Monolithic Power Systems (NASDAQ:MPWR) reported record second-quarter revenue of $981 million, up 22% sequentially and 48% from a year earlier, as growth across its end markets was led by enterprise data and communications.
VP of Finance Tony Balow said enterprise data revenue increased 45% from the first quarter, supported by broad-based ordering patterns, customer ramps, higher module content, platform refreshes and CPU-related demand. The company raised its full-year growth floor for the enterprise data business to 130%, compared with its prior expectation of at least 85% growth.
Data Center and Communications Demand Leads Growth
Communications revenue rose 80% year over year, according to analysts on the call. Balow said the segment’s growth reflected contributions from both optical-module power solutions and a broader switching category that includes top-of-rack switches, TPUs, NIC cards and other rack-level applications.
Optical-module solutions remain the larger portion of the communications opportunity because they have had a longer growth runway, Balow said, but switching-related demand is also increasing. He said the company sees further opportunities to gain socket share while benefiting from growth in the underlying market.
Chairman, President and CEO Michael Hsing emphasized MPS’s module capabilities, describing the company’s products as integrated power solutions that combine its power-management ICs with inductors and capacitors in compact form factors. He said MPS is increasingly expanding from being a chip supplier to a semiconductor-based solutions provider.
The company also said CPU server power has remained a contributor to enterprise-data growth. Balow said MPS is broadly positioned across x86 and Arm customers and could benefit if demand for CPUs rises further with the adoption of agentic AI. Hsing said the company’s CPU market share is now comfortably above the 30% level he had previously identified as a strategic benchmark.
New Products and Capacity Expansion
MPS said it received initial orders for high-speed DDR5 memory components, a product area that could expand its addressable market beginning next year. Hsing said the DDR5 interface controller is a new capability for the company involving high-speed analog circuitry operating in the gigahertz range.
While management did not provide a revenue forecast for the DDR5 products, Balow said MPS is in the early stages of proving itself in that market. Hsing said the technology and know-how developed for the memory-controller application could eventually be extended into other communications applications.
The company also began sampling high-voltage AC-to-DC products for 800-volt data-center architectures. Hsing said the 800-volt solution currently relies on MPS’s own silicon-carbide devices. He added that the company has also developed its own gallium-nitride devices since last year, though he did not provide a timing forecast for an 800-volt data-center transition or related revenue.
Management said it extended its supply-capacity plans significantly beyond $6 billion in revenue support. The expansion involves both front-end wafer capacity and more complex back-end assembly processes needed for modules and system-level solutions. Hsing said module assembly is more complicated than traditional semiconductor packaging and requires specialized equipment, vendor qualifications and manufacturing expertise.
Balow said the company is seeking a geographically balanced supply chain, though management did not specify the eventual split between China and non-China manufacturing capacity.
Automotive, Industrial and Emerging Markets
In automotive, MPS said it has shipped products for more than 1,500 new sockets so far this year. Balow said the company expects the automotive business to be flat in the first half before increasing in the second half, with the overall end market potentially growing in the mid-teens year over year.
The new automotive sockets extend beyond the company’s historical strength in advanced driver-assistance systems, management said. Hsing cited zonal architectures, 48-volt systems, battery applications and LiDAR as emerging opportunities that could gain wider adoption in coming years.
Management said industrial markets could grow modestly but remain primarily a design-win opportunity in 2026. It was more cautious on consumer markets and notebook-related storage and compute demand in the second half.
Hsing also discussed building automation and robotics as longer-term opportunities. He said MPS hardware is being installed in a one-million-square-foot building-control deployment, while the company continues to develop software intended to improve ease of use and implementation. He said MPS expects to complete the necessary software work by year-end. In robotics, Hsing said the company’s motion-control and power solutions are being used by customers and in MPS’s own factory automation processes.
Pricing, Margins and Capital Returns
Management said pricing did not materially drive the company’s sequential growth or outlook. Hsing said revenue gains were product-driven and that MPS does not raise prices broadly when supply chains tighten or cut them broadly when markets become oversupplied.
Balow said price increases have primarily been limited to situations involving higher input costs, customer expedite requests or supply-chain requirements outside China that carry higher costs.
Interim CFO Rob Dean said strong order levels gave the company the ability to slightly increase its gross-margin guidance, although management said margins remain near the low end of its targeted range. Balow said operating expenses have not changed materially in strategy, with higher revenue levels producing additional operating leverage and operating-margin expansion.
The board authorized an additional $500 million for stock repurchases, bringing Monolithic Power Systems’ total current repurchase authorization to $1 billion.
About Monolithic Power Systems (NASDAQ:MPWR)
Monolithic Power Systems (NASDAQ: MPWR) is a fabless semiconductor company that designs and supplies high-performance power management solutions for a broad range of electronic systems. Founded in 1997 and headquartered in Kirkland, Washington, the company focuses on analog and mixed-signal integrated circuits that convert, regulate and monitor electrical power with an emphasis on efficiency, integration and power density.
MPS’s product portfolio includes DC‑DC switching regulators, power modules, power management ICs (PMICs), LED drivers, battery-management ICs, motor drivers, and AC‑DC power solutions.
