stockrowWhat it does
Monolithic Power Systems, or MPS, designs semiconductor-based power electronics that manage electricity inside electronic equipment. It is a fabless company: it develops its products but relies on other companies to manufacture, assemble and test them. Founded in 1997, it is headquartered in Kirkland. Founder Michael Hsing is its chief executive.
The company focuses on analog and mixed-signal chips. Among other functions, these chips regulate or convert voltage so that electronic components receive the power they need. MPS also combines functions into modules and single-chip solutions, using its own designs, manufacturing processes and packaging technologies.
Its products serve makers of equipment used in storage and computing, enterprise data, automotive, communications, consumer and industrial markets. Applications range from servers and artificial intelligence systems to notebooks, vehicle electronics, network equipment and home appliances. A DC-to-DC product, for example, converts and controls voltages within an electronic system.
MPS works with customers’ engineers as they design products that incorporate its chips. It then sells primarily through distributors and resellers. Its products generally have long lives: MPS says their life cycles are typically over 10 years.
How it makes money
MPS earns revenue by selling power-management and related semiconductor products. Its principal product families include DC-to-DC and AC-to-DC converters, power-management integrated circuits, driver devices, current-limit switches and lighting controls. Its applications engineers help customers incorporate those products into their equipment, after which orders generally flow through distributors and value-added resellers.
For the year ended December 31, 2025, revenue was $2.8 billion; for Q3 2026, revenue was $1.2 billion.
Storage and computing was the largest end market in 2025, followed closely by enterprise data. Automotive, communications, consumer and industrial equipment also contribute revenue. These are end-market categories for the company’s products, rather than separate subscription businesses. MPS makes sales primarily through individual purchase orders, and customers can cancel or reschedule orders without a significant penalty.
A customer’s initial order for a new product generally takes a number of quarters to ramp. Product life cycles are typically over 10 years, giving products a long period in which they can be used in customer equipment, although orders and volumes are not guaranteed. The company says average selling prices in its industry decrease over a product’s life.
MPS said pricing was not a significant contributor to its recent revenue growth and that it absorbs some cost increases while sharing costs with customers. Revenue growth in 2025 was primarily due to increased shipment volume. Gross margin was 55.2% for the year ended December 31, 2025.
Customers and how it sells
MPS sells into a range of electronics applications, including memory and storage, servers and AI systems, vehicle assistance and infotainment, network infrastructure, home appliances and industrial equipment. Its applications engineers work directly with customers’ engineers on systems that contain MPS products. Sales offices and engineering teams operate in Asia, Europe and the U.S.
Most products reach end customers through third-party distributors and value-added resellers. Distribution agreements generally give major distributors non-exclusive rights to sell and promote MPS products. The company’s sales are made primarily through individual purchase orders, and distributors may also sell to other resellers.
In FY2025, Distributor A accounted for 26.0% of revenue. Distributor B accounted for 18.0% of revenue, and Distributor C accounted for 10.0% of revenue. Those are shares of revenue from direct distributor customers, not identified shares attributable to individual end users. No other direct customer accounted for more than 10% of full-year revenue in 2025.
Customers in Asia accounted for 92% of revenue for the year ended December 31, 2025. Worldwide sales are primarily billed and payable in U.S. dollars, although a stronger dollar can create pricing pressure for products sold to customers in Asia.
Suppliers and costs
MPS uses outside suppliers to make its silicon wafers and independent subcontractors to assemble and package its chips. It also uses facilities operated by itself and its partners for testing. The company has developed its own process and packaging technologies and works with foundry partners to install those technologies on equipment at their facilities.
Its wafer foundries are in China, Taiwan, South Korea and Singapore. Assembly, packaging and testing take place across several Asian countries. MPS says the fabless model reduces fixed costs and capital expenditures while allowing it to concentrate engineering resources on design.
Cost of revenue includes manufacturing, assembly and testing, along with warranty, inventory-related and overhead costs. Research and development spending includes engineer compensation and new-product development; selling and administrative spending includes personnel, facilities, outside services and legal costs. For the year ended December 31, 2025, R&D expenses were $382.3 million and selling, general and administrative expenses were $428.8 million.
MPS said its capacity surpassed $6 billion in annual revenue support during Q3 2026. That figure describes manufacturing capacity, not revenue earned.
- Revenue$2.8B
- Cost of revenue−$1.3B
- Research and development−$382.3M
- Selling, general and administrative−$428.8M
- Operating income$728.6M
Competitive position
MPS competes in analog and mixed-signal semiconductors against domestic and international chip companies. It names Analog Devices, Infineon Technologies, NXP Semiconductors, ON Semiconductor, Power Integrations, Renesas Electronics, ROHM Semiconductor, Semtech, STMicroelectronics and Texas Instruments as primary competitors in one or more product lines. Some competitors have more financial resources or broader product offerings.
MPS says its products compete on integration, size, energy consumption and performance. It combines circuit design with proprietary semiconductor processes and packaging, and its engineers work with customers during system design. It generally patents aspects of its circuit and device designs while keeping manufacturing process technologies as trade secrets.
Our reading: The combination of design expertise and proprietary process and packaging technology is a meaningful source of differentiation, but competing products can also be developed or patented by others. Our reading: Engineering relationships and product life cycles that are typically over 10 years can support continuing sales after a design win, although purchase orders can be canceled or rescheduled. Our reading: Intellectual-property protection supports the company’s position but is not absolute: patents can be challenged or circumvented, and the company does not rely on any single patent for its success.
MPS expects competitive pressure to continue, including from new entrants. It also notes that semiconductor consolidation can give competitors more resources.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Analog Devices | Analog and mixed-signal product lines | Medium |
| Infineon Technologies | Analog and mixed-signal product lines | Medium |
| NXP Semiconductors | Analog and mixed-signal product lines | Medium |
| ON Semiconductor | Analog and mixed-signal product lines | Medium |
| Power Integrations | Analog and mixed-signal product lines | Medium |
| Renesas Electronics | Analog and mixed-signal product lines | Medium |
| ROHM Semiconductor | Analog and mixed-signal product lines | Medium |
| Semtech | Analog and mixed-signal product lines | Medium |
Growth opportunities
MPS plans to introduce products within existing families and enter new product categories. It says growth depends in part on innovation, winning positions in customers’ designs, entering new markets, expanding its customer base and securing manufacturing capacity.
In enterprise data, the company reported demand across existing customers and expects that demand to continue into 2027. It also said its in-house AI design tools helped it expand its customer base and win designs in applications including desktop AI. MPS said growth among customers using application-specific chips has involved customers primarily using modules.
In automotive, MPS received its first orders for 48-volt power solutions and expects design wins involving 48-volt and zonal architectures to support growth in 2027. It also began ramping robotics solutions using sensor and motor-control products. The company secured its first large data-converter design win and expects it to ramp in 2027.
For data centers, MPS began sampling gallium-nitride-based solutions for 800-volt architectures, alongside existing silicon-carbide-based designs. It said the expected growth in its enterprise-data business was not dependent on a large built-in 800-volt ramp.
MPS expects to have $8 billion of annual revenue-supporting capacity in place by the second half of 2027, on its way to $10 billion. It says the capacity plans are intended to keep supply ahead of the business, rather than provide a quarterly revenue forecast.
- $1.2BFY2021
- $1.8BFY2022
- $1.8BFY2023
- $2.2BFY2024
- $2.8BFY2025
Structural risks
- Asia and trade exposure: Most revenue comes from customers in Asia, and the company relies on suppliers and operations there. Trade restrictions, tariffs, political tensions, currency movements or disruptions in China and Taiwan could affect costs, shipments or demand.
- Demand and inventory: The semiconductor industry is cyclical. MPS builds inventory using sales forecasts, while customers can cancel or postpone orders. Excess inventory may require discounts, write-downs or disposal; insufficient inventory can reduce sales.
- Outside manufacturing: MPS depends on third parties for wafers, assembly and testing. Capacity shortages, higher material prices or disruptions in subcontractor relationships could affect its ability to deliver products or increase costs.
- Competition and product development: Competitors may have greater resources or broader offerings. MPS must keep introducing products, recruit engineers and meet customers’ efficiency requirements; R&D spending may not produce increased sales.
- Intellectual property and personnel: Patents and trade secrets may not prevent copying or competing technologies, and infringement disputes can be costly. Experienced analog engineers are limited in number and difficult to replace.
- Financial controls: MPS identifies risks connected with internal control over financial reporting, an identified material weakness and the restatement of prior financial statements.
Leadership
Michael Hsing founded MPS and serves as its chief executive and chairman.
| Name | Role | Since | Total pay, FY2025 |
|---|---|---|---|
| Michael Hsing | President, Chief Executive Officer and Director | — | $19.9 million |
| Bernie Blegen (1) | Executive Vice President, Chief Financial Officer | — | $7.0 million |
| Deming Xiao | Executive Vice President, Global Operations | 2008 | $9.0 million |
| Maurice Sciammas | Executive Vice President, Worldwide Sales and Marketing | 1999 | $9.0 million |
| Saria Tseng | Executive Vice President, Strategic Corporate Development, General Counsel and Corporate Secretary | 2004 | $9.0 million |
Bottom line
Our reading
Our reading: MPS is a design-led power-semiconductor business whose proprietary processes, packaging and customer engineering relationships support its position across several equipment markets. (item1)
Our reading: Its growth opportunities span data centers, automotive and newer applications, but it remains exposed to semiconductor cycles, Asian customers and outside manufacturing capacity. (item1, item1a, call_prepared)
Our reading: Long product lives can support repeat sales, while cancelable orders and distributor concentration make demand and inventory management important to results. (item1, item7)