Monolithic Power, which makes power chips, thinks that business will grow in the second half of the year

Monolithic Power Systems Inc. (MPWR), a tech company, started the year with sales growth of more than 10%. Its products are in high demand, and Monolithic thinks it will have a good year. Miniature power supply systems are what Monolithic Power does best. The chips made by the company are used in telecommunications equipment, industry, cars, data centers, home appliances, and other places.

The need for these parts is growing because more and more equipment uses electronic parts. For example, cars use 5G modems and video cameras with data processors, which need relatively high current and stable voltage. Monolithic Power’s sales grew by 48.4% from the same time last year to $377.7 million in the first quarter, which ended on March 31. Earnings went up from $45.4 million and $0.95 per share a year ago to $79.56 million and $1.65 per share.

The company has set up separate segments for data storage, computing, and corporate storage solutions. The management of Monolithic Power probably thinks that these segments will continue to grow quickly in terms of sales. There are a few reasons why: In the first quarter, sales in the corporate data storage business grew by 162% and made up 11% of total sales. Based on the results of the current quarter, Monolithic Power expects to generate between $420 and $420 million in revenue and have a gross margin of between 58.4 and 59 percent. Power competes with big names like Texas Instruments and ON Semiconductor.

Also, the business has a bit of a cycle to it because of how technology changes. Monolithic Power is now waiting for a new growth cycle because it has made a lot of new chips that haven’t been used before in one way or another.