Alpha and Omega Semiconductor expands FQ1 revenue by 28.6 percent

Alpha and Omega Semiconductor FQ3 2020 results in line with guidance.
Image: Alpha and Omega Semiconductor

Alpha and Omega Semiconductor (AOS) expanded its fiscal first-quarter revenue by 28.6 percent year-over-year. The company grew its business thanks to strong demand from its computing and home appliance customers.

The firm anticipates its success will continue through the holiday period because of interest in its graphics card platforms.

Homebound Consumers Indirectly Drive Growth

In its latest annual financial disclosure form, AOS listed Dell, LG, Hewlett-Packard, and Samsung as its primary customers. With those companies as its chief clients, it is not surprising that its best-performing products are consumer electronics components. However, the firm’s remarkable FQ1 2021 gross income spike reflects larger global electronics market trends.

Last period, AOS took in $151.6 million, a sizable improvement on the $117.8 million it made in the same time frame last year. The company’s healthy intake enabled claim $9.6 million in net income, up significantly from its FQ1 2020 profit of $1 million.

The biggest change affecting the firm’s customer base in the last 12 months is inarguably the COVID-19 outbreak.

The health crisis and the regional lockdowns that followed led millions of people to working and learning from home. To adjust to new circumstances, consumers purchased new, more powerful business and educational hardware. Gartner noted the trend bolstered global personal computer sales by 3.6 percent in the September period.

As post-pandemic demand helped make Hewlett-Packard the world’s number two PC manufacturer last quarter, its mounting sales probably positively impacted AOS’ bottom line.

Similarly, Samsung reported its best-ever quarterly revenue for the period ending September 30.

The conglomerate’s gross income rose to new heights in part because of strong interest in its home appliances. With no sporting events or concerts to attend, people decided to upgrade their entertainment systems. Since Samsung is responsible for over 5 percent of AOS’ annual revenue, that change in end-market behavior benefited both companies.

2020 is Banner for the Gaming Industry

For Q2 2021, the chipmaker offered a revenue range of $150 million to $156 million. If the firm meets the high point of its guidance, it will grow its business by 2.90 percent.

AOS Chairman Dr. Mike Chang explained his firm recently launched multi-socket video game system and PC graphics card platforms. The offerings apparently did well in the September quarter, and the company has high expectations for them in the holiday period. Because the firm also believes its home appliance offerings will continue to move at a brisk pace, its near-term forecast is positive.

The company’s outlook makes sense since it is supported by historical seasonal data and more recent volatility.

The last three months of the year traditionally are a good time for the video game industry, but the 2020 holiday season should be even better. This year, Microsoft and Sony will deploy new consoles that have already sold out at the pre-sale level. Intel and Nvidia also recently launched new chips to make PC gaming more visually immersive than ever before.

In addition, homebound consumers have grown the video games sector by double digits this year while trying to relieve their boredom. Logically, that trend should intensify buyers rush to snap up new high-performance systems and PCs. AOS should reap big rewards in the first post-coronavirus holiday season by servicing console and computer hardware vendors.

Quite reasonably, the firm offered a measured outlook because of uncertainty regarding the pandemic’s second wave. But a year removed from its first outbreak, it is clear COVID-19 delays rather than destroys consumer demand. If the chipmaker does not have a blowout FQ1, its FQ2 intake will likely make up for the temporary shortfall.


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