. Okay. But what does that mean in terms of a charger or a battery management I see? Well, what it means is it leaves us room inside of the package to put other features in there that our competitors normally have discreet ICs for. So typically what happens is a competitor goes to a customer and they say, okay. Look. Have a battery management system. How many cells is your battery? Is it USB powered? Whatever. And then they say, okay. Well, look, we've got this product portfolio. We're gonna sell you 4 devices. Or 5 devices or 6 devices. So the customer has to pick, okay. I've got a charger. I've got input voltage protection. I've got my USB detection. I've got my battery pack protection, all of this stuff, and then they have to lay out all those things. They have to do that design. They have to validate it, etcetera, etcetera. Okay? So what we're saying is is look, we don't want to go there and do this super complicated PMIC you know, where we've integrated every feature. Because when you do that, I mean, it's usually only works for one customer because everyone else looks at you and is like, I'm not paying for this. So the key is is to intelligently look at these market verticals and say, okay. This market is USB powered. It's a 2 cell battery. They need cell balancing and a charger. Let's integrate those 2 features, or they need USB detection. They need, over voltage protection. And we've already done that. We we have products. We have a product out in the market right now that's a boost charger USB compatible, and it integrates the cell balancing. Which is very nice for a variety of different markets. So what I'm saying here is let's use we are using our PowerFET process advantage to take that extra area and intelligently choose which features to integrate in that same package based on not just what one customer wants, but what a large quantity of customers in the same market want. And and that is That is gonna win. Okay. So remember, there were those 2 categories. There's 2 different markets that I wanted to focus on. Of the growth markets, growing the salmon. So BMS. So you look at this and you're like, wow, there's there's so many things there. And and there really is. I mean, you think about it from power tools to electric vehicles to the, you know, power wall for your house, this type of thing, there's really a lot of stuff. And, you know, one one approach could be let's just cast a wide net and try to attack everything. Now you can do that, but the problem is if you wanna get the coup de grace, the EV, you know, high value, maybe $8 per BMS chip, in the electric vehicle, and it's got, you know, maybe a 100 of them. If you wanna get that socket, those designs take a long time And those customers wanna say, okay. Well, what's your what's your track record in automotive VMS? What other design wins do you have? Do you have any, like, you know, proven your your automotive process. This blah blah blah blah blah. And we do have an automotive product line. We do have, proven devices that are automotive qualified. But we we need to to show them a track record of BMS design wins in order to build the confidence that we can use that in electric vehicle. And that's what we're in the process of doing. And how we're gonna do that is we are attacking the electric bicycle market, the power tool market, the cell, battery backup market. So, like, the cell towers, small cell, this type of thing, and we are already engaged with those customers right now. So we do have solutions in development for this. I believe this is definitely a portion of big part of our future, and, we do have some, some experts in this type of technology who are working on right now. Okay. So the second thing so mobile computing so this is on the consumer side. This is what I was talking about, you know, smartphones, laptops, this type of thing. So I wanna tie that all together and say, I believe the key to taking on this market is doing something different, and that is USB type C and PD. So you can look at this chart and, basically, what it's saying is this is the number of devices, number of connectors shipped not number of devices, so laptop may have 4 connectors. But look at that. I mean, we're talking, I think, really see the screen exactly, but around 2,500,000,000 units this this year and doubling that in 2021. And pretty much 80 to 90% of that is consumer and wireless. And, you know, obviously, cell phones kinda led the charge there with adopting that tech technology, but you can see right now that computers are doing the same thing. I mean, you have Apple as type C on all their laptops, You're starting to see business laptops now being shipped with Type C. So the key there is we we wanna take advantage of this growth. And that's what we're doing. So the products that we are developing right now are taking advantage of this by integrating functionality and making sure that we have compatible features for the spec. So more about that. So more about the the exact products. So these are the the type of of different devices. So, you know, notebooks, smartphone tablet, power banks, like before, VR headsets, wearables. So, I touched a little bit on this, but the wireless headphones, that's that's a big market right now you know, Apple came out with the the AirPods and this type of thing, but no one none of the phones have a three and a half millimeter jack anymore. Because it adds cost to the phone, makes waterproofing it more difficult, and it takes up more space that that a battery can use. So that's great. Because, you know, that means more headphones with more batteries. So we have solutions for that right now. Now the the the very key thing that we're working on that we are we are sampling a product right now is US, a buckboost charger. So what this means is to support USB, you have to support 5 volts. Okay? So that's no problem if you only have one battery cell in your device. Because it's one cell, it goes from three bolts to 4.5. But as soon as you have, let's say, 2 series cells or 3 or 4. So we're talking, you know, laptops speakers. This type of thing that has higher power. So the higher current. So sort of like, Jing Hai was talking about with server. You know, you go to higher voltage, you get lower current. So these devices go to a higher voltage battery so they can reduce the current. If you do that, you need a buck boost because you need to take 5 volts and step it up to the battery. But then as soon as you need more power, someone plugs in a beefy power delivery charger that's a 100 watts, that thing can go up to 20 volts. So now you need to buck down. So that's why you must have a buck boost charger in your portfolio, preferably many of them. And what we're seeing right now, if you look on the market from competitors, the the only high power solutions that are available all have discrete bets. It's a very similar story to the to the computing product line. Everyone has this huge solution with 4 to 5 MOSFETs, and what we're doing is we're integrating it. Of course. Right? That's what we'd like to do. We're monolithic. We integrate things. So, customers are very interested in that because we can reduce the solution size in half, at least, because we have all the Fets in 1, you know, 4 by 5 package, let's say. So, this is this is the key, and this is something that we see a lot of growth potential in. So finally, like I said, it was a short presentation, but I just wanna leave you with some points of what we're gonna do to win here. So point number 1, increasing product offering diversity. So, you know, that curve increasing the available SAM for us we have to spread out. We can't, you know, we can't just focus on 1 or 2 or 3 markets. We have to have solutions for all these markets. We need the buck boost charger. We need the the BMS IC. And trust me, we are working on that right now. You will see at the next Analyst Day. And then the growth strategy focused on a high level of integration. So I can tell you that, you know, my experience before was all on the smartphone side where everything is integrated. Space is absolutely critical, but like I said, we need to intelligently point out those opportunities for which features to integrate in the same chip and and do so for a wide variety of customers. And that's what we've been doing for the last 2 years, to be honest. And we already have products that are in production that demonstrate that. And then the 3rd point, fully monolithic chargers for USB power delivery. So like I said, the current solutions are all discrete bets. So we're going to do the same thing with that market that the computing group did with the computing market. And that's I we have a proven track record there, so I know we're going to be successful. And then finally, for for BMS, So you might ask, okay. Well, like, why why is MPS gonna win in BMS? It isn't, like, you know, super high power density. It's not really a power IC. Well, the thing is is we have a lot of R and D investment, going into this. It is all about speed and accuracy, circuits, Right? So you have to have a good design team, a good systems team, and and we do. We've absolutely been hiring in that area. And, we are developing some very accurate monitoring circuits that will compete with the big big guys in that market. So anyways, with that, I'll I'll close and, point to the question slide and Please give this gentleman a microphone. Thank you. One of your peers, pretty close-up the road here. They're working on, the charger technology that takes the charger function from the device onto the adapter itself. I know historically MPS hasn't really participated much on the actual Adaptive market, but is is that something that, you know, you think will happen? Do you have technology that could potentially participate in in a technology development like that? So I can speak to that in the highest volume market that that's in, the cell phone market. So commonly referred to as direct charge. I guess that's that's where you're talking about. Right? So we we actually do have an ACDC product line. Goran's right over there. So you should, chat with him about this after the meeting. But I I do have a lot of experience in that area, and I without naming particular customers or competitors, basically, I'll tell you what happened. So USB type CMPD, so the cable can handle 3 amps. Okay? That's a standard cable. The one that, you know, you have the charger you have your device, and you can unplug it from the charger and unplug it from the device. So if you wanna go to a captive cable, which means it's permanently connected to the charger, like a laptop, then it can go to 5 amps. So the the thing was is that there were a few Chinese, a smartphone OEM, that thought, oh, this is a great idea. We're just gonna do direct charge. We're gonna take the regular charger that's there in the the PMIC, right, and we're gonna leave it there. Because that'll be used for when someone plugs in a regular a regular charger off the shelf, right, and the buck will step down and charge the battery. But when someone plugs in our special charger, we're gonna identify it. We're gonna turn off the PMIC, and we're gonna bypass it with this back to back MOSFET that's super low Ardis on. And then what they're gonna do is they're gonna take that wall charger, and they're gonna either regulate the output current, like a current source, or they're gonna have a fine voltage resolution, change. And that so so what happened is they started doing that, and that worked great. Problem is for the user, it only they have to carry that one charger with them, which kinda sucks. Right? I can't just use yours. You can't use mine. It's this type of thing. And those, those companies actually purposely tuned down the current for when someone plugs in anything else to make their charger look so much better. Okay. So that's that's what happened. But, anyway, these guys went down that road. Type C comes out. They're like, okay. We're gonna do this over type C now. But type C is sort of the the unifying standard. Right? And so, you know, we came out with the power rules 59, 15, 20 volts, but but but basically China said well, we're not gonna adopt this unless you give us the option to do this super fast charging. So we did they have that option. It's called programmable power supply, PPS. So the fundamental problem with the technology is even if you get around the cable thing, the 5 amps, 5 amps isn't enough. Mean, if you wanna fast charge some of these newer smartphones, I mean, they're, like, 25 watts, 30 watts even. It sounds ridiculous, but it actually is happening. So, you know, the question is is, like, what do you what do you do from that that time frame? So now what people are doing is they're going to a different topology of charger, which basically divides the voltage by 2 inside the phone. So you use that same type of wall charger that can regulate the current except you double the voltage so that the power can increase and you can still stay under the 3 amp limit of the cable and it double the current. So 3 amps in, 6 amps out. Right? So, yes, people are doing that, but I don't think that's the future because none of those converters are interoperable. And, they're expensive. You're adding a lot of costs to the ACDC, and I think Goran can speak to the fact that those are pretty cost sensitive. And, you know, it's you want it you want universal charging. And I think the consumer is gonna make the choice to buy something that's compatible. Right? So That's cool. Thank you. I hope that wasn't too much. No. That's great. Thanks. Yes. Maybe this maybe this one will be shorter. The on the BMS side of things, you talked about MPS needs to earn the credibility to get into that What are some of the milestones we externally can watch for how you earn that credibility? And given the design cycles on the automotive side of that market, when would you think revenues could actually come once that credibility is earned? So okay. So let's let's take a step back and say, okay. Those first markets that we're talking about going into with BMS that we're engaged with customers right now, like electric, bicycle, power tools, this type of thing, I think the ebike is a really good, example case. So so we have some customers that we're talking to. And if we execute on our schedules and stuff I think that, you know, end of 2019, early 2020, we can start, you know, to get design wins there. And, and and then, you know, grow that business, expand into other customers, this type of thing. And in parallel to that, we've also got a few, external projects that we're working on where we're basically pairing our BMS IC that we we have that's in development on certain designs. So for example, tear down an ebike or, you know, working with some students who develop, like, race cars for university, this type of thing. So, basically, we're doing the the r and d and the proof of concept effort on that side and engaging with the customers in parallel. So once we have the design wins there at the, let's say, the ebike and the cell tower battery backup power tools, this type of thing, we're absolutely gonna continue knocking on the doors of these automotive, these automotive guys and showing them, hey, look, you know, we We've done this. We've done that. We have, Alan has the relationships with these customers, and we're gonna we're gonna leverage that to our advantage. So does that answer your question? I I don't I don't know if you're looking for, like, you know, you know, q 3 of 2019, we're gonna do x. I'm like, I can't tell you that. That's good. Thanks. Just a follow-up on the USB C. Sure. Did did USB, was that just mostly a step down or a buck topology. And and when you go to USB C, you change the buck boost, and that's your opportunity to kind of engage. I mean, you've got a lot of incumbents on assuming an USB power been there for a while. What's the change? You know, if you could just kind of simplify it a little bit. What's the change that gives you as sort of a new player into this market, the opportunity to kind of come in and take share I would think most of the power management guys that are doing USB C, or as Berkeley, did USB C probably have buck boost capabilities in house to to is there something that gives you an edge as you make that transition from USB to to Type C? Sure. Sure. Yeah. So, it's it's really about power levels. So the previous USB that everyone's using is micro USB and a little trapezoidal connector. So that's limited to 7 a half watts. Okay? So it's 7 a half watts, and that's 5 volts, 1.5 amps. Then if you look at type c, excluding power delivery, if you you can use you can go up to 15 watts from 5 volts. So that's 5 volt 3 amps. Okay. Then where the the big power comes into play is as soon as you add power delivery, it means you can go up to 20 volts at 5 amps. So a hundred watts. So, basically, all those markets that were taking those, the or the, let's say, the power power semis who were taking those sockets before, those converters were all taking a barrel jack input. Like, if you look at probably the laptop that you brought to this, except for you know, person with the apple over there. It'll have a barrel jack. It'll be 19.5 volts, and it'll be 65 watts. And the architecture is a buck because they have, you know, a 2 cell or a 3 cell battery, and the adapter voltage is always higher than the battery. So they know exactly what the power is available, and they know, you know, what the adapter is. With USB, it changes the whole thing, right, because you don't know what the customer is gonna plug in. They could plug in their old, you know, one amp apple brick, or they can plug in a 100 watt charger. So, basically, you have to have a solution can go up to a hundred watts and you have to have a buck boost. So before they could have a buck, so a buck boost, that means more fets. So now if you if you tear down one of those notebooks, you will see the solutions like this for the charger. The inductor's like a 10 by 10 millimeter. And if the the system is thinner, it's even it's even worse. Like, if you're doing a solution, like, a surface or something that's a 2 in 1, you need maybe 1.2 millimeter height on your inductor. So, yeah, you're doing, like, a 10 by 10 So, you know, what you need is kind of look at what computing did, right, multiple phases, monolithic devices, bring down the area, increase the frequency, this type of thing. It's it's it's the same thing Absolutely. Yeah. So, I mean, I wouldn't have brought that up if, you know, this wasn't what I believe truly a consumer electronics revolution because, you know, I mean, there's been guys playing in the notebook charging market for 10 years. I'm not gonna kid you and say, oh, we're gonna walk in there and just design them all out. You know, there has to be a a disruption in technology that happens, and that event is happening now. Other questions? Let me hop easy here. Okay? Alright. Thank you. Oh, yeah. Oops. I didn't turn it off. Sorry. Okay? You guys hear me okay? Yeah. Okay. Good afternoon, everybody. My name is Alan Chen, and I'm the automotive Marketing director here at MPS. I want you guys to know that I consider myself to be very lucky. And I consider my team back there to also be very lucky because as you guys should know, the automotive market is going through one of the biggest interesting technological revolutions ever. Right? NPS, we feel is in the right place at the right time right now to really succeed in this space. So over the next, 10, 15 minutes, I wanna talk to you guys about how we're doing in the automotive market today. How our automotive business is. I wanna talk to you guys about the major theme shaping our innovations, our R and D over the next few years. And then I wanna talk to you guys about how MPS is nicely positioned to really succeed. Okay? So first, we're gonna start off by talking about how our business is today. 5 years of development and focus in this market from 2013, $8,000,000 to last year, $53,000,000, 7 x growth in 5 years. Now let me tell you the story. In the very beginning, we decided, let's go after the space. What we did is we started by drawing from our catalog of 1000 plus power products, right, taking them converting them to automotive qualifying them and selling them into the space. And what that experience gave us was an understanding of how to develop IP for the automotive market It helped us to understand the customers and really figure out what their care about are and really figure out what this very unique ecosystem looks like. Fast forward, 9 to 5 years, 20 17, $53,000,000. We've come a long way. Today, we are now developing all of our products from day 1 for the automotive space. And then when we get the opportunity to, we may downgrade that and sell it into consumer space. But it's a fundamental shift in our philosophy, our approach as into the automotive. The other thing I wanna also point out is we're growing so fast. Okay. 55 percent year on year growth last year. Take a look at the total semiconductor market in auto. It's about 13%, right? 4 x growth versus the market. And you can see the TAM that we're going after 7,000,000,000 dollars, $7,000,000,000 And our slice right there is that little green one, which you might not even be able to see in the back. So the cake that we have in front of us is huge. Right? We've only now just begun to start growing. I also want you to understand a little bit about what our business looks like. It's very diversified. So the first little pie chart there on the left shows you how our revenue is built up. And the statistic here is 50% of our automotive revenue comes from small customers individually contributing less than 1% to our top line revenue. So, really, our goal is to grow that entire base of customers. Right? And the second one there, it's a little bit hard to see. Visualized, but basically we're very nicely diversified regionally. So North America, Europe, Japan, China, Korea, Our business isn't made up in one region. It's the entire world where automotive development happens today. So that's the first part talking about kind of where we come from. I also wanna just refresh you guys, right, the automotive landscape. How does this work? So you have the Honda's, the Toyota's, the Mercedes Benzes that you see on the road. These are the automotive OEMs. So these guys, what they'll do is they'll define, okay, I've got an infotainment system. I've got my HVAC, and then they'll define what they need in this new vehicle and actually work with tier 1 automotive suppliers. Right? A single OEM, a single Honda, or a BMW may work with multiple tier ones to develop that whole vehicle. The tier 1, in turn, will also develop infotainment systems or radio or or cameras for multiple OEMs. So today, MPS is already shipping into half of the top 50 tier ones worldwide. And we are either ramping at or deeply engaged with virtually all of the others. So then let's talk about some of the big themes, these big tectonic shifts right, that are really informing what's gonna be happening next. So really 3 major ones. The first one, you guys all know, autonomous driving, the goal eventually, you know, I live in San Francisco. I wanna get in my car in the morning, go to sleep, and wake up here. It's an hour a half drive sometimes. It's really far. You know? And I think eventually we're gonna get there. I don't think it's gonna happen in the next few years. I think that people underestimate just how complex this challenge is. But certainly, what we're already seeing now is level 2 vehicles where I can kinda let it control itself, you know, but I still have to pay attention that exists today. Level 3 already exists today, and there's so much investment dollars behind this. It's gonna happen eventually. Right? Second one then, I wake up from my nap, and I wanna watch Game of Thrones. Right? Connected cars. So cars are ready today. You can have Wi Fi hotspots, you know. You can get 4 g and eventually get 5 g connectivity. Cars are gonna be talking to other cars. Communicating with street signs and street lights and all this, the idea of the connected vehicle, it's a logical step once you have this push towards self driving. And then the 3rd category is electric mobility. So electrification Of course, like Chris was talking about, there's this holy grail, right, of fully the fully electric vehicles or hybrid electric vehicles A reality is it's not gonna become the majority of cars over the next couple of years, even over the next 10 years, but there actually is this very interesting intermediate stage. 40 eight volt batteries. So the idea here is you still keep that hundred and twenty year old lead acid battery. It's been around a long time. It's very, very cheap and reliable. But you actually add this intermediate 48 volt battery. And that allows you to electrify some traditional mechanical components It gives you slightly higher reliability as a result. It allows you to get a little bit better performance benefit from your car, and it also gives you some fuel economy savings. So this is really for a lot of folks, a good intermediate zone over the next 10, 20 years. Some projections think maybe 10% of the market may shift to over the next 10 years. Okay? So when we think about these 3 major themes, what does that mean for us? Well, the obvious thing is more semiconductor content. Right? So if you take kind of a benchmark, today, a normal level 2 vehicle internal combustion engine, versus the car of the future, fully self driving, right, electric vehicle up to 18 x the amount of semiconductor content in the same vehicle. That's really good news for us. Like I said, we feel very lucky And for us, of course, that means that already giant cake, you know, $7,000,000,000 is only gonna increase. Easily getting to 13 over the next 5, 6 years. Really nice opportunity for us. So then from these themes, we think about what do we wanna go after inside and around the vehicle? So MPS is not here to do me two parts. Right? We're not here to do copycat symbl parts. We're here to offer differentiated solutions. Something that gives the customer a compelling value, motivation to design us in. And so from this, we have 5 major ones. The first one the digital cockpit. Think huge screens displaying content on demand, right, entertaining you think USB charging all over the vehicle because we have so many gadgets now that, that that need to be charged. Think about clusters and heads up displays. So, actually, today, our business is primarily made up from this. Infotainment is already a thing. Right? And the shift towards you know, going from traditional analog radio dials is is already happening. So 1st category, digital cockpit. 2nd one, lighting. So the shift to LED lighting for the headlamp is actually still under way. It hasn't really happened in full. So today, you know, you think about some cars that you see coming down the road, you can actually start identifying them by the headlight design, right, when I first washed iron man, and I saw that it was at the Audi RA. You know, I fell in love with the brand as a result because it's such a beautiful headlamp, just, you know, design. That's already stuff that exists today. The car in the future is gonna get even more intense. So that headlamp is now no longer just providing illumination Right? Giving you a a what is that car. It's actually signaling intent as well once you go to self driving. That car needs to be able to tell you a pedestrian a cyclist, another vehicle, what is my goal? Right? Today, maybe you can look at the driver and see, okay. Well, he's gonna slow down for me, so I'm okay. But the car's not gonna tell you that. So we see a lot of very, very cool developments. We have those relationships with these customers. Some very interesting stuff happening in in lighting. 3rd category, body electronics. We talked about that 48 volt, right? Electrification of some mechanical components Basically, this means anything that's a motorized in the car. Right? Seats, side mirrors, of course, long have been a motorized. But think about, like, those door handles, right, that pop out when you get to the car and go back in a little bit extra aerodynamic quality. Or think about lift gates. Now if you buy luxury cars or even high end SUVs, the door, the trunk closes and opens by itself. So 4th category, battery management. So, again, the goal is eventually getting to HEV, EV stackable complex 400 Volt battery management solutions, it's gonna take us investment and time to get there. But today, that short term target, the 48 volt battery is achievable. It's achievable with the IP that these guys are working on. 5th, last but not least, Aatus. Right? How much are we gonna need in terms of sensors and computing to get to full level 5 self driving? I don't think anybody knows yet, but certainly this means radar camera, lighter, ultrasonic, thermal, maybe a lot of sensors in around the car, even ones looking at you, the driver, to make sure you're a a alert, a wake, you know, present. So we see these 5 major categories. You'll see that there are some that are missing here. And the reason why is because these are either very low margin opportunities we don't see really nearly the kind of innovation that's going to be demanded of us over the next 5 years. So 5 major automotive applications. So why is MPS gonna win? It always comes down to great technology. You guys heard this from the other 2 presenters. Really, we have to walk in and offer a compelling reason why they should shift. So there's a couple different vectors that you can choose from. I mean, at the end of the day, I wanna offer more integration, better thermals, lower noise, you know, lower EMI, something that's a compelling reason. The first one on packaging you guys know about our flip chip power packaging. Right? We've been doing this for quite some time. I'll tell you guys a secret. 1 of the top 5 tier ones in the world We are the very first supplier to actually have that flip chip power packaging qualified by that. I walked into the meeting last year, and I told them about this. And they said, this is crazy. There's no way this is gonna work. We've tried this from your competitors in the past. And it failed horribly. And I said, well, give it a shot. Try it up because we've gone through, right, there are billions of units Right? We know how to do this and in high quantity. So sure enough they went, they tested it 8 months later in the past. They were shocked. We weren't very surprised. So for us, you know, that power packaging really offers nice benefit. In some cases, twice the power density, of some of these other solutions. 2nd 1, integration. So here with that flip chip packaging, what we can also do is start integrating more stuff into the same equivalent package. It looks maybe just like the same queue of fans that our competitors are offering, but there's a ton of stuff inside In one case, we have this LED driver that's four times smaller than the equivalent solution from one of our competitors. Really nice benefit in integration, reliability there. And the last one, a full power tree. We can now walk into customers 5 years in and offer solutions. For example, think of an infotainment system. You'll often find like 15 to 25 different switcher opportunities in there, and we can provide a full power tree today. So we're one stop shopping for the customer. And in in addition to that, we've got some great, leadership and expertise in, you know, very, very, extreme and complex, topics like EMI or thermal management. So we can provide all that technical support. So let me give you 2 quick benchmarks. The one on the left is a competitor solution. This is USB charging. Every car has this now. Right? The competitor part right there, 1, 2, 3, 4, 5, 6 different ICs needed to realize this solution. NPS can do this in one single chip. That's equivalent in size to one of their devices. It almost seems too good to be true if it weren't for the fact that we're shipping millions of these already. And the second one was that module that I showed you guys. So here, it's not just a switcher. It's got some inductor of the passengers inside and it fits into that little tiny 3 by 5 QFM. This actually has allowed our customers to create some form factors for their applications that they couldn't otherwise achieve because they couldn't get the board size down enough. And for some of our lighting customers, they're able to achieve exotic looking lamp designs because of this kind of technology. It's a really, really nice differentiation for them. So just to wrap up, really, we're at this moment where the opportunity is incredible MPS happens to be at the right place or the right time. We've learned from the last 5 years of innovation of selling. We understand the customers. We have the great products we see the growth really continuing over the next 5, 6 years easily 40 to 50% CAGR. And I did, you'll notice that the units are missing here. We didn't wanna make our competitors jealous. So you guys can throw some math at this and figure this out based on the numbers that I showed you earlier. I had a question about, processor in the car Mhmm. And especially thinking about the competitive landscape. So we know, you know, Qualcomm was just trying to buy NXP. I think we all understand a bit why, but if you think about that specific opportunity, how does MPS intend to go after that market? Because, you know, I'm I'm sure there's gonna be a lot of reference work that's gonna be required. And I also assume that, you know, the power management for you know, the infotainment processor or the ADAS browser, whatever's gonna be in there, I'm sure it's a pretty big, dollar content opportunity. Yeah. Good question. So, obviously, every processor GPU FPGA company wants this space. They wanna play. Right? And in many of these cases, we have those relationships already. And so, I mean, I can't comment publicly on this, but suffice it to say, if you know the right folks, you have a much better opportunity to get in. We have the differentiated power solutions. We actually are already on the reference designs. You can go to our website and see for a lot of the folks that are really aggressively going into this space. No other questions? Okay. Well, feel free to come find me afterwards. Thank you very much. Alright, everyone. We're gonna take a quick 15 minute break. So feel free to help yourself to the refreshments in the lobby, and we'll see everyone back here at about, 345. Alright. If everyone could take their seats, we're gonna be starting in a minute or so. Charge. A month. Yep. I'm just waiting until the last. 1 sausage. So good afternoon, everybody. My name is Jens Mutashka. I've joined the company when we were acquired as Centima Technology 4 years ago, and I already asked you to excuse my Alpine accent I'm going to talk to you about emotion, and that's something that Michael presented 3 years ago basically as a vision. And that's a slide from that presentation. Just to, recap, Michael showed that we are able to measure, really, an angle position. Yeah. The width of a hair, finally integrated, and that's the concept the vision is to move that into an integrated solution to really revolutionize the motion control market And I want to show you where we are with that today, what's the status of emotion, basically as of today, what did we do over the last years? The important thing for the beginning is that e motion is really the concept of having a fully integrated solution for motion control. Which is then really a one stop solution for, at the moment, rather complex things, but that's founded on 2 pillars that we need. The one is we need to know where is the rotor of a motor really. That's an angular sensor that we need. The other key technology is that we need to drive the motor that we need to provide power. And these two pillars are of key importance to then in the end carry that overarching vision of emotion. And as most of you are very familiar with power things, you might not be that familiar with that motion same motion sensing and motion control market just to categorize it a bit. We have things in your everyday life. So your mouse wheel is the angle sensor that everybody has something like 10 hours per day in their hand, but it's also gaming wheels, things like that. These are pure angle sensors, but on the other hand, you have also in the consumer space, a lot of applications that couple that with emotion, with a motor already, handheld, gimbalts, robots, but also printers are the normal things. That's then another thing is in the industrial and automotive market that simply carries on. Motion sensing and motion control is one of these ubiquitous technologies that we take for granted, that we are quite often not even aware of anymore. And now let me explain how we are tackling these challenges in this market, and I want to dive into the 1st pillar which is the angle sensing. At NPS, we have that spin axis technology, which enables us to really sense the position of a rotor instantaneously and on a very small chip. That's an MPS pro, proprietary solution that's patent protected And where others are doing a lot of computation, we simply transfer it into a smart and simple time measurement. Sounds very technical, but in the end, we derive customer benefits out of that on the product. We quite often replace bulky optical encoders, which are sometimes the the size of a fist into the 3 by 3 or 2 by 2 millimeter. Package. We are able to sense very fast. We have a very robust magnetic setup and can deliver that with very low power consumption. All of these are technology features, but these have been integrated in a complete product family that we micro alpha, which are then tweaked into the different application fields into the different interfaces, speed, and resolution needs that the, people need. And we have considerable design wins across all of these markets already from consumer or industrial automotive into medical. So then there is a second pillar. The motor drivers, basically, the muscles providing the power to really energize windings and the motor. And then we are, of course, being a power company We leverage the strengths that we have there. It's our unique technologies. It's the packaging, the testing, and also knowing how to support these things out during the design and and in the market. And again, we derive customer benefits out of that. We are smaller, more efficient than our competitors with these motor driver things, which provide thermal advantages and cost advantages across all of these different DC motors from Stepers, brush over to brush the CC. Again, there it's converted already to good extent into really design wins because we are able to address these markets with a much higher integration means that people don't only, the customers don't only get the power delivery chip, but it has all the protection circuitry, all the first levels of logic already integrated. And that enabled us to win designs in also across markets, consumer, industrial, and automotive, made the drones, made the ebikes, robotic arms and and similar things. Now we have 2 these 2 pillars where we in both pillars have unique technologies, unique advantages for MPS, and now we are the next logic step for MPS is, of course, and that was Michael's vision years ago already to then combine that into the emotion thing. And we are pretty lucky, so to say that we are really meeting a market in motion. Because the sheer number of electric motors is increasing. And while that market is expanding, the fraction of that market, which is being brushless DC, is increasing at the same time. And that's due to the advantages of brushless DC motors in efficiency, space, torque ripple, audible noise, things like that. The big challenge in that market is that when you want to really get all of these nice features, the investment in controlling them is ever increasing, and that is for many applications prohibited. Let's have a look how such emotion system usually looks like. The standard solution is based on a brushless DC motor, and then you first have hall elements to control the commutation. You have an encoder, for a pre splice measurement of the position, and then you need signal processing and a drive circuit next to it. All that first comes with a pretty high price tag. If you take the cheapest ones, you're at half a dollar, you're up to $2, optical encoders can range anywhere between $2 $100. Then all the processing circuitry drive circuits, then attached to it can range from easily 80 to 50 or even above dollars because the price tag is pretty heavy. At the same time, these things tend to be rather bulky. One of these rules of thumb is that the complete circuitry controlling the motor has 2 to 5 times the volume of the motor. And now we start playing with our unique technologies, and we are able to integrate everything controlling the brushless DC motor. Into a single combined solution. That means we have the position sending, we have the signal processing, and the motor drive circuitry in a 4 by 4 millimeter package fully integrates. That's an existing product from us. And not only have we managed to shrink all these things into that small package, But on top of that, we are able to provide the so called field oriented control algorithm inside that. That's a very advanced algorithm enabling you to get the best out of the motor itself, the best features in terms of torque, into in terms of power consumption, thermal performance, and similar. So some customers even get more value out of that than just reducing the circuitry, they also get better performance out of the motor or can downsize their motor. Now let's have a look what, yeah, that has an effect on the market. But we are already seeing, and what I showed you, part of that, is that we are designed in and have revenue already from let's say the industries with the fast design cycles, we are to a good part in handheld gimbals, drones, and toyings things that have a very fast turnarounds, cycle in the design, but we already have secured. Also, the design wins into the next levels of complexity into industry markets, into automotive solutions, into, for example, fans where we are enabling to couple 2 fans into novel server ventilation, things where you need to synchronize these things which would have not been able without our solutions. And we are then also seeing that we are naturally growing into the higher complexities and even longer design cycles into, the ruggedized industrial and also automotive applications. What we are already seeing is, a CAGR of above 60%, and we are seeing that also continuing in the trend over the next years. 60 to 80%. So to wrap up, we are pretty well positioned in both of these separate pillars in the magnetic position sending and in the motor drivers and free drivers because of our unique technology. And now we are using that to convert it into the emotion products to create really that unique bundle which nobody else is able to deliver, which not only provides a high value to the customer, but also technical advantages. And in the end, the user wins we win, we get more dollars per application in the in the end. So I hope that explains a bit why we are so passionate about that thing, what we call emotion, and now I'm happy to take any questions if you have. Thank you. Could you give us, an idea about, you know, how big this this business can be. Because, I mean, obviously, you're not gonna replace the entire, motion control market, you know, maybe one day you will, but You talked about some of the growth numbers, obviously, as as investors, we have no sort of reference for, you know, how big the business could be. So if you could give us a ballpark number of of how this business could be by, I don't know, maybe 2020, 20 to 25, that'd that'd be helpful. Thanks. On numbers, I defer you to Bernie later on. But to give you, sense of the market size, the sheer market size, is somewhere in the $2,000,000,000 ballpark. Very helpful. Thank you. That's today. I can tell you also that both markets have, have a growth rate of between 6 8% per year, just from the, from the 10 perspective. Hi. I have a question about the business model in in this product category. I'm told from folks involved in in, motion control that typically buyers don't buy just the motor. They buy sort of the whole solution. So the the problem that I've, thought that you might, have in this market is that you're either asking your customers to go design motors that the the the OEMs don't historically do, or you're going to motor companies and saying, why don't you go, you know, design your motor around my part? Which they might not wanna do either. Is that, a dynamic that you see in the business? Is that something that's that sort of you have to figure out a way to get over to get the edot motion to to accelerate and, what are you doing to what are you doing to overcome Yeah. Well, you sent me up so well. I I exactly. I was I was just hesitant to answer. Yeah. All I was gonna say is if you could hold If you could hold hold that question until Michael gets his presentation, I think you're gonna be more than satisfied with the response. Are there any other questions? He's next. So right after me. Just sort of a question about how you're looking, at any motion. You talked about the 20 plus design wins in position sensing, a similar number in motor control today, and and you showed a chart where emotion in terms of revenue seems like it is still fairly small as part of the overall I don't know if that was your revenue forecast or that was a total TAM, but it's still fairly small. When you talk about emotion as a business, are you including the individual position sensors and motor controllers as part of that emotion business, and then I'm gonna follow-up. 5,000,000. Yeah. So what's And that's position sensors, motor controllers, and And motor drivers. Yeah. Okay. That's combined here. And then just on those design wins for the motor drivers and the position sensors, should we think about it today, you've won position sensing in a certain number of designs, but the motor driver supplied by perhaps an incumbent and vice versa for the for the position sensor. So that ultimately, emotion could come in and give you both sides of that, but it takes time to win perfect one. With the integrated solution. Yeah. Like that, we we quite often sell the position sends us separately. The motor sends us most appropriately, but a lot of customers love to have that coupled thing where we really provide them the first sens of integration, but then really was a fully integrated, solution. We are bringing them one step further. Thank you. And you mentioned one thing, something like 20 design wins. We have 20 products being designed into various customers. The base is much launched. I believe there are no more questions, and I hand over to Michael. Well, okay. Well stew steaming my thunder stolen my fingers. Okay. I well, on the other hand, it's probably easier. I came to communicate the message. You set it up as soon as I get it. And, so Let me start with this. Okay? It's a different message. So we have today we talk about Berry Management. We talk about, computing, and, we'll also talk about molo driver position sensors and, automotive. These are, of course, is growing revenues, and that's where you're interested in the in the for the next 3 to 5 to 5 years. And that, yeah, we haven't talked about all the other forms. The development activities All will you hear today? It's probably 30 for maybe 40 to 50%. All the other areas that we're working on, the other ones, Ace of the DC, the new product lines, the guys here. And, DC to DC is our traditional product. That's 70% of our our revenues. And still growing. And we have all the other ones, other ones, electronic fuse is a electronics actually, is a electronic circuit circuit breaker. Circular breaker is can be used for for cars, for for any things that conducts a lot of currents need to shut off. And we develop a lot of sensors too. So today, what you hear is only a fraction of the things we do. We have a lot more product. These are, I would say, conservatively more than $2000 per up 2000 different parts. Probably more than that. And I've I I lost count. And, how do we leverage these things? How do we do that? And, also, as I said, that I repeatedly said that in a in a earnings call, that in the next 2, 3 years is pretty much set because it's set by 2, 3 years prior to that. And, so I see we're going to a $1,000,000,000. And, So the company we set as is will naturally go grow to that to a $1,000,000,000 without much of a changes. So here is, how do we go back to this page? How do we leverage these go beyond that. So that's my topic today. So it's a 1,000,000,000 to $2,000,000,000. I visit all these customers amid a conclusions, and that's the way we're gonna go. It doesn't cost you that much. And I don't spend, like, you always blame on me. I can't spend too much money. So I'm like, okay. This program doesn't it's a free running. Okay. It's a free running. It doesn't cost too much. Okay. And a very little risk. But the concept is difficult to tell you. I can maybe you walk out of here. So what the hell are you talking about? I'm not here. But it's a I'm not the I'm not a very nice presenter, Sonaka, but, maybe in a conversation, Sonaka, we can we can engage. You can learn more. Okay. So feel free. Raise the questions anytime. So, okay, I think it'll help the concepts. Okay. So what is this? It's a it's a e to e business. I in the end, I think I find out to him. Okay. How do you get high margin, at least. Okay. Higher margin side, you not only selling the component, you selling, your service, ease of use. In history of NPS that we do integrate monolithics, That's the name we'll confirm, and we integrate a lot more component than our competitors. And that's the ease of use. We don't customer design. Don't have to do a lot of major design effort. And, so go back to this. Okay. I'll go back to this page. All these product, we do monolith lot of it's all monolithic. We integrate a lot more than our our competitor do, but still require our a senior, a very experienced person to design, implement our product to their application, or use our M MPS FAE fuel application engineer to help them. It's not an easy task. This these $22,000 or 2000 plus product. So now think about our next models. What are we what are we gonna do? First thing's okay. I'll show you a couple of videos. These are the video up during how our customers visit or find out That's a great way to communicate to you. First is this. It's a small warehouse, underneath is a it's kind of robots. And, these robots moves millions of our products. And, I believe this is the future of all warehouse Okay. The next one is is apostle's sword. A visit these customers and that When they each pass parcels package at the right place, the right the correct model speaks it and on the conveyor belt as it gets into the right place. And, on the at the begin on the other end of Well, it's not a it's not an in there to market somehow. Well, the other one's okay. The other the other videos, oh, this is I think we we okay. We the videos. The other one is on the other end, how you get the package send it to to the conveyor bill. And how you have the package landed on each these each little is a is a one card. And then you land on it in the middle of it, not in in in in between. So I sorry. I don't have the videos and, okay, and, some technical issues. And here's a well, what's all of these? Actually, next page, I could This one, a a person drop, a robot, a drop, a package, and the sand is used right into the middle of this. On top of this red ball is a sensor. We check the speed, size, everything, And, this one is moves the converter bill. This one's a each there's a car. The car this this conveyor belt is moving sideways. So this company the owner designed the anti system by themselves. And He probably has about 30 or 40%. He's the the market's growing. He's captured more and more. In the in the shipping of warehouses, and the most lazy e commerce company. And, guess what's the all of this was inside a model, You have each bill. They have the 1 model in there. They have the synchronize. And each of these has a model. This model and neither drivers. Is a motor board and the optical sensor. That's a position control. So he told me he spent a year and a half to design the Why? Because it well, it's not that he you don't you you don't you can't buy one. You can buy one for a few $100 to control this modem, to brushless models. If we can use the cheaper one, the models ended up this big. We cannot brushless motors, the highest energy density models. And hit the design. If the control, you see the the other pages, okay, it's kind of fancy controls. It costs a few $100. And then that put him out of the game. He designed him on his own, but he's not an expert of this. He knows electronics. And it took him a year and a half to stabilize this things. Guess how much effort you put it in? And that this thing costs $15. He's using he's a consuming every year. Somewhere 52, and now it's growing. It's a 50,000 units a year. And, last, again, this this year, he already shipped almost 100 k consumes this 100,000. So he's a 100% even in a less than 6 months, he had a 100% growth. This one. And Does he really want to buy this one? We'll say that. This is like a he doesn't want to buy this thing. He doesn't want to do it even. His difficulties operate the entire from the metal to the end. He he does a sheet metal too because this is the he can't buy the sticks. He has to do, implement all the sensors, everything around to make it work. And he couldn't hide enough staff even. That says that he's facing that problem. And now here's a I'm not talking about only model. He has to talk about DC to DC. How do you power up this thing? This one, he designed his own DC to DC on it. And the the DC to DC below up, all our issues, he's playing to me is, okay, that kind of thing. So, okay, is a and the sensor are now in just recently in the since since last year, he can't source the component. And optical encoders, he had to buy. They increased the price from $6 to $12. And he had to he had to change the encoders. Okay. And I do all kind of things. He had to do So not on only the model drivers, not only that, and that you have to deal with AC to DC, DC to DC encoders, everything's which he really doesn't wanna do it. If it's a reasonable cost, he designed for him you're glad to do it. It's great to hand it to you. So I didn't make the point very clear. So, like, if you buy a couple of $100, okay, these these, model control, it still doesn't serve his purpose. He has a very he have a different model. He have a different needs. And everything has to be custom tweak. Tweaked. So that's a that says the situations. And, I'll give you another one. You see the what's the tear down? What's the inside? Actually, 3 model. 1 is the 1 is the left, left, right. And what's inside is the battery. You have, model, control, DC to DC, and a BMS. Another examples. It's a black sexy. It's text time, machinery. These are the last century things. Okay. But these are just undergoing, and you don't know. These are undergoing a tremendous change So full automations. Hyperscale. You see this line. When I see this line, it's just I was amazed. These are this factory probably millions of models in there. Each threat is changing. It's all have a model controlled. You have a socks, machines, you have, kneading machines, you have all kinds of things is all become automations, all computerized, and all become small quantity everything has to be in the computerized and it's due to a very small, smaller quantity. And but different kinds. With the inside. Just only one section of it. These are models. These are control bars. Each threat that you see it inside this one has a to the tension management. It manages that each transportation. There's 2 models in there. Mailings of a of a of a of these things. They have a solutions. It's working probably in the last 20, 30 years, and that they have a solutions If we want to do something new, they have to redesign these. And then now it's undergoing a big change. Another one another examples. I visit a a customer's They do this in in this business. Building control automations. But are building actuators. It's a $96,000,000,000 business. And that these are sleeping market. It's all there. Okay? But the electronics portion of it is about 10%. It's really about 10%. And, So you have about $9,000,000,000 opportunities. Okay. And it's growing. And that now, you know, the connectivity is everything is undergoing a big change. Everything has to be connected. So first example is air float. So all these things, even even this, we build it. They have a dunk switch, a dump control somewhere. You have to go in going there. If it gives us the rooms, it gets the hot or cold, and, okay, you have to kinda manually operate. Disease. And, these things all can be automated. You have smart thermostat. The Wi Fi control is naturally you operate that switch. Oh, you operate the valve or the valves? Okay. Hold on. It's a air tamper. Whoops. What is that? No. This is not Okay. So these are Oh, it doesn't show up here. It's not the HP. It's the HP. And the and the those kind of things, and, the the air dampers, ever that's actually is about, they call it dampers. And not only in the industrial office buildings, but also the in the, in your home? Alright. We're back in business. Okay. Let me flip a couple. Okay. And so this is just a typical home. And that if you have a small thermostat, you naturally want to put it in more. And the more vowels, you can control you don't have to heat up the entire house or cool it down the entire house. So this is undergoing a lot of changes. There's a lot of small company doing Oops. Sorry. Oh, yeah. Okay. I have to ride the rescue. There's a lot of small company doing these kinds of things, and particularly in in that is in the box. He's the sheet metal guys. Think about sheet metal guys and making these dent making these dampers. Okay. They can hire a team of our engineers to do this. They needed some kind of solutions. Even you've gone downtown to a different levels. Okay. Well, this is a it's in the mo it's a model. Motor controls, and also the DC to DC, and then supply the Wi Fi, all that, and then supply the the communications. That's what's seeing inside here. And that even the actuator guys making that those guys are making the actuators. They had to design this electronic control segment. So that's not do they really want to do that? If we give them a reason of not charging them on the lakes, solutions. Another examples. Well, it's not a heat in the Okay. I'm sorry. Okay. This is a this is the water. It's a it's a it's a water hot in the car in the cold waters. Full control valve. So so far, you have a valve, a person's a turn alarm, turn it off, and that these valves now here are the small valves, connectivity. And what's the inside of valve? Then inside or inside this this box, you have a model, you have a model control board, and you have a DC to DCs, is sometimes AC DCs. So pulling in the the control box, The valve guys had to design the electronics. So that's the So think about these things. Textile machines, I don't really wanna attempt to quantify what's the size of a market. I don't know some. Okay? And and I know this one. This one is something 96, some $1,000,000,000 that we're here in total maybe electronic size take a very, very single digit fraction of a few biddings. Okay. And I'm going on the next ones. Okay? So we're talking about billings stuff. We're talking These are not a typical your your household tools. You have a you have a fastener. You have a electrical lawn mowers. In Europe, you see very often here. We still have a modding of people. I think assume other other people were driven out of the country. They have to think about the how you model your house along. And, all of these, it's also going to experience all these electrification. So I can hear the user bad. Okay. What's the insight? Typically, have a battery. You have a BMS, you have a battery management, motor control, all of these. And that these are really a small tools. And they sometimes, okay, I know the companies from, with this company, then outside of this smallest country, something like that. And, and also, besides the Switzerland, it's They're making the tools hittite, hitty, healthy, like a yeah. Healthy. Yeah. They're making But gentleman told me, okay, they're making these tools. They count the usage, the rentals tools. And the tools get even smarter. I'm talking about industrial applications. These are all kinds of stuff. It's It's happening. Oh, the another example. Massage here There's a 3 or 4 milling massage chairs a year. Oh, Worldwide. Bets, hospital beds. And this one, these beds, you can buy one for force. 3 or $400. You can have a you have a 0 way. You can you can you can use a remote control control the seats. So we're seeing we're seeing sides. Same thing. Exactly the same thing. This board and the models and the optical optical encoders. Another example. I just put the example there just to make sure so I can I'm talking about a model is everything related to models. I have this one here. Take a guess. What is that? Okay. It's a thermostat. It's a small thermostat. If you put a position, this is the display. This this, thermostats. Okay. This is the control board. It's a display. I don't wanna name the names. Okay. Who's making these things? Okay. Here. Look at this. In a decisive, very, very complicated. And these are relate and that this is AC to DC and the DC to DC. Here we offer something like this. You don't have issues. You get rid of almost get rid of the board to be aware about this size. And make it very, very thick. So how many buildings? How many buildings of units of a thermostat, not talking about industrials, just talking about consumer size. Some something like a worldwide, like a 80,000,000, 90,000,000 units. This one. So My conclusion here is that there's a lot of underserved market segment. This underserved market segments. And, going back to the first slide, in the first tear downs. And, okay, those are small size customers. They sell 50, 200,000 units. So for IC guys, for IC company sell them what? In this is, is there anything related to a power? They expected, okay, under $2 or $2 you are so so expensive. So you're making only, what, 100 to $200,000 account. For large customers or for even NPS, our salespeople, our FAE, it's not efficient to serve those customers. So there's plenty of them. And if the sheet metal, guys, if we wanna do some do some uh-uh electronic items, these are act these are actuators. They have the go to a consultant company. So the consultant company do it, and then he give it to those, contract manufacturers to do the manufacturers. And there is a lot of a lot of these customers. Even for the bigger ones, You're talking about these all these well known companies. These are these are Honeywells and these Schleien, but, okay, Sebastian. But, yes, Schneider's, and that these are large companies. And, they have a team of other people working on these things. They have their own peoples. And, if we have a project comes in, they have to go stop on the scratch. And so what we do is give them the demo board. They're evaluating this. Okay. How about this? I give it to I give it to them this plug and play solutions. You replace this ball with a standard model behind it. No optical encoders, no DSP, nothing I can note, no get rid of this bore. If you want to, they can even buy a model. We don't make a model. We don't make all these components either. And then we just give them solutions. And this solutions, we're making standard product. These are standard product. Standard mechanical size. These are all standard. We're just only a few examples, so we're gonna have a lot more. Mechanical size are standard size. They can buy one of these and a ball along there. And the there's a three wires comes out. Power, ground communications. And that they can use a software to adapt whenever they they they want. So we sell them I will happily sell them for this one, $15. Or plus encoders. $20 and This person's doing the conveyor belts, he wants to do a running change even. This one's I don't know if I lost everybody or not. And, okay, this is the new concept that I'm talking about. We're selling boards. We're selling We're selling a real plug and play solutions. This solution, why other people can never a lot of module company out there. A lot of module company. Those more nodes and the NPS why NPS can't do it. Oh, your inventory will skyrocket. You're gonna pile up a different type of a module okay, these ones. And these are costly. We're the 1st company we can do programmable. We don't have to have a different kind. We don't have to we don't have to hand holding to change the component. That's the most difficult part. These are all software. Reconceivable. So we're giving them a module. We reconfigure for what they need. They can do them. We don't have to do it. We're just giving them a software. So model is a good examples. Even even we want to do it and even want to do it, we don't make any models. And a lot of customers says, like, give me a model too. Just like you said, You design everything for it. Just give me that. Okay. And he will hook up with the the the signal. He hook up with the with the work, the brain of the word, whatever the the systems he can operate Whoops. I have a phone coming. Sorry. It's our operation managers. Okay. So so let me show a lot. Okay. And, he's doing a so she so of course, if we're selling a model, we have to sell him three times as a price as a way buyer. Okay. The key is that here's is a total solution solution providers. We provide the convenience. So in the long run, of course, we might you're not gonna buy from from us. He can buy the ball, or even he wants to get the even higher lower cost One of these, he can still buy our chip. This open bill of materials I don't know if he gets, you get, sir. We're selling BOR. We're selling components. Different makers and we're selling our own chip. So if you want if he's selling this ball, we're selling $20 Also, we give you the list of a component, and we tell you how you can make this board. And these components are NPS qualified. MPS on the MPS list. You can sourcing from our MPS outsourcing from from other company. And also if you do your own, totally do your own by NPS chip, So it doesn't contract it to to existing models. So that's my my conclusion. We're gonna do this. Not only the motion, not the sensor. I would do DC to DC, our biggest product line. We do easy to do easily. So that's why in a 3, 4 years ago, just 3 years ago talking about it. We gotta because we involved all the component, this is in a this is where it probably involves all the cost for a few dollars. We only can sell a chip for less than a dollar if this is like a we we create this business We should have captured it and we should have provided convenience for for all the users So who are the recaps? Okay. Who are the our customers underserved customers? I believe there's a 100,000 of it, of these people around. There's a tucking the industrial parks, okay, by 10,001,000 units a year. Another type of a target another target is quick time to market. I want some solution of plugging a user, okay, or somebody school up. As soon as he doesn't work using this. So all these pictures you see it, we're ready to pull on a mark on our our our website. And the more the more I talk I talk myself into it, I actually believe this is gonna happen. And, whether we can grow very big. I don't know. And the risk was very small. It doesn't cost you a lot. Okay. Maybe a penny a year or something. Okay. Maybe a penny. And it doesn't cost. So risk is very minimal. And, but the gang has a lot. So, okay. The next question is, like, how do you get to all these guys? Okay. I I I give you a summary. K. This is a this is our, okay, engineer, 2 engineers, okay, through e commerce. Okay. And here's what we do. It's our operations. We designed a chip. It's all chip based. This everything we do with the module is our key most critical components on on the board. And it's programmable using BCD 5 or, oh, no, somebody already says 6. Like, I don't deny that. Okay. And I have a e commerce and a and a e commerce, website. Then would build a tool, interactive tool. They input what they want, and then they will see the performance out of this. And then the order auto programs program these modules. For them is a custom modules and we ship. So the first target now keeps saying it was 10 days. Now it's 10 days. We promise our customers, okay, whoever wanna buy these things, custom chip, a customer custom what it doesn't really matter is the chips or or the modules. 10 days, you will have your custom product. And also, by the way, these are all fully automated. Fully all fully automated from, the customers selecting the product to, customer's input, and we're going there. Okay. For cost analysis, it's not quite automated. Okay. And we have a lot of people plug in this one's Testing. Okay. But it would be fully automated. That's that's my visions. And So that's, that's our e commerce model. And the next thing is that I let Dean to talk about the how we get to these small underserved market segment. And, probably didn't wanna do a demo. And, all these are our websites. Well, I I say we keep Fucking that up. Okay. That's all. And now the final is up. Okay. But then it's a first, a very cool, the first slide. Okay, but we're we're we're, I think it's it's up it's up running. And actually, you can program a product you can buy a product. Okay. That's a first step. Alright. I think, we should ask the questions later. Right? I'll do it now. Okay. Teams are doing okay. There you go. Hello? Great. So I'm going around my Hi. I'm Dean Gannon, Director of E Commerce, and, I'm here to talk to you about, the other part of Michael's vision. And, just, aside the the this is a first time that I've seen Michael's presentation all run together, and it reminded me of why I joined MPS a couple of years ago because he explained this to me when he was recruiting. And, you know, I thought, yeah, this, you know, it really makes sense. You have all these underserved customers, you figure out a product that fits, you know, like he's talking about, and then you you you figure out a way to reach them. And, and I'm I was brought on board to help reach these customers. So, there are hundreds of thousands of these underserved customers, and and you can't have a sales team go out for these accounts. I mean, they're they're nice nice sized potential accounts, but to support a sales engineer and a sales person, they just don't work. And so what what are we doing to to pull in these customers? Just like any consumer websites, we're using all of these, different online marketing tactics to to, allow customers to discover MPS. It's the same thing Amazon does. It's the same thing I did when I was at Amazon. And we're using, MPS is just starting to use these tactics, but we are, seeing some early successes. We've hired a experienced team that's been really successful doing this previously, and, and we've we've seen some good things so far. So reaching these, you know, this is a engineer to engineer business. So it's a little different than a consumer business. And so we have to really understand how our customers are interacting with with our website. So we have we've put in place analytics so we can watch their behavior. We can see, are they, interacting in a way we won't, you know, that Mino is gonna lead to, a successful outcome. Are they ordering samples? Are they using our engineering tools? Are they downloading data sheet are they looking at pages that we want? And, now that we're now that we've been tracking that, we're looking at, how we brought them to the website. And so the the ways different ways that we showed on the on the previous slide, like through search engines or ads, we've been following those in the in the channels that are working well, we've started to to to put more emphasis on this. And so you can see from this graph, prior to 2016, we weren't doing any online marketing. The website served as a as a source for our customers to get our existing customers to get information And so we'd like a reference website. But we started in, middle of 2016 to just do some basic online marketing, and just from we have a shoestring budget, very limited resources because our team is really focused on launching the the website in Michael's colorful language, how it launched. But, we did. We did it. But even with even with our focus on something else, we saw a 100% increase in users to the website. And so we are taking those tactics. Now we're able to put more resources and time and effort, and we're and we're pushing out all those tactics to bring in more customers worldwide. And the other part of what, what we're we're having to deliver, not only we have to bring in all these of customers, but we have to allow them to to really self serve. We can't have an engineer spend time with with the the textile customer and the conveyor belt customer, we we just we just can't do that. So what we've done is we've built self-service tools that allow our customers to do the engineering, and our our tools provide the solutions. So This is what we've, what we've built here, and this is, what we launched a couple of weeks ago, and I'll just give you a quick overview. So this is what a customer typically do. So if you think of this underserved customer, they're not a power power, electronics expert, they're responsible for designing, you know, Michael is showing like that they have to design the controller and they have to design all these other interfaces. And the power is, like, the the last thing on their list that they have to worry about. So this is a this is a simulate this is a simulation of a lab bench that a customer would have to use. So if you're thinking about, let's say, that robot example that we looked at a second ago, the customer will put in their power supplies. So this would be like the battery that powers the robot. On the end, they have the load, which would be like, say, the LED lights and the motors and the little controllers. That are in there. And this is our product in the middle that takes the battery power and puts it into a usable state for for the controllers. So what are Let's see. Okay. So what our customers will do is they actually enter the enter what their battery information is, their load information, and that's all they need to do. And then they can run some simulations So they can run, like, for example, here, they would run like a startup. So there's a bunch of simulations that, engineer will run through to make sure things are working correctly. So in this case, he wants to see how quickly a system will start up. And, just to step back for for everyone to get on the same page about what our customers normally would have to do. So to get to this state, normally, what a customer, like our, say, the robot customer would have to do they would have to get the they'd have to design the physical product, they'd have to get the components, assemble the components physically in their lab, throw it on the bench, and make this measurement with the oscilloscope to get this trace. So all of that to just get to that first point to see if it actually is working the way they need to might take them 2, 3 weeks just to get to that point. And then if it comes out that, oh, this is starting up too slowly, it's taken two and a half milliseconds instead of what he needs. You know, he has to go back. He has to contact engineering support. You know, and he's a small customer. He's an underserved customer. So engineering not gonna wanna pay attention to him. So he has to sit there and do some debugging and troubleshooting, which might take him a couple more weeks. He has to reorder, you know, and actually to make the change, he has to physically change the hardware. And so he has to get parts, he has to get them back in and plug them in, and that's just a whole another design cycle, which might take Moite So what he can do with our system here is he can actually instead of changing the hardware, right now, what I'm doing is I'm changing a software configuration on how quickly the system starts up. So I'm not changing anything any physical, I get to log in quick. Luckily, that remember me thing works now, Maurice. I can log it right back in. Alright. So I'm going to so I'm gonna have I have my designers working on. So you get to see what happens actually So, I turned this on at the beginning of the presentation, so it timed out. I was able to log back in. It has my design saved. So my my software design that I've saved for the system and come back here. I'm gonna speed up how quickly this starts up. And this again, this is just a software change. And then I'm gonna run the startup. Simulation again, see how quickly it starts up. So before, if you remember, it was 2 a half milliseconds. So this is about a second startup time. So, they're able to figure out all quickly like this. You know, within minutes, they can figure out, does this meet my system's needs? They can let's say let's say they they do this, they save their design, so they're saving and think about what they're saving here. They're saving a software configuration that we're gonna load on to the chip for them. And so they're able to do these quick iterations and and, and get through a lot of different design cycles, which normally, you know, if it's hardware based, they're gonna spend 3, 4 weeks just getting to this point. And once they have that saved, you know, at this point, we've made it so the experience from this point on is just like buying anything online. So they have their design that they they saved. They say, okay. I'm gonna pick this one. They add to cart. And check out, and it's exactly the same as any other other e commerce platform. So just as as simple as buying a pair of shoes, you can, you can order a customized customized product and you get it. You know, our goal is to be able to turn around in days. We're gonna be able to do this. Right now, we can do it and 10 days, we're gonna there's no reason we can't do it in 2 days, and that's what we're gonna be shooting for. So, again, just to quick summary. Our customer's design put in their parameters. We optimize their design, and we ship it in days. And, as you can imagine, looking at the opportunity for us, you know, it's not just the motion control examples that Michael is talking about. We're putting this this capability into all products that make sense. So, like, you know, it's across our whole product line portfolio. And we're, you know, we're, you know, the pipeline for our product releases, it's really it's pretty full, and, we'll be rolling products out over the next 12 to 18 months that have this capability. So again, customers that, are very underserved. They're not power experts, but they need expert power solutions. It's a $9,000,000,000 addressable market. We're gonna reach them through these online marketing tactics that, that I showed the beginning, and we're gonna deliver them you know, self-service with these online tools that allow the customers to self-service and, you know, receive hundreds of thousands of customers, at scale. Thank you Yeah. You can help me. I stand here. Yes. Thank you. Dina, I had a question for you. So I'm I'm sure as you got into this industry, you started looking at you know, some of monolithic powers appears. And, you know, TI is kind of the 8800 pound gorilla in the space. And Mhmm. Ti.com sells heck of a lot of power management tips. Yep. I don't know if you, you know, if you have the ability to go in and experience, you know, their e commerce platform, but in in a very brief explanation, you know, what would you define as the main difference between ti.com and what Malethic power is doing with the e commerce process? Is it programmability or are there other things that we should be aware of? I think the the key the key thing that we're offering that's very different from them is the ability to to software configure your hardware, and that's what we're leading with. Because you can't do that anywhere else. There's no other company that's offering that. And so that's where we're pushing forward right now. There are other areas where I think we'll end up you know, we're we're catching up. I mean, 2 years ago, we were a reference website, and now we're we're we're moving beyond that. But that's really the key thing. And as we add on and we launch all these product lines with this capability, you know, it allow you know, Tia has has nice tools that allow engineers to to to do a lot of stuff themselves But in the end, there's, you know, to change things, they still have to, you know, if they have a change in their system, so as my engineers have explained to me, you know, it's not uncommon to for the first time you turn on the board that it doesn't work exactly the way because the, you know, the way you design is a little bit different than the way the datasheet can be spec. It's not uncommon. And the way that you have to adjust for that is you have to physically change stuff. The way we can with our system is our customer can plug that board in that they have in their lab it can change the software, upload a new configuration, and they're done. They can move on to their next problem. And so that's really, I think, where we're differentiating, and where we'll win. Much bigger. And, what they're selling is, this fall, what they're selling, And, it's it's a I don't think we can do it. Okay. Yes. So you can do some sugary if something's changed. Maybe a theory of, These are the standard of power. And, you have a different power or a different size, everything. And fixing the back of the model. And, if you go to the thermostat, okay. It's on a different wall. This looks all here in iconic fields. Oh, in a pharmaceutical way. So we just and that's the way we can do that. And, it's actually going on. And, these to me is fundamentally different in, at the end of the first We're doing this. I'm sorry. It's Chris Caso from Raymond James. I I just wanted to dig in a little more on on the value proposition for the programmable analog. And mean, it sounds like what you're saying is, you know, the fact that you can reprogram it on the fly, if there's something in your design, which is not doing right, you have the ability to kinda upload something different. I guess from that, is there a cost disadvantage in doing that? And and how is that solution if the if if that's the if if that's the main benefit, how much might how much of a premium do I pay for that and what market segments would that be more appropriate? The the cost to actually out of the in the first which depends on this. We're safe to be able to develop. Okay. And a per unit. And, If we use our own solutions, we're not replacing it. Our solutions are more, more for, a a program. Sometimes If you go to a 1001 hours, okay, or a couple of 1001 for a modem. Right? We use it as a user to speak that integrate that it's not doesn't do it now, but I'll control provide a value of proper dish in the sense of solution for a variety of them, of, of other people. That's it. But in his lap, his volume goes up. He wants to do everything by himself. I can't call. You're doing memory, you're doing, you're doing medical, memory, analog, So you two so your view is if I use the programmable solution and my alternative is go to ti.com, build it with discrete components myself. Your view is that your solution will be equivalent to the cost of of of doing with discrete solutions. I just wanna Michael, just sort of a follow-up question. Delivering reconfigurable modules makes a lot of sense. Can you elaborate a set number of programmable SKUs that you can deliver once you start getting into board level products with passives, and everything else on the board. That sounds like that gets very custom very quickly. So who's doing the board design as part of this ecommerce delivery Are you you're gonna do the board? Does the software automate delay? I mean, does does the customer say I've got a 5 by 7 PCB board, and I've got these components on I mean We are not okay. Let me ask you how do you operate and answer your first. Okay. And using addition to this model, we just draw current storage and they can fix what they want in there in a standard module. We we design our stuff. And we have a lot of, application issues. We design what we call it. With our agents, we'll give it away. Instead of when we do these models, we have people to do this. And, so do you to cover the DC policies in the last and, we have a few products, even standard products. To cover the second part of which. Recovered in that month. Let's say we have an end to end models. In the in the past. We can cover of 50% of the market size. So this one, we're not making any more. Maybe 10 of these modules And, well, this is a big one. Okay. And this is a small with any, contained wall, these 10 different models on the back of, mobile. And, If you want a custom design, if we came up over. Okay. So that's actually not out there. The main focus on the program online. Yes. That's how we'll focus on. Traditionally the market for these underserved sort of customers where you can't afford to serve direct or not picking up you know, volume tons ASAP is not big enough that tends to go through distribution. And we've talked a lot about Digi Key and Mowser. This this seems like perhaps it's a it's something that might reduce your need, distribution partners. Am I reading that right? Does it change the relationship with distribution? Our institution, our institution is to reinforce, our student, I would say the 9.90 some percent of our mining activity In terms of our demand creation, all of it. Okay. So you're not using FAEs at No. Very little. Very, very little. I wish they could give us a number. We're underserved. Are you gonna present some financial? Or Yeah. It's a we do. I sure will all have gross margin questions about the market. The gross margins, okay, I'll say, oh, yeah. I didn't say that, but Alright. I I forgot some issues. Okay. This one's this one's I think the weekend sale, the, these size of modules, okay, for replacing this. For $15, I want to margin the enrollment. I want to say what? Okay. Way about NPS. Every I'll get N NPS today's gross margin. This is very accretive to your Absolutely. So after that, nothing should look. Hello, everybody. I'm Bernie Blegen. Last act. So I wanna thank you again for joining us. I know that, this represents a significant commitment for all of you to, pay us a visit both in times of, in terms of, your time. And resources, but I think it's a very meaningful day. Particularly, I think that you're probably pretty used to at this point interfacing with both, Michael and myself, although we did show a little different side of, of Michael today, and and and that's why it's important to be able to actually meet some of the product managers who are actually driving these lines of business. And, it was interesting because in a couple instances, It almost came off like, we were leading an engineering class here. But that's the way we think. Most of these people are PhDs. They're very senior in their roles, and they're very committed to, very passionate, in fact, about the technology. And I think that's only something you can fully appreciate when you come on-site here. So again, thank you very much for, taking the time, be able to see it Now we're running a little bit over. So I'll just kinda give you preview of what we think we're gonna do, and I hope that you can stay for as much of it as you can. I'll finish up with the, financials. I'll ask Michael if he has some closing comments. We'll have a short Q and a period at that point. And then, I have, some additional things I wanted to cover just sort of the the recap and then we have a product demo here. So we're gonna have a mixer and, the people who presented as well as, some of the other employees that, make these things happen. Will be available to talk to you. You can ask them about just about anything you want, except for revenue expectations. You you you you can you can save that question for me, and I'll I'll just give you a a sort of a quizzical look back. So any case, without further ado, one of the things, that that I that I am do. I've been with the company now almost 7 years, and, in the role of the controller as well as now the CFO, and One of the things that I've found, that is really the value creation is our predictability. If we say we're going to hit a number we hit a number, and in fact, what we try to do is do a little bit better. Not significantly better. Just do a little bit better. And so as we look at, we're gonna update the quarter, and we're gonna do a little bit of a recap of our history We're also going to lay out guidance, as far as what we think our targets, financial targets should be. And, again, it's going to be pretty boring. It's pretty much what you've already seen before. Any case, back in April, We offered guidance on what the quarter was gonna look like and surprise. We've raised the midpoint for revenue, gross margin, and for operating expenses. And the way we did that is we held with the, upper end, and we raised the lower end, and this would change the midpoint So it is incrementally positive news here, as far as how reviewing Q2 guide. When you look at our history and you have to remember that, the formative period of time as far as developing the strategy that's resulted in this performance was really 2010 2011. And if that period, what we identified is that we needed to go into diverse markets, and those markets had to be relevant, large They had to have long design cycles. They had to have ASPs that did not suffer downward pressure. The same way the consumer did, and they had to have gross margins that were in excess of our corporate average. And so if you use this as sort of a scorecard, for how we've done, the bars represent our revenue, every year with the last year is reflecting in the consensus estimate for Wall Street. And then the two lines, what you see there, that's the stock price. What we've done is we have our stock price in the blue, and in the green, we have, our peer group, the socks index, how it's performed over that time. And basically, the results of it is that our revenue last year, we were at 21% growth compared with a market of about 11%. So nearly double that. Over the last three years, we've had, revenue CAGR of 19%. And when you look at the stock price during that period of time, Our stock has gone from, little under $20 up to a 135 ish 7x growth over this period of time, and that compares with the SOX index, which is done, mind you very well, very well at 3x. So our performance has more than doubled that of the industry. So when you look at the diversification, how's that strategy paying off for us so far? Well, again, the two top areas that we talked about today were automotive and compute and storage. It was very interesting because I was reviewing the presentation materials from 3 years ago, and we actually had relatively concrete plans on how we were gonna develop and manage the growth for each of those 2. And then I would probably say that in some of the other categories, it was more visionary. So in the concrete area of automotive, obviously, 2010, we were at 2% of our total sales related to automotive. That now stands to somewhere in the low mid teens. And over the last 3 years, we've experienced a growth rate of 65%. And, you should recall that the CAGR going forward is somewhere annually between 40.50 sense. So it's a sustain sustainably high rate of growth. Likewise in computing storage, we went from about 10% in 2010. And now it's a double bath at 23. And here again, we have a CAGR of 30%. In industrial, which I got a lot of questions as far as what its long term prospects and performance were gonna be because, we broke it out from automotive and it suffered a little bit in comparison. But here again, you can see that industrial has grown at 20%, nearly 20% over the last 3 years and represents about 13% of our business. And many of the initiatives that Michael has talked about in the engineer to engineer in the e commerce, in the emotion. I think somebody referred to that as the killer ease that, that is really gonna probably benefit industrial and other the most. So we're really investing in that area. Consumers, you can say, is not performing at the same level, but, as our corporate average, but what you can't see on this slide is the shift as we've gone from traditional consumer into high value consumer. High values like home appliances and they have characteristics that are much more, aligned with what you'd expect to see in industrial. And then finally, we have communications. Well, every every pound has to have one dog, but don't treat it like that because in the communications, it's actually one of the areas that we believe is gonna be future high growth as we see the, convergence of, the changeover in technology was going more IC based and the 5 g implementation. So that's really 2020, 2021 as when we see it. So now when we talk about MPS, so much of the conversation seems to be weighted on revenue growth. And I think that is a significant aspect in, our value proposition, but that's not the whole story I think that we get as much value from the operating leverage. And as you can see here, they compared with 2012 Our revenue has increased a 120%. That's very significant. But look here. The operating margin has experienced a 70% improvement going from about 17% up to almost 29%. And so when you take the leverage that we have with the revenue growth, that results in EPS going up almost 3x 214 percent increase from 93¢ on a non GAAP basis to $2.93. How has that, affected us as far as free cash flow? We are generating an awful lot of free cash flow, and we started early, as you can see in this model back in 2008 2009 to be able to formulate a capital allocation strategy between stock buybacks and dividends. And this is still a work in process because we recognize that other peer companies return a much higher percentage of, their free cash flow to shareholders, but they're also there's a different value proposition We are very much a growth company and will continue to be, but we also have to, we also recognize the need to be able to return cash. So just looking at this slide, which has the green line is our actual cash balance, and the blue line is what we would have been at had we not returned cash to shareholders. So you can see that 52% of our cash has in fact been returned to shareholders. So here I want to look at the growth and diversity. And this slide is very important me because when I look back on the presentation materials that we had 3 years ago, we had identified most of the major categories on here, computing, automotive, industrial, infrastructure networking and consumer. So we'd actually identified what were the end markets that we saw that met our criteria being large, you know, long design cycles, but it's been interesting because even in 3 years since we presented, we've added so many new submarkets. So for example, we heard about GPUs, which would not been on our radar screen previously. We're looking at, artificial intelligence in automotive, ADOS was very aspirational. Now it's getting to be very real. When we look at industrial, the factory Asian and robotics, is a new area. In the infrastructure, again, the 5 g, opportunity and on consumer wireless charging and augmented reality. So what does that do for us? It increases the available market that we can go after because we have markets that are growing and markets that are adding new products and we happen to be in the right place at the right time. And so when we look at what we've showed you 2015, Again, that's very healthy picture to be able to go after a target market of $12,000,000,000. But now because of the expansion I've talked to about, we actually believe that we're going after a $17,000,000,000 opportunity. As you said, in automotive, that's increased to 7,000,000,000, and you saw on the slides is that's actually just the tip of the iceberg. Right? Potential to grow significantly in the next couple of years. In motion control, this is a market that we knew was fundamentally big, and now we're seeing opportunities we didn't even anticipate. And the fact is is that brushless motors, which is key driver for this market for us. The adoption from brush motors to brushless is that is occurring at an accelerated rate. AC to DC, unfortunately, we haven't even done more than just touch on it. And yet, this is one of our significant growth, growth drivers, particularly in industrial, but also in consumer. The modules we've talked about, cloud computing is increasing. This may, in fact, be a modest number networking and telecom is something that is gonna, expand greatly, and we're part of it. And then you've already heard about our manage battery management story. So when you look at the numbers, you go, that's terrific. But here again, that's only part of what we're trying to do. What is important to us above all else is not just maintaining but accelerating our rate of technological change. So for example, we wanna have full digital solutions that are augmented by software. So you get what we're referring to as like synthetic analog. We wanna be able to take, as Michael was describing, I've I've just pointed out here that we wanna take our sensor technology and make it field programmable, with an integrated software. In fact, we wanna do that with all of our product lines. And then we are, working on advanced power analog processes in the current year, what we're doing is we're going from 8 inches to 12 inches in the fab. We're going from 90 nanometer down to 65 and, 55 nanometer. So we wanna push that advantage that we already have. And then in the markets where we're strong, and we have, commanding or not commanding, but we have a good foothold we wanna continue to see the gains in compute and in automotive. And then we also wanna be able to develop with the investments so that we can plan ahead in order to take advantage of future growth in both infrastructure and in industrial. And so what does this all lead to? We have a target for our growth, and it looks like Oh, that's kind of disappointing. It looks the same as what we showed you 3 years ago. Revenue growing 20 annually, gross margin going into the mid high, fifties and our, reinvestment in R and D and SG and A staying at 50 to 60%. Now I should add that these are targets. When we announced our targets 3 years ago, we proceeded to have revenue growth that was, approximately 19% that was followed the next year by 18%. And then we've got followed that by 17%. Last year, we have 21%. And if you take your numbers, that would also yield us a 21% growth. So these are targets. We're we're we're not still exacting, so it's a few points plus or minus. And the reason that I bring them up a few points plus or minus is some of the initiatives that we're looking at as far as the process technology, as far as doing the successful launch of the e commerce initiative, as far as getting sales and marketing resources that are tied into the markets that we've identified that are gonna generate revenues 3 years from now. And as far as the design and application engineers, we need to develop the next generation of products. We are making a concerted effort in those investments. So we're probably gonna go a little bit high on the operating expenses, Will we exceed it by a point or 2 points possibly? Might we do that this year and next? Yes. But they're very worthwhile investments. And we've demonstrated a history of being able to generate positive returns on those. So, it's something that, I think that you're familiar with Michael he is very frugal. We are very deliberate in how we make our expenditures, but we see an opportunity so bright right now that we wanna pursue that. And when you run the numbers, just simple math and you say, okay, if you hit those, goals, What does that do? What does your target become? We've become a $1,000,000,000, company in 2021. Now prior to my scene, Michael's presentation where we're already I thought this is gonna be the big, big part of my presentation, but kinda let the air out of that one. But I think what is important to talk about is that with the gross margin improvement, the leverage in operating expenses, that we're gonna see our, operating margin go up to around 36%, which would represent about a 7 a half percent improvement from where it stands last year. So those are meaningful and significant numbers, and we believe that it's possible to do that for an extended period of time. And lastly, on this slide, I wanna point out that we have added 1 for capital allocation, I'm still trying to digest and figure out all of the implications of tax reform. It is still very much a moving target. And until I have a lot of confidence on that, I wanna be able to, again, set a target that I know I can meet or exceed and then have an opportunity to improve on that down the road. So for our current target today, we're saying that we're gonna return between 30 to 40% of our free cash flow in the form of either dividends or buybacks. That compares with what we did last year, which was 34%. So that sort of wraps up the the quick, the shortened abbreviated, a meaningful financial presentation And what I'd like to do is see if Michael, did you have any additional thoughts before we go to the q and a? Yeah. We'll go go to a q and a. Okay. Well, thank you for coming, and that came in. So this is, we'll have a Well, we'll show you something today and I'll get me in that. Well, I think the first solution I go to those questions. Yeah. Yes. Thank you for this very informative analyst day. Bernie, you've talked the last few calls about inventory days, you know, moving up because of the business model. You know, based on what we heard today, any any changes, what what is the target, you know, does does this you know, mean, a a particular change in in how the inventory days will look like going forward? Yeah. So there there's a, current question far as what do we think is gonna happen in Q2? And then there's what's, the long term model look like. And I think for those of you who have followed us, our historic model has been between a 135 days and a 155 days. And, last quarter, we were at about 177. So in the current quarter, when you look at or you look at last quarter, really if you look at the types of new products that we've come out with, and the almost strategic nature of the partners or the people that we're selling to, people in automotive people in compute, and some people in gaming, they're not customers that wanna go lines down because, you know, their first time supplier has, not delivered on time. So what we did is we made a conscious decision to build ahead in those 3 categories, and that counted for most of the increase that took us out of our model to the 177. We're very conscious that that is not a sustainable level of inventory for the company. And so what we're doing is making short term decisions far as how to manage that down. And then long term, I probably say that there will be a, a bump up in our days of inventory. But no more than 5 days on the model. So if we were at, 135 to 155, it would be easy for me to imagine that now is 140 to 160. Thank you. I also had a follow-up for Michael. Michael, you talked about from a 1,000,000,000 to 2,000,000,000 being a a low risk strategy should we assume that, you know, you can get to 2,000,000,000 organically, or is there any, you know, any M and A in in the picture there? Do you feel like you need to go not require anything or or is this gonna be an organic 2,000,000,000? I think it's some simmers, like, as a as a example, if we want to acquire, like, a some complimentary, technology. We have a cash. Okay. We have a we can't do it. And, So now we're expanding our business in a to, to outreach to these underserved, the smaller smaller customers. I can, the key is that, absolutely. We don't wanna require revenue. Okay. I think the revenue for us, the NPS is cheaper, cheaper to grow the revenues. And for any complimentary technology, any small any some of business sites. And, okay, we're not ruling out. Okay. And, but that's our position and, and, you know, going forward into $2,000,000,000. And, you know, people do our modules, and I get very complimentary to NPS. Why not? Hi. Thanks for taking my question. Bernie, I have 2 actually, first, Bernie, for you. In the past, In addition to the model you've presented, you've talked about gross margin expansion of something on the order of 10 to 15 bps a quarter Is that still the the sort of formula that we should think about for gross margin traction over time? Yes. Yeah. So, The the model that we've been following in there, so we've demonstrated very, good track record on that over the last twelve quarters. Is to have gross margin increasing 10 to 20 basis points quarter over quarter. And what that results in is that annually will be up between 40.50 basis points. So when you look at the, results of the model that I shared with you when we get to a $1,000,000,000 in growth, that's simply doing the math along that along that. Yep. And understanding your business is not a spreadsheet. But we now have this concept of going from 1 to 2,000,000,000. This is out of the modeling horizon for most of us, I think. But I wonder what the margin structure looks like as you plan that path to, you know, significantly bigger. I think one of the really, attractive things about the company is that even going from where you are now to 1,000,000,000, it's still such a small part of the analog market. It's sort of just paid runway almost. It's company's doing so great at that. And as we think about 2,000,000,000, that's sort of the dream to dream and what the margins look like in that scenario. I think it had to be hard. I believe it must much higher. And, although this is at the very beginning, this is the is the, the models, is the opportunity that I see it? And, a bigger motivation is a lot of money to be made. The margin had to be higher. So that's a there's a need. There's a lot of money. Customer's happy or we're happy. Yes. And I can't think of it. There will be a lot to pay for that. I'm not gonna and the the bottom line is the mudging has to be up. You know? So What is the financial models, anything? As as long as I see, I believe that there's a lot of money to be made. I'm like, we're not going after that. And, and the model has to be better than current model. Yeah. This can be either for Michael or Bernie. I I know you both love OpEx questions so much. So I'll let you share in the fun. Can you hire fast enough? To stay within that 50 to 60% growth rate as the dollars are getting bigger on the revenue side? Harry, it is a difficult, in a particular, in a, in a barrier. And, we can't find, you know, people and, qualify people. And, but you turn around, think about why barrier? Why here? They have so many so many other companies making so much money. So, okay, they high. So many peoples and, like, and why do we have to compete with them? We don't have to stay here. And, So that's why it's an okay and also in the last 10 years, we grow, is it last 10 years, or more than 10 years, the last 13, 14 years. We're growing China from, 0 to over a 1000 peoples over there. And, it's also difficult now. There's domestic industrials that came in particularly in the late late just read, just lately. The semiconductor's demands so much, like, they wanted starting startups everywhere. And it's difficult to hire people there too. So that's why I'm going to spend. There's a there's a lot of good engineers there. It's gonna be, well, maybe I shouldn't openly say Yeah. Forget it. An unrelated follow-up question. Bernie, you mentioned about the mixing up in the consumer business. How far along is that? And and I know you've used the the consumer segment as a bit of a modulator on the gross margin to keep it consistent because all these new products kick in. It seems like it'd be harder and harder to have that that slug be big enough to moderate what the rest of the company is doing. So I guess the underlying part of both of my questions is it seems like the margin should have some good tailwinds. Yeah. And and I think this is a a follow on to the earlier question that said that, when certain of these initiatives really start to contribute, you know, particularly on the e commerce and the field programmability and, you know, serving the underserved market all of those have margins that are significantly higher than our current run rate. And you are right that there is a not a limited pool, but probably a point, where we wouldn't be able to, you know, continue to accelerate revenue growth through taking on incremental consumer business. And at that point, I think we would end up having a margin acceleration that is likely to occur after we get past $1,000,000,000 mark. I think it's a the margin wise, okay, the margin had to go has to go up. Because as we're transforming a company to be a really we need a brilliant, a group of the people here. They had to be a high pay. Okay. Other people are here, and it has to be high payer. Otherwise, while you're working in in in NPS. So as we grow, the money has to be more concentrated. And to be small about it. In the Bay Area, if we we necessary, we had to hide the best has to be above the market rate, but we have to be is a necessary high in the in the in the barrier. So you can hide somewhere else. It's much cheaper. And, you still pay the mark above the market rate. You get the best people. So in the end, we need the best people and then we need to pay the market above the market rate. That's really MPS behind it. Yes. We have to do that. And So the margins in the you said it has a tail tailwinds, like a tailwinds, for Airplane is not very good. Okay. It's a wobbling. I have I have I have I have to turn around think about it. So I'm not gonna tell you. All these are for not even talking about other only ecommerce, not talking about and the all the existing product and the NPS are going to the those market segments. The price It's not determining you're winning or losing it. If this start this strategy, we're going up. It's we're sorry about A years ago, and we're not complaining these are large, I call them mega market segments. And price is very important. Michael, the question is about what's what's the prime differentiator for for monolithic power? What what's the secret sauce that allows you guys to do things that the competition can't do. Is it is it the BCD process the heart of of the competitive advantage and or or is it more than that and know, get get some the the discussion on what allows you to do things that TI and other guys can't do. I I think it's a I can't comment on the different companies because I never been never worked there. Okay. And, I can't comment out on on us. That's a very broad question. Okay. I think as a while, we can do these. And, first thing is, okay, myself, I'm not a professional manager. I'm I enjoy working on these products. Okay. And, so looking for innovations. I think the innovations start from the CEOs to trans translate it to all people. I think that's very important. And, I'm not really looking for, okay, Frankly, it's okay. Shareholder return is, is not the primary. It's okay. Not the the issues for me. I'm looking for a better product. And a better opportunity. And at same time, we're making a ball of money. That's that's what I'm looking like. That's what I'm enjoying doing. Okay. I think the company is doing that and summarize, okay, the differentiation is the culture of, of, of, in, in, in NPS. I think as of what we're fundamentally different. Okay. We're now looking for shareholder The shareholder return is, of course, is is important, but they're not the primary reasons where as an existing of a of a of a NPS. It's a byproduct. It's a measurement comes up. But making boatloads of money, but I think we we all we all we're all all in favor of that. I guess two questions for Breen. You mentioned the 30% to 40% capital or returning 30 or 40 percent of of free cash flow to shareholders was partly due to uncertainty around tax and I noticed you didn't put a tax rate in your longer term forecast today. You're about a 7 a half percent tax rate. Where do you see that tax rate going, saving that 20 2021 model. Yeah. So for the, initial implementation of tax reform, there are certain discrete tax items that were granted bothered, into, the model. And so our tax rate will stay low for the, you know, 18, 19, and 20. At the 7.5% rate. But then after that, if we don't take any other steps, we would start to come up to probably another 5 percentage points, after that. But what I'm, looking to do and what we're gonna when we're studying is what are other opportunities where we can still get, tax advantages. So it's that's more of a you've got the framework, but it's a work in process. Great. I maybe missed it in some of the public disclosures, but I think in the past, you guys have talked about, performance stocks units for for management and and how they've been set at at future price levels to incentivize management to obviously drive shareholder returns. I'm just wondering if you could give us a sense where the latest round of PSUs were sort of struck, you know, as as perhaps one metric where the stock price could be headed? If if history repeats itself. So what I can do is, I I I can tell you the structure of the program, it's as follows, is that, right now, we're in the, middle of a, MPSU program. And the way it's set up is that the price targets are established based upon our ending stock price either at the end of December or the average for December, whichever is higher. And then what we do is there's a formula, which is in our 10 k, that graduates what the stock prices are, and, to date, we have actually, met most of the existing price goals. We have their 5 prices each for each annual, increment, and we've hit 3 of them so far this year. And, then as far as to your second point where the stock price is going, those targets again are mechanical in nature. And so it's based on the, closing price of December. K. But looks like we're about at the end of the questions. Okay. Okay. Go ahead. The last things. Yeah. Okay. The last things as a with you know, to be able to call. And a lot of people know about it. Okay. And, today okay. Watch Let me tell you, okay, why we we build a card. Okay. And when we work, when I will start to work on these kind of things, when I work on these things. Okay. 1st, very few customers that can They have a they have a appetizer. They they have an interest to work with us. On on this kind of thing. You don't know what the hell you're talking about. I'm not gonna and, they want solutions. And, so our board members of Maxim models okay. There's a there's a he's making models and and, we work with them. So, like, I mean, even there, they said, what what do you really wanna talk? And, So we're building a learning platform. How do we do this? How do we give it out? Okay. And for the last year, we learned a lot. So what kind of things do we wanna do? Make something difficult and potentially very useful. And We're building a car. We're building a car. It's a full electrical car, and that can be self driven. And that can be used in the in the suburbs or in the city. And can can get on the highway. Okay. And can get on the even all terrain. Any fields? And the so what is is that all these cannot be using mechanically? Everything had to be electrical controlled. And, here's the car. It it's a little it looks a little bit crudgy. Okay. And and a lot of these are pure. It's just straight out of the our our labs. Okay. Come on for you to take a look. Okay. These ones, okay, it's all drive by, not by y. By y, by y, by WiFi. And the all the control system is a we can take it out if you use it. Whoever builds the ADAS, put a model on there, it will drive itself. And come for you to take a look. Maybe I can I'll give you a demo. Okay. And half of the functioning is not working yet. It's not working. A lot of things that is in the end, there's a software issues. Okay. And then come over and take a look at it. Don't let me over run you. Okay? This obviously concludes formal part of the presentation. Ridzo Hinscan drive it in. Yeah. Yeah. Feel free.

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