NXP Semiconductors (NXPI) 1 Nov 222022 Q3 Earnings call transcript

Hello. Thank you for standing by and welcome to the NXP Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference may be recorded.

to Palmer, conference Investor Senior like speaker to Relations. now Jeff today, Vice would hand over the your I President of Please go ahead.

NXP Bill call today and Welcome Kurt Sievers, earnings Josh morning and is CFO. With Semiconductors' CEO; President the and call. the you, XXXX our third on Thank me NXP's quarter Betz, good to everyone.

involve that call will from our replay cause call The will forward-looking to from available include be differ today uncertainties is management's being for risks statements results NXP's current that website. could recorded Today's and and materially corporate expectations.

our and but macroeconomic operate, pandemic uncertainties on These markets on limited risks COVID-XX continued the the business, end include, we impact to, the statements which regarding our the the not of impact specific are update in existing for undertakes statements. the any and be of for results XXXX. or and NXP reminded quarter that financial revise publicly sale fourth to new the of no forward-looking obligation Please expectations products,

disclosure please forward-looking full For statements, our refer press a on release. to

Additionally, consider refer discrete does operating driven management are events related that financial primarily not non-GAAP we performance. measures, to be NXP's underlying by directly to core will to which certain

Investor and the Regulation available quarter release, directly has NXP to reconciliations financial section be website be furnished our nxp.com. Relations provided will the most at on which Pursuant to X-K measures on XXXX SEC the comparable of Form in G, measures press GAAP non-GAAP third earnings the in to NXP's

to Now, to I'd call like the Kurt. turn over

you today. and Jeff joining We good our you, morning call appreciate Thank everyone.

a review of Now, quarter let performance. our with me three begin

Mobile, better our guidance Infrastructure of all expectations. with better million $XX Automotive, Our than revenue was midpoint the markets our performance Communication the and in than

of let started is of segment subset is & and China remind thousands of XX% me distribution exposure customers approximately the up consumer to you the through And the channel. made the we IoT revenue. Industrial Industrial For our It serviced weaker our primarily IoT that sell-through in experience consumer in market, of exposed IoT IoT and partners.

of revenue billion, XX% Taken year-on-year. together, increase of $X.XX an three delivered NXP quarter

operating margin guidance. year XX ago record was a the of our XXX better non-GAAP and Our three basis basis in points than midpoint points quarter above the period XX.X%,

with the revenue Our than fall-through strong incrementally operating profit solid higher leverage. on guided and execution results better reflect

Notwithstanding environment. we our our results, which guidance, facing are tricky surpassed a demand

On the advanced customers And and from industrial we and constraints are to supply one the hand, face demand trends products. very resilient. core multiple continue across automotive microcontroller analog

mobile hand, the broad in we And IoT market. weakness on the the consumer in see Android other and

environment, operating pull inventory unbalanced that discipline are we demand to and and of namely that are expense. those control, dynamic going the channel Given levers our discretionary in management stringent

managing of terms to In distribution we channel approach Draconian our decided take a inventory, have to inventory.

which quarter ability of to keep incremental level, our where Specifically, sheet, X.X channel inventory is the our contemplates guidance three to balance four quarter shipments months our at redirect any well-below model. inventory control we in long-term supply line and with have the a as and needed. We prefer on

these believe amongst demand discretionary of see we until environment. time we of prudent such others, spending, and as the we clearer slowing hiring. are consistent measures terms rate in are All-in-all, the of more a view And approach a

our lastly, our guidance. $XX guidance. of XX% million, in the automotive, revenue turn revenue -- million end year-on-year, And In IoT, guidance. year-on-year, million slightly below specific up Communication better and than was In $X.X in QX XX% Other our $XXX In up XX% was markets. trends billion, the guidance. to QX XX% revenue $XXX near was me let focus up revenue year-on-year, in end Industrial Now was high & million, Infrastructure year-on-year, million, $XXX $XX Mobile, up our was above

dynamics, demand operating me Now the at indicators where relative to noted look the we key following. let see

just ago. of This to dropped a we XX quarter our times overall, XX% was are with metric times, lead portfolio weeks. than lead product below that than greater quoted XX% of terms greater In

an While the aggregate industrial from periods, and this be end sold is through automotive out in prior core to improvement markets. we XXXX in continue

our core demand industrial and program, of NCNR continue for of most our supply terms assured In automotive to XXXX. customers

Our NCNR continues XXXX. supply surpass been to our as well XXXX XXXX book the have requested NCNR orders, for capability level of order as which

on-hand further. inventory, long-term distribution contemplates And QX months, target XX as With our of to respect in guidance NXP, terms our DIO X.X days sequentially our has well-below days, at it will increased X.X to of increase noted inventory channel at months. five previously, and

are portfolio, comfortable application-specific we nature our the direction. with this of Given product

turn four. for to let me our quarter expectations Now

We versus midpoint, up sequential XX% the are decline about a to of business. X% of year-on-year. guiding range X% at quarter fourth our within perspective, revenue at the the we about from a the of represents versus up this At prior in $X.X XXXX, And trends the X%, billion, midpoint following quarter. a up anticipate

the up the double-digit four on the a teens range quarter versus quarter is in in in be XXXX. percent and low versus basis versus is and flattish XXXX. XXXX on basis high Industrial a percentage to down three to teens and down Automotive be quarter high range IoT three expected expected year-on-year

the in Other up Mobile quarter up three range to versus Communication is a finally, teens is And the low sequential same on expected a flattish and single-digit the and range expected upper be Infrastructure the year-on-year single-digit to year range ago be basis. and low period XXXX. in in down versus

a that quarter noted real The in there concern Now that some in consumer a destruction materialized. for serve. we dichotomy potential summary, markets end the demand has we the various last markets in is as end

limit into inventory to are could taking stance we the more we buildup. channel, channel proactive a ship While

Industrial which customer shipping segments, very demand. in the resilient end And continues outpace core from where true are conversely, and Automotive demand the to we us seeing supply, demand to hinders

So, near remain uncertainties environment. to overall, in the the macro we due the in term cautious

of our for financial like review pass And performance. now a to with that, to I over you, call would the Bill,

on and Thank morning you, to Kurt, everyone good today's call.

provided the and for I of QX covered highlights. move outlook QX, has the our the Kurt As will to revenue financial already revenue during drivers

both midpoint our of guidance million our good. above midpoint range. very profit Overall, was the performance non-GAAP QX And guidance. non-GAAP financial and were Revenue was profit our operating of the gross above $XX

to portion moving the details notwithstanding of weakness the in Industrial was and of consumer-centric billion, year-on-year, Total the segment. XX% revenue $X.XX QX. up Now IoT

of We guidance generated and $X.XX of profit gross reported a factory billion non-GAAP higher as XX%, basis and margin XXX the sales a both in volume. above year-on-year non-GAAP utilization up gross and midpoint of result higher range, points

model. up $XXX Total than from guidance our QX, non-GAAP were million our better and below million or operating up expenses and year-on-year long-term $XX $X million XX.X%, range

total was year-on-year billion, XXX $X.XX operating and non-GAAP non-GAAP margin profit of perspective, the was XX.X%, From operating above and the operating up range. both profit midpoint guidance a basis points

cash which in million, $XX million XX.X% earnings, $XX is taxes of effective for included ongoing was $XX or was expense million. operations tax not rate. cash Stock-based about $XXX was interest Non-GAAP our interest compensation, And with million. non-controlling non-GAAP

Now like would I and in to cash turn changes the our debt. to

was debt Our billion, total QX sequentially. end the flat $XX.XX at of

the position a EBITDA $X.XX improved we ending resulting Our billion. was of up billion, XX-month with million $X.XX was to cash $X.X exited adjusted And $XXX sequentially, debt The operating billion. quarter net performance. trailing thanks

X.X and trailing to was interest XX.X XX-month Our net was adjusted EBITDA QX XX-month of our end debt adjusted times. coverage at times, ratio of the EBITDA

supply we XX increase Turning of evenly and mobile in The raw support between weakness market the to materials in growth work continue to of increase and on-hand subsequent of working incrementally as Android noted improved increase an in experience process and capital days finished inventory days, the sequentially, split and was to trends. an portion IoT. Industrial metrics. in five the inventory Days was to revenue periods goods due in consumer-centric

two As well we below receivable and X.X Inventory inventory. were quarter. our channel to days, sequentially. days versus prior XX, increase the be an days mentioned, the continue our channel payable long-term manage target. Kurt was continues XX flat to tightly were And months in Days of

our cycle cash XX was days. conversion together, Taken

Our working and non-GAAP balance of and was or billion, managed. revenue. free flow capital XX% from continue revenue, or be was and cash $XXX sheet resulting operations strong $XXX $X.XX CapEx X.X% of Cash net a channel in well very of flow to metrics management, million million

QX, of shares. and During in million NXP we repurchased paid dividends, we cash $XXX $XXX million

to generation have through back through returned of flow our additional the the million XX% a program. shares the to XX, of $XXX company, XX-month the of excellent. of under capital XXbX-X beginning In free QX the On end an October basis QX, flow consistent of since with owners addition, continues we trailing purchased cash be cash established non-GAAP of we our strategy. The business allocation

Now QX. for turning our to expectations

be this As about is plus the and to down mentioned, $X.X million. X% X% year-on-year up we about revenue or sequentially. midpoint, At minus Kurt $XXX billion, anticipate

XX XX.X%, about be to margin gross non-GAAP plus basis minus points. expect or We

lower sequentially, million, plus $XXX down expenses to discretionary $XX compensation incentive are which spending. and X% minus expected around by is about million, be Operating or about driven

at see midpoint. we non-GAAP to together, Taken operating be the XX% margin

be non-GAAP our to by financial estimate a model, $XX $XXX tax effective XX%. XX% cash we driven ongoing We be to income. operations rate or rate, communicated to higher tax tax interest is expense to million related a anticipate about of And cash effective million, about which below about full leading year

modeling And purposes, million. share suggest shares. for an million we count QX, of $XX XXX about for you be should use interest Non-controlling average

equipment X%, For to of CapEx, deliveries. expectations year prior in XX% bringing use due delays we our you versus X% total CapEx suggest to

with our reported guidance Finally, I have for an QX our update beginning XXXX. to financials,

guidelines. annual estimated rate to earnings profit an basis, GAAP report change We NXP before non-GAAP a on a will to our with to go-forward SEC thus, non-GAAP tax This our share enable begin will apply and, tax. consistent per

will of Given at XX%, Day rate current in rate our Analyst tax XXXX. be as long-term legislation, estimated with we tax November new tax our consistent our believe cash provided of

as uncertain will our Kurt are foreseeable more our future, to despite Furthermore, some within and such is in macroeconomic long-term as control, over financial of channel our which will the impacting we we Overall, inventory consumer-oriented conditions the model. mentioned, discretionary navigate what operate spending. continue markets,

to you, the operator the and we questions. can now turn call for over back Thank

Thank first with Our comes you. [Operator Bank. Seymore Ross from question Deutsche Instructions]

proceed. may You

the me to the sheet. question. on your side channel Kurt, I Hi balance guys. about and for both Thanks ask on the ask inventory the wanted letting of equation,

On guys were about people were you points worried side said, similar the like well where of about below well being target things, channel you a at at months, us where cycle. below are, peak you X.X

if channel to the your be as led the it more significantly you and prior more sheet question could prioritization? philosophical seems opposite wanted ship So, I to cycles guess into shift the what's the channel in lessen balance the And to to? you on is,

and have segments. and part open this the morning fourth orders into in could more answer the shipped IoT actually especially good our blunt a quarter, of Yes, into We yes. thanks, the is Ross. that channel Yes, against consumer

mind this limit channel mentioned, a I at months low much uncertainty, as X.X the which of prudent terms months macroeconomic this to would given $XXX million. the very the And delta But we be open about inventory serve. is of whole which it and X.X would we feel you easily more orders, could actually level have, just that to in of approach level revenue that's we

macro it's the and that develop. further the the But how because prudent going of is is unclear more going part we to to in think it's demand develop market how

it's the feel in-house in already to better a position sheet, being eventually we a So idea keep the customers. keep pipeline it redirect have we to and to also balance other for on to in what

of four. have do and Now to we And one more we could we supply, also could enough auto just be the you situation real the make there, core have house, revenue have continue this industrial -- have that out. house. to remind I at the actually sold situation. in Ross, same the that time, we only side we of have we the We that's the quarter supply, if so the in side opposite also not

We really orders, of all very can't of have checked real. them, them. are which a We but lot open serve

cycle, initial your to the do. this very at but should long-term though, we found could question, is a particular low X.X in more, at It's it's period but much sell to we time. to it we back stick feel wise channel more yes, again, of this thing the target, best not this months But we inventory

margin I impressed, that color. one flat, follow-up, gross that revenues word are be so. the as guess or staying more for dropping things. would the is impressed gross margin the Thanks than side surprised X% is the for Bill my given maybe of on I'm that

gross very rough a X% revenue that a of had margin. a predecessor thumb in drop Your in drop was rule X%

So keep at the flat? the how of ability that keep to to sustainability are you that this level? gross able what's general margin And

in fall-through. guidance understand we bit Yes. for our area a is internal if One the still are capacity constrained higher you auto. pinpointed Thanks, And than And remain mixed-signal, driven by utilizations more slightly is capacity specifically auto-centric question. XXs internally, think well the revenues our our our just better you're need as and to Ross, I in that our your proprietary better little about right, constrained. IP we two-thirds internally. are high of we did than And to think we

Kurt we be you are all As heard sold well-utilized we and mention, expect XXXX. to this out, throughout

on Second, out incorporated guide. range, is really mentioned we you're and product as high-end And those term, us I what tight delivering would journey, QX we'd we've our in calls, in in the longer previous new toward more that, think are to I right, introductions, And mentioned gets our demonstrated stay further XX% model. say. it's which a

you. Thank

Thanks Ross.

for questions. moment One Thank you.

Muse comes from Our next with Evercore. question C.J.

You may proceed.

for Ross's all you I can the And the of the ability comment capacity? answer growth margins. change wafers top repurpose guess, to coming in taking every question. internal of you recovery, X% part is I in that, as is no. versus before external, had morning. then Thank gross follow-on Yeah, XXX question, the I construct, guess, at bps think, sense My on the on gross to margin line, a good you

kind be side? a clear as sort or you that the holding thinking into consumer strong, correction is yet see gross on margin the further weaker, push terms Now auto, of about of industrial model in some side there we shift mix should consumer of we process thought forward on a here core

morning. Hey C.J. good

first Let at or of the go the for repurposing capacity. potential repurposing me

consumer-oriented supply confirm So is directionally between and When then you can indeed our first I strategy. mean all, external that about of internal limited. that's really I yes, we've repurposing think very how within built internal a serve, it external, the or to which segments specifically between auto more core and markets versus and within limited that's more the repurposing the now is we possible. industrial-oriented between level, different

possible at It all on a level. is finished product typically not

product the once So is completely manufactured.

have program, any we sometimes And are swappable. which products hardly

with you those if opportunity inventory example, about but to the However, several not we still of all speak process with for them. between swap nodes buyback, markets, do have actually

you one sizable which us. give quite for example I'll is

technology, example, nanometers going XX applications. with lot We out is memory very, is not that but purely we product are a technology any that of also automotive, have very nonvolatile in of in same used means are for sold embedded which we consumer that short for the

So consumer doesn't there. drop us the really in demand help

other technologies, like nanometers is there we this XXX yet if or not where nanometers, finished XX goods. do However, can the product is

swap to like over could our or So that we see [indiscernible] it's in of a example past an markets between, markets X we but market here. in in others, amongst existing those bit into start of super the some have acceleration quarters. capacity QX, which constrained of parts some RFID actually we revenues e-government the were also liberty markets, our because is why, for in And our reason the

I'd side, within is segments. the of of each say margin margin there variation On the quite some

is sophisticated, fair. between margin the draw company. revenue of what their segments, the the to you draw of go little Bill cannot sure the be you conclusions want the mix if segment. to end, what it total the to on means a you end and level in four bit easily I'm But is deeper. It So cannot more not conclusions

there. No, else nothing

follow-up? a have you did CJ,

that, just the weakness a piece, enabled kind key give kind that guess, until within think to or earlier, a proven drivers least hold China sub Yes, of have IoT that's us how to I particular guys. be color would Thanks more to are have bucket? end I so quick little more resilient, can shown that there The markets would of about follow-up. of thought on that that at today, you kind up have

different significantly Yes. It honestly, mean, this August of drop. course, I color, we just kept I'd days, a to gives X.X of going quite our really again, say, into to would inventory then approach started of CJ. and month in, stick have channel But in October to former shipping. the level

have inventory get So we finally, channel the we it felt up. would oh, like,

do don't we think that as the this, better explained choice But we our much that's said way decline. to very want a I It's why IoT would again, sees frame. it's and we consumer to do time August that's to is again, in it's harsh quite we it I just China. say, such But a Now, earlier, it. softening. have market which started the it globally that exposure sizable relatively

be very non-Chinese that would not customers resilient. the But still it's consumer IoT

globally where is a approach explained makes a significant it why very earlier, but general which is think, how which difference us hits want China also large perspective. deal is this harder think we have this I this I channel it. And from we to with weakening, in I exposure, a

helpful. Very Thank you.

One you. Thank for moment questions.

next Vivek America. of comes Bank with Arya Our from question

proceed. may You

taking oversupplied to question. supply-demand on first Tier industry equation kind perspective think supplied? one, customers. curious or your they're just for or undersupplied Thanks in my Kurt, Do my and still for I'm get at rightly of your you the OEM X just automotive the

And now? just what's balance how into QX you've think the growth your at undersupply more first just which or And what of But next are a supply I your your perspective just over visibility right variable. supply-demand flattish, of assume the I now? is is into auto added half hotspots customers year? right of the

Thanks, Vivek. Yes.

was First straight let is in flat I it function different, that QX it a indeed but supply. of into all, just unfortunately me auto supply. of a of function purely is sequential confirm the wish

limitation. sequential a a way, has the supply nice the still it is Now by but year-on-year growth,

in to continue thorough In demand our this and general, the products, from is very careful in of after web whole portfolio part constrained all, in the which if to And that large X. Tier be OEMs analog many very significantly through and of the have, not automotive. analysis a microcontrollers, supply we the

current think shows NCNR And large I out place given more with level last we part ever automotive getting really the have supply a through constraints today. the we market above course, than will through be the of in that we and that. improves before we will be in are to also, visibility, depending, year, next trying in more order for of So understand sold discussions visibility our those all year, transparent the possibly have But further to in automotive detailed it of continue on to continue how year. next which supply

me demand, probably gap of If much it the the we in to how in supply core have a is that next was and of true you’d true year Automotive order demand. Industrial versus -- ask XX% coverage

is still this to screw there want I table. take don't golden the problem, off this so Now

shortage So component is or sometimes the flushed few that is indeed takes away is from overall in the through. one being peer until that us key there weeks then missing a and products. analog take and in another stuff it microcontrollers from market, doesn't But

it. Got

and core growth you flattish the sales much offsetting Industrial inventory you out so year-on-year at my year year? your that of next I and I any conclusion next your almost couple that next demand core sold mentioned you're is build year, continue continue is you sheet. that's to right you're stretching build but fact inventory the that for from out guidance, to that side, and two-thirds So XXXX not follow-up, balance too planning your least combining are know in that is it still the giving fact auto for or industrial, business, core to when you consumer with on industrial automotive for the auto you're weakness assume on And sold planning to with fair be and

is this Bill. Vivek, Hey

Let take this one. me

me increased and in was everyone. not go about work-in-process. off, to the goods and a for the raw XXXX, days, into summarize First XX% guiding inventory try we've five material internal is Yes, let which from And we're but finished quarter-over-quarter perspective. remainder

or in NXP a as mentioned, this channel goods material inventory was need fungible reroute as finished driven portion it's some we levels, and primarily as inventory Clearly, the and customers Kurt consumer buildup Kurt in Areas of not. hold test of back-end or before in mobile these preventing have to in of is other by facilities. assembly our we the higher we completing it wafers some mentioned, die where bank,

our remain putting build control will create of be remarks, and as inventory we XX, the ready core mentioned we industrial specific to future constrained demand. which just the XX, application our same majority better and in and areas falls. keep segments. At opening it into your which is XX in to again, wafer channel, in time, if demand own XX to future very again, it's and And of service auto highly XX, confidence and long-lived, And gives we the us issues what hold of both

Bill. Thanks,

see reason just maybe Let it on were following, year no amongst automotive one when of content strong the add view next would increase earlier. and electrification since break. me to trend that others, why you comes asking ADAS We

the I of think at ratio before. electric cars of every quarter quarter, higher than we look is SAAR the in the total

we be XX% the year, For car. what for in this to content the a semiconductor that for of see now EVs. And forecasted means you know total being And year, it's SAAR XX%. next ex

there extended our market, is So because supply view continues very perspective, still it I a certainly It same good low and the continues level. chain to to that reason is, at very still believe while is time, the in dysfunctional, from to too it actually strong that a underfilled. resilient view, demand be be from think

maybe demand those to pretty should on So an perspectives two perspective a automotive XXXX. from add healthy view

you. Thank

for moment One questions. you. Thank

question from Our with comes Rasgon Bernstein Research. next Stacy

You may proceed.

Thanks questions. for guys. Hi, taking my

and mobile. issues to get and auto first at one, But resilient. point. seem really look numbers The this be the now the in Those industrial I in consumer

You're out. sold

You've got these NCNRs.

those markets core anything how it small are presumably in tiny worried that you do any signs or support any cancellations at is, sustainable of that signs, in why even you seeing given all like, long-term those weakness, so guess upticks I markets? and like sound given core in

also orders for supply have want I core schedule can industrial. -- position to we to the guidance here crystal Stacy, I this we the so -- have cancellations Industrial and no I the is But be this Auto. But At or which here is the push-outs, based no and on macro for a auto in no four. confirm and don't economic capability for take quarter time, year. the in cancellations next absolutely at ball, don't push-outs core have or a hand same

maybe indicator feel And And level to better is there, supply the longer somewhat can anything two And believe which extended from those on to the of a in gives one and that term should the check the in continues stay sitting continue why resilient. chains it level that's see markets. inventory we low. be very super we

Got it. Thank you.

follow-up again, to, channel For guess, on wanted I my in question, I dig inventories. the

So you're still to of shipping flat. like it weak the into the channel, the inventories a channel, the which are stuff but sounds that is lot channel goes not consumer

stuff Like the within how making shipping is you weakening? of consumer other are as that that's stuff for I it? the guess, into the channel So mix, is changing up channel end markets

not at complicated. the level about becomes because it is in of But channel not months We steady into the ship we speak of ship X.X We do to the keep a then it not all will that really mix inventory. channel.

that So shipments. That's we to works. not it's stop how so it dramatic not to is all have that say this

not it data that with quarter, sell-through distribution We that's true end as partners week, doesn't then make sure are the surpass we at segment. for And sell-in the quarter, and sitting disciplined. Bill that's only the of and we actually at very -- every of look the X.X. our the every just each are by I week we

to mean, is higher could have I that, wanted The far, order in have have change in inventory. was quarters more for wished it shipped a honestly, communicate I would it, we only we channel to so into get row, desperate a up. today to I eight

Now to given it it is disciplined but zero -- doesn't especially mean actually there parts where go demand are is doesn't more in actual those shipments. trends, those we higher, consumer make sure

that consumer higher I I'm go ago? even asking guess quarters detailed couple mix, is lower the is is, to you to what the to mix versus the don't within stuff maybe I it the of is mix of want and if say, fair a mix understand that. other now channel

No.

No? Okay.

be. you not it No, should not. I'm why is think sure it

is weaker, the and limiting the of of channel. total your the lot into XX% mean, stuff and it That's a of all. look consumer goes demand business, I so much Industrial that inventories through they're weakening. said But And there the is the Well, channel, it if shipments sounds same. you clearly, it's stuff like

are company, But still Stacy, zero mean that consumer way. IoT of about the is XX% shipments. XX% is limiting the we at that's I Yeah, and the level. I IoT, The think revenue it of of segment and this industrial total a shipment not

So it perspective. is from not that dramatic a change

Got it.

That’s Thank helpful. you Appreciate it. Okay. guys.

One questions. for you. Thank moment

next with Our question comes Stein William from Truist.

proceed. You may

constraints and between hand on other. on I'm discussion Sorry, and level my lead Thanks question. automotive your hoping have levels muted. you the taking the one of I of was might for demand some and in terms the industrial times in difference

prior That please? on of industrial the you've attention. I that Can same think is constrained dynamic, us noted than quarters, level doesn't quite automotive. in get update more even you that

escalated key shortages continuing in that to be the indeed We don't it -- way, still quite broken highly the are industrial core and we’ll have but really down painful.

statement the be as in noise made earlier I our repeat in I there So I industrial, about case, reports to short before. used we and about industrial, that a shortages be think much auto core can we be to as while continues in the the lot continue public to of less

have next for about we against believe XX%. five quarters, of quarters, of the coverage a -- it our question. think should after in XX% be context about earlier, that said I the we Say demand, to I different four or I couple used think, risk adjusting

higher, aggregate for industrial the necessarily be. in consumer auto it that in equally such total points percentage painful five or to than used come the has up up much, are so demand we side dropped the it on it XX%. be for to auto the that total we other and or has in see company But you continues because So the capability to that not is just supply industrial gone but IoT is

Appreciate that.

that this today? aware only terms pivot big And As linger the a more if on company your the terms channel distribution. model, way making your sort that the in thought in growing perceived There's a in oriented has which you control. Thank if with I a that with small like discussing given in I'm consignment way moving one of inventory. to to I'd make this even how you. approach dealing wonder you're of potentially to of you're But wonder an a of evaluated outlier has follow-up, you're would company allow to that's deal that I

But no, not Bill. quick answer, we Thanks, that. are contemplating that's a

Okay. Thanks.

questions. you. Thank for moment One

next question Mobley comes from with Our Wells Gary Fargo.

proceed. may You

Hey question. smaller about I the taking for talk business. the is your businesses one second, to mobile that of a for guys. and Thanks side wanted my of

You handset-related business. going to weak look counterintuitive particular highlighted the at of X% by revenue year. QX grow we Based your data given forecast to is some like for on to sounds mobile points. And upside your you're the step and QX business which XX%, full what that guide, back close that

growth, So inventory you what's is it outperform there? helping it or content Is channel related?

discipline same or to inventory, the on all with because nothing It's we do channel put segments. got

comparably have bias bands. about is Think is growth. very low-end say, and wide market, do directionally, the our Android. black Think but which also better the ultra not than Now we it on really mobile has kicking wallet. higher-end which doing I'd year the a to white, we in to strategy, about mobile phone this it's with content And have,

answers. therefore say, I'd two So

mean, a ago position that in say the share much increase exposed we Day. phones. Android gains company-specific more with are we we working are end rather very a at Our phones, might Investor in than put somewhat good higher And are the year secondly, because is line you it how to the our content out. in with I feature

Thanks that. for

follow-up, whether these footprint? As my I so I But latest some kitting requires it to export impacted not how ask your want can in end US the result you're and/or you to in certain you My guess indirectly, change directly markets much manufacturing issues hunch it US speak is restrictions. to export restrictions. may about from

Yes.

also will changes. and make any control we we XXX% of so sure course, after of regulations, are export all, that these total So are we times, all in first compliance at latest with

All in that, show of immaterial super changes if have these we so far impact anything, our our regulations latest on assessment of the revenues.

which super being I to, haven't researching But comes order us. it admit found it. which if also third this keep must were at or only anything, only you anything, there looks we say for like no, I second can course, we of hinting point, immaterial When really impact. But effect, issue to an

Thanks, Kurt.

moment Thank you. for questions. One

Cowen. question Our from comes Ramsay next Matt with

You may proceed.

the my were and quite a mentioned for you Good you about the your in think continues very to quarterly I sort of clear kind morning. of the an Kurt, numbers in earlier basis, Automotive very business estimates. of well. question, business much. to first continue trends ADAS and on numbers question, go Thank to do SAAR higher penetration LTL own you that the X And your

year next CarMax other interest content those lot But sources or a in how and assumptions changes just of externally out the some us think rates? two you of do mix and some on and guys any the of of saw the I made data auto. based kind to

heavily. car pretty obviously are New purchases financed

So based is of rates? there any have would on changed interest the some assumptions be interesting. your Thanks. That forecasting recently in that might

Yes, Matt.

the give one two term. I you -- we answers. here So The is short

is on hand. I done, about orders is these mean for So for guidance -- and QX based orders we considerations don't really but bit This next the we when it at don't a make months. strategic holds capability. the really it comes three supply to

have Longer term, year, again, crystal I the to next I want ball. say say don't

So typically SAAR, a believe, just think something XX to, like SAAR X% growth forecast which for next year their the million for IHS units. for I we I updated use

matters it premium all. that isn't features other is vehicles content has a What important really the do really to However, at in. to e-vehicles, which kicking with mix the lot increase, and

I buying rates think car the the with cars. -- the the content it incredibly of right, down, people that unless discussion believe perspective on and whole left unit looming a we to be, is it per content start that from this semiconductor automotive. as us again, dumping know have year. semiconductor and I much So more relevant. actually industry what impact really more more than going but perspective But look I guide drops content the demand And interest rather recessions don't SAAR far that don't is company for and But and I next I itself. you behavior we a agree to is in at should mean, moves around could on a

it’s it’s Really one the getting. picture big we’re that. question. for Thanks But a that tough,

have wanted the and there's there's of why, and it means managing you sector, semis fast onboard what batt lots in sides fast chargers. battery. the ask, the one, charging and a BMS, position the in on guys I obviously so But There's car, automotive battery. two follow-up, side running then the actually strong -- in to to conversation managing my for As

wonder, guys solution solution? against not any anything is be discharge as manufacturer and and buying are appreciate doing type but full would BMS battery charging I looking a or And someone managing into, the the that that the side both the a else you the integrated And helpful. thoughts it, Really battery, it. there applied it of from of fully something

Well, look only at not system but actually, work it, end-to-end. we we the

So companies providing and building also the busy very infrastructure. we with are charging

work for closely includes this ChargePoint, seamless charging, I very earlier, the is even name. revealed US. with use the to make have example, not the I think in consumer. so the but only that may on for process we that And a We payment

technologies identification included and security are and So payment also in being this. our

-- look yes, we at a end-to-end as So total from a it basis.

still this say into we to discrete are have means not I However, going power.

carbide, this not solutions, whenever is these silicon so need focus. wherever our like discrete So and power they systems

and XX% advanced logic Our opportunity. is focus which that about analog the products, we on of remains think

next please. the take we’ll Josh, question

for Thank questions. you. One moment

Joseph Morgan Our Moore comes next question from Stanley. with

You proceed. may

quarter the the Great. desire Thank stock level. about automotive up X guys build you know at Tier I talked have you. last of companies to the safety

mean sounds able any to pretty are is there tight, I months. in think they six still that into indication process? are they're inventory talked definitely I it things like that but that place? Where about you put of any

is putting have which, Tier many in Xs. OEMs Indeed, and cases, Yeah. that on requirement, been strategic are

perspective, full built anything happen, the guess My are are whole is those start a us to sheer chain, far higher lot in achieving guess extended and chain get to from supply my very others be inventory this, from cases, -- hard because, it's very, that they performance whole a able picture to very again, building level. of supply before build needs few the some start would in even this, on to is which that a somewhat plaguing core but of products they the

not trade That's it's functional. one just whole more company, in just but the that becomes

So, requirement. the we will us say, and how trends demand and before next still, judge I take would close would given the this that all of come year industry, I even capability end to supply the of

Great. Thank you very much.

One you. moment -- Thank

Joe, is or that it? did follow-up have you a

good, No, I'm Jeff. you. Thank

question. This will probably be Operator? our last

Thank One questions. moment for you.

comes question from Hari next with Our Sachs. Toshiya Goldman

proceed. may You

so Hi. two Good squeezing morning. questions. me Thanks much have in. for I

one First on is pricing.

if I we around revenue year. your of for full the to be take going think QX the midpoint guidance, growing you're XX%

given, from intent can And pricing, next again, well. is pricing. your we thoughts foundry get raise to significant the that gave on think think, XXXX, supplier on good then an color If you pricing really preliminary perspective be tailwind pricing from your great. quarter the how on a update particularly I XXXX I would as year into last

pricing calendar XXXX. year practice, quarter last very Yes, XXXX of in will done good almost we so year, provide the dynamic, It's we've day-out. I would for a as Toshiya, very, for as say still impact full year day-in, one

give growth for the our will you year in QX pricing impact you we next provide this of on revenue year. aggregate and So

strategy cost From stick input from us. continue that level the That protect foundry other our to cost but an cost partners, customers on we to profit to also inflationary talk percentage. increases exactly sizable of lot quite overall dynamic is can our to that see cost gross the walk input those -- decreases absolutely we perspective, we we there's a And, pass to to course, that our of increases.

guess, seeing reasonable will to year, And our moving in continue to assume next into markets is prices imbalance how I also the core next year. is raise supply-demand that it we

to those prices, also next continue end that think of We are cost highly I following input likely to year's much say XXXX will increases. now just that we so the fair it's it's

That's helpful. Thank you.

Sorry.

Yes. Go ahead.

Sorry that. about

elevated how you've at equipment thinking we clarify utilization As say point? utilization my then you're the high be to CapEx had delivery much. they rates just about XXs, inventory the growing are comment being but forward, on little a into my going rates or you utilization CapEx delays. given Thanks you Bill, premature it mentioned to wanted And to follow-up, guess bit where is is rates your XXXX, that. quarter, in on Should in expect this so to talked on CapEx, keeping about and just you're

is the quickly me let to speak So take and utilization, going about Bill CapEx.

very, majority factories On because, core the Bill the working we and utilized are internal very our yes, stay as it utilization, highly will put of front-end earlier, industrial. automotive for

strong So high. rates will the that's stay that's the exactly and why utilization where continuing, there we see very demand there

to over for you Bill, CapEx.

year, this between Yes. do we XX% the we X%. I range to next better X% be in and will mentioned, as will to the year, Related CapEx, going And X%.

much. so Thanks

to the of that guess the us gets end I Yeah. call.

are I uncertainty. macro near-term summary, the given we in say would cautious So in all the

markets, having. everything continue pretty supply quite line industrial our which try is weakening market, while, a the resilient core call to signals, with a to we automotive the same channel surface, However, the disciplined see supply the IoT soonest in which with game stay the want partners we ahead in constrained really we dichotomy, trap where what under be time, our we to foundry to approach of demand the in-house the are do significantly at and get very to I and we and very consumer not where the

And much. that the you. all you today. it Thank sets for very call Thank

Josh. you, Appreciate concludes That today. everybody's Thank call attendance. the

for Thank participating. conference call. you. you This Thank today's concludes

disconnect. You now may