Monolithic Power Systems Inc MPWR

Monolithic Power Is Taking Share With Its Wide-Moat-Worthy Power Chips

We think Monolithic Power Systems is a disruptor in the power management chip market, using its proprietary process technology to differentiate from larger competitors. In our view, electrical engineers tend to buy power management semiconductors from reputable, proven vendors that use lagging-edge manufacturing. As a relative newcomer, MPS differentiates via its unique fabless model, with which it develops advanced manufacturing processes that integrate many functions on a single chip to offer a smaller form factor and greater energy efficiency to its customers. While MPS remains a small player in power management, we think revenue growth far above its largest competitors shows its differentiated approach to power management is gaining traction in the market.