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BQ24035: Q2 - BAT FET not fully turning on?

Part Number: BQ24035

Hello,

My schematic is setup like the EVM with the following settings: ISET2 pull-up to USB input, PSEL pull-down to GND, CE pull-up to USB input, ISET1 1K to GND, TMR 60.4K to GND, DPPM 37.4K to GND, 10 uF caps on BAT and USB inputs.

The AC input is never used (AC left floating) - only BAT and USB.

If I connect a 4.2 V battery to BAT pin I only see ~3.4 - 3.5 V on the OUT pins (not as expected).  After connecting a USB source I see 5 V on the OUT pins (expected).  After removing the USB source I see the full 4.2 V on the OUT pins.

The system appears to work normally after this - but I am interested if this is expected or if I have a design issue.  This same behavior happened across 25 systems.

Thanks,

Kevin