Monolithic Power's Growth Engine Reinvented: From Power Modules to High-Speed Interfaces
Record revenue and capacity expansion signal a strategic shift beyond core power delivery.
MPWR · Earnings Call · 2026-07-30
A Blowout Quarter Built on AI and Diversification
Monolithic Power Systems delivered a record Q2 2026, with revenue of $981M, up 22% sequentially and 48% year-over-year. Enterprise data led the charge, growing 45% sequentially on new sockets and broad-based ordering. As Tony Balow noted, “we are willing to raise floor for that particular end market from 85% for the year to 130% for the year” “...raise floor for that particular end market from 85% for the year to 130% for the year” — Tony Balow, Chief Financial Officer · 2026-07-30. This isn't just a one-off beat; it reflects a structural shift in how MPS is now capturing the AI power opportunity across multiple customers and applications. The company's total revenue has accelerated from $638M in Q1 2025 to $804M in Q1 2026 and now $981M in Q2 2026 — a 48% year-over-year surge. All end markets grew sequentially, with communications up sharply (80% sequentially, per analyst commentary) as optical modules and switches join the data center buildout. This diversification is intentional, as Michael Hsing put it: “We learn from our customers. We let the market demand to decide that.”New Frontiers: Beyond Power Delivery
Two new strategic thrusts stood out this quarter. First, MPS announced initial orders for a high speed DDR5 memory interface controller — a completely new capability that expands the company's SAM beyond power management. Michael Hsing described it as “a true fundamental know-how,” adding, “This is a new to us. This is a high-speed, very high speed into the gigahertz.” “This is a new to us...very high speed into the gigahertz.” — Michael R. Hsing, Chief Executive Officer · 2026-07-30 This is not a marginal product extension; it signals MPS's ambition to become a broader systems player. Second, the company is now sampling 800V silicon carbide AC-to-DC solutions for next-generation data center architectures. This is a long-game bet, but Michael's willingness to admit a prior technical misjudgment is telling: “In the past, I openly said I do not believe GaN. And now I think I was proven wrong.” “I do believe... I think I was proven wrong.” — Michael R. Hsing, Chief Executive Officer · 2026-07-30 MPS now has its own GaN for lower-voltage applications while relying on SiC for 800V — a dual-compound strategy that positions it for the eventual high-voltage transition.Capacity as a Moat, Not Just a Metric
Amid the growth, MPS extended its internal capacity target beyond $6B, emphasizing not just foundry but also back-end assembly and test. As Tony Balow explained, “we have been increasingly focused not just on the foundry side... but also the back end because modules and solutions will become increasingly important.”This vertical integration is a powerful differentiator, especially as power density becomes the industry's critical metric. The company's proprietary packaging—like its high-current-density modules—gives it a structural cost and performance edge.The only thing I would add on that is, you know, when you just call a total number, it sometimes gets lost in the detail, but I think we have been increasingly focused not just on the foundry side of business. But also the back end part of the business because as Michael alluded to, modules and solutions will become increasingly important.