Company: AOSL
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0001387467-25-000017
Chunk: 117

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-02-06
Form: 10-Q
Item: Item 2
Chunk 117
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 JV Company.  The funding of the investment will be made in three installments.  The JV Company received the first installment of RMB 40 million (or $5.5 million) on December 31, 2024.  The remaining installments are expected to be paid by July 31, 2025.  This transaction was considered as closed when the JV Company completed the registration of the issuance of equity interest to the investor with the local government authority on January 15, 2025, at which time, the percentage of outstanding JV Company’s equity interest owned by the Company was reduced to approximately 39.2%.

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In the past three years, we have been reducing our ownership of the JV Company to increase the flexibility of the JV Company to raise capital to fund its future expansion.  The JV Company is also contemplating an eventual listing on the Science and Technology Innovation Board, or STAR Market, of the Shanghai Stock Exchange.  The reduction of our ownership assists the JV Company in meeting certain regulatory listing requirements.  A potential STAR Market listing may take several years to consummate and there is no guarantee that such listing by the JV Company will be successful or will be completed in a timely manner, or at all.  In addition, the JV Company will continue to provide us with significant level of foundry capacity to enable us to develop and manufacture our products.  Pursuant to an agreement with the JV Company and other shareholders of the JV Company, the JV Company is committed to provide us with a specified level of monthly wafer production capacity.

Other Factors affecting our Performance

The global, regional economic and PC market conditions: Because our products primarily serve consumer electronic applications, any significant changes in global and regional economic conditions could materially affect our revenue and results of operations. A significant amount of our revenue is derived from sales of products in the PC markets, such as notebooks, motherboards and notebook battery packs.  Therefore, a substantial decline in the PC market could have a material adverse effect on our revenue and results of operations. The PC markets have experienced a modest global decline in recent years due to continued growth of demand in tablets and smart phones, worldwide economic conditions and the industry inventory correction which had and may continue to have a material impact on the demand for our products.

A decline of the PC market may have a negative impact on our revenue, factory utilization, gross margin, our ability to resell excess inventory, and other performance measures. We have executed and continue to execute strategies to diversify our product portfolio,