Diodes Incorporated (NASDAQ:DIOD) Q4 2023 Earnings Call Transcript

Tristan Gerra: Okay. That’s great. And then for my follow-up, I believe most of your pricing agreements are in automotive. So outside of automotive, in terms of your revenue, that’s not locked into pricing agreement. I mean, what type of feedback are you getting from customers? Are people trying to ask for better pricing or is it relatively stable? And how do you think that evolves through the rest of this year?

Emily Yang: Yes, I think, Tristan, it really varies a lot depends on the end market, right? So you’re absolutely right. Usually in the Automotive Market segment, we actually have a longer time price matrix type of agreement in place with the customers. And for example, in the Computing Market segment, it’s going to be a lot more function and feature protocol driven discussion than some of the others. Of course, our price competitiveness is given, right? If we take more extreme in the consumer market, because the overall cost is very sensitive, the demand is weaker you tend to get more of the pricing discussions, right? So I think it varies a lot. It also varies from customer to customer. But in general, right, definitely as the demand is weaker, you definitely get a little bit more price pressure.

It’s almost going back to my discussion earlier, depends on the product type. If it’s a function feature rich type of product, you get less of the competition. If it’s a deep commodity, you get more. And just keep in mind that pre-COVID Diodes actually had a 1.5% to 2% built in quarterly price reduction. So we actually definitely structured to support this kind of overall pricing, I would say trend. And the way to really focus on is actually improve the manufacturing efficiency and the cost down to really balance this kind of pressure that we’re seeing in the market.

Tristan Gerra: Okay. Great. That’s very useful. Thank you very much.

Operator: Thank you. And this concludes today’s question-and-answer session. I’d like to turn the conference back over to the company’s President, Gary Yu.

Gary Yu: Thank you, everyone for participating on today’s call. We look forward to reporting our progress on next quarter’s conference call. Operator, you may now disconnect it.

Operator: Thank you, sir. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.