What changed in this filing

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Item 1. Business

2024-08-23 compared with 2023-08-29 · 75 added, 70 removed, 352 unchanged (29% of the section changed)

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We are a designer, developer and global supplier of a broad portfolio of power semiconductors.

Our portfolio of power semiconductors includes approximately 2,600 products, and has grown significantly with the introduction of over 60 new products in the fiscal year ended June 30, 2023, and over 130 and 160 new products in the fiscal year ended June 30, 2022 and 2021, respectively.

Our portfolio of power semiconductors includes approximately 2,700 products, and has grown with the introduction of over 100 new products in the fiscal year ended June 30, 2024, and over 60 and 130 new products in the fiscal years ended June 30, 2023 and 2022, respectively.

Our teams of scientists and engineers have developed extensive intellectual properties and technical knowledge that encompass major aspects of power semiconductors, which we believe enables us to introduce and develop innovative products to address the increasingly complex power requirements of advanced electronics.

We have an extensive patent portfolio that consists of 918 patents and 45 patent applications in the United States as of June 30, 2023.

We have an extensive patent portfolio that consists of 930 issued patents and 52 pending patents in the United States as of June 30, 2024.

We also have a total of 1,025 foreign patents, which were based primarily on our research and development efforts through June 30, 2024.

We differentiate ourselves by integrating our expertise in technology, design, and advanced packaging to optimize product performance and cost.

Our portfolio of products targets high-volume applications, including portable computers, graphics cards, home appliances, power tools, smart phones, battery packs, consumer and industrial motor controls and power supplies for TVs, computers, servers and telecommunications equipment.

We differentiate ourselves by integrating our expertise in technology, design and advanced manufacturing and packaging to optimize product performance and cost.

Our portfolio of products targets high-volume applications, including personal computers, graphic cards, game consoles, flat panel TVs, home appliances, power tools, smart phones, battery packs, consumer and industrial motor controls and power supplies for TVs, computers, servers and telecommunications equipment.

During the fiscal year ended June 30, 2024, we continued our diversification strategy by developing new silicon and packaging platforms to expand our serviceable available market, or SAM, and offer higher performance products.

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Our business model leverages global resources, including research and development and manufacturing in the United States and Asia.

Our sales and technical support teams are localized in several growing markets around the world.

We operate an 8-inch wafer fabrication facility located in Hillsboro, Oregon (the "Oregon fab"), which is critical for us to accelerate proprietary technology development, new product introduction and improve our financial performance.

We also expanded and upgraded our manufacturing capabilities at the Oregon Fab in 2023.

Our sales and technical support teams are localized in several growing markets.

We operate an 8-inch wafer fabrication facility located in Hillsboro, Oregon, or the Oregon Fab, which is critical for us to accelerate proprietary technology development, new product introduction and improve our financial performance.

To meet the market demand for the more mature high volume products, we also utilize the wafer manufacturing capacity of selected third party foundries.

We utilize both in house assembly and test facilities in China as well as subcontractors for industry standard packages.

For assembly and test, we primarily rely upon our in-house facilities in China.

In addition, we utilize subcontracting partners for industry standard packages.

We believe our in-house packaging and testing capability provides us with a competitive advantage in proprietary packaging technology, product quality, cost and sales cycle time.

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As of December 1, 2021, we owned 50.9%, and the Chongqing Funds owned 49.1%, of the equity interest in the JV Company.

The Joint Venture

was accounted under the provisions of the consolidation guidance since we had controlling financial interest until December 1, 2021.

The Joint Venture was accounted under the provisions of the consolidation guidance since we had controlling financial interest until December 1,

As of December 2, 2021, we ceased having control over the JV Company.

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Such reduction reflects (i) the sale by the Company of approximately 2.1% of the outstanding JV equity interest which resulted in the deconsolidation of the JV Company, (ii) additional sale by the Company of approximately 1.1% of outstanding JV equity interest in December 2021, (iii) the adoption of an employee equity incentive plan and the issuance of additional equity interest equivalent to 3.99% of the JV Company to investors in exchange for cash in December 2021, and (iv) issuance of additional equity interest of the JV to investors in January 2022.

In February 2024, the JV Company repurchased certain shares that were previously issued to employees under the employee equity incentive plan, which increased our percentage of equity ownership in the JV Company by 0.54%.

As of June 30, 2024, the percentage of outstanding JV equity interest beneficially owned by us was 42.8%.

While we no longer control the JV Company, the JV Company continued to provide us with significant level of foundry capacity to enable us to develop and manufacture our products, including a commitment to provide us with a monthly wafer production capacity until December 2023, and additional commitment to provide wafer capacity after December 2023 if the JV Company’s production capacity reaches certain specified level.

We were incorporated in Bermuda on September 27, 2000 as an exempted limited liability company.

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The proliferation of computer and consumer electronics, such as notebooks, tablets, smart phones, flat panel displays and portable media players created the need for sophisticated power management that increases power efficiency and extends battery life.

The evolution of these products is characterized by increased functionality, thinner and smaller form factors and decreasing prices.

The evolution of these

products is characterized by increased functionality, thinner and smaller form factors and decreasing prices.

Our Power IC and low voltage (5V-40V) MOSFET products address these markets.

In the area of AC-DC power supplies for electronic

equipment, data centers and servers, the market is characterized by a continuous demand for energy conservation through higher efficiency, which drives the market for our medium voltage (40V-400V) and high voltage (500V-1000V) MOSFET products.

In the area of AC-DC power supplies for electronic equipment, data centers and servers, the market is characterized by a continuous demand for energy conservation through higher efficiency, which drives the market for our medium voltage (40V-400V) and high voltage (500V-1000V) MOSFET products.

The increased application of power semiconductors to control motors in white goods and industrial applications is driving demand for Insulated Gate Bipolar Transistors, or IGBTs.

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Power ICs can be implemented by incorporating all necessary power functions either on one piece of silicon or multiple silicon chips encapsulated into a single device.

Additionally, advancements in semiconductor packaging technology enables increased power density and shrinking form factors.

Power semiconductor suppliers develop and manufacture their products using various approaches which tend to fall across a wide spectrum of balancing cost savings with proprietary technology advantages.

At one end of the spectrum are integrated design manufacturers, or IDMs, which own and operate the equipment used in the manufacturing process and design and manufacture products at their in-house facilities.

IDMs exercise full control over the implementation of process technologies and have maximum flexibility in setting priorities for production and delivery schedules.

At the other end of the spectrum are completely-outsourced fabless semiconductor companies, which rely entirely on off-the-shelf technologies and processes provided by manufacturing partners.

These companies seek to reduce or eliminate fixed costs by outsourcing both product manufacturing and development of process technologies to third parties.

Our model balances between technological advancement and cost effectiveness by using a dedicated in-house technology research and development team to drive rapid new product developments, while utilizing both in-house and third-party foundry capacity for our products.

Additionally, advancements in semiconductor packaging technology enable increased power density and shrinking form factors.

Our business and operational model is based on achieving a balance between technological advancement and cost effectiveness by using a dedicated in-house technology research and development team to drive rapid new product developments, while utilizing both in-house and third-party foundry capacity for our products.

This is particularly important in the development of power semiconductor products due to the unique nature of their technology.

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We intend to continue exploring opportunities to expand our manufacturing capabilities, including acquisition of existing facilities, formation of joint ventures or partnerships with third parties or applying for government funding or grants available in the semiconductor industry.

Although our largest end-market is the personal computing (“PC”) market, we have successfully diversified our business by expanding into other markets, including consumer, communications, and industrial markets.

While we have made progress in our diversification and expansion into additional applications, we continue to support and grow our PC business by expanding bill-of-material content, gaining market share, and acquiring new customers.

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We believe that the ever-increasing demand for power efficiency in power semiconductors requires expertise in and a deep understanding of the interrelationship among device physics, process technologies, design and packaging.

believe that engineers with experience and understanding of these multiple disciplines are in great demand but short supply.

We also believe that engineers with experience and understanding of these multiple disciplines are in great demand but short supply.

Within this context, we believe that we are well positioned to be a leader in providing total power management solutions because of our extensive pool of experienced scientists and engineers and our strong IP portfolio.

Accordingly, we intend to leverage our expertise to increase the number of power discrete technology platforms and power IC designs, including future digital power controller products that are currently under development, to expand our product offerings and deliver complete power solutions for our targeted applications.

In addition, our ability to develop new technology is enhanced by the operation of our own manufacturing facilities in Oregon and Chongqing.

power solutions for our targeted applications.

In addition, our ability to develop new technology is enhanced by the operation of our own manufacturing facilities in Oregon and our close partnership with the JV.

Increase direct relationships and product penetration with OEM and ODM customers

We have developed direct relationships with key OEMs that are responsible for branding, designing and marketing a broad array of electronic products, as well as ODMs that have traditionally been responsible for manufacturing these products.

We are also focusing on developing and solidifying relationships with certain Tier 1 customers, whose reputation, resources and market share may enable us to generate more significant sales and design wins.

While OEMs typically focus design efforts on flagship products, ODMs are increasingly responsible for designing portions, or entire systems, of the products they manufacture for OEMs.

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Our power ICs deliver power as well as control and regulate the power management variables, such as the flow of current and level of voltage.

Our DrMOS family of products continue to grow as we paired our latest high performance MOSFET silicon with our latest Driver IC technologies.

We continue to expand our EZBuck power IC family with products that feature lower on-resistance, less power consumption, smaller footprint and thermally enhanced packages.

While we derive the majority of our revenue from the sale of power discrete products, sale of power ICs continued to gain traction during the past years.

Our Type C smart load switch product line has also expanded as it offers reverse blocking capability, designed to protect applications against high voltage exposure.

Our DrMOS and smart power stage (SPS) family of products continue to grow as we paired our latest high performance MOSFET silicon with our latest Driver IC and smart driver technologies.

We continue to expand our EZBuck power IC family with products that feature lower on-resistance, less power consumption, smaller footprint and thermally enhanced packages as well.

Our smart load switch products have expanded beyond basic load switched to include specialized applications like Type C and eFuse.

Success has been driven by increased power density and protection to discrete solutions.

Sale of power ICs continued to gain traction during the past years especially with the expansion of our driver and multiphase controller product lines.

We introduced higher voltage drivers to expand success beyond PCs to motor drive applications such as power tools and garden equipment.

We have also made a major investment in R&D to enter the multiphase controller market in 2020 with the introduction of the Intel IMVP 9.1 controller for notebooks.

Since then, AOS has released or is designing in several multiphase controller families serving Intel, AMD and Nvidia.

Introduction of these

multiphase controllers has enabled AOS to become a complete solution level provider, across multiple compute platforms from PCs, graphics cards to AI and datacenter.

The following table lists our product families and the principal end uses of our products:

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We introduced several new products based on our proprietary technology platform and continue to expand our product families.

During the fourth quarter of fiscal year of 2023, we released the 600V αMOS7™ Super Junction MOSFETs Family.

These devices are designed to meet the high efficiency and high-density needs of servers, workstations, telecom rectifiers, solar Inverters, EV charging, motor drives and industrial power applications.

During the third quarter of fiscal year of 2023, we introduced a powerful duo of sink and source switches that can increase the power delivery capability of USB Type-C ports to 140W, paving the way for Type C extended power range (EPR)

implementations.

The AOZ13937DI is suited for 28V Type C sinking applications while the AOZ15333DI is capable of Type C sourcing applications.

These new switches are suited for 28V Type C EPR implementations in high-performance laptops, personal computers, monitors, docking, and other applications.

Also, we introduced an extension to our active bridge driver, AlphaZBL™ family.

The new device in this family is suitable for use in adapters for high-end laptops and televisions, as well as power supplies for Desktops, Game consoles, and Servers.

During the second quarter of fiscal year of 2023, we introduced our new industry-leading 650V and 750V SiC MOSFET platform for both industrial and automotive applications.

The 650V SiC MOSFETs are ideal switching solutions for industrial applications such as solar inverters, motor drives, industrial power supplies, and new energy storage systems, while the AEC-Q101 qualified 750V SiC MOSFET line is targeted for the high-reliability needs in electric vehicle (EV) systems such as the on-board charger (OBC) and the main traction inverter.

Also, we introduced an extension to our compact Smart Motor Module (SMM) family.

Available in an ultra-compact, thermally enhanced 3mm x 3mm QFN-18L package, the highly integrated AOZ9530QV SMM is a half-bridge power stage with a slew of features and protections that simplify motor drive designs.

The AOZ9530QV SMM is suitable for use in a large number of BLDC fan applications ranging from PC and server fans, seat cooling and home appliances.

In addition, we released AONS30300, a 30V MOSFET with low on-resistance.

The AONS30300 features a high Safe Operating Area (SOA) capability making it ideally suited for demanding applications such as hot swap and eFuse.

During the fourth quarter of fiscal year of 2024, we expanded our package portfolio options available for the second generation 650V to 1200V αSiC MOSFETs.

These new package selections give designers the added flexibility of multiple system optimization options to further maximize system efficiency while streamlining their manufacturing process.

We introduced industry’s lowest quiescent power multiphase Vcore solution for computing systems.

This new Vcore solution

offers low quiescent power in all power states to maximize battery life.

Also, we introduced innovatively designed, space-saving half-bridge MOSFET for DC-DC applications.

In addition, we introduced ultra-low capacitance TVS diode series.

This is ideal to protect high-speed serial interfaces that are used in a broad range of electronic systems.

Moreover, we introduced a 20V, 7A type-C sourcing protection switch designed to enhance USB type-C efficiency and safety.

During the third quarter of fiscal year of 2024, we introduced XSPairFET™ Buck-Boost MOSFET for higher power USB PD 3.1 EPR applications.

This reduces board space and improves power density to achieve the high-efficiency performance goals designers have set for this widely adopted USB-PD Type C application.

Also, we announced application-specific EZBuck™ regulator to power intel meteor lake and arrow lake platforms.

We launched 3-phase driver IC to increase battery life of cordless power tools and E-mobility.

In addition, we announced innovatively designed double-sided cooling DFN 5x6 package to meet a wide variety of high-performance application requirements.

Moreover, we released αMOS5™ 600V FRD 95mohm and 125mohm super junction MOSFET which are designed to meet the high efficiency and high-density needs of servers, workstations, telecom rectifiers, solar Inverters, EV charging, motor drives and industrial power applications.

During the second quarter of fiscal year of 2024, we released our state-of-the-art automotive TO-leadless (TOLL) package for the company’s automotive grade 80V and 100V MOSFETs.

This TOLL package helps designers meet the ongoing trend to electrify vehicles with the latest battery technology to meet clean energy zero-emission goals.

During the first quarter of fiscal year of 2024, we announced ultra-low reverse working voltage TVS diodes for USB4 and thunderbolt 4 ESD protection.

This feature can provide a faster response time compared to conventional snap-back devices, enabling it to absorb ESD energy extremely quickly to avoid damage to the IC and surrounding components.

Also, we introduced MRigidCSP™ package technology strengthening our battery management MOSFETs.

In addition, we announced application-specific EZBuck™ regulator to power 5V system rails.

Distributors and customers

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We believe that the technical background of our marketing team, including application engineers, helps us better define new products and identify potential end customers and geographic and product market opportunities.

For example, as part of our market diversification strategy, we have deployed and plan to recruit more, field application engineers, or FAEs, for our new product offerings, who provide real-time and local response to our end customers' needs.

For example, as part of our market diversification strategy, we have deployed and plan to recruit more, field application engineers, or FAEs, for our new product offerings, providing real-time and local response to our end customers' needs.

FAEs work with our end customers to understand their requirements and resolve technical problems.

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We strategically position our team near our end customers through our offices in Taipei, Hong Kong, Shenzhen, Shanghai, Qingdao, Suzhou, Tokyo, Seoul, Heilbronn, and Sunnyvale, California, complemented by our applications centers in Sunnyvale and Shanghai.

In addition, our distributors and sales representatives assist us in our sales and marketing efforts by identifying potential customers, creating additional demand and promoting our products, in which case we may pay a sales commission.

In addition, our distributors and sales representatives

assist us in our sales and marketing efforts by identifying potential customers, creating additional demand and promoting our products, in which case we may pay a sales commission.

Our sales cycle varies depending on the types of products and can range from six to eighteen months.

In general, our traditional power discrete products in PC and TV applications progress more rapidly through the customer's design and marketing processes, and therefore they generally have a shorter sales cycle.

In contrast, our newer Power IC and IGBT

products, used mostly in the power supply, home appliance and industrial applications, require a more extended design and marketing timeline and thus have a longer sales cycle.

In contrast, our newer Power IC and IGBT products, used mostly in the power supply, home appliance and industrial applications, require a more extended design and marketing timeline and thus have a longer sales cycle.

Typically, our sales cycle for all products comprises the following steps:

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As we provide power semiconductors used in consumer electronic products, our business is subject to seasonality.

Our sales seasonality is affected by a number of factors, including global and regional economic conditions as well as the PC market condition, revenue generated from new products, changes in distributor ordering patterns in response to channel inventory adjustments and end customer demand for our products and fluctuations in consumer purchase patterns prior to major holiday seasons.

Our sales seasonality is affected by a number of factors, including global and regional economic conditions as well as the PC market trends and conditions, revenue generated from new products, changes in distributor ordering patterns in response to channel

inventory adjustments and end customer demand for our products and fluctuations in consumer purchase patterns prior to major holiday seasons.

Our sales are made primarily pursuant to standard purchase orders from distributors and direct customers.

The amount of backlog to be shipped during any period depends on different factors, and all orders are subject to cancellation or modification,

usually with no penalty to customers.

The amount of backlog to be shipped during any period depends on different factors, and all orders are subject to cancellation or modification, usually with no penalty to customers.

The quantities actually purchased by customers, as well as shipment schedules, are frequently revised to reflect changes in both the customers’ requirements and in manufacturing availability.

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We allocate our wafer production between our in-house facility and third-party foundries.

During the past three years, we have gradually reduced our reliance on third-party foundries and increased allocation of capacity to our Oregon Fab and Chongqing JV Fab.

We entered into an agreement with the JV Company for the Chongqing Fab, pursuant to which the JV Company agrees to provide us with a monthly wafer production capacity guarantee, subject to future increase when the JV Company’s production capacity reaches certain specified levels.

Currently our main third-party foundry is Shanghai Hua Hong Grace Electronic Company Limited, ("HHGrace"), or formerly HHNEC, located in Shanghai.

past three years, we have gradually reduced our reliance on third-party foundries and increased allocation of capacity to our Oregon Fab and Chongqing JV Fab.

On July 12, 2022, we entered into an agreement with the JV Company for the Chongqing Fab, pursuant to which the JV Company committed to provide us with a monthly wafer production capacity until December 2023, and additional commitment to provide wafer capacity after December 2023 if the JV Company’s production capacity reaches certain specified level.

Currently our main third-party foundry is Shanghai Hua Hong Grace Electronic Company Limited, ("HHGrace") located in Shanghai.

HHGrace has been manufacturing wafers for us since 2002.

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We own significant intellectual property in many aspects of power semiconductor technology, including device physics and structure, wafer processes, circuit designs, packaging, modules and subassemblies.

We have also entered into intellectual property licensing agreements with other companies, including On Semiconductor Corp.

and Giant Semiconductor Corporation, to use selected third-party technology for the development of our products, although we do not believe our business is dependent to any significant degree on any individual third-party license agreement.

In February 2023, we entered into a license agreement with a customer to license our proprietary SiC technology and to provide 24-months of engineering and development services for a total fee of $45 million, consisting of upfront fees and fees upon the achievement of specified engineering services and product milestones.

We have also entered into intellectual property licensing agreements with other companies to use selected

third-party technology for the development of our products, although we do not believe our business is dependent to any significant degree on any individual third-party license agreement.

In February 2023, we entered into a license agreement with a customer to license our proprietary SiC technology and to provide 24-months of engineering and development services for a total fee of $45 million, consisting of fees of $18.0 million, $6.8 million and $9.0 million paid to us in the March 2023, July 2023 and February 2024, respectively, with the remaining amount to be paid upon the achievement of specified engineering services and product milestones.

While we focus our patent efforts in the United States, we file corresponding foreign patent applications in other jurisdictions, such as China and Taiwan, when filing is justified by cost and strategic importance.

The patents are increasingly

important to remain competitive in our industry, and a strong patent portfolio will facilitate the entry of our products into new markets.

The patents are increasingly important to remain competitive in our industry, and a strong patent portfolio will facilitate the entry of our products into new markets.

As of June 30, 2024, we had 930 patents issued in the United States, of which 927 were based on our research and development efforts and 3 were acquired, and these patents are set to expire between 2024 and 2042.

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We are also focused on ensuring a diverse workforce, including our management team.

Our Nominating and Corporate Governance Committee leads the effort in recruiting qualified directors to serve on our Board.

Our Nominating

and Corporate Governance Committee leads the effort in recruiting qualified directors to serve on our Board.

Our employees appreciate and value the strength of our people-oriented culture and the benefits our workplace diversity brings.

We commit to a fair and living wage for all employees.

We offer competitive compensation and benefits packages for our employees that include a combination of base salary, annual bonus, discretionary bonus for outstanding achievements, an employee share purchase plan, time-based and performance-based long-term equity compensation.

We offer competitive compensation and benefits packages for our employees that include a combination of base salary, annual bonus, discretionary bonus for outstanding achievements, an employee stock purchase plan, time-based and performance-based long-term equity compensation.

Our equity related compensation programs are designed to motivate and incentivize our employees and align their rewards to financial and other business performance goals, while increasing our shareholder value.

We have an established Employee Recognition Award program which is regularly utilized to recognize the outstanding achievements of employees and teams that go above and beyond to achieve AOS business goals.

In addition, we have engaged nationally-recognized outside independent compensation

consulting firms to independently evaluate the appropriateness and effectiveness of compensation for our executives and other officers and to provide benchmarks for executive compensation as compared to peer companies.

The health and safety of our employees are paramount to our company.

While the COVID-19 global health emergency has ended, COVID-19 and other infectious diseases remain a threat to the health and safety of employees.

As such, we continue to monitor and follow requirements and guidance related to COVID-19 prevention in the workplace published by applicable public health agencies in various jurisdictions in which we operate.

In addition, we have policies and procedures in place to respond to COVID-19 infection in the workplace including isolation requirements for employees infected with COVID-19 and close contact individuals.

We believe policies and procedures help to ensure the health and safety of our employees.

In addition, we have engaged nationally-recognized outside independent compensation consulting firms to independently evaluate the appropriateness and effectiveness of compensation for our executives and other officers and to provide benchmarks for executive compensation as compared to peer companies.

Environmental matters

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The following table lists the names, ages and positions of our executive officers as of August 15, 2024.

There are no family relationships between any executive officer, except that Mr.

There are no family relationships between any executive officers, except that Mr.

Chang is a son of Dr.

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Chang, Ph.D ., is the founder of our company and serves as our Executive Chairman.

Chang served as Chief Executive Officer from the founding of our company until March 2023.

Chang served as Chief Executive Officer since the founding of our company until March 2023.

Prior to establishing our company, Dr.

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Liang served as our Interim Chief Financial Officer from November 2013 to August 2014, our Chief Accounting Officer since October 2006, and our Assistant Corporate Secretary from November 2009 to November 2013.

Liang joined our company in August 2004 as our Corporate Controller.

Liang became our company's corporate controller in August 2004.

Prior to joining us, Mr.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business