Prospectus Summary
PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. You should read the following summary in conjunction with the more detailed information and our consolidated financial statements and related notes appearing elsewhere in this prospectus. You should read the entire prospectus carefully, including “Risk Factors” and our consolidated financial statements and related notes, before deciding whether to purchase our common shares.Our Business
We are a designer, developer and global supplier of a broad range of power semiconductors. Our portfolio of power semiconductors is extensive, with over 600 power discrete and power integrated circuit, or power IC, products, and has grown rapidly with the introduction of over 100 new products each year during the past three fiscal years. We seek to differentiate ourselves by integrating our expertise in device physics, process technology, design and advanced packaging to optimize product performance and cost. Our broad portfolio of products targets high-volume end-market applications, such as notebooks, netbooks, flat panel displays, mobile phone battery packs, set-top boxes, portable media players and power supplies. Our products are incorporated into devices branded by leading original equipment manufacturers, or OEMs, which, for the six months ended December 31, 2009, included ASUSTeK Computers Inc., Dell Inc., Hewlett-Packard Company and Samsung Group and into devices manufactured by leading original design manufacturers, or ODMs, which, for the six months ended December 31, 2009, included Compal Electronics, Inc., Hon Hai Precision Industry Co. (Ltd.), or Foxconn, Quanta Computer Incorporated, TPV Technology Limited, or AOC International, and Wistron Corporation.
We have assembled a team of approximately 250 scientists and engineers globally, including 34 Ph.D.’s, and have developed an extensive portfolio of intellectual property. Our intellectual property portfolio and technical knowledge encompass major aspects of power semiconductors, providing us with a platform to rapidly introduce innovative products to address the increasingly complex power requirements of advanced electronics.
Our transnational business model leverages global resources, including leading research and development expertise in the United States, cost-effective semiconductor manufacturing in Asia and localized sales and technical support in several fast-growing electronics hubs globally. Our core research and development team, based in Silicon Valley, is complemented by our design center in Taiwan and process, packaging and testing engineers in China. While we utilize third-party foundries for all of our wafer fabrication, we deploy and implement our proprietary MOSFET processes at these third party foundries to maximize the performance and quality of our products. We rely upon our in-house capacity and an associated provider for most of our packaging and testing requirements. We believe our in-house packaging and testing capabilities provide us with a competitive advantage in proprietary packaging technology, product quality, cost, flexibility and cycle time.
Our revenue was $198.2 million, $248.0 million, $185.1 million and $138.7 million for the fiscal years ended June 30, 2007, 2008, 2009 and the six months ended December 31, 2009, respectively. Our revenue in fiscal year 2009 declined primarily as a result of the global economic recession. Historically, a substantial majority of our revenue has been derived from our power discrete products, and a small but growing amount has been derived from our power IC products. Our power IC products accounted for 1.4%, 4.5%, 10.5% and 11.9% of our revenue for the fiscal years ended June 30, 2007, 2008, 2009 and for the six months ended December 31, 2009, respectively, with the remainder of our revenue derived from sales of our power discrete products. Our net loss was $31.1 million, $26.8 million and $0.5 million for the fiscal years ended June 30, 2007, 2008 and 2009, respectively, and our net profit was $19.1 million for the six months ended December 31, 2009. Our net loss for fiscal years 2007 and 2008 included significant non-cash, non-operating charges of $42.5 million and $30.9 million, respectively, related to changes in the fair value of our preferred shares to conform to mark-to-market accounting under IFRS.
Our Industry
The rapid growth of the power semiconductor market in recent years has been driven by the proliferation of consumer electronics, such as notebooks, netbooks, smartphones, flat panel displays and portable media players that require sophisticated power management to improve power efficiency and extend battery life. The evolution of these products is characterized by increased functionality, thinner or smaller form factors and decreasing prices. Today, integrated consumer electronics devices require multiple and separate voltages to power all of these functions properly. These complex power requirements generate heat and reduce battery life. As a result, the task of developing small footprint power components that deliver high efficiency and effective heat dissipation becomes very complex, requiring greater technical skills and resources.
Power semiconductor suppliers manufacture their products typically using one of three approaches:
Our Competitive Strengths
Our competitive strengths enable us to offer high performance and cost-effective power semiconductor solutions to our customers. These strengths include:
Expertise in integrating device physics, process technology, design and advanced packaging to optimize performance and cost The four key elements required to develop high performance power semiconductors—device physics, process technology, design and advanced packaging—are all critical to our products’ success. Our deep understanding of device physics and architecture allows us to develop efficient and high performance process technology. We deploy and implement our proprietary processes at the third-party foundries that fabricate our wafers, which allows us to design cost-effective and high-performance products optimized for manufacturability. We have developed advanced proprietary packaging technology that we implement at both our in-house facility and with our associated packaging provider. We believe that our advanced packaging technology allows us to deliver devices in continuously shrinking form factors with efficient heat dissipation.
Strategic transnational business model
Our transnational business model leverages global resources, including leading research and development expertise in Silicon Valley, cost-effective semiconductor manufacturing in Asia and sales and technical support in fast-growing electronics hubs globally. We deploy and control our proprietary MOSFET processes at our third-party foundries in China to maximize the performance and quality of our products. We believe that our in-house packaging capabilities in Shanghai provide us with competitive advantages in advanced proprietary packaging technology, product quality, cost, flexibility and cycle time.
Differentiated, multi-chip approach for power ICs
In addition to the traditional monolithic, or single chip, design, we employ a multi-chip approach for our power ICs, where we co-package our MOSFETs with power management circuitries into a single encapsulated device. This multi-chip technique allows us to leverage our proprietary MOSFET and advanced packaging technologies to expand our power IC product lines and offer integrated solutions to our customers. This approach allows us to introduce new products by interchanging only the MOSFETs without changing the power management circuitries, thereby offering design flexibility and reducing the time required for new product introduction. We believe this approach, especially in higher power applications, allows us to offer products with better power efficiency compared to our competitors.
Rapid product introductions driving growth
Our integrated expertise has provided us with a platform to rapidly introduce new, innovative products that address the changing power requirements of advanced electronics. We have introduced over 100 new products per year over the past three fiscal years. We believe that our pace of new product introductions has helped us enhance our relationships with leading ODM and OEM customers and has enabled us to expand our addressable markets.
Broadly diversified customer base and end markets
We believe that the diversity of our customers, end markets and applications, together with our catalog of over 600 products, provides us with multiple growth opportunities and enables us to create and maintain strong relationships with leading OEMs and suppliers.
Experienced management and technical team
Our nine-member management team collectively has more than 180 years of semiconductor managerial and technical experience, and our technical team consists of approximately 250 scientists and engineers, including 34 Ph.D.’s.
Our Strategy
Our objective is to extend our position as a leading designer, developer and global supplier of a broad range of analog semiconductors, specializing in power semiconductors. To accomplish this, we intend to:
Leverage our power semiconductor expertise to drive new technology platforms
We intend to leverage our integrated expertise to increase the number of power discrete technology platforms and power IC designs to expand our product offerings and deliver complete power solutions for our targeted applications.
Apply our technology platforms to introduce new products and expand our addressable market
We plan to further expand the breadth of our product portfolio to increase our total bill-of-materials within an electronic system and to address the power requirements of additional electronic systems. We also believe that our expanding product offerings will allow us to penetrate new end-market applications and will provide us with an important competitive advantage.
Increase direct relationships and product penetration with OEM and ODM customers
We have developed direct relationships with key OEMs who are responsible for branding, designing and marketing a broad array of electronic products, as well as ODMs who have traditionally been responsible for manufacturing these products. We intend to strengthen our existing relationships and form new ones with both OEMs and ODMs by aligning our product development efforts with their product requirements and by increasing the number of our products used within their electronic systems.
Leverage our transnational business model for cost-effective growth
We intend to continue our transnational business model to leverage global resources and regional strengths by deploying marketing, sales and technical support teams in close physical and cultural proximity to our end customers and by expanding our technical marketing and application support team along with our sales team to better understand and address the needs of our end customers.
Risks and Challenges
In pursuing our strategy, we face a number of risks and challenges and are subject to risks and uncertainties that are discussed in more detail in the section of this prospectus entitled “Risk Factors,” beginning on page 9. The primary risks and challenges that we face include those relating to:
If we are unable to adequately address these and the other challenges we face, our business and results of operations will be adversely impacted.
Corporate Structure
We were incorporated in Bermuda as a limited liability exempted company on September 27, 2000. Our holding company, Alpha and Omega Semiconductor Limited, has one direct subsidiary, Alpha and Omega Semiconductor (Cayman) Ltd., or AOS (Cayman), through which we own directly or indirectly all of our other subsidiaries. We employ a transnational business model and conduct our operations through our subsidiaries, including the following principal subsidiaries:
The following describes our corporate structure. Our direct subsidiary, AOS (Cayman), has three direct subsidiaries: AOS (USA), Alpha & Omega Semiconductor (Hong Kong) Limited, or AOS (Hong Kong) and Alpha & Omega Semiconductor (Macau), Ltd., or AOS (Macau). AOS (Hong Kong) has five direct subsidiaries: AOS (Shanghai), Alpha and Omega Semiconductor (Shenzhen) Co., Ltd., or AOS (Shenzhen), AOS (Taiwan), Alpha & Omega Semiconductor (Singapore) PTE. LTD. and Nissi.
The address for AOS (USA) is 495 Mercury Drive, Sunnyvale, California 94085, and its telephone number is (408) 830-9742. Our website is www.aosmd.com. Information contained on our website does not constitute part of this prospectus.
The Offering
The number of common shares to be outstanding after this offering is based on:
The number of common shares to be outstanding after this offering excludes:
Except as otherwise indicated, all information contained in this prospectus assumes:
Summary Consolidated Financial Data
The following summary consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, all of which are included elsewhere in this prospectus. Our consolidated financial statements have been prepared in accordance with IFRS. The summary consolidated financial data presented below for the fiscal years ended June 30, 2007, 2008 and 2009 is derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated financial data for the six months ended December 31, 2008 and 2009 is derived from our unaudited financial statements that are included elsewhere in this prospectus. The unaudited consolidated financial statements were prepared on a basis consistent with our audited consolidated financial statements and include, in the opinion of management, all adjustments, which consist only of normal recurring adjustments, that management considers necessary for the fair statement of such data. Our historical results are not necessarily indicative of results that may be achieved in any future period.
The above table presents our consolidated balance sheet data: