Diodes Inc (DIOD) 2018 Q1 法說會逐字稿

Good afternoon, and welcome to Diodes Incorporated First Quarter 2018 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded today, Tuesday May 8, 2018.

下午好，歡迎參加 Diodes 公司 2018 年第一季財務業績電話會議。（操作員說明）謹此提醒，本次電話會議將於今天（2018 年 5 月 8 日星期二）錄製。

I would now like to turn the call over to Leanne Sievers of Shelton Group Investor Relations. Leanne, please go ahead.

我現在想將電話轉給謝爾頓集團投資者關係部的 Leanne Sievers。莉安，請繼續。

Good afternoon, and welcome to Diodes' First Quarter 2018 Financial Results Conference Call. I'm Leanne Sievers, President of Shelton Group, Diodes' Investor Relations firm. Joining us today are Diodes' President and CEO, Dr. Keh-Shew Lu; Chief Financial Officer, Rick White; Vice President of Worldwide Sales and Marketing, Emily Yang; and Director of Investor Relations, Laura Mehrl.

下午好，歡迎參加 Diodes 2018 年第一季財務業績電話會議。我是 Leanne Sievers，Diodes 投資人關係公司 Shelton Group 的總裁。今天加入我們的是 Diodes 總裁兼執行長 Keh-Shew Lu 博士；首席財務官，里克懷特；全球銷售與行銷副總裁 Emily Yang；和投資者關係總監 Laura Mehrl。

Before I turn the call over to Dr. Lu, I'd like to remind our listeners that the results announced today are preliminary as they are subject to the company's finalizing its closing procedures and customary quarterly review by the company's independent registered public accounting firm. As such, these results are subject to revision until the company files its Form 10-Q for its first quarter 2018. In addition, management's prepared remarks contain forward-looking statements, which are subject to risks and uncertainties and management may make additional forward-looking statements in response to your questions. Therefore the company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore, we refer you to a more detailed discussion of the risks and uncertainties in the company's filings with the Securities and Exchange Commission, including Forms 10-K and 10-Q. In addition, any projections as to the company's future performance represent management's estimates as of today, May 8, 2018. Diodes assumes no obligation to update these projections in the future as market conditions may or may not change.

在我把電話轉給盧博士之前，我想提醒我們的聽眾，今天公佈的結果是初步的，因為這些結果取決於公司最終確定的結算程序以及公司獨立註冊會計師事務所的慣例季度審查。因此，在公司提交 2018 年第一季的 10-Q 表格之前，這些結果可能會進行修訂。此外，管理層準備的言論包含前瞻性陳述，這些陳述存在風險和不確定性，管理層可能會針對您的問題做出額外的前瞻性陳述。因此，該公司聲稱受到 1995 年《私人證券訴訟改革法案》中包含的前瞻性陳述的安全港保護。實際結果可能與今天討論的結果有所不同，因此，我們建議您參閱公司向美國證券交易委員會提交的文件（包括表格 10-K 和 10-Q）中有關風險和不確定性的更詳細討論。此外，對公司未來業績的任何預測均代表管理層截至今天（2018 年 5 月 8 日）的估計。由於市場狀況可能會或可能不會改變，Diodes 不承擔未來更新這些預測的義務。

Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. Included in the company's press release are definitions and reconciliations of GAAP to non-GAAP items, which provide additional details. Also throughout the company's press release and management statements during this conference call, we refer to net income attributable to common stockholders as GAAP net income.

此外，該公司在本次電話會議期間的新聞稿和管理層聲明將包括以公認會計原則和非公認會計原則術語討論某些措施和財務資訊。該公司的新聞稿中包括 GAAP 與非 GAAP 項目的定義和調節，其中提供了更多詳細資訊。此外，在本次電話會議期間公司的新聞稿和管理層聲明中，我們將歸屬於普通股股東的淨利潤稱為 GAAP 淨利潤。

For those of you unable to listen to the entire call at this time, a recording will be available via webcast for 60 days in the Investor Relations section of Diodes' website at www.diodes.com.

對於目前無法收聽整個電話會議的人士，可在 Diodes 網站 www.diodes.com 的投資者關係部分透過網路廣播提供為期 60 天的錄音。

And now, I'll turn the call over to Diodes' President and CEO, Dr. Keh-Shew Lu. Dr. Lu, please go ahead.

現在，我將把電話轉給 Diodes 總裁兼執行長 Keh-Shew Lu 博士。盧醫生，請講。

Thank you, Leanne. Welcome, everyone, and thank you for joining us today. First quarter revenue was at the high-end of the guidance, primarily driven by strong growth in the consumer, automotive and industrial markets, complemented by revenue in Europe reaching record levels. In fact, our automotive end-market reached 9% of the revenue in the quarter as we continue to benefit from our successful customer and content expansion efforts. Since implementing our automotive strategy in 2013, we have achieved a compound annual growth rate of 27% in this business, reflecting our expanded customer base, increasing pipeline of design wins and the growing content across multiple applications. The quarter was also highlighted by gross profit dollars reaching a record, growing 33% year-over-year, twice the rate of our revenue growth and contributing to almost 3.5x increase in non-GAAP earnings per share over the same time period. Additionally, EBITDA in the first quarter reached a record $54.2 million or 20% of revenue. The operating leverage in our business model positions Diodes to deliver increasing profit and a cash flow in the coming quarters, as revenue continues to increase at a faster rate than operating expense and approach our target model of 20% of revenue.

謝謝你，莉安。歡迎大家，感謝您今天加入我們。第一季營收處於指引的高端，主要受到消費者、汽車和工業市場強勁成長的推動，同時歐洲營收達到創紀錄水準。事實上，我們的汽車終端市場佔本季收入的 9%，因為我們繼續受益於我們成功的客戶和內容擴展努力。自2013 年實施我們的汽車策略以來，我們在該業務中實現了27% 的複合年增長率，這反映出我們擴大的客戶群、不斷增加的設計獲勝管道以及跨多個應用程式的內容不斷增長。本季的另一個亮點是毛利達到創紀錄水平，年成長 33%，是我們營收成長率的兩倍，並促成同期非 GAAP 每股收益成長近 3.5 倍。此外，第一季 EBITDA 達到創紀錄的 5,420 萬美元，佔營收的 20%。我們的業務模式中的營運槓桿使 Diodes 能夠在未來幾季實現不斷增長的利潤和現金流，因為收入繼續以高於營運支出的速度成長，並接近我們佔收入 20% 的目標模型。

Looking to the second quarter, we expect to extend our growth momentum with continued strength across our target geographies and the end markets, which we anticipate will result in the achievement of new quarterly records for both revenue and gross profit.

展望第二季度，我們預計將透過目標地區和終端市場的持續強勁來擴大我們的成長勢頭，我們預計這將導致營收和毛利創下新的季度記錄。

With that, let me now turn the call over to Rick to discuss our first quarter financial results and our second quarter guidance in more detail.

現在，讓我將電話轉給 Rick，更詳細地討論我們第一季的財務表現和第二季的指導。

Thanks, Dr. Lu, and good afternoon, everyone. Revenue for the first quarter 2018 was $274.5 million, an increase of 16.2% from the $236.3 million in the first quarter 2017 and an increase of 2.3% from the $268.4 million in the fourth quarter 2017. Revenue increased in the quarter with Europe achieving record revenue, mainly due to strength in the automotive and industrial end markets.

謝謝盧博士，大家下午好。2018年第一季營收為2.745億美元，比2017年第一季的2.363億美元成長16.2%，比2017年第四季的2.684億美元成長2.3%。本季營收有所成長，其中歐洲收入創歷史新高，這主要得益於汽車和工業終端市場的強勁表現。

Gross profit for the first quarter 2018 was a record $98.6 million or 35.9% of revenue compared to $73.9 million or 31.3% of revenue in the first quarter 2017 and $96.4 million or 35.9% of revenue in the fourth quarter 2017. The 460 basis point year-over-year increase in gross profit margin was primarily due to favorable product mix, increased contribution from Pericom products as well as improved capacity utilization.

2018 年第一季的毛利達到創紀錄的9,860 萬美元，佔營收的35.9%，而2017 年第一季的毛利為7,390 萬美元，佔營收的31.3%，2017 年第四季的毛利為9,640 萬美元，佔營收的35.9%。毛利率年增460個基點主要得益於有利的產品組合、Pericom產品貢獻的增加以及產能利用率的提高。

GAAP operating expenses for the first quarter 2018 were $71.7 million or 26.1% of revenue and $64.7 million or 23.6% of revenue on a non-GAAP basis, which excludes $4.8 million of amortization of acquisition-related intangible asset expenses, $2.6 million of expenses related to officer retirement and a $300,000 credit related to the KFAB restructuring. This compares to GAAP operating expenses in the first quarter 2017 of $64.6 million or 27.3% of revenue and non-GAAP expenses of $57.3 million or 24.2% of revenue, and GAAP operating expenses in the fourth quarter 2017 were $72.9 million or 27.2% of revenue and $64.3 million or 24% of revenue on a non-GAAP basis.

2018 年第一季的GAAP 營運費用為7,170 萬美元，佔營收的26.1%；以非GAAP 計算，營運費用為6,470 萬美元，佔營收的23.6%，其中不包括480 萬美元的收購相關無形資產攤銷費用、260 萬美元的相關費用攤銷以及與 KFAB 重組相關的 30 萬美元信貸。相較之下，2017 年第一季GAAP 營運費用為6,460 萬美元，佔營收的27.3%；非GAAP 費用為5,730 萬美元，佔營收的24.2%；2017 年第四季GAAP 營運費用為7,290 萬美元，佔收入的27.2% 6,430 萬美元，即非 GAAP 收入的 24%。

Looking specifically at selling, general and administrative expenses for the first quarter. SG&A was approximately $47.2 million or 17.2% of revenue. On a non-GAAP basis, excluding the officer retirement expenses, SG&A in the first quarter was approximately $44.6 million or 16.2%. This compares to $39.7 million or 16.8% of revenue in the first quarter 2017 and $44.7 million or 16.7% of revenue for the fourth quarter 2017.

特別關注第一季的銷售、一般和管理費用。SG&A 約 4,720 萬美元，佔營收的 17.2%。以非公認會計準則計算，不包括高階主管退休費用，第一季的銷售及管理費用約為 4,460 萬美元，即 16.2%。相較之下，2017 年第一季的營收為 3,970 萬美元，佔營收的 16.8%，2017 年第四季的營收為 4,470 萬美元，佔營收的 16.7%。

Investment in research and development for the first quarter was approximately $20.2 million or 7.4% of revenue. This compares to $18 million or 7.6% of revenue in the first quarter of 2017 and $19.7 million or 7.3% of revenue in the fourth quarter 2017.

第一季的研發投資約為 2,020 萬美元，佔營收的 7.4%。相較之下，2017 年第一季的營收為 1,800 萬美元，佔營收的 7.6%，2017 年第四季的營收為 1,970 萬美元，佔營收的 7.3%。

Combined, SG&A plus R&D for the first quarter 2018 was $67.4 million or 24.5% of revenue. On a non-GAAP basis, it was $64.8 million or 23.6% of revenue compared to $57.7 million or 24.4% of revenue in the first quarter 2017 and $64.4 million or 24% of revenue in the fourth quarter 2017.

2018 年第一季的 SG&A 加上研發費用合計為 6,740 萬美元，佔營收的 24.5%。以非公認會計原則計算，該數字為6,480 萬美元，佔營收的23.6%，而2017 年第一季為5,770 萬美元，佔營收的24.4%，2017 年第四季為6,440 萬美元，佔營收的24%。

Total other expenses amounted to approximately $600,000 for the quarter, including a $3 million foreign currency loss, a $2.8 million interest expense. These losses were partially offset by other income of $5.2 million, which included an insurance reimbursement of approximately $3 million for business interruption due to the KFAB shutdown. Income before taxes and noncontrolling interest in the first quarter 2018 amounted to $26.3 million compared to $2.1 million in last year's first quarter and $20.8 million in the fourth quarter of 2017.

該季度的其他費用總額約為 60 萬美元，其中包括 300 萬美元的外匯損失和 280 萬美元的利息費用。這些損失被 520 萬美元的其他收入部分抵消，其中包括因 KFAB 關閉而導致業務中斷的約 300 萬美元的保險報銷。2018 年第一季稅前及非控股權益前收入為 2,630 萬美元，而去年第一季為 210 萬美元，2017 年第四季為 2,080 萬美元。

Turning to income taxes. Our effective income tax rate for the first quarter 2018 was approximately 29.6%. GAAP net income for the first quarter 2018 was $18.5 million or $0.37 per diluted share compared to GAAP net income of $1.2 million or $0.02 per diluted share in the first quarter 2017 and a net loss of $30.7 million or $0.62 per share in the fourth quarter 2017, which included the impact of the tax reform act. The share count used to compute GAAP diluted EPS for the first quarter 2018 was 50.6 million shares.

轉向所得稅。2018 年第一季我們的有效所得稅率約為 29.6%。2018 年第一季GAAP 淨利為1,850 萬美元，即稀釋後每股0.37 美元，而2017 年第一季GAAP 淨利為120 萬美元，即稀釋後每股0.02 美元，2017 年第四季淨虧損為3,070 萬美元，即每股0.62 美元，其中包括稅收改革法案的影響。用於計算 2018 年第一季 GAAP 攤薄每股收益的股票數量為 5,060 萬股。

First quarter 2018 non-GAAP adjusted net income was $24.2 million or $0.48 per diluted share, which excluded net of tax $3.9 million of noncash acquisition-related intangible asset amortization costs and $2 million of officer retirement expenses. This compares to non-GAAP adjusted net income of $7 million or $0.14 per diluted share in the first quarter 2017 and $21.6 million or $0.42 per diluted share in the fourth quarter 2017. We have included in our earnings release a reconciliation of GAAP net income to non-GAAP adjusted net income, which provides additional details.

2018 年第一季非GAAP 調整後淨利為2,420 萬美元，或稀釋後每股0.48 美元，其中不包括稅後390 萬美元的非現金收購相關無形資產攤銷成本和200 萬美元的高階主管退休費用。相較之下，2017 年第一季非GAAP 調整後淨利為700 萬美元，即稀釋後每股收益0.14 美元，2017 年第四季調整後淨利為2,160 萬美元，即稀釋後每股收益0.42 美元。我們在收益報告中納入了 GAAP 淨利潤與非 GAAP 調整後淨利潤的調整表，其中提供了更多詳細資訊。

Included in the first quarter 2018, GAAP net income and non-GAAP adjusted net income was approximately $5 million net of tax of noncash share-based compensation expense. Excluding share-based compensation expense, both GAAP diluted EPS and non-GAAP adjusted diluted EPS would have increased by an additional $0.10 per diluted share in the first quarter 2018, $0.05 in the first quarter of 2017 and $0.06 in the fourth quarter 2017.

計入 2018 年第一季，扣除非現金股權激勵費用稅後，GAAP 淨利及非 GAAP 調整後淨利約 500 萬美元。不包括以股票為基礎的補償費用，2018 年第一季 GAAP 稀釋每股收益和非 GAAP 調整稀釋每股收益將額外增加 0.10 美元，2017 年第一季增加 0.05 美元，2017 年第四季增加 0.06 美元。

EBITDA, which represents earnings before net interest expense, income tax, depreciation and amortization, was a record $54.2 million or 19.7% of revenue in the first quarter 2018 compared to $28.6 million or 12.1% of revenue in the first quarter 2017 and $47 million or 17.5% of revenue in the fourth quarter 2017.

2018 年第一季EBITDA（扣除淨利息費用、所得稅、折舊和攤銷前利潤）達到創紀錄的5,420 萬美元，佔收入的19.7%，而2017 年第一季的EBITDA 為2,860 萬美元，佔收入的12.1%，2017 年第一季的EBITDA 為4,700 萬美元，佔營收的19.7%。佔2017年第四季營收的17.5%。

Cash flow generated from operations was $54 million for the first quarter of 2018. Free cash flow was $22.3 million for the first quarter, which included $31.6 million of capital expenditures. Net cash flow was a negative $21.3 million, including the pay down of approximately $46.5 million of long-term debt.

2018 年第一季營運產生的現金流為 5,400 萬美元。第一季自由現金流為 2,230 萬美元，其中包括 3,160 萬美元的資本支出。淨現金流為負 2,130 萬美元，其中包括償還約 4,650 萬美元的長期債務。

Turning to the balance sheet. At the end of the first quarter, cash and cash equivalents plus short-term investments totaled approximately $186.3 million. Working capital was approximately $393.9 million and long-term debt including the current portion, was $221.8 million.

轉向資產負債表。截至第一季末，現金和現金等價物加上短期投資總計約1.863億美元。營運資金約 3.939 億美元，包括流動部分在內的長期債務為 2.218 億美元。

At the end of the first quarter, inventory increased by approximately $20 million from the fourth quarter of 2017 to approximately $236.5 million. The increase in inventory reflects a $10.6 million increase in finished goods, a $2 million increase in work-in process and a $7.4 million increase in raw materials. The increase in finished goods inventory is to support our expectations for a continued growth in the second quarter. Inventory days were 116 in the quarter compared to 114 days in the fourth quarter of 2017.

第一季末，庫存較2017年第四季增加約2,000萬美元，達到約2.365億美元。庫存的增加反映出成品增加了 1,060 萬美元，在製品增加了 200 萬美元，原料增加了 740 萬美元。產成品庫存的增加支撐了我們對第二季持續成長的預期。本季庫存天數為 116 天，而 2017 年第四季為 114 天。

At the end of the quarter, accounts receivables was approximately $174.1 million, a decrease of $26 million from last quarter. AR days were 61 compared to 74 last quarter.

截至本季末，應收帳款約1.741億美元，較上季減少2,600萬美元。AR 天數為 61 天，而上季為 74 天。

Capital expenditures on a cash basis for the first quarter were $31.6 million or 11.5% of revenue. This above model CapEx was to put capacity in place with expected strong revenue growth in the second quarter and second half of 2018. We expect CapEx for the full year 2018 to return to our target model of 5% to 9% of revenue. Depreciation and amortization expense for the first quarter was $25.6 million.

第一季現金資本支出為 3,160 萬美元，佔營收的 11.5%。上述模型資本支出旨在落實產能，預計 2018 年第二季和下半年營收將強勁成長。我們預計 2018 年全年資本支出將恢復到佔收入 5% 至 9% 的目標模式。第一季的折舊和攤銷費用為 2,560 萬美元。

Now turning to our outlook. For the second quarter 2018, we expect continued strong growth with revenue increasing to a range of $292 million and $308 million, or up 6.4% to 12.2% sequentially. We expect GAAP gross margin to be 35.5% plus or minus 1%. Non-GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets, are expected to be approximately 22% of revenue, plus or minus 1%.

現在轉向我們的展望。對於 2018 年第二季度，我們預計將繼續強勁成長，營收將增至 2.92 億美元至 3.08 億美元，季增 6.4% 至 12.2%。我們預期 GAAP 毛利率為 35.5% 正負 1%。非 GAAP 營運費用（即針對收購相關無形資產攤銷進行調整的 GAAP 營運費用）預計約為收入的 22%，上下浮動 1%。

We expect interest expense to be approximately $2.5 million. Our income tax rate is expected to be 29% plus or minus 3%, and shares used to calculate diluted EPS for the second quarter are anticipated to be approximately 51.3 million.

我們預計利息支出約為 250 萬美元。我們的所得稅稅率預計為29%正負3%，用於計算第二季稀釋每股盈餘的股票預計約為5,130萬股。

With that said, I will now turn the call over to Emily Yang.

話雖如此，我現在將電話轉給艾蜜莉楊。

Thank you, Rick, and good afternoon. As Dr. Lu and Rick discussed, first quarter revenue was up 2.3% sequentially and up 16.2% year-over-year. Q1 distributor POP was flat and POS was down 6.6%. Europe and North America remained strong with record high POS results. Asia POS is down due to impact of the Chinese New Year holiday shutdown on our customers. Channel inventory increased 7.8% sequentially.

謝謝你，瑞克，下午好。正如 Lu 博士和 Rick 討論的那樣，第一季營收季增 2.3%，年增 16.2%。第一季經銷商 POP 持平，POS 下降 6.6%。歐洲和北美市場表現依然強勁，POS 業績創下歷史新高。由於農曆新年假期關閉對我們客戶的影響，亞洲 POS 業務有所下降。通路庫存季增 7.8%。

As evidenced by our above seasonal results, customer activity remained strong across regions, with solid design activity and design wins. We continue to penetrate our key customer base with an expanded sales footprint, deeper product line and significant cross-selling opportunities with the Pericom product lines.

正如我們上述季節性結果所證明的那樣，各地區的客戶活動仍然強勁，設計活動和設計獲勝。我們透過擴大銷售範圍、更深層的產品線以及與 Pericom 產品線的重大交叉銷售機會，繼續滲透我們的主要客戶群。

We set revenue records across 4 product categories in the first quarter, including connector ASIC, interface, protection devices and signal integrity. We also continued to see strong momentum in the battery management, EPMS, switches, MOSFET and CMOS LDOs, driven by recent design wins on new products. Going forward, we expect our expanded product portfolio, new product introductions and design win momentum will support continued revenue growth.

第一季我們在 4 個產品類別中創下了收入記錄，包括連接器 ASIC、介面、保護裝置和訊號完整性。在最近新產品設計勝利的推動下，我們也持續看到電池管理、EPMS、開關、MOSFET 和 CMOS LDO 領域的強勁勢頭。展望未來，我們預計我們擴大的產品組合、新產品的推出和設計獲勝的勢頭將支持收入的持續成長。

Looking at the global sales in the first quarter. Asia represented 78% of the revenue; Europe, 13%; and North America, 9%. In terms of our end markets, consumer represented 27% of the revenue; communications, 24%; industrial, 23%; computing, 17%; and automotive, 9% of the revenue.

看看第一季的全球銷售。亞洲佔收入的 78%；歐洲，13%；北美為 9%。就我們的終端市場而言，消費者佔收入的27%；通訊，24%；工業，23%；計算機，17%；和汽車業，佔收入的 9%。

As Dr. Lu mentioned, our automotive market was a highlight in the quarter, setting a quarterly revenue record and growing 50% year-over-year. Given its strong performance, I want to start my end-market commentary with auto market, which has been a key focus area for Diodes for the past several years and also a area where we are seeing expanded opportunities for growth.

正如盧博士所提到的，我們的汽車市場是本季的一大亮點，創下了季度營收記錄，並且比去年同期成長了50%。鑑於其強勁的表現，我想從汽車市場開始我的終端市場評論，過去幾年來，汽車市場一直是 Diodes 的重點關注領域，也是我們看到更多成長機會的領域。

During the quarter, we continued our penetration momentum by winning design in with key automotive customers worldwide. There are 3 application areas where Diodes is gaining significant traction, including connected driving, which consists of ADAS, Telematics and Infotainment systems. Comfort, style and safety, including lighting and brushless DC motor control as well as Powertrain, covering conventional, hybrid and electric vehicles. Specifically, in the connected driving application, Diodes offers are led by PCI switches and ReDrivers as well as signal switches, timing and USB chargers, an area where Diodes' currently offering some of the only AECQ-Qualified parts available in the market.

本季度，我們透過贏得全球主要汽車客戶的設計，持續保持滲透勢頭。Diodes 在 3 個應用領域獲得了巨大的關注，其中包括由 ADAS、遠端資訊處理和資訊娛樂系統組成的互聯駕駛。舒適、時尚和安全，包括照明和無刷直流馬達控制以及動力總成，涵蓋傳統、混合動力和電動車。具體來說，在連網駕駛應用中，Diodes 的產品以 PCI 開關和 ReDriver 以及訊號開關、定時和 USB 充電器為主，在該領域，Diodes 目前提供市場上僅有的一些符合 AECQ 認證的零件。

For comfort, style and safety, Diodes has a range of MOSFETs designed specifically to meet the needs of brushless DC driving, with mainly high- and low-power motors and vehicles covering functions such as seat adjustments, windshield wiping, fuel and water pumps as well as power steering. Also in comfort, style and safety, we've had strong success from LED products like buck, boost, buck-boost, linear drivers and bipolar transistors in applications such as daylight running lights, rear cluster, styling, instrument lighting as well as the latest beam steerable LED matrix headlight technology. This segment represents a large portion of Diodes' auto revenues with strong shipments, numerous design in and close engagements with targeted customers offer further opportunity for growth.

為了舒適、時尚和安全，Diodes 擁有一系列專為滿足無刷直流驅動需求而設計的MOSFET，主要用於高功率和小功率馬達和車輛，涵蓋座椅調節、擋風玻璃擦拭、燃油泵和水泵等功能。以及動力轉向。此外，在舒適性、風格和安全性方面，我們的降壓、升壓、降壓-升壓、線性驅動器和雙極電晶體等LED 產品在日間行車燈、後儀表組、造型、儀表照明以及汽車照明等應用中取得了巨大成功。最新的光束可控 LED 矩陣頭燈技術。該細分市場佔 Diodes 汽車收入的很大一部分，其強勁的出貨量、眾多的設計以及與目標客戶的密切合作提供了進一步的成長機會。

In the Vehicle Powertrain segment, Diodes' supplies into conventional internal combustion engine powertrains as well as those for hybrid and electric vehicles. In fact, we have secured multiple design wins and opportunities for the battery management system to meet the need of the fast-growing electric vehicle market. As a result of our automotive expansion initiative, over the past 5 years, we estimated that we can now address over $70 of semiconductor contents per vehicle, which will contribute to driving significant revenue upside towards our long-term goal of 20% of the revenue.

在車輛動力系統領域，Diodes 為傳統內燃機動力系統以及混合動力和電動車提供動力。事實上，我們已經為電池管理系統贏得了許多設計勝利和機會，以滿足快速成長的電動車市場的需求。由於我們的汽車擴張計劃，在過去 5 年裡，我們估計現在每輛車可以處理超過 70 美元的半導體內容，這將有助於推動收入大幅成長，實現我們佔收入 20% 的長期目標。

Turning next to industrial market, which has also contributed to our growth both sequentially and year-over-year. Diodes also continues to secure expanding design ins for products such as LDOs, LED lighting and packet switches as well as continued growth from our Triac-Dimmable offline LED product samples. Our packet switch products remained a primary revenue driver from our connectivity product family and are gaining increased interest for the applications such as security systems, industrial PCs and virtual currency mining machines.

接下來轉向工業市場，這也為我們的環比和同比增長做出了貢獻。Diodes 也持續確保 LDO、LED 照明和分組交換器等產品的擴展設計，以及我們的 Triac-Dimmable 離線 LED 產品樣品的持續成長。我們的資料包交換產品仍然是我們連接產品系列的主要收入驅動力，並且對安全系統、工業 PC 和虛擬貨幣挖礦機等應用的興趣日益濃厚。

Additionally, Diodes launched new MOSFETs for motor and DC industrial applications, also aimed at industrial motor driving, our 2 new devices are recently launched and increasing popular gate drivers ranging from 60 volts to 600 volts, complementing the gate driver portfolio with 5 additional IGBT products, with 600 volts and 1,200 volts rating and handling currents up to 60 amps.

此外，Diodes 推出了用於電機和直流工業應用的新型MOSFET，同樣針對工業電機驅動，我們最近推出了2 款新器件，並增加了60 伏至600 伏範圍內的流行柵極驅動器，通過另外5種IGBT 產品補充了閘極驅動器產品組合，額定電壓為 600 伏特和 1,200 伏特，處理電流高達 60 安培。

Now looking at consumer market, which continued to be a strong area for us, growing both sequentially and year-over-year with increased momentum for new applications like IoT, gaming, quick-charging, handheld portable devices, USB chargers, smart devices and smart audio wireless speakers. We also continued to gain strong traction for our single-chip USB Type C controller with integrated Mux and speeds up to 10 gigabits per second, that provides the regular Type C connectivity with low power in a very small package. These products are suitable for applications such as IP cameras as well as in computing applications such as LTE routing tablets and notebook. In the same way, our USB Type C cross bar switch enables video applications over the USB Type C as it supports USB 3.1, Gen 2 for data and display for a video. We also continued to expand our footprint with our small-sized low-power high-performance crystal and crystal oscillators product family acquired from Pericom.

現在看看消費市場，這仍然是我們的一個強勁領域，連續成長和同比增長，物聯網、遊戲、快速充電、手持便攜式設備、USB 充電器、智慧型裝置和智慧音訊無線揚聲器。我們的單晶片USB Type C 控制器也繼續獲得強大的吸引力，該控制器具有集成多路復用器，速度高達每秒10 GB，可在非常小的封裝中提供低功耗的常規Type C連接。這些產品適用於 IP 攝影機等應用以及 LTE 路由平板電腦和筆記型電腦等運算應用。同樣，我們的 USB Type C 交叉開關可透過 USB Type C 實現視訊應用，因為它支援 USB 3.1 Gen 2 資料和視訊顯示。我們也透過從 Pericom 收購的小尺寸低功耗高性能晶體和晶體振盪器產品系列繼續擴大我們的業務範圍。

In the communications market, we continue to see strong design in activity with our hall sensors, USB switches, LDOs, timing, TVS, SBR, MOSFETs and connectivity products that are designed in multiple applications, including telecom gateways, routers, switches, setup boxes, smartphones, wireless devices and chargers. Lastly in computing applications, we continued to gain increased content opportunities with our expanded portfolio of Pericom products. We secured several design ins for our new interface products, signal integrity, logic, LDO and low jitter PCIe Gen2, 3, Gen4, crystal oscillators, clock generators and clock buffers in the server, storage and data center applications.

在通訊市場，我們繼續看到霍爾感測器、USB 開關、LDO、定時、TVS、SBR、MOSFET 和連接產品的強大設計，這些產品設計用於多種應用，包括電信閘道、路由器、交換器、設定盒、智慧型手機、無線設備和充電器。最後，在計算應用領域，我們透過擴大 Pericom 產品組合繼續獲得更多的內容機會。我們為伺服器、儲存和資料中心應用中的新介面產品、訊號完整性、邏輯、LDO 和低抖動 PCIe Gen2、3、Gen4、晶體振盪器、時脈產生器和時脈緩衝器獲得了多項設計。

Additionally, we launched several new products for computing applications, including a 30-volt bidirectional MOSFET low switch for USB power delivery as well as TVS products for USB 3.X, USB 3 and Thunderbolt 3.0 applications. Diodes also launched 80 to 100 volt Trench Schottky rectifiers for notebook power supplies.

此外，我們還推出了多款適用於計算應用的新產品，包括用於 USB 供電的 30 伏特雙向 MOSFET 低開關以及用於 USB 3.X、USB 3 和 Thunderbolt 3.0 應用的 TVS 產品。Diodes 也推出了用於筆記型電腦電源的 80 至 100 伏特溝槽肖特基整流器。

In summary, we are pleased with the growth and momentum we continue to achieve, in particular, in the automotive and industrial markets. We have made excellent progress with our product and content expansion initiatives that have resulted in increased market share and a deeper sales footprint. We are well positioned to capitalize on the continued strength in the global market and expect to continue our strong growth in the second quarter.

總之，我們對我們繼續實現的成長和勢頭感到高興，特別是在汽車和工業市場。我們的產品和內容擴展計劃取得了巨大進展，從而增加了市場份額並擴大了銷售足跡。我們處於有利位置，可以利用全球市場的持續強勁勢頭，並預計第二季將繼續強勁成長。

With that, I'm opening the floor to questions. Operator?

現在我開始提問。操作員？

(Operator Instructions) And our first question will come from Tristan Gerra with Baird.

（操作員說明）我們的第一個問題將來自 Tristan Gerra 和 Baird。

Question on gross margin, which typically increases sequentially in Q2 and also presumably given the strength at the top line is something that should help gross margin as well. What is the reason for the midpoint of the Q2 gross margin guidance to be slightly down quarter-on-quarter? And is this possibly related to the ramp of your 8-inch capacity?

關於毛利率的問題，毛利率通常在第二季連續增加，考慮到營收的強勁，毛利率也應該有助於毛利率。Q2毛利率指引中點較上季小幅下降的原因是什麼？這可能與你們8吋產能的提升有關嗎？

You are right, Tristan. It's -- that's one of the reasons. The other reason is, we focus on significant growth in 2018, evidenced by the guidance second quarter, 9% growth over the first quarter. So because of that, we have increased the capacity, and I think by -- looking at the CapEx number in 1Q, you can see we're adding capacity to support the growth of this year. And therefore, it will be -- the company is already impressed. You're correct, you were right. So but depreciation will be needed right away. And therefore, the depreciation from CapEx in (inaudible) plus 8-inch capacity expansion, those will be -- increased the depreciation and interviews un-audit negative PV. But look at the GP gross profit, GP dollar, we actually if you look at the midpoint, the guidance actually up above $8 million from 2Q to 1Q, so the percentage might went down a little bit due to the capacity -- under the capacity, but the gross profit is actually focused at $8 million.

你是對的，特里斯坦。這就是原因之一。另一個原因是，我們關注 2018 年的顯著成長，第二季的指引證明了這一點，較第一季成長 9%。因此，我們增加了產能，我認為透過查看第一季的資本支出數字，您可以看到我們正在增加產能以支持今年的成長。因此，該公司已經印象深刻。你是對的，你是對的。因此，但立即需要折舊。因此，（聽不清楚）資本支出的折舊加上 8 英寸產能擴張，這些將增加折舊和採訪未經審計的負 PV。但是看看GP 毛利潤，GP 美元，實際上，如果你看一下中點，從第二季度到第一季度的指導實際上高於800 萬美元，因此百分比可能會由於產能而略有下降- 在產能之下，但毛利實際上集中在800萬美元。

Great. That's very useful. Next, could you then give us a quick update on 8-inch capacity ramp? And also when we should expect that gross margin to rebound on the basis of the background you just gave us?

偉大的。這非常有用。接下來，可以為我們介紹一下8吋產能提升的最新情況嗎？根據您剛才提供給我們的背景，我們何時應該預期毛利率會反彈？

Okay. I think the 8-inch, I think we already said, the focus is ramping up to about 9,000 to 10,000 wafer per month by end of 4Q. So right now, we look at that, 1Q is only total 800 wafer only. Then Q2 probably ramp it up gradually to probably 2,000, 3,000 at max. Then go to 3Q, 6,000, 7,000 a month, then in 4Q -- at end of 4Q probably 9,000 to 10,000 inch wafer per month. And the CapEx is already spent. And now, I think we already -- somewhere around 6,000 wafer capacity equipment is already installed. And then we probably have another piece of gear (inaudible) of the year, will give us the capacity up to 10,000 per month.

好的。我認為 8 英寸，我想我們已經說過，到第四季度末，重點將增加到每月約 9,000 至 10,000 片晶圓。所以現在，我們來看看，第一季總共只有 800 片晶圓。然後第二季可能會逐漸增加到最多 2,000、3,000。然後到第三季度，每月 6,000、7,000 片，然後在第四季度——第四季度末每月可能有 9,000 至 10,000 英寸晶圓。而且資本支出已經花掉了。現在，我認為我們已經安裝了大約 6,000 個晶圓產能設備。然後我們今年可能會有另一件裝備（聽不清楚），將使我們的產能達到每月 10,000 個。

And our next question comes from Shawn Harrison with Longbow Research.

我們的下一個問題來自長弓研究中心的肖恩·哈里森。

The increase in channel inventory of about 8% sequentially, do you expect that will be consumed by distribution during the second quarter? Do you believe you'll need to continue to build channel inventory? Or they'll build channel inventory, I guess?

通路庫存較上季增加約8%，您預期第二季會被分銷消耗掉嗎？您認為需要繼續建立通路庫存嗎？或者他們會建立渠道庫存，我猜？

No, we won't consume for sure. We already looked at the (inaudible) consume some. But end of the quarter, we expect it will be -- most of them will consume. Again the reason actually is due to the Chinese New Year, most of our customer during the Chinese New Year shutdown, the whole week, and so the POS is reduced. And typically our 4Q in Asia POS is always very high. So if we look at U.S. and Europe, the POS actually will go high. So the whole problem -- I won't say the problem, the whole inventory build is actually in Asia. And the Asia was due to Chinese New Year of a customer shutdown they are not using the product, but the design you need is already there. And they -- right up in the Chinese New Year, they stop to ramp. So much the POS is already started to move. It's really the 1Q role is in February, and then the March that move and April, we report is quite well, the POS is quite well too.

不，我們肯定不會消費。我們已經研究過（聽不清楚）消耗了一些。但到本季末，我們預計其中大部分將被消耗。還是那句話，原因其實是因為農曆新年，我們大部分客戶在農曆新年期間都停業，整週，所以POS減少了。通常我們在亞洲 POS 的第四季總是非常高。因此，如果我們看看美國和歐洲，POS 實際上會走高。所以整個問題——我不會說這個問題，整個庫存建設實際上是在亞洲。亞洲的客戶由於農曆新年而關閉，他們沒有使用該產品，但您需要的設計已經存在。就在農曆新年到來之際，他們就停止了成長。POS 已經開始移動了。事實上，第一季的角色是在 2 月份，然後是 3 月份和 4 月份，我們報告說情況很好，POS 也很好。

Okay. And as a follow-up, are you seeing the pricing environment where you're kind of flattish now year-over-year? Or you're having any ability to see pricing go slightly higher? And then as a separate follow-up to Rick, when do you think you'll be in a net cash position? Could you be there by the September quarter?

好的。作為後續行動，您是否看到現在的定價環境與去年同期相比持平？或者您有能力看到價格略高嗎？然後，作為瑞克的單獨後續行動，您認為您何時會處於淨現金狀況？您能在九月季度之前到達嗎？

Okay. Let me answer the pricing, and then Rick answer the cash balance-issue. The pricing, we typically put 2% a quarter decoration and that's typically our motto. And from the good time, or from the capacity time, we now is less than 1%. But very hard to go to customers and say, I want to raise the price, we -- it's very difficult. But what we tried to do is product mix. So that's one of key, new product -- driving the new product to replace the old product and typically new product because of the performance, because the cost reduction, typically new product give you a better margins. And by doing that, each year through improved GP instead of go to the customers and say, now, you are (inaudible) we want to raise the price, that's just in our business, that's not the traditional way to do it. But we can slow down the price reduction and therefore, now our price reduction is less than our model. Rick?

好的。讓我回答定價問題，然後里克回答現金餘額問題。定價方面，我們通常每季支付 2% 的裝修費用，這通常是我們的座右銘。而從好的時候，或者說從產能的時候來看，我們現在還不到1%。但很難去找客戶說，我想提高價格，我們——這非常困難。但我們試圖做的是產品組合。這是關鍵的新產品之一——由於性能的原因，推動新產品取代舊產品，通常是新產品，因為成本降低，通常新產品會為你帶來更好的利潤。透過這樣做，每年透過改進 GP，而不是去找客戶說，現在，你們（聽不清楚）我們想要提高價格，這只是我們的業務，這不是傳統的做法。但我們可以放慢降價速度，因此，現在我們的降價幅度小於我們的模型。瑞克？

So the issue here is that we have debt outstanding of about $222 million and we had cash of $186 million. So the difference is $45 million. So the question is whether we're going to be able to pay down $45 million by the end of the year to just get to a net position. Dr. Lu would like us to do that. He's pushing, but I'm not sure we're going to be able to do that because we have to make some equity injections into our Chengdu facility. And so that might preclude us from doing that. But I would say that by the time -- by this time at the end of next year, we should be there for sure.

因此，這裡的問題是我們的未償債務約為 2.22 億美元，而我們擁有 1.86 億美元的現金。所以差價是 4500 萬美元。因此，問題是我們是否能夠在年底前支付 4500 萬美元以獲得淨頭寸。盧博士希望我們這樣做。他正在推動，但我不確定我們能否做到這一點，因為我們必須向我們的成都工廠注入一些股權。因此這可能會阻止我們這樣做。但我想說，到明年年底的這個時候，我們肯定會實現這一目標。

When you say equity injections in the Chengdu, could you elaborate a bit?

您提到成都的股權注入，可以詳細說明一下嗎？

Yes, we have a commitment to the Chinese government, that we will invest so much money from an equity standpoint. It was one of the original things we agreed to back in 5 years ago.

是的，我們向中國政府做出承諾，從股權的角度來看，我們將投入如此多的資金。這是我們 5 年前同意支持的最初項目之一。

5 years ago. The key think is we both -- they keep us within, and we kind of biased about them, but they give us the money back. And so we have some commitment is by each year, how much money we'll put in for expansion.

5年前。關鍵是我們兩個——他們把我們關在裡面，我們對他們有點偏見，但他們把錢還給了我們。因此，我們有一些承諾，即每年我們將投入多少資金進行擴張。

So it has to do with expansion. So as we've talked about previously, we're continuing to slowly expand the capacity in Chengdu. And this helps firm that capacity expansion.

所以這跟擴張有關。正如我們之前談到的，我們正在繼續緩慢擴大成都的產能。這有助於鞏固產能擴張。

(Operator Instructions) Our next question will come from Edgar Roesch with Sidoti.

（操作員說明）我們的下一個問題將由 Edgar Roesch 和 Sidoti 提出。

I had one follow-up on capacity in the CapEx, sort of the pacing in 2018. I mean, would you think that you can stay ahead of demand with the additions you're making? Or would you expect maybe you're going to get on allocations with any products in the second quarter? Do you have any thoughts on that?

我對資本支出的產能進行了一項跟踪，類似於 2018 年的節奏。我的意思是，您認為您所做的添加能夠保持領先於需求嗎？或者您預計您會在第二季度獲得任何產品的分配？您對此有什麼想法嗎？

Well, I hate to say it, but currently we still have some of the product and the allocation. So we'll continue that situation, and -- but we do foresee the market's tight since last year, and we are putting the request to put in the CapEx. And it just started coming by (inaudible) of 1Q, and we have installed that, and then we go to start rent in Q2. But that's just enough to support the expansion, because -- for this year. And we will still see the capacity is quite tight on certain package.

好吧，我不想這麼說，但目前我們仍然有一些產品和分配。因此，我們將繼續這種情況，而且——但我們確實預見到自去年以來市場緊張，我們正在提出資本支出的要求。它剛從第一季開始（聽不清楚），我們已經安裝了它，然後我們在第二季開始出租。但這足以支持擴張，因為——就今年而言。我們仍然會看到某些包裝的容量相當緊張。

I will also say that, Ed, if you look at the first quarter, we did about $31.5 million worth of CapEx on a cash basis. And that's higher than our model, as I mentioned in my speech, it's to front-load this for the capacity expansion. And during the year, we think we'll go back to the 5% to 9% model that we've had on a yearly basis. So to answer your question, it's going to be more front loaded than it is backloaded.

我還要說的是，Ed，如果你看看第一季度，我們的現金資本支出約為 3,150 萬美元。這比我們的模型要高，正如我在演講中提到的，這是為了擴容而預先加載它。今年，我們認為我們將回到每年 5% 至 9% 的模式。因此，為了回答您的問題，前端加載的數量將多於後載的數量。

Yes, so our model, who still want to keep our CapEx expenditure at our model, which is 5% to 9%. Now in 1Q, we are more than 10%. It has (inaudible) and because typically our rent is in second quarter and third quarter. So by the first -- full fourth quarter is to date to put in putting the CapEx to support this year.

是的，所以我們的模型仍然希望將我們的資本支出支出保持在我們的模型上，即 5% 到 9%。現在一季度，我們已經超過 10%。它有（聽不清楚），因為我們的租金通常是在第二季和第三季。因此，到第一季為止，整個第四季都將投入資本支出來支持今年。

That's right.

這是正確的。

And then on the packaging side, just kind of on a broader level, you've had so much success in the automotive side. Are you finding that your packaging is as big of a differentiator and leads to the product wins in that end-market as much as it has historically for Diodes?

然後在包裝方面，在更廣泛的層面上，您在汽車方面取得了巨大的成功。您是否發現您的包裝具有很大的差異化優勢，並能像 Diodes 歷史上那樣在終端市場上贏得產品勝利？

Well, yes packaging is one of the key technology we have in our automotive. And by (inaudible) we are -- since installed that strategy back to 2013, we are now in mix CAGR at the 20% for the last 5 years. So in our view, our strategies are working and our -- from the product, from the packaging, from since we have been doing it is successful. So we're going to continue the similar effort to continue grow ourselves quickly in automotive. And as in DC, I think we are target at 9% and we're going to achieve better than 9% and then move to 10% probably next year.

嗯，是的，包裝是我們汽車中擁有的關鍵技術之一。到了（聽不清楚）我們 - 自從 2013 年實施該策略以來，我們現在的混合複合年增長率在過去 5 年中達到 20%。因此，在我們看來，我們的策略正在發揮作用，而且從產品、包裝、從我們這樣做以來都是成功的。因此，我們將繼續做出類似的努力，繼續在汽車領域快速發展。與華盛頓一樣，我認為我們的目標是 9%，我們將實現高於 9% 的目標，然後可能在明年達到 10%。

So just to add a little bit. Beyond the packaging, I think the performance and features are also very, very important. This is also a direction, we continue to invest in technology and working closely with the customer to really find the perfect solutions for their applications.

所以只是補充一點。除了包裝之外，我認為性能和功能也非常非常重要。這也是一個方向，我們不斷投資技術並與客戶緊密合作，真正找到適合他們應用的完美解決方案。

Okay. And then one quick one. I don't know, I was looking through my notes, but the purchase accounting adjustment that you're including in the Q2 guidance, Rick, is for Pericom and other acquisitions, is that a fairly typical adjustment? Or is it something that triggered that particular adjustment?

好的。然後快一點。我不知道，我正在查看我的筆記，但是 Rick，您在第二季度指導中包含的購買會計調整是針對 Pericom 和其他收購的，這是一個相當典型的調整嗎？還是觸發了特定調整的因素？

No. That's an adjustment we've made every quarter for many quarters.

不。這是我們連續多個季度每季都會進行的調整。

And we have a follow-up question from Tristan Gerra with Baird.

我們有特里斯坦·格拉（Tristan Gerra）和貝爾德（Baird）提出的後續問題。

Could you mention the percentage of your product portfolio that has lead times exceeding 12 weeks? And give us a range of how far lead times are stretching? And also how does that compare with the quarter ago?

您能否提及您的產品組合中交貨時間超過 12 週的百分比？並告訴我們交貨時間延長了多遠？與上一季相比又如何？

Well, actually, product really -- the DTAM really based on the product. For example, most of the telecom product other than crystal and oscillators, most of the telecom product because the wafer fab coming from foundry and packaging from silicon. The DTAM is low compared with Diodes product. And Diodes product typically are wafer fab. The number of Mux is very less than telecom product start from Diodes (inaudible) to MOSFET probably in 9 days and telecom product 20-something days. So the DTAM on the wafer fab makes significant difference. Packaging is not done much different, except they are outside, and the Diodes product is we do it all internally. Therefore, we can shoot in DTAM a little bit. But majority, the DTAM really coming from foundry wafer and because numbers there are significantly different between the discrete and the telecom product.

嗯，實際上，產品確實——DTAM 確實是基於產品。例如，大多數電信產品除了晶體和振盪器之外，大部分電信產品的晶圓廠都來自於矽的代工和封裝。與 Diodes 產品相比，DTAM 較低。Diodes 產品通常是晶圓廠。Mux 的數量比電信產品從二極體（聽不清楚）到 MOSFET 的開始時間要少得多，大約需要 9 天，而電信產品則需要 20 多天。因此，晶圓廠上的 DTAM 具有顯著的差異。包裝沒有太大不同，只是它們在外面，而 Diodes 產品是我們在內部完成的。因此，我們可以用DTAM來拍攝一點。但大多數 DTAM 確實來自代工晶圓，因為分立產品和電信產品之間的數字有顯著差異。

So I think in general supply is still very constrained, and we really do not see a significant change from our overall lead time situation point of view.

因此，我認為整體供應仍然非常有限，從整體交貨時間情況的角度來看，我們確實沒有看到重大變化。

And I'm showing no further questions at this time. I would now like to turn the call back to Dr. Keh-Shew Lu for closing remarks.

目前我不會再提出任何問題。現在我想將電話轉回給盧克秀博士，讓其致閉幕詞。

Thank you for your participation on today's call. Operator, you may now disconnect.

感謝您參加今天的電話會議。接線員，您現在可以斷開連接了。

Thank you. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.

謝謝。女士們、先生們，感謝你們參加今天的會議。這確實結束了程序，你們都可以斷開連接。大家，祝你有美好的一天。