POWI Q2 2025: July bookings down 20%, Q3 revenue outlook $118M
- Technological Leadership in GaN: The company’s proprietary GaN technology (notably the 12.50 Volt GaN) sets it apart from competitors and positions it well to capture opportunities in high-power applications, including both data center and automotive markets.
- Strong Progress in Automotive and Industrial Segments: With design wins leading to products now in about 30 cars on the road and expectations to generate low double-digit million revenue in automotive by 2026, the company demonstrates robust momentum in growing high-value markets.
- Effective Management of Inventory and Tariff Impacts: Despite near-term challenges from evolving tariffs, controlled channel inventory levels and strong major appliance performance (with 15% YoY growth) indicate that the business can adjust effectively and capitalize on demand as conditions normalize.
- Tariff Headwinds and Consumer Weakness: Tariffs are impacting the consumer segment, particularly major appliances. Comments indicate that while first-half growth in appliances appeared strong due to front running, there is a risk of a pullback in the second half as consumer orders weaken and design wins don't offset the downturn in traditional appliances.
- Decline in Bookings: There was a 20% decline in bookings in July, which is below the normal run rate. This slowdown raises concerns about near-term demand, especially when combined with market uncertainties around tariffs.
- Extended Inventory Adjustments: The adjustment in channel inventory, particularly in the appliance segment, may persist for two or more quarters. This lingering correction could delay revenue normalization and reflect ongoing market uncertainty.
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
GaN Technology Leadership and Evolution | Discussed extensively in Q1 2025 (highlighting 750V, 900V, 1250V, and 1700V capabilities ) and in Q4 2024/Q3 2024 emphasizing cost‐reduction, voltage leadership, and system‐level solutions ( , , ). | Q2 2025 call focused on proprietary GaN leadership with emphasis on high-voltage GaN (1250V and 1700V), system-level solutions for data centers and automotive, and differentiation via process and device control ( , , ). | Consistent focus with increased emphasis on system-level applications, market differentiation, and leveraging proprietary technology. |
Automotive Segment Growth and Design Wins | Q1 2025 and Q4 2024 highlighted early GaN design wins (e.g. first automotive GaN design win for a drivetrain emergency power supply ) and Q3 2024 detailed geographic expansion and wins with Tier 1 suppliers ( , , ). | Q2 2025 showcased progress with products now in about 30 cars, multiple design wins across China, India, and the U.S., and continued momentum in expanding automotive applications ( ). | Steady positive momentum with expanding geographic reach and additional design wins driving growth in the automotive segment. |
Industrial Segment Expansion and Momentum | Consistently noted in Q1 2025, Q4 2024, and Q3 2024 through high-power design wins in renewables, high-voltage DC transmission, and metering among other segments ( , , ). | Q2 2025 reported nearly 30% sequential growth, with new design wins including traction inverters, solar and battery storage inverters, and continued strength in the metering business ( , , ). | Robust and accelerating growth with expanding high-power applications and strong revenue contributions in industrial markets. |
Consumer Revenue Challenges and Tariff Impacts | Q1 2025 highlighted strong YoY growth (20%+) driven by TVs and game consoles, while Q4 2024 and Q3 2024 noted softness in appliances and inventory issues amid tariff and subsidy uncertainties ( , , ). | Q2 2025 reported mid-single digit declines in revenue due to softness in appliances, with evidence of tariff front-running impacting orders and customer caution ( , ). | Shift from early strong performance to more cautious outlook as tariff impacts and inventory adjustments weigh on the consumer segment. |
Inventory Management and Adjustments | Q1 2025 noted stable channel inventories (around 7.9 weeks) with some adjustments; Q3 2024 and Q4 2024 described slight overbuilds in consumer channel and elevated inventory days with expectations for normalization ( , , , ). | In Q2 2025, channel inventory fell to 7.6 weeks and balance sheet inventory dropped, with expectations for flattish sell-in/sell-through in Q3, reflecting ongoing adjustments ( , , ). | Ongoing normalization with improved balance sheet metrics; adjustments continue but trending towards steady channel inventory levels. |
Bookings and Backlog Trends | Q1 2025 described stable bookings with a book-to-bill ratio >1 and normal backlog growth; Q4 2024 and Q3 2024 did not provide notable commentary on this topic ( , ). | Q2 2025 noted a 20% decline in bookings in July—primarily in the appliances segment—due to tariff uncertainty, triggering caution in revenue guidance ( , ). | A shift from previously stable bookings to emerging caution as external tariff uncertainties impact order flow. |
High-Power GaN Execution and Adoption Risks | Q1 2025 mentioned a minor delay in one high-power program but expressed confidence in design wins; Q3 and Q4 2024 discussed technical challenges, breakthrough timelines, and competitive risks with high-power GaN technology ( , , , , ). | Q2 2025 emphasized robust execution of proprietary high-power GaN with extensive discussion on system-level solutions and validation of their approach (e.g. TSMC exiting foundry business), while acknowledging market risks ( , , ). | Consistent optimism regarding high-power GaN, with continued confidence despite acknowledged market and competitive risks. |
Currency Volatility and Margin Pressure | Q1 2025 detailed the benefit from a weak yen (providing 200 basis points benefit ); Q4 2024 noted favorable exchange rate impacts on gross margins with little mention at Q3 2024 ( ). | Q2 2025 noted a slight decline in non-GAAP gross margins (down 10 basis points) due to higher input costs and a smaller benefit from the dollar-yen exchange rate ( ). | Persistent exposure to currency fluctuations; current period shows slightly increased margin pressure due to higher input costs offsetting exchange benefits. |
Data Center Revenue Recognition Delays | Q4 2024 discussed that significant revenue for data center products will be recognized in 2028 (with minor revenue in 2027) ( ); Q1 and Q3 2024 did not mention this topic. | Q2 2025 did not address data center revenue recognition delays. | Previously a point of focus, now not mentioned, suggesting a temporary or lower priority discussion in the current period. |
Macro Economic and Regulatory Uncertainties | Q1 2025 mentioned trade policy and tariff uncertainties impacting second-half outlook ( , ); Q3 2024 highlighted renewables, energy efficiency regulations, and the muted impact of China’s stimulus; Q4 2024 discussed effects of tariffs and Chinese subsidies ( ). | Q2 2025 provided detailed commentary on tariffs (steel and finished goods), interest rate impacts on the housing market, and customer caution driven by changing trade policies ( , , , ). | A recurring concern that has intensified in the current period, with sharper focus on tariff-driven uncertainties impacting order and revenue trends. |
Strategic Acquisitions in GaN Technology | Highlighted in Q4 2024 and Q3 2024 regarding the acquisition of Odyssey Semiconductor, which was cited as accelerating high-power GaN development and expanding technology capabilities ( , , , ). | Q2 2025 did not mention any strategic acquisitions related to GaN technology. | Previously emphasized as a strategic move; its absence in the current discussion may indicate integration progress or a shifted focus in the current period. |
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Guidance & Bookings
Q: How is guidance de-risked amid macro shifts?
A: Management explained that despite a 20% drop in bookings in July, they set a cautious Q3 revenue outlook of about $118M, reflecting tariff uncertainties while expecting underlying industrial strength to support future growth. -
Segment Mix
Q: How are segments driving Q3 guidance?
A: They noted that Industrial remains robust while Consumer is flat—offset by design wins in video gaming—which balances the mix and supports the overall outlook. -
Inventory Adjustment
Q: Is the inventory pull mainly in Consumer?
A: Management highlighted that the adjustment is driven largely by the appliance segment, with orders falling sharply; this correction is expected to last at least two quarters. -
Competitive Positioning
Q: Has TSMC’s GaN exit shifted competition?
A: They stressed that while rivals can switch foundries, no one matches their proprietary 12.5V GaN capability, which gives them a leading edge in performance and cost. -
GaN in Data Centers
Q: When will you join NVIDIA’s approved vendor list?
A: They indicated active engagement in data center applications, with GaN sampling for main converters scheduled next year and existing 12.5V and 1,700V solutions already supporting auxiliary power. -
Competitor Outlook
Q: Can double-digit long-term CAGR resume?
A: Management expects every segment, especially Industrial with strong GaN differentiation, to rebound into a double-digit CAGR once the current adjustment subsides. -
Channel Inventory
Q: What is the channel inventory outlook?
A: They reported channel inventory is maintained at around 7.7 weeks overall (approximately 6 weeks in Consumer) and should remain flat, supported by short lead times even amid tariff uncertainty. -
Seasonality vs Tariff
Q: How do seasonality and tariffs interplay in Q4?
A: They explained that seasonality primarily affects high-power and cell phone sectors, with the current inventory adjustment—driven by tariffs—likely extending over at least two quarters as market conditions evolve.
Research analysts covering POWER INTEGRATIONS.