Company: AOSL
Filing Date: 2025-08-28
Form Type: 10-K
Source: 0001628280-25-041297
Chunk: 59

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-08-28
Form: 10-K
Item: Item 1
Chunk 59
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 and 12-inch wafer fabrication facility (“Fab”, “Chongqing Fab” ) in the LiangJiang New Area of Chongqing, China, and the JV Company is an important supplier of wafers and assembly and test services to us.  On December 30, 2024, the JV Company signed an investment agreement with an investor, pursuant to which the investor agreed to invest RMB 500 million (or $68.5 million based on the currency exchange rate between RMB and 

1

U.S. Dollar on December 31, 2024) in the JV Company in exchange for a 7.09% interest.  This transaction closed 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%.  We recorded a gain of $0.5 million on the change of equity interest in the JV Company, which was included in the equity method investment loss line in the consolidated statements of operations.  The funding of the investment was agreed to be made in three installments.  The JV Company received the first installment of RMB 40 million (or $5.5 million) on December 31, 2024.  However, the JV Company has not received the remaining two installments as of the filing date.

On July 14, 2025, we entered into an equity transfer agreement (“Agreement”) with the investor to sell approximately 20.3% of outstanding equity interest in the JV Company for an aggregate cash consideration of $150 million. We identified the negotiations of the equity transfer agreement throughout the fourth quarter of fiscal year 2025 as an impairment indicator and performed a quantitative impairment test as of June 30, 2025. Based on the implied valuation of the JV Company per the transaction price in the equity transfer agreement, the fair value of the equity method investment was determined to be lower than its carrying value, and a $76.8 million other-than-temporary impairment of the equity method investment was recognized as of June 30, 2025.  We believe this sale will provide additional and significant capital for us to continue investment in technology, research and development projects and acquisition of assets complimentary to our business operations, which will facilitate and accelerate our efforts to develop and distribute innovative and diverse power semiconductor products to customers worldwide.  In addition, the JV Company will continue to provide us with a significant level of foundry capacity to enable us to