--- title: "Monolithic Power rose nearly 17% the day a jury let Reed Semiconductor compete for its AI sockets" description: "A Delaware jury found Reed Semiconductor did not infringe either of two Monolithic Power patents, ending a three-year fight over who may sell the silicon that feeds AI racks. Monolithic Power still closed up nearly 17% that day, and the premium now rests on execution rather than the courtroom." publisher: "The Inference" section: "Chips" published: 2026-11-10T15:04:04.516Z modified: 2026-11-10T15:04:04.516Z canonical: https://theinference.org/article/monolithic-power-rose-nearly-17-the-day-a-jury-let-reed-semiconductor-compete-for-its-ai-sockets language: en keywords: "Chips, Patents, Monolithic Power Systems, Legal, AI Racks" --- # Monolithic Power rose nearly 17% the day a jury let Reed Semiconductor compete for its AI sockets > A Delaware jury found Reed Semiconductor did not infringe either of two Monolithic Power patents, ending a three-year fight over who may sell the silicon that feeds AI racks. Monolithic Power still closed up nearly 17% that day, and the premium now rests on execution rather than the courtroom. A Delaware jury decided on November 9 that Reed Semiconductor did not infringe either of the two patents [Monolithic Power Systems](https://theinference.org/markets/companies/monolithic-power-systems) had asserted against it, and with that one of the legal fences around the fastest-growing corner of AI silicon came down [1]. [Reuters reported the verdict](https://www.tradingview.com/news/reuters.com,2026:newsml_FWN46Q1IV:0-reed-semiconductor-jury-finds-no-infringement-of-monolithic-power-systems-patents-in-delaware-district-court/) the same day [2]. Reed's chief executive, Wenkai Wu, aimed his [victory statement](https://www.businesswire.com/news/home/20261109350026/en/) straight at "the investment community," and he picked the right audience [1]. Monolithic Power collects no damages from a case it brought, and its stock still closed at $1,382.34 that day, a fifth gain in seven sessions [3]. The market paid for the demand and said nothing about the moat. ## The same silicon, the same racks Reed is a private, fabless chip designer in Warwick, Rhode Island, and its catalog is the same plumbing Monolithic Power sells: the eFuses, bus converters and multiphase controllers that step 48-volt rack power down to the low-voltage rails an AI accelerator actually runs on [4]. Reed markets its line as power "from Vin to Vcore" [4]. The jury's finding of no infringement means a data-center buyer can now qualify Reed's parts for an AI power socket with no infringement cloud over them [1]. An appeal is possible; it would not restore that cloud for years, and Reed has an infringement suit of its own pending against Monolithic Power [1]. ## The growth is real; the price is for the moat Monolithic Power's [September quarter, filed days before the verdict](https://www.sec.gov/Archives/edgar/data/1280452/000162828026069440/mpwr-20260930.htm), shows the demand: revenue reached $1.2 billion [5]. Enterprise data, its AI and server power business, grew 165 percent in the quarter [5] and now supplies 42 percent of sales [5]. Gross margin has sat near 55 percent for three years [6]. *Chart: **AI demand nearly tripled Monolithic Power's quarterly revenue in three years** Line chart of Monolithic Power Systems quarterly revenue from Q4 2023 to Q3 2026, rising from $0.454 billion to $1.202 billion* *Quarterly revenue in USD billions as reported in Monolithic Power Systems' SEC filings. [5][6]* At 76.6 times trailing earnings, against a five-year median of 66.5, the price assumes that margin holds while revenue keeps compounding [3]. A patent fence that a jury found does not stop the nearest competitor was part of that assumption. Insiders sold $724.5 million of stock over the past twelve months and bought none [3]. Monolithic Power's own 10-Q, for what it is worth, never names the Reed case in its legal-proceedings note [5]. *Chart: **Gross margin has been pinned near 55 percent through the whole AI ramp** Line chart of Monolithic Power Systems gross margin by quarter, holding between 55.1 and 55.4 percent from Q4 2023 to Q3 2026* *Gross margin in percent of revenue, by quarter, from Monolithic Power Systems' SEC filings. [7]* ## Reed earned the right to compete While defending, Reed also won a January ruling in which a patent-office tribunal invalidated all challenged claims of a Monolithic Power patent, and it closed an oversubscribed $100 million funding round with global semiconductor companies as investors [1]. That is the reward side of this story: a smaller builder spent years of its own money keeping the right to compete, and came out with capital and a clean catalog. For the AI buildout the outcome is right, too. Power delivery is a genuine bottleneck in every rack, and sockets awarded on merit build cheaper data centers than sockets awarded in court. Nothing in the verdict takes a dollar of Monolithic Power's revenue. What it takes is the assumption that no one else was allowed to compete for it. ## Takeaway The verdict removes the legal fence around AI rack-power silicon, leaving Monolithic Power's 76.6-times-earnings premium to rest on execution rather than exclusivity. ## Sources 1. [Business Wire, "Reed Semiconductor Prevails in Patent Lawsuit Brought by Monolithic Power Systems," 9 November 2026](https://www.businesswire.com/news/home/20261109350026/en/) 2. [Reuters via TradingView, "Reed Semiconductor Jury Finds No Infringement Of Monolithic Power Systems Patents In Delaware District Court," 9 November 2026](https://www.tradingview.com/news/reuters.com,2026:newsml_FWN46Q1IV:0-reed-semiconductor-jury-finds-no-infringement-of-monolithic-power-systems-patents-in-delaware-district-court/) 3. [GuruFocus News, "Monolithic Power Systems (MPWR) Surges Nearly 17% Amid Strong Sector Momentum," 9 November 2026](https://www.gurufocus.com/news/9186072/monolithic-power-systems-mpwr-surges-nearly-17-amid-strong-sector-momentum) 4. [Reed Semiconductor, company website and product catalogue, accessed 10 November 2026](https://www.reedsemi.com/) 5. [Monolithic Power Systems, Form 10-Q for the quarter ended 30 September 2026, SEC EDGAR, filed 3 November 2026](https://www.sec.gov/Archives/edgar/data/1280452/000162828026069440/mpwr-20260930.htm) 6. [Monolithic Power Systems quarterly figures from SEC filings, EDGAR company page, retrieved 10 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001280452) 7. [Monolithic Power Systems, quarterly figures from its SEC filings, retrieved 10 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001280452) --- Monolithic Power rose nearly 17% the day a jury let Reed Semiconductor compete for its AI sockets — The Inference. Canonical: https://theinference.org/article/monolithic-power-rose-nearly-17-the-day-a-jury-let-reed-semiconductor-compete-for-its-ai-sockets