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AOSLInvestorPresenta0onB.RileyFBRConference
May23,2018
SafeHarborStatementThispresenta/oncontainsforward-lookingstatementsthatarebasedoncurrentexpecta/ons,es/mates,forecastsandprojec/onsoffutureperformancebasedonmanagement'sjudgment,beliefs,currenttrends,andan/cipatedproductperformance.Theseforwardlookingstatementsinclude,withoutlimita/on,statementsrela/ngtoprojectedamountofrevenues,grossmargin,opera/ngincome,statementsregardingmarketsegments,diversifica/onofproductsandnewcustomers;theexpectedtrendonrevenueandsalesforeachsegmentofourserviceablemarket;theprogressofconstruc/onofmanufacturingfacilityinourjointventurewithChongqingfunds;ourabilityandstrategytodevelopnewproducts,expandoursales,revenueandprofitability;expecta/onwithrespecttoourlicenseagreementwithSTMicroelectronics;ourabilitytomanagesupplyconstraintsandtheexpecta/onwithrespecttocapacitylimita/on;theexecu/onofourbusinessplan;andotherinforma/onregardingthefuturedevelopmentofourbusiness.Forward-lookingstatementsinvolverisksanduncertain/esthatmaycauseactualresultstodiffermateriallyfromthosecontainedinthispresenta/on.Addi/onalinforma/onconcerningtheseandotherriskfactorsiscontainedintheRiskFactorssec/onsofourmostrecentlyfiledForms10-Kand10-Q.AOSundertakesnoobliga/onanddoesnotintendtoupdatetheseforward-lookingstatementstoreflecteventsorcircumstancesoccurringaPerthispresenta/on.Non-GAAPResultsNon-GAAPresultsreferencedinthispresenta/oncontainnon-GAAPfinancialmeasuresbecausethefinancialcommunityusesnon-GAAPresultsinitsanalysisandcomparisonofhistoricalresultsandprojec/onsoftheCompany'sfutureopera/ngresults.Thesenon-GAAPresultsexcludeshare-basedcompensa/onexpense,Chongqingpre-produc/onexpensesandcertainotherexpensesandbenefits.Managementusesthesenon-GAAPmeasurestomanageandassesstheprofitabilityofthebusiness.Thesenon-GAAPresultsarealsoconsistentwithanotherwaymanagementinternallyanalyzesthecompany’sresultsandmaybeuseful.
AOSConfiden/al 2
Dollars in millions. Source: Gartner.
AOSLStory:NextPhaseofGrowth
q Corebusiness:healthygrowth• Drivenbyrecordhighdesignac/vi/es• Supportedbyinternalcapacityexpansion
q Newgrowthdriver:digitalpowercontroller• Ini/al$400MSAMexpansionintoservermarket• Tobecometotalpowersolu/onprovider
q Long-termsupply:ChongqingJV• 12”fabexpectedtorampstar/nginCY19• PhaseItosupportaddi/onal$150Mannualrevenue
AOSConfiden/al 3
Reigni0ngGrowth
AOSConfiden/al 4
Revenuesin$Million
Unaudited
$1 $12
$47
$98
$154
$202
$274
$185
$302
$361 $342 $337
$318 $328 $336
$383
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 Q1~Q3
$312
$108*
*Mid-pointofrevenueguidancerangefortheJune2018quarter
QuarterlyRevenue&GAAPGrossMargin
AOSConfiden/al 5
$77M$81M $81M $80M
$83M$91M
$97M $95M $93M $98M
$105M $104M $103M
16.6%17.6% 18.5% 18.8%
19.7%
21.3%22.5% 23.3% 24.3%
25.6%26.3%
27.0% 26.4%
10%
20%
$0M
$20M
$40M
$60M
$80M
$100M
$120M
Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18
Revenue GrossMargin%
0.23
MarQ2017 MarQ2018
Non-GAAPEPS($)**
HealthyGrowthMomentum
AOSConfiden/al 6
24.6
26.8
MarQ2017 MarQ2018
Non-GAAPGrossMargin(%)*
+220bps
*Non-GAAPgrossmarginexcludesshare-basedcompensa/onexpenses.**Non-GAAPEPSexcludesshare-basedcompensa/onexpensesandChongqingJVpre-produc/onexpenses.
0.2193.3102.9
MarQ2017 MarQ2018
Revenue($m)
+10% +9.5%
High-SingleDigit
Growth
Near-TermGrowthDrivers
AOSConfiden/al 7
• SmartphoneBaaeryPackgrowth
• Compu0ngsharegaininhighASPsockets
• HomeAppliancesRevenuegrowth
• Addi0onal$40milcapacityexpansioninFY18
• Support>$50milincrementalannualrevenue
GrowthStrategybySegment
8AOSConfiden/al
Compu0ng41%
Consumer21%
Communica0ons14%
PowerSupply/Industrial
21%
MarchQ2018
Chartexcludes‘Others’of3%
q Marketsharegainq NewentryintoAdvancedCompu0ngapplica0ons
q IGBTsolu0onforhomeappliancemarket
q GeographicexpansionofTVcustomers
q AlphaDFNproduc0onramp
q Furtherpenetra0onintotelecomnetworking
q Quickchargerproduc0onramp
q Broadencustomerbase
NewGrowthDrivers:AdvancedCompu0ng
PC300MU
TV200MU
Mobile1.4BU
AdvancedCompu0ng>11MUServer
• DigitalPowerController• TotalPowerSolu0on
AOSConfiden/al 9
AOSL
• HighlyefficientdiscreteandPIC
• Differen/atedpackagingcapability
• Strongcustomerrela/onship
STMicroIP
• Digitalpowermul/phasecontroller
• Op/malperformanceandprogrammability
• Ease-of-use
AdvancedPIC
• Totalpowersolu/ontocustomers
• Diversifyintonewmarketsandcustomerbase
• ShiPtohighervalueproducts
AcquiredIPEnablesAdvancedCompu0ng
LicenseAgreementwithSTMicroelectronicsenablesDigitalPowerControllerProductsand$400MNewMarkets
AOSConfiden/al 10
JVHelpsAddressCapacityConstraints
q ImprovementincapacityandCapExq BeoeraccesstodiversecustomersinChina
q Phase1JVsupports~$150milofaddi/onalrevenue
ChongqingJV($355mil)
AOS(54%)$35milcashExis0ngequipmentCertainmanufacturingIPs
Chongqing(46%)
$162milcashcontribu0on
ChongqingJVBuildingsandCleanrooms
ChongqingJVKeyMilestones
ı
q Construc/onofJVbuildingsandcleanroomscompletedq Assembly/Testtrialproduc/ontostartinthe2HCY18q 12”fabtrialproduc/ontowardtheendofCY18
AOSConfiden/al
ı
Assembly/Test
Produc/on
12”WaferFab
JVAgreementSigned
¢ ¢ ¢¢
Construc/onCommenced
2017⏏
2018⏏
2019⏏
TargetModel
AOSConfiden/al 13
Revenue
GrossMargin
Opera0ngExpense*
Near/MidTerm
High-singledigitgrowth
>Mid20%
~22%
LongerTerm
~$600mil
>30%
~20%
*Non-GAAPmeasuresexcludeshare-basedcompensa/onexpensesandCQJVpre-produc/oncosts.
HealthyEBITDAS
AOSConfiden/al 14
($1)
$38 $38
$13
($5) ($3) ($8) ($3)
$14
$10
$52
$63
$47
$33 $31
$28
$33
$51 $43M
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18 Q1~Q3
Net Income EBITDAS
$13
($Millions)
Dollars in millions. Source: Gartner.
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StrategicCapitalAlloca0onPlan�
q AOS-Only:Supportorganicgrowth• FY18internalcapacityexpansionsupportedbycashflowandmodestleverage
• AOSCapextotaperdownfrom2HCY2018• Investindigitalpowercontrollerproductline
q AOScashbalancetoreboundattheendofCY2018• SupportChongqingJVramp• $30milsharerepurchaseprogramauthorizedinSep.2017
q ChongqingJV:Progressasplanned• $63milleasefinancing• One-/me$25Mcashcontribu/ontoChongqingJV
Dollars in millions. Source: Gartner.
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KeyBalanceSheetMetrics�($Millions,exceptforra/os)
June 2017 Dec 2017 March 2018 Ratios
Cash – AOS Only $110.0 $89.0 $79.3
Debt $0.0 $0.0 $13.0 $0.53 / Share
Net Cash – AOS Only $110.0 $89.0 $66.3 $2.68 / Share
Cash - Chongqing JV $6.1 $57.1 $46.0
Trade Receivable $28.4 $28.4 $28.9 30 days DSO
Inventory $76.3 $85.7 $90.5 105 days in INV
Total Equity $298.5 $393.1 $436.2 $17.62 BV / Share
Dollars in millions. Source: Gartner.
AOSLStory:NextPhaseofGrowth
q Corebusiness:healthygrowth• Drivenbyrecordhighdesignac/vi/es• Supportedbyinternalcapacityexpansion
q Newgrowthdriver:digitalpowercontroller• Ini/al$400MSAMexpansionintoservermarket• Tobecometotalpowersolu/onprovider
q Long-termsupply:ChongqingJV• 12”fabexpectedtorampstar/nginCY19• PhaseItosupportaddi/onal$150Mannualrevenue
AOSConfiden/al 17
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NASDAQ:AOSL Q&A
www.aosmd.com
19
APPENDIX
March 31, 2018
March 31, 2017
GAAP gross profit $ 27,133 $ 22,697
Share-based compensation 449 222
Non-GAAP gross profit $ 27,582 $ 22,919
Non-GAAP gross margin as a % of revenue 26.8 % 24.6 GAAP net income attributable to AOS $ 1,651 $ 3,556
Share-based compensation 2,460 1,715
Income tax benefit from tax reform — —
Pre-production costs related to joint venture 1,615 —
Non-GAAP net income attributable to AOS $ 5,726 $ 5,271
Non-GAAP net income attributable to AOS as a % of revenue 5.6 % 5.7
GAAP diluted net income per share attributable to AOS $ 0.07
$ 0.14 Share-based compensation 0.10 0.07
Income tax benefit from tax reform — —
Pre-production costs related to joint venture 0.06 —
Non-GAAP diluted net income per share attributable to AOS $ 0.23
$ 0.21
Shares used to compute basic per share 23,795 23,675
Shares used to compute dilute per share 24,755 24,951
Threemonthsended
WorldClassOEMs/ODMs
StrategicCustomerRela0onships
AOSConfiden/al
5/23/18 20
KeyDistributors
(amemberof)
TaiwanSouthKorea
JapanChinaEurope
UnitedStates