Title

Presentation

Monolithic Power Systems, Inc. beats earnings expectations. Reported EPS is $5.1, expectations were $4.9.

Operator: Good day, and thank you for standing by. Welcome to the Monolithic Power Systems, Inc. First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. We are joined by speakers, Michael Hsing, CEO and Founder of MPS; Rob Dean, Interim CFO; Tony Balow, Vice President of Finance. And now I would like to turn the conference over to Arthur Lee to read a safe harbor statement. Please go ahead.

Arthur Lee: Earlier today, MPS released a written commentary on our results of operations for the first quarter ended March 31, 2026. This document can be found on our website. Before we begin, I would like to remind everyone that in the course of today’s presentation, we may make forward-looking statements and projections within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. The risks, uncertainties and other factors that could cause actual results to differ from these forward-looking statements are identified in the safe harbor statements contained in the Q1 2026 earnings commentary and in our SEC filings, including our Form 10-K and Forms 10-Q, which can be found on our website. Our statements are made as of today, and we assume no obligation to update this information. Now I would like to turn the call over to Tony.

Tony Balow: Thanks, Arthur. Good afternoon, and welcome to our Q1 2026 earnings call. In Q1, MPS achieved record quarterly revenue of $804 million, 7% higher than the fourth quarter of 2025 and 26% higher than the first quarter of 2025. Our quarterly performance was a result of our continued innovation, our consistent execution and the resilience of our diversified market strategy. Let me call out a few highlights from the quarter. Our communications end market grew 33% sequentially on the strength of our power solutions for optical modules and switches. The pipeline for our automotive and enterprise data end markets, including server continue to accelerate as we won multiple new projects across customers and regions. We sampled our first high-speed interface products for DDR5 at major customers and MPS continued to grow our capacity past our original $4 billion plan with a new goal of reaching $6 billion in the near future.

We continue to adjust to the fluid geopolitical and macroeconomic environment, but our diversified market strategy remains unchanged. MPS focuses on innovation and solving our customers’ most challenging problems. We consistently invest in new technologies that open new end markets and applications and accelerate our transition from chips only to a full-service silicon-based solution provider. And finally, we continue to expand and diversify our global supply chain, allowing us to capture future growth opportunities, maintain supply stability and rapidly adapt to market changes as they occur. Operator, you may now open the webinar for questions.

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Operator: [Operator Instructions] Our first question comes from Ross Seymore with Deutsche Bank.

Ross Seymore: I just want to dig a little bit into the enterprise data side of things. Can you just talk about the different trends you’re seeing between kind of the XPU side versus the CPU — server CPU side? I know you mentioned in your preamble that the backlog and visibility was improving in both. But given the strength of demand we’re hearing elsewhere in the server CPU side of things, I wondered how you guys are doing there.

Michael R. Hsing: Both are good. Yes, Tony, you can talk to that.

Tony Balow: Yes. I’ll give a little more color. And Ross, if you recall, even last year in 2025, we had talked about CPU being a tailwind, and we continue to see that here in 2026. But if you look across enterprise data, for us, right, as we’ve said, it’s increasingly hard to differentiate between sort of AI solutions and CPU. But in general, all the growth drivers are intact. We’re ramping new customers. We’ve been ramping existing customers. We continue to see the transition to modules. And like I said, plan server has been a tailwind, and we think it will continue to be so.

Ross Seymore: And I guess the second question would be on the storage and computing side of things that seem to be a little bit better than feared in the first quarter. Talk about the tailwinds or headwinds given what’s happening from a macro perspective and then potentially the difference between what you guys do on the storage side versus the computing side?

Tony Balow: Yes. I’ll start on that one, and then I’ll let Michael and Rob jump in. But as you know, right, that segment really has sort of 2 separate businesses in it. The storage side obviously has remained strong as it’s really been indexed to a lot of the data center business. And we see strength in DDR5. We see strength in HDD and SDD continue out of last year and into Q1. On the notebook side, we’re still more cautious on that side. As you know, there’s really 2 dynamics there. I’m sure you’ve heard other companies talk about potential TAM headwinds associated with memory shortages or elasticity from memory prices. But remember, we also selectively play in that part of the market that has lower margins around consumer. And so I think — and if we look forward to those 2 — on that business going through the year, I think we’re still very optimistic about storage staying strong, probably much more cautious on the notebook side.

Michael R. Hsing: But the notebook, we don’t really care this quarter or next quarter as long as we develop — we developed the best solutions of power density and our customers’ ease of use. And these design wins that we have, the revenue will ramp.

Operator: Our next question comes from William Stein with Truist Securities.

William Stein: Great. First, I’d like to ask about manufacturing. You noted in the press release that you passed the $4 billion target, you’re now working to $6 billion capacity, maybe you can update us as to the strategy around geographic placement of your capacity? And maybe remind us what’s going on from a technology perspective. This used to be a big focus of the various BCD iterations that you produce. But can you bring us up to speed as to what is the latest BCD generation?

Michael R. Hsing: I’ll answer your last question first. We are still around 60 nanometers and maybe we’ll go down to 40, 45 nanometers. And these ones as a power density, as a market trend, the power increases and we increase the power densities. And it’s just old stories. We keep doing the same thing in the last 20 years. And we just do better than our competitors. For the $6 billion goal for manufacturing pipeline. We — clearly, and we have — we see our near future, we see a lot more activities, a lot potentials and all these design wins is imminent, they will turn into revenues.

Tony Balow: And maybe just to add. Well, I think I’m telling you what you know, but on the $4 billion of capacity, we talked about that being very geographically diverse, both inside and outside of China. And remember, our strategy really is to maintain that supply chain diversity. So we’ll continue to try to have that balance going forward.

Operator: Our next question comes from Joshua Buchalter with TD Cowen.

Joshua Buchalter: Congrats on the results. Maybe to start, can you just help us a little bit with the models? Any help you can give us on the guidance by segment as we think about sort of a 12% sequential growth for the June quarter, which segments should be above and below?

Michael R. Hsing: Well, I think, let me start with what you guys are more interested in the most, okay? Bernie, last time talked to you guys, that we have a 50% floors, so 50% floor. I’ll let Tony talk about — give you a better news today, okay? And I’m more excited about the other projects that are deeply involved, okay? I mean the building automations and audio project side and as well as robotics. And these ones will pave the way for our next 2 to 3 years out to remain on the same growth trajectory.

Tony Balow: Yes. I’ll follow up a little bit as kind of marching through. And Josh, I know the first thing people are interested is enterprise data, so I’ll start there. And as you recall, we tend to be fairly conservative in how we look at these things, waiting for the backlog to be in place. So late last year, we talked about 30% to 40% growth year-over-year. In the last call, we kind of rose that to a 50% floor. And the strong ordering patterns that we saw start last year has kind of continued through Q1. So at this point in time, I think we’re comfortable raising that floor up to around 85% year-over-year growth. And that will certainly be one of the drivers of growth for the year for MPS. If you look — sorry, Michael.

Michael R. Hsing: I’ll let Tony deliver better than our last CFO.

Tony Balow: Okay. If you look at the others, Josh, I think we’ve been signaling on communication as we’ve become increasingly excited about that end market with not only the optical module growth, but due to switches as well. So we certainly would expect those to be drivers. Auto, I think is a very consistent story. We said that would be roughly flat for the first half of the year and ramping in later in the year. And then storage and compute, we talked about a bit already with Ross, right? There’s really 2 different dynamics going in there where we’re still very optimistic on storage pulled through by data center, more cautious on notebook.

Michael R. Hsing: So again, overall, we cannot predict which quarter goes ramp volumes. And that’s not our business to do that. And we’re winning strategy is same as the last 20 years. As long as we deliver the best product and service our solving our problem for our customers. And I don’t see we lose any socket, okay, the major socket at least. And we’ll keep winning. And those business — those design wins will turn into revenues.

Joshua Buchalter: Thank you both for all the color there. Unfortunately, when you deliver good news, you still get annoying follow-up questions. But I guess if we think about the incremental upside since last quarter, any help you can give us on how much of that’s coming from CPUs, as Ross mentioned earlier, versus more confidence into either content or visibility into share on the AI accelerator side? Congratulations again.

Michael R. Hsing: That’s a good try, okay? I’m not going to give it to you. Okay.

Tony Balow: Yes, Josh, I think we just fall back and we’ve talked about all the growth drivers and say they’re intact. I don’t think we want to try to parse out between volume and content because it can be very specific.

Michael R. Hsing: In reality, it’s very difficult, okay, to separate it, okay. What is called AI, what is called servers. There’s a lot of etching and a small segment and these are very small utility box. We see a lot happening. I mean maybe I don’t use the right words and you guys use it, I mean these are portable AI devices. And just based on GPUs. These are happening. And that’s clearly overlapped with the CPU and GPU powered.

Operator: Our next question comes from Rick Schafer with Oppenheimer & Co.

Richard Schafer: I’ll add my congratulations and just a wow, I guess, on the outlook. Maybe if I could just for a second, talk about enterprise data. I’ve got a follow-up, Michael, that you’ll like better, but I think — the top 4 CSPs, I think just last night, I mean now we’re over $700 billion in CapEx just from them. I mean it seems like you guys are clearly seeing that increased order velocity, my real question is, are you able to capture all of that upside? I mean is there anything hurting your supplier, your ability to capitalize, Michael? Because in years past, you guys have kind of made your bones on always being ready for that upside and kind of never being caught short. So I’m just kind of curious if that’s still the case or kind of what you’re seeing?

Michael R. Hsing: I think it’s exactly right I mean although we have a few more players and — well, let me go back a few quarters ago. In these AI and in GPU powers in a given time will be the performance and also the manufacturing capabilities and reliability will remain as only a few players. And after a year — a couple of years, it’s been very clear that MPS is one of the players. And as I promised over a year ago or so, and we continue to do well in many aspects, especially for the power density side. We are the best in the market segment because we provide a total monolithic power solutions. And we can use a single piece of silicon versus our competitor use multiple pieces of silicons. And that clearly shows our advantage. And yet, we don’t want to be the dominant suppliers, well, we just want to be a part of it. And our goal is to diversify growth.

Richard Schafer: Got it. And for my follow-up, Michael, I’m just curious on physical AI. Obviously, it’s getting a lot more — a lot more people talking about it and see a lot more focused. And just if you could flesh out maybe a little more of your plans for that segment. What kind of TAM do you — have you guys identified there? I mean you called out robotics a minute ago on the call. I mean, can that be a meaningful revenue contributor next year? Or when would we start to see robotics start to drive top line?

Michael R. Hsing: We see this year and — but the volume are still low, but it can kind of move the needle slightly. And if we go up the trends and this is still at the very beginning, and it’s very difficult to predict. And many companies have launched the first high-volume robotics that we clearly benefited from it. And after that, we can call — we cannot call the market segment growth. But the future is there. Clearly, when more AI adopt it in robotics, the application will be widened.

Tony Balow: And I think what you see is us try to run the typical MPS playbook, which right now we’re trying to engage broadly and win all the designs we can. We can’t control when the customers ramp, but we can’t control winning the sockets, and that’s the broad engagement we really see happening in 2026.

Michael R. Hsing: That’s very good point. Yes.

Operator: Our next question comes from Quinn Bolton with Needham & Company.

Quinn Bolton: I’ll offer my congratulations as well on the results and outlook. Michael, Tony, I guess I wanted to ask on the comms segment. It was up 33% sequentially. And March, it sounds like it’s going to be one of the faster-growing segments in the June quarter. When I look at optical modules, I think 800 gig modules are more than doubling in ’26. So — my question is, do you think the comms segment could actually grow as fast, if not faster, than enterprise data this year given those trends?

Michael R. Hsing: Yes. Again, I’ll follow for Tony’s answer the last one. So we’re not in the business to predicting what the market trend is, okay? I mean we provide — this happens in this particular segment. And we saw a lot of activities and a lot of demand for high-power density product and especially modules. And I think, as I mentioned about maybe a few quarters ago. And so this quarter and it just jumps out. And I — from what we learned, the power density of the module with a very confined area and the data rate keeps increasing. And with the opticals or with other type of format, the power will keep increasing, okay? And in what rate, I cannot predict. But in the small confined areas and the power density is critical, that’s our basic technologies that we could apply in that segment and that we execute fast and we capture the market.

Tony Balow: Yes. And I think as ordering patterns have continued to be strong and extend, we still have them all the way through the year. So I think it’s pretty tough for us to call all the way through the back half right now. But certainly, we’d put that end market above the corporate average.

Quinn Bolton: Got it. Okay. And then…

Michael R. Hsing: Same way, I’ll go back to servers side and I go back to server side, we — in the last years, we don’t know, the server market will pick up or not picking up, okay? As far as we listen to our customers, we get our inventory ready and when they need it, they have those products. And so we just focus on deliver better product, winning more socket.

Tony Balow: Yes. I’m a broken record, but I think it’s a great example of, again, diversified approach, you land and you sort of look at the other sockets available to the applications and continue to grow your SAM.

Quinn Bolton: My follow-up question. Michael, you guys have been sampling your products for 800 or plus/minus 400 volts for a few quarters now. Wondering if you could provide any feedback on how that activity is going? And can you give us any thoughts on — there’s a lot of debate between whether those higher power conversion steps will be more GaN-based or silicon carbide based. If it goes GaN, will you guys have GaN-based solutions ready for that opportunity?

Michael R. Hsing: No, we based on silicon carbide and our — that’s our solutions. We do — in the past, I openly said I don’t believe in GaN, okay? Now start to — I didn’t know what I was talking about, I guess, okay? We — in the last — start of last year, we developed our GaN, but it’s not for 800 volts, it’s for lower voltage and lower power and lower power segments. We start to develop these fundamental technologies in GaN. To answer the first part of your question, yes, we’re sampling, and again rather sample or call it sampling co-developed that systems with our customers and also our customers’ customers. And it’s — we don’t talk about those until I guess, you guys ask us. And 800 volts became a household number — household names on the Wall Street in GaN.

And so we start to talk about it. And our product is working. And I think the overall, the environment and in the new 800 volts power bus data centers, they — a lot of things has to be resolved. And we just have our — for that application is ready, and also have 800 volts, go to 10,000 volts, okay? That’s another segment and has to be developed a lot more efficient power conversions. And these are all part of the pictures. MPS will play in those segments.

Operator: [Operator Instructions] Our next question comes from Tore Svanberg with Stifel.

Tore Svanberg: Congrats on another record quarter. I had a question, maybe as a follow-up to a previous question on power. So I do realize there’s a lot of focus on 800-volt, but before we get there, there’s the move to 2,000-watt GPUs. And I know there’s a lot of sort of wannabe power management companies out there, Michael. So just hoping you could touch on 2 of the 3 things that really make MPS so unique and differentiated to handle those types of power levels because that is not like a 2028 time frame, right? I mean, that’s already next year. So yes, if you could give us some color there, that would be great.

Michael R. Hsing: Yes. Okay. That’s a good question. I can touch and one of them I already said earlier, MPS is a focused on the monolithics. And we do what is the most cost effective and we do — and how we do the integrations. And we have the capabilities to integrate or disintegrate, okay? And the integration we can put it in our modules. And that’s a huge advantage. And with the multiple other chips, okay, and if we use particularly discrete power components, discrete power fabs and it’s very difficult to do for manufacturing the modules. The second thing that I should mention that we invested in a module development, you note, for other segments, actually, and since 2016, we want to move up from providing silicon-only power conversion.

And again, we do a plug-and-play solution. That journey we started 2016. And immediately, we know how we test these devices and how we qualify these devices, not — and if it’s a higher volumes and high qualities, it can’t be touched by humans. We develop our own test systems and own reliability systems. These are fully automated. And actually, it’s all based on MPS eMotion product. And these ones are very unique. And they — before these systems putting in production, we can’t find anything like this on the market. And that’s I think — to me, this is a huge advantage. And the other one is — the last one that will go back to semiconductors, like we talked about this. We use 60-nanometer and now we move to 40 nanometers. And those increased the power density by — last time we talked about 3M per millimeters cube and now we go pass that.

Tore Svanberg: Great. And as my follow-up, when you mentioned a new product, I always listen to you because I remember you talked about 800 gig optical components being in your market. And before you knew it, you had a huge business there. And you now mentioned you have your first high-speed interface product sampling for DDR5. So just curious, when should we start to see material revenue from that business? And could that also grow into a several hundred million dollar business over the next few years?

Michael R. Hsing: That’s absolutely right, okay? And frankly, I don’t know anything about this high speed and which is hire the best engineers and cut them loose and then they created this, okay? But from a business side, it’s our natural way of expanding the service, total service market that increased our SAM. And we have a pretty good position in PMIC in memory, then we introduced timing drivers and timing control, whatever and also temperature sensors. And now the RCD or whatever the things came and I know it’s very difficult. This is beyond my understanding. Our engineers and our people they pull it off. And so we have a few people that compare — other companies like they have 50 people that design groups, and we will be able to pull it off in a few years.

These are brilliant guys and they want to make things happen. That’s — and the revenue, usually we don’t talk about it. I can talk about the product and we sample those products. Clearly, in that market segment, our customers are very much welcomed that we have another player.

Tony Balow: And Tore, I’ll just help you with the model a little bit. I wouldn’t really have that as being a contributor to 2026 revenue. I think we’re really highlighting it as we continue to expand our footprint in that market.

Operator: Our next question comes from Gary Mobley with Loop Capital.

Gary Mobley: Let me also extend my congratulations. I’m curious about the comms business that definitely a stand out for the quarter in terms of growth, upside, and I presume carrying through the — into the second quarter and for the balance of the year as you previewed already. So what I’m most curious about is how much content you have in these 800-gig optical modules and I assume maybe of rack switches, maybe if you can put it in the context of by how much you see your content increasing in rack scale solutions for accelerated compute given this beachhead in these 2 new applications?

Michael R. Hsing: I think it’s more than a beachhead than not. We’re pretty well in the — well beyond the beach now. Tony, you want to?

Tony Balow: Yes, I think we’re going to stop short of kind of giving a dollar content. But obviously, in the optical modules, right, we have a module in the module doing that. So we obviously look at more of that than a discrete device. If you talk about switches and things of that sort, you have a whole different number of trays, for example, you have switches, you have NIC cards, you have other things like that, which all require power. And so I think the opportunity is, right, is you have a number of different processors in these that sit in these racks that we can provide power for and that we’ve been expanding that all sit within our Communications segment. But I think we’re — as usual, right, we’re not going to talk about specific content layers, especially for specific customers.

Gary Mobley: Okay. As my follow-up, I wanted to ask about distribution channel inventory. I know it’s been running lean. Is it still lean relative to where you would normally place your distribution inventory and then as well, maybe if you can talk about the sort of inflationary relating pricing trends that you have to pass along?

Tony Balow: I’ll take that one. With regards to our distribution channel, we don’t have a great deal of perfect visibility there. But what we have seen at least in 2025 and carrying into 2026, is that the channel has been very lean. And that implies to us that we’re shipping to what demand is at the end market. But beyond that, we’re looking good.

Michael R. Hsing: For the pricing, cost pricing, yes, some of the cost is higher, okay? And we see a lot of activities, okay? So we will keep — the goal is that we’re keeping our margin profiles.

Tony Balow: Yes. I think and just to add to Michael’s, I think we don’t — we’re not looking at it a broad-based across the board, but there are places where input costs have gotten higher, people are asking for expedited supply chains and things of that sort. And in those cases, yes, you could see us raise prices to stay within our gross margin model.

Operator: Thank you. Our next question comes from Joe Quatrochi with Wells Fargo.

Joseph Quatrochi: Maybe just a follow-up there on the gross margin. Wondering if you could just share any of the puts and takes on the guide. It seems like obviously very positive revenue acceleration in kind of not a ton of follow through on gross margin kind of still stay in that range.

Michael R. Hsing: Yes. Okay. I — again, I said the margins in the last couple of quarters, so margins on the low end. And although it’s in our model, I mean it’s on the low end. And we still improve the yields on the modules. And I think that we don’t have much of a headwind, we’re moving up. But I don’t want to give you a false hope that we’re going to jump very high. That’s not NPS. We don’t do that kind of thing.

Tony Balow: I’ll expand a little bit on what Michael just said. Historically, we’ve been very consistent with delivering to our gross margin guidance. For the last 4 quarters, we’ve been flat at 55.5%. which is at the low end of our gross margin model for growth, which ranges 55 — mid-50s to upper 50s. For Q2, as you know, we did have the confidence to increase incrementally our gross margins, mainly because we’ve gotten better visibility to our backlog. We saw this happening in the fourth quarter of last year, and it’s continued into the first quarter of this year. So that has again given us some confidence. We do, however, do see some strong headwinds potentially in the second half. And so we’re not — we’re remaining cautious for the guidance in the second half of the year.

Joseph Quatrochi: Right. That’s helpful. Maybe just on the robotics socket opportunities. You talked about up for grabs or to win this year. Are those — do we think about those as being incremental? So I think you talked about $150 of content like for humanoid back at the Analyst Day. Is that the right way to think about it? Or are those expanding opportunities?

Michael R. Hsing: It really varies. I mean, humanoid is the most visible. You see some dancing robots and those kind of — and the — what we focus on is in robotics. If it’s remote and without power cord plug-in robot and those have battery operations. And so our battery management product plays a role in there. And the other one is the AI side, the compute side, for power the GPUs, okay. And these automated control units and also as well as these sensors. And the other segment is the actuators, the motion side. That’s overall we sell — we offer for the robotic companies. And many applications is in actuators and they can be in a medical assist for rehab purposes, we’re seeing those kind of things happening. And for the dollar content, as I go back to your dollar content, it’s very difficult to say.

It’s a variety of applications. We sell in chip and to selling modules, okay? And so the dollar content is also different, and it’s very difficult to judge. But the trend is this robot will happened and there will be a lot in the world, will be a lot more automated, and it can assist human to do a lot of things, okay?

Operator: [Operator Instructions] Our next question comes from Chris Caso with Wolfe Research.

Christopher Caso: Yes. I guess the first question would be about the ED segment. And if you could talk about the growth on Merchant Solutions versus ASIC solutions this year? And what you’re expecting with regard to content? I know you’ve got a strong position in both, but do you expect outsized growth in one area or the other? Any color you could provide would be helpful.

Michael R. Hsing: We don’t divide it into — these are the learning side, inferencing side and frankly, we don’t know how to separate it and they could use the similar product. What we do is — why we’re winning all these segments is because the power density, as I said earlier, okay? And nobody wants to waste power and efficiency is — power densities directly related to power efficiency. And so they want a smaller size and they want to have a high efficiency. It really doesn’t matter to us which segment.

Tony Balow: Chris, the only thing I’d add, right is, I think we’re comfortable raising the floor from 50% to 85%, not because there’s been a fundamental change in the growth drivers for how we’re approaching the market. It’s really, as you know, are more comfort about what’s in backlog, and we’ve seen that extended ordering pattern. So I think to Michael’s point, I don’t think we subdivide it to content and volume. But I just want to make sure you know that I don’t think anything has changed other than be able to see more orders in the books going forward.

Christopher Caso: Got it. As a follow-up, if I could ask about the auto segment, and you talked about that being flattish in the first half with some growth in the second half. Obviously, auto has been a little more variable in terms of its recovery. There was some data out of China, which was a little weaker in the beginning of the year, perhaps you give some color on the visibility you have at auto and why you think that starts to grow again in the second half?

Michael R. Hsing: I don’t pay attention to these, which ones are strong — which segment is strong, which continent and it’s more stronger or weaker, because these are chasing the market. We’re not chasing the market. Whatever happened happens and we have the product ready, we can deliver. But Tony, you can talk about the near term, I don’t pay any attention to it.

Tony Balow: Yes. I mean I can add a little bit more there. I think, Chris, the shape of the year, as you said, right, our expectation hasn’t necessarily changed. And while we’ve talked about seeing that ramp later in the year is really on our belief on one of some of these designs that we previously won coming to market. We can’t control when our customers ramp. But the pipeline in auto has been expanding. And based on our current belief, we would expect to see that ramp later in the year. So again, as always, right, we’ll monitor as things go through, but that’s our belief at the moment.

Michael R. Hsing: Well, the bottom line is we’re winning socket and we’re expanding our market share.

Operator: Our next question comes from Kelsey Chia with Citi.

Wei Chia: Congrats on the results. Could you talk about the rationale behind focusing on silicon carbide for 800-volt step down while focused on gallium nitride just for the lower voltage, lower power segments. It seems like some of your peers are also using GaN for higher voltage step down. How would that influence your competitive positioning?

Michael R. Hsing: It’s a long question. Okay, it’s a long answer starting, okay, I didn’t — I said I didn’t believe in GaN, okay? And I still don’t believe for high power, I mean, we still have to prove that in the market segment. The reason we use the silicon carbide is these devices are proven in the history like 20 years ago, they’re making diodes, made the materials a lot more reliable. And there’s some fundamental issues, we started this — try to improve at start of 2016. And as a result, we have a deep know-how and to make — to use the silicon carbide. And the MPS is unlike other company, we’re selling — we don’t sell silicon carbide fabs. These are passive semiconductor pass-through device. And we always integrate into our modules. So that’s a kind of a short story for you, okay?

Wei Chia: Got it. And I know that the team historically has been able to gain share in tight supply environments. Could you talk more about your supply chain management strategy and also your confidence in meeting customer demand if other suppliers face capacity constraints?

Michael R. Hsing: We — throughout our history, if you look at it, and especially during 2021, and these are after COVID happened. And MPS always listen to our customers. We don’t play a passive role, when customers tell you to pull in too late, okay? And we have actively preemptively and to build these inventory, get these inventory ready and our product life cycle is very long. So we don’t have any materials, like a large amount and scrapping and we know this one, sooner or later we’ll sell. And again, like you asked me where these products ramping, I don’t know, plus/minus years, it will. And we don’t mind and have a little higher inventory, although in the last recent quarters, we cannot have enough to build up.

Tony Balow: Yes, I just think the last thing I’d add, just so it’s really clear is nothing about our outlook or anything we said about enterprise data floors because we see any constraints in the supply chain. It’s something we’ve continuously stayed ahead at. So the root of your question, Kelsey, was whether or not the 85% floor was limited by something, that’s not an issue right now.

Operator: I’m showing no further questions at this time. I would now like to turn it back to Tony Balow for closing remarks.

Tony Balow: Thank you, operator, and thank you all for joining us on this conference call today. I look forward to speaking with you on our next call for our second quarter 2026 results. Thanks, and have a great day.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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