Equity Method Investment in Equity Investee

12 Months Ended

Jun. 30, 2025

Discontinued Operations and Disposal Groups [Abstract]

Equity Method Investment in Equity Investee

On December 1, 2021 (the “Effective Date”), Alpha & Omega Semiconductor (Shanghai) Ltd. (“AOS SH”) and Agape Package Manufacturing (Shanghai) Limited (“APM SH”), each a wholly-owned subsidiary of the Company, entered into a share transfer agreement (“STA”) with a third-party investor to sell a portion of the Company's equity interest in the JV Company which consists of a power semiconductor packaging, testing and 12-inch wafer fabrication facility in Chongqing, China (the “Transaction”). The Transaction closed on December 2, 2021 (the “Closing Date”), which reduced the Company’s equity interest in the JV Company from 50.9% to 48.8%.

On December 24, 2021, the Company entered into a share transfer agreement with another third-party investor, pursuant to which the Company sold to this investor 1.1% of outstanding equity interest held by the Company in the JV Company. In addition, the JV Company adopted an employee equity incentive plan and issued an equity interest equivalent to 3.99% of the JV Company in exchange to cash. As a result of these two transactions, the Company owned 45.8% of the equity interest in the JV Company as of December 31, 2021.

On January 26, 2022, the JV Company completed a financing transaction pursuant to a corporate investment agreement (the “Investment Agreement”) between the JV Company and certain third-party investors (the “New Investors”). Under the Investment Agreement, the New Investors purchased newly issued equity interest of the JV Company, representing approximately 7.82% of post-transaction outstanding equity interests of the JV Company, for a total purchase price of RMB 509 million (or approximately $80 million based on the currency exchange rate as of January 26, 2022) (the “Investment”). Following the closing of the Investment, the percentage of outstanding JV equity interest beneficially owned by the Company was reduced to 42.2%.

In February 2024, the JV Company repurchased certain shares that were previously issued to employees under the employee equity incentive plan, which increased the Company’s percentage of equity ownership in the JV Company by 0.54%.

On December 30, 2024, the JV Company signed an investment agreement with an investor, pursuant to which the third-party investor agreed to invest RMB 500 million (or $68.5 million based on the currency exchange rate between RMB and U.S. Dollar on December 31, 2024) in the JV Company in exchange for a 7.09% interest. This transaction closed on January 15, 2025, at which time, the percentage of outstanding JV Company’s equity interest owned by the Company was reduced to approximately 39.2%. We recorded a gain of $0.5 million on the change of equity interest in the JV Company, which was included in the equity method investment loss line in the consolidated statements of operations. The funding of the investment was agreed to be made in three installments. The JV Company received the first installment of RMB 40 million (or $5.5 million) on December 31, 2024. However, the JV Company has not received the remaining two installments as of the filing date.

In the fourth quarter of fiscal year 2025, the Company began negotiations with a third-party strategic investor to sell a portion of its outstanding equity interest in the JV Company. On July 14, 2025, the Company entered into an equity transfer agreement with the investor to sell approximately 20.3% of outstanding equity interest in the JV Company for an aggregate cash consideration of approximately $150 million to be paid in four installments, subject to satisfaction of certain conditions.

The Company identified the negotiations of the equity transfer agreement throughout the fourth quarter of fiscal year 2025 as an impairment indicator and performed a quantitative impairment test as of June 30, 2025. Based on the implied valuation of the JV Company per the transaction price in the equity transfer agreement, the fair value of the equity method investment was determined to be lower than its carrying value, and a $76.8 million other-than-temporary impairment of the equity method investment was recognized as of June 30, 2025. The impairment loss is recorded within Equity method investment loss in the consolidated statement of operations for the year-ended June 30, 2025.

The Company accounts for its investment in the JV Company as an equity method investment and reports its equity in earnings or loss of the JV Company on a three-month lag due to an inability to timely obtain financial information of the JV Company. During the fiscal years ended June 30, 2025, 2024 and 2023, the Company recorded $77.8 million including the impairment loss, $4.8 million and $1.4 million of equity method investment loss, respectively, using lag reporting. As of June 30, 2025, the percentage of outstanding JV equity interest beneficially owned by the Company was 39.2%. The difference between the investment’s carrying value on June 30, 2025 of $279.1 million and the underlying equity in net assets of approximately $107.1 million as of March 31, 2025 relates primarily to equity method goodwill.

Summarized Financial Information

The following table presents summarized financial information for the JV Company (in thousands):


	As of March 31, 2025		As of March 31, 2024		As of March 31, 2023
Current assets	$	101,151	$	86,280	$	122,324
Non-current assets	$	315,420	$	338,450	$	333,165
Current liabilities	$	61,341	$	70,776	$	122,340
Non-current liabilities	$	82,124	$	81,899	$	36,525

	For the period April 1, 2024 to March 31, 2025		For the period April 1, 2023 to March 31, 2024		For the period April 1, 2022 to March 31, 2023
Revenue	$	142,921	$	128,951	$	178,974
Gross profit	$	8,662	$	1,844	$	4,502
Operating expenses	$	10,637	$	9,174	$	5,939
Net loss	$	3,195	$	9,477	$	4,906