NXP Semiconductors (NXPI) 2 May 232023 Q1 Earnings call transcript

Good day and thank you for standing by. Welcome to the NXP First Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Jeff Palmer. Please go ahead.

good and Latania you, morning everyone. Thank NXP to Semiconductor’s first call. earnings quarter Welcome me is Bill CEO; today the Betz, Sievers, CFO. With call and Kurt on NXP’s President our and for being will today website. recorded call our corporate is be The available replay from and

revise COVID-XX forward-looking differ to, macroeconomic impact Today’s to include, impact second risks operate, and NXP’s statements. from but forward-looking for on and and and on statements Please no specific uncertainties in or the which management’s continued current to that expectations pandemic of are that uncertainties quarter call statements the the end existing update involve limited the could we markets regarding reminded publicly business, the that our for the of will undertakes be new cause any sale results risks not XXXX. include financial materially of results NXP our expectations. These products obligation

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

refer underlying financial our directly does not will certain the to will of management to Relations be at first measures measures website the X-K related directly NXP’s release in on the non-GAAP financial nxp.com. quarter provided we non-GAAP to Investor has and operating that are NXP’s section press performance. NXP to measures, comparable driven Form by Regulation Pursuant events consider be GAAP earnings the to SEC reconciliations most XXXX to Additionally, in core primarily which discrete G, furnished available on which

turn over Kurt. call to the I like to would now

call today. second guidance a then start good quarter. morning, one discuss the everyone. our Thanks appreciate review results very joining quarter with We and will much, our and you I for of our Jeff

begin me So, with one. let quarter

end midpoint segments $XXX was than better the better the with revenue Our trends performing than in all expectations. of our our market the guidance million

above level, billion, continue channel which to at a of year-on-year, points ago midpoint maintain quarter of months our was NXP essentially margin points was with basis revenue operating a X.X XX.X%, of inventory our operating target. the so year margin below $X.XX basis higher combined revenue, by together, expenses. long-term XX Taken distribution gross QX our guidance, XX better delivered flattish Non-GAAP flat is the one well offset period. while we Year-on-year in result performance below

let was and near me near the Now, XX% ago high one Other, guidance. the one quarter end in guidance. versus billion, period IoT, guidance. markets. down revenue And XX% up the down high-end versus year automotive, the our of and of trends the & In turn XX% X% above was million, $XXX $X.XX was to $XXX year and million, year-on-year revenue revenue mobile, the Infrastructure focus our In up specific one versus period million, of Industrial one year $XXX above revenue In the quarter ago our and midpoint the of finally, midpoint Communication quarter ago our guidance. quarter and was period end our

which are particularly our same During European At market this across time, we slow the all American our served our businesses. incremental And businesses, Industrial and primarily IoT modest in start, first the seen that we was improvement solid a business China-exposed and segments. through for demand after & channel. distribution in saw mobile have quarter, true North

for the second will XXXX. I Now, turn expectations quarter to our

billion. QX We $X.X to are revenue guiding

year-on-year XXXX quarter midpoint, and low up is our percent & single-digit business. quarter to Industrial is Automotive single-digit versus period, versus the midpoint. trends we of flat range the up mid-XX% range expected down At XXXX. ago is and XX% to low to the up this down be range to be resumption and the single-digit on up range quarter following X% versus finally, expected the Infrastructure in range range about the about sequentially. in XXXX. in a high in up year And be it IoT basis. sequential XX% be and the expected the at mid is is Communication versus While in about one in Mobile anticipate percent sequential single-digit high to a down year-on-year X% one year-on-year in expected growth the & to the Other represents two be

end while and progress our believe the our business we do we are portfolio and should with the weeks. of mobile which subside progress have this greater automotive, demand stabilizing. lead as over a infrastructure we shortages, in now last third through substantially years, consumer, from as solid This XXXX, with severe about down than prior environment times is summary, communications experienced year, core towards continued IoT only periods. X see industrial a the We our In businesses, of we XX

still constrained for However, primarily segments. technology and nodes, the industrial we several continue specific to be supply in core automotive

to continue is execute to cost along our In policy, to pairing consistent addition, margin. customers, experiencing not we higher which Hence, increases pricing our input we while pass gross our the are cost.

throughout positive as includes see NXP-specific content as Automotive, and increases. tailwinds combination well Within a the the xEV ongoing ADAS These we drivetrains secular year. continuing of adoption and of price

same to select Third-party firms are due pockets issues, auto which held a inventory screw Tier elevated have golden plagued increase extended chain. global the some car X time suppliers at year-on-year production, we modest auto believe supply research while of the of the anticipate at there

in products to Industrial companies submarkets core enable relative strength infrastructure critical In IoT, as we and industrial more & efficient. our be the expect

cyclical in to the in continue consumer while stabilizing, the we a on In especially will business segment, growth Mobile this through sub-seasonal year. However, half of significant trough navigate IoT the a first is China. a more dependent be rebound,

the solutions. do card specifically second and against half against for RFID in Other, growing our releases lastly, sector improving we to supply premium in Infrastructure further our model demand, anticipate resume And demand are we normal growth. help tagging However, in & Communications, pent-up capability secure solutions

lumpy growth remains and in XG business power this year RF India. to limited our hand, other the is On build-outs

in the emerges. second quarter And maintain level. year. into to we with consistent well we channel sell-through on-hand second as of this it Our in rebound And X.X this a that possible positioned half level guidance are when satiate inventory inventory channel and we months we very the for strength demand if yet, overall, start increasing may see the contemplates

In half. of of summary, in believe environment. stay be our revenue the second quarter total guidance us of to within very our our views be and first to quarter than acknowledge combination year what results, do our we second year the early the in half our the leads the uncertainty and will cautious that and financial for half manage the the second for control we long-term is will the greater Therefore, into the demand continue first optimism, the model. Despite ongoing disciplined

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

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

during highlights. and was covered of of the revenue Overall, revenue the guidance and profit financial operating for was the our both And the the were non-GAAP already QX will range. has our Kurt very our high-end drivers good. midpoint outlook guidance. Revenue above gross performance As I the above QX QX, to provided financial move of

the year-on-year, of QX, total [Technical billion, generated while details guidance of Difficulty] the revenue the range. flat to midpoint moving $XXX essentially We $X.XX million above Now, was

This Instructions] and you your [Operator are operator, is live.

about folks. Great. that you Sorry Bill, why don’t continue?

of year-on-year, Total XX.X%, above the midpoint down driven R&D was revenue me $XXX above details the variable operating of non-GAAP range. $X.XX was From the fall-through flat guidance billion non-GAAP of basis and by range, start QX. the on guide. the of million profit of midpoint $X.XX or $XX basis up and midpoint revenue were $X.XX moving the increased now range, slightly investments. guidance XX from and the XX.X% billion a level let up year-on-year, of XX.X%, while points points high-end total essentially guidance We billion non-GAAP versus QX, a $XX non-GAAP operating points XX solid profit Total though So the above year-on-year billion, profit margin year-on-year revenue, the to and non-GAAP higher reflecting generated in and modestly above of operating gross operating expenses million gross reported margin compensation guidance the basis up perspective, was million XX range. $XXX the

million, million, non-GAAP was $X non-GAAP the Non-GAAP non-GAAP due with profitability interest to expense stock-based Non-controlling reflecting in with better of $XX and was the interest of the guidance a is million. consistent end which income XX.X%. high included $XXX provision million tax of effective $XX compensation earnings rate tax not was

the range. near in $X.XX, Taken is per guidance our share together, high-end which this non-GAAP of resulted a earnings of

quarter investments, of net capital the to and changes $X.XX EBITDA QX the net $X.XX XX.Xx. to ratio the position resulting was debt QX sequentially of was and end of due at and generation cash billion, XX-month was adjusted The with XX-month higher cash a total cash coverage cumulative billion, The billion QX. Turning debt of the our of exited EBITDA EBITDA The sequentially. was $X.XX million adjusted the trailing adjusted X.Xx was billion. to and CapEx we ending $XX.XX interest capital, at XX-month end working the effect flat $XX debt, trailing during up returns in debt

from which QX, we of our issues During cash repurchases in recent and QX. environment sector, in to represented the cash $XXX the XX% operations. paused dividends, the million macro regional flow uncertain share banking paid during we liquidity Due

XXX% strategy changed. the to free to excess company. our We resume cash back the owners has of allocation to plan However, we and buybacks plan return QX in capital not flow of

XXX inventory months inventory sequentially metrics, days. working of days of this XXX to increase was XX approximately an channel days. or and represents Turning was combined, days, capital distribution When X.X days XX

our goods last together and/or excess hand strategy serve the inventory during inventory distribution and call, to on mentioned finished both customers channel. As the better sheet prevent our inventory and channel manage earnings our in on to balance is

the deliveries approximately or is being needed have months if goal distribution next the we or to XX ship quarter channel only days balance XXX quarter. sheet, likelihood pre-staged the that into From inventory hold internal in we X.X in days. an for at as standpoint, long through customer the a current of are on products of Our supporting channel selling high so comfortable the is

inventory million die by inventory sheet deliver to returns correspondingly the the enables XX X.X us balance $XXX bank QX, As days, the to the the target we balance hand. on would or leveraging long-term on flexibility extra of months our revenue of inventory inventory. an sheet In channel lower

to decrease on it Days up of liabilities timing amounts true QX, of days due to XX reclassified to payable days, Please days receipts. other Moving to a trends. in sequentially. material X payable certain current were X payables XX reflect beginning was days better receivables, note, days, we sequential

was million, million net $XXX operations an of or was and into the XX of increase balance we flow to cash leverage as quarter cash conversion $XXX prior sheet increased the flow revenue. of together, XX% the over is million cycle Taken due capital channel. The $XXX flow XX as Cash versus cash from non-GAAP shipping the avoid CapEx days, days free was free resulting needs working previously primarily noted. quarter-on-quarter in in reduction to

cash has free Our XX%, greater are the focused not long-term demonstrated flow we half changed level non-GAAP margin on we in to target second of driving and a XXXX. than

QX Turning second and for QX. $X.X the Kurt our inventory this environment, quarter, Furthermore, our or improved demand year-on-year At may be revenue to a plus to we move current revenue conditions. and billion at our expectations level, X.X now outlook, the guidance manufacturing cycle channel of down versus anticipate contemplates market $XXX though up million. month given our times this midpoint pending as X% is mentioned, minus the X% upward maintaining we

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

reflecting to annual plus $XXX expected million are $XX merit be million, or minus expenses Operating increases. about

margin non-GAAP will operating midpoint. be at together, Taken XX.X% the

be be We financial Non-controlling interest $XX million. the will rate expense profit non-GAAP tax and be before non-GAAP expect XX.X% of to $X million, tax. to

use suggest count we you million average CapEx share QX, revenue. For of XXX.X a purposes, shares an for X% and of rate of modeling

midpoint, this together share a non-GAAP $X.XX. Taken at implies of the earnings per

cycle. to closing, earnings for key highlight themes would the this In like I

greater our us enables the will and our first inventory we the than manage supports better internal serve the a second First, outlook be customers’ buildup channel of inventory channel in inventory. half requirements, half. to as of XXXX prevent excess revenue to our This continue and combination to for

utilization the lower remain and margin flexibility our mix. Despite better high-end anticipate at enables from improved internal the the modestly believe be our which operating guidance range, in down the gross throughput. QX reasonable driven We XXs to of Second, remainder long-term a more XXXX by level, low utilization our model at contemplates is factories utilization mid-XXs the QX. we in level of the factory product improved to for

Thirdly, all we timing funded repurchases, are any hand. to ability as magnitude the of balance cash options the greater cash dividends acquisitions, debt tuck-in can retire holding early which includes flexibility. more and of cash sheet to or share enable the as on around on small with well be This

continue Finally, be manage we stay to in to financial is our long-term very our within and what will disciplined control model.

I back for would it to questions. like turn the now to operator

And Instructions] will question first of C.J. [Operator our Evercore. from come Muse

open. Your line is

Good I could first I speak question, Thank afternoon. the hoping in XXXX. question. guess Good morning. Yes. pricing you for you to was perhaps tailwinds taking

told segments? us that versus obviously, But update for half that you’re your it is be thinking that all in your is increase to something You going relates how is just a specific each a thinking that the curious, second should you segments? first input are And I embedded And impact about just stronger quarter. in you that as half, higher saw get pricing across outlook overall January costs? higher Or something to XX% broad-based not business. the we that. for to about of

Thanks, C.J.

stay other So of no, see continues input increased and input don’t solid to that, to actually been with protected. we absolutely continue headwinds our since which from in and on the it’s experience the cost keep pricing our year. side cost, I percentage order policy, all throughout indeed on growing would this pricing be pass to say rock has probably we margin gross of to we

this perspective, be from increases will So to that there continue price year.

only tailwind. detail So year. by how big here. will And we next a actually headwinds to tailwind It’s be that out yes, going is early no

we like before. just year the did this and year So

– in across industrial. is you a mentioned it I the pretty remarks think I’d say, supply supply and function shortages, and was does when think of second most core go automotive the my of demand different Now the segments, prepared directionally, that persistent How It half this in think I segments? are as your straightforward. the the into simple say question. and I and is

biggest is those note, two year. don’t price where the where touch segments of actually a the price this In So large for then tailwind also general, are this important the whole also through our continued sees it’s throughout an annual which anchored to negotiations, or into that annual we C.J., business part the pricing that year. is anyway the year year on

about is half year continued first in headwind second the short, in being price increases. contemplated revenue larger in from in So no of pricing. half than is What said terms what we the on this based also

Very helpful.

to a As auto grew of shift my kind be shift XX% OEM for quick industrial versus or function a your a about total should Is of is mix we follow-up, this ago. sales year simply permanent of that NXP? sales XX% thinking to that

China a actually function the in No, weakness that QX. of was of

our industrial As in part is of call, of business we to last one the the large speaking, first automotive out for China and had And relatively so weakness us spoke on the business. why IoT and distribution quarter the the the significant with then China. much we is largely distribution business also in China weaker a part again this with is quarter. came through the start

this So going QX to not and China. it’s been thing, this a no, but permanent a consequence be of direct weakness is in impact

Thank you.

Deutsche will come Instructions] [Operator question next from of Ross Bank. our Seymore And

is line open, Ross. Your

I just the Can talk about questions. great bit two shortages quarter, didn’t versus mentioned takes upside I as other limited? seeing Thanks. in just just a about as please? have wanted significant It’s auto. you guys. what little Is some it really much Just others? you’re segment. to Auto there. of than a everything Kurt, talk that only demand side in puts the see you Is Hi, to still just end but the was that demand upside reason great on Auto? and on supply the it supply, about

Thanks, Ross. in was QX actually Well, I quarter. felt Yes. great Auto a

our the supply fact. upside was end Indeed, all long-term gated QX capability. think a high Auto I is above which XX% in we of year-on-year of growth guidance. indeed That’s revenue growth, in matter did by the

talked a are across the in the be I’d indeed really in increases, bit through that we sitting I content half on is more Automotive, earlier, of growth Automotive. which company Going including which follows to have xEV C.J. also I to drivers, but situation, automotive. It vivid. pricing before. normalize ADAS year, the as year, this forward, the pretty the penetration which material of automotive, shortages largely I’m hope the remaining Ross, going to core in gain is in part industrial, such that through say penetration. share and automotive that will sure see continues shortages, quite we which the the the And forward, little NXP is continues the is in second discussed supply/demand damn continued It

segue balance That’s rate you’re was about optimism grow down your revenues conservatism optimistic a while that I that’s ability half, half over my so talking utilization/inventory utilization inventory then nicely. utilization and more to taking versus expected about second despite versus what conditions, to question inventory, sounding a did beating how help little reconcile it you the perfect the on the demand us demand guys And the significantly of out? kind etcetera. on surprised in to you’re Can simultaneously more the you

Sure, Ross.

Let me take that.

we now around and the then running mid-XXs low are think probably high they sweet XX%. in is XX%, the again, last and quarter, mentioned, QX in And as in utilizations, were our XXs spot So the versus, XXs, XXs.

bit to have below get several we’re sure inventory or moment we where a We’re rebuilt make areas of buffer inventory our we as that at trying internally. the produce

any bank a that me inventory, in take just that we’re it holding the die strategic XXX orders form have When within on quarter to bridge help days. we’re ready period. and – bit. we them let Again, all relates holding about our and about comfortable in So new service that to

days it, where We’re today. we but And the could if actually think not. put decide to we into we XX about channel holding so, at XXX do we’re have we’re if you it

very are here. cautious We being

improves. the when looking only through when at market We’re and product sells

we focused finally, to So that we align CapEx XX% Then is X% IP Analyst internally, hold about as factories. our with again, versus base. we honest days, would that and CapEx to on strategic The of And the that’s spending during be them inventory continue XX we XX Day. days feel to with orders XXX that off proprietary comfortable that we factories I our XX that another to XXX which internal internal to of target we say, have days get our be today off as upside or set technology. we’re another service is linked that around quarter, our customer XX-day we and really within the you, the like able to out call

inventory, work commented our about internal will and will will mid-XXs, running think I foundry revenue inventory, of and first some utilizations it larger By we servicing front-end the our adjust obviously, way higher think the XXXX. half our down that purchase XXXX the to we Kurt So internal the throughout than of be to the half. orders probably continue in second

Thank you.

our And from question Stacy will Rasgon come next of Bernstein Instructions] [Operator Research.

open. is line Your

wanted question. Thanks for guys. ask Hi, also about taking I Auto. my to

about know you’re the I shortages also talking mentioned pockets of still, channel. inventory out but you in So

those kind on I’ve that? What seeing you – was in you Could pause are? in little are us auto how areas And products is much levels the more heard build-outs those color of your where any inventory think categories? mention directly actually the channel. give first time I in given of you this those revenue a

tried Tier it as it’s a from sounds as than on no, suffering OEMs, larger we the describe. do it’s Stacy, the what those very It’s inventory were Hey, golden now of the I much, surplus Tier What select products, suppliers. to about Xs, screw about much few problem. you X pockets not see phrased a way which

got see be that had certain products came And X select from available. parts pockets, where the on. products a a to one situations more were could were the over to that they a we there when Tier period, few those bit it’s past structural seem that seem piling years, up not few part before be through missing, And parts those flushed But Xs amount. there say few remember was it’s somewhat elevated certain which then consistently I or but part a missing inventory. You other a at

of Xs hold. companies is to Now in should car now the are Tier about inventory at and discussion from so inventory, actually the the anyway asking automotive Tier the size time, what there diligent more a in more same forward. going I’m OEMs, industry quite that of the the the is witnessing levels And elevated which target for X

talked have are being to these which elevated in what safety terms inventory So forward chain industry. is now used levels somewhat going supply reasons, satisfy in what for to safety actually we figure extent needed about, reasons to just anyway the out of actually maybe I pockets, elevated for

So a bit, little Stacy, it’s very a customers. few

the this tiny clear, nothing the year mean actually of those talk business I we little hinder because So, mentioned year. a to levels. to put just about balance automotive all to be But in – wanted And of and year-on-year. will might grow very I dramatic, grow inventory just X% headwind it to from close there to not because be by, I that, think, this a growing bit it SAAR just I substantially

helpful. it. That’s Got you. Thank

For to my ask I follow-up, wanted China. about

[ph] you are you mentioned jump last through a So seeing to little issues Sea quarter’s you the it in maybe early or like were far? what calls. what that more you as that to is just you shoots quarter? actually little China too Is relative worked it like Are you China seeing seeing does green or like exactly this recovery? last China characterize recovery Dead Would on a sound had it

Yes. early statement. such make I Yes, it’s too a think Stacy, to

based of the levels slow these start, a a clearly seen modest, It few first and came not I just none We have Year New I infection from are mean, in would Chinese improvement throughout very and modestly elevated gradual weeks. I comments see Stacy, would up. also and quarter in making also we also guidance your our just today that on And on based say our the this. business a forecast through distribution. XX% are first this would to rebound. by connecting our but that. automotive We is not sharp don’t you be way, clearly question. numbers the first again, see that, Mind

talk But XX% I of which they the explained in these when another automotive and earlier direct. the chunk mean goes through is So about pockets perspective. channel what distribution X.X large that through put inventory, Bill in is business, are of months. actually our through the management disciplined XX% just through it at controlled to I

That’s guys. helpful. it. Thank Got you,

will Vivek come [Operator question America Securities. Instructions] Our next of Arya, Bank from

line open. Your is

thanks growth is Kurt, it because for my your half-over-half My remarks. about mentioned one, taking questions. first you in Hi,

back? is half? China driving the second have that? So it half-on-half? it of in of I what the Is And exclude should about importantly, that increasing that have right in second a Is kind the for just NXP kind X% about XXXX, half grown place what we if driving conceptual Just do second expectation half? sales is you more Is help around you X% at could half-on-half. growth the pricing expectation? set And Is models it least think us what if coming basis to on seasonality?

two premium anchor support element. will models in the mean maybe points. I the Clearly, So a I half half mean only half to I in few you disappoint want next Yet, it with a seasonality will to guide need Mobile size you I over of that little. the give that one growth we you know Vivek, that’s quarter. a second the here. ramping one. I not

supply would as also I in element other is infra. core increasing comms auto clearly it But capability, is industrial and and earlier. in is indeed it discussed The here mention we

with we year years. this secure the X in Within seasonality secular that tagging from demand the massively continues cards that which this serve demand and finally past growth. bit can will quite to the through in business, a we actually one becoming deprioritized card We over have two the RFID supply had RFID Mobile finally and drive benefit business, together available. the And pent-up now half half so of business segment, infra comms secured the

the on demand market, And we EV in maker it. and premium just right, China. we see sluggish we play, just a at one when Got then cutting state prices, automotive of look the more hear then end U.S.

market we cautious how comes those peers Kurt, strength are the and end and demand? macro more all it you a So lot points, semiconductor because when that data to are your should conservative that versus automotive reconcile reporting of factors

portion it globally Well, I of number about grow it the of terms xEVs And first place. to SAAR. the in content really and the will increase is drivers the content increase is in which hit back goes main data have total for two latest the xEVs, year then absolute one XX% this the year XX% of that will like over last

just way, local Chinese of a SAAR I of be move. shifts. the year will total by or clearly, mean this there of is yes, a are third hybrid bit is or And success XX% So electric. than the a this more wave there mean, OEMs. I massive fully

grounds companies. local vehicle might some electric companies the that China against with losing Western seen in of have are You sales

are we perfectly Now hedged.

So Chinese just we are we exposed Western OEMs as to the to ones. as are the

is there SAAR also is for So a overall main growth. content still increase an forecast the move,

last had seen over neighborhood, I number S&P growth I of XX think, think million, year. about that in million X% so a is the which from somewhere or latest was, I XX

it is And and Vivek. xEVs you the all underlying cars, the going, even combustion-engine keeps that’s if take SAAR, also growing. actually reason together, So why business this

that’s it So I surprising. don’t find

you, Thank Kurt.

will from come question next Ramsay our of Cowen. And Matt Instructions] [Operator TD

open. Your line is

pricing morning, the – a Good very are or of business and auto And downs the quickly for revisit maybe of to increases in much of is up we pricing. a will I of please. going eventually, times think point your lead you higher lot – costs come that remainder little is, the long-term a I and when the do of cost expect if you address could afternoon. view get back stabilize, a clear the your you system, everybody. come do bit, on think what as little much, you Are you how down. auto base stabilize from pricing I for comments, business? wondered the though Good year. bit input to when will a Thank thinking I were question question But about much. Thanks. There particularly lot it permanent? normal price a goes we down in And these some the input I what just to in angst Yes. Kurt, get very you to wanted that,

Yes.

So pricing, especially would we’ve auto, structural, understand important the this capacity place. actually where or It price in in in is order new those question all from mature where most significant CapEx the came extend shortages. had investment increases to to on significant the from the They cater to for areas nodes. I a first in came

be across CapEx spent, through of lot the the to but depreciation on and the next been going painfully necessary we all of depreciation as last industry. witnessed that of is most So, also years XXX-nanometer that area. that is the products continues of And the to spent additional capacity, a of all these XX-nanometer over to years, in few sit which became has the

what pricing some increases. from back which point. of go my erosion and will to was not is yes, normalized had demand over single-digit levels. situation, price the So, have And small, falling have old will at sequential achieved but we new the year-over-year, that back price we when in supply we level, which years ASP X plateau It is course a then estimate to before maybe is that, this will here of

mix? target. if Thank inventory of made long-term on levels. ask you being flexibility. channel below And I full and that I NXP roughly where clear. to flexibility a Kurt. just you you? are ratios in little guess a the holistically, books bit may today to inventory of the is, the close kind inventory your I given not of just more the what’s about long-term the for real get more And then the gives observation go for speaking, Bill, roughly keep follow-up, kind question oftentimes I relatively Why be are than wanted And days isolation. inventory gives the that old increasing. my Very you it bit have incentive flat, talk Thanks. to on about channel the they that it to in discussed the could just back books Those wonder inventory

on stays real it inventory fast if the Yes. put day, real that’s want shelf on at get to channel eventually demand what the really through then It is of real is idea in shelf, the the the you and you to inventory put uses managing And The discounted. there of you to going market. so good end do have whole turn the understanding versus estate forth.

We So, channel way turning product shipping what we about are making are right, we is into want that to the do. way only the about do is think And of you inventory past is just we is the same to of demand. think fast the this the at amount real sure basically way the we it. because in end and the it day, new about changed both learned holding have from strategy trying actually, same – combined, we the and this it’s combine lessons strategy all we are you

add, me Bill. let And

I will this soon. relatively possibly think we now enter

X.X back As months as it remarks the that, from are have can the we increase X.X will level, again, we again, from those consistent soon into as the industry we demand will soon we distribution demand months would end, as and we share And months. line industry in in will $XXX to In the X.X And we you, the months channel, we a having million as sell-through in is trends up. moment levels. about basically uptick back. in market get or attention be fill that the prepared see but mind when through speak But go X to sure we required to delta the $XXX gain with the channel more we coming emphasized ticks make coming. our the million, the to that

Thanks clear. guys. Very

our Gary of Fargo. come next from And next for our Mobley And one question moment question. Wells will

line Your is open.

available stand or you my the whether out add. down, was us update Thanks give in you that the of that – guys. durability out remainder not trend where your with sold year of an are of backlog hoping sold through that backlog, continues Hey you for today I but backlog presume question. can weeks your to supply I based and on I still the automotive should taking

Gary. Hi

misleading So, backlog that the the no, and because, it’s had sure sure, tried to all never guess orders the of has beginning there. been I talked about we double and triple you number situation everybody chain that understand supply misleading size in I that else really consider the of and since be backlog we we because

a made backlog, sense it I get for So, size as future of speak that felt growth. backlog about a the metric to never to feel the

we no, will to the What why, I back you not are speak is – it NCNR comes that’s in however automotive, think the about backlog. orders. for asking So, what

of orders all. not automotive our year. The So, backlog to this the has yes, for part that be has at and continues NCNR changed NCNR been business covered order of largest by size

We I And also cannot executed is. the always right there it it more, of before, and we changes is mix stuff, has same and just left down. to the is ship what it but it size from been mean is

of follow-up, automotive a I want ask to chain changing shortages X-year Thanks the about following in period market. Kurt. behavior end a supply And

big, that there more perhaps whether with the to collaborating the Is not or has expand lesson by that way a quantify you the these learned lead more like will And any validity? And chip perhaps share so it closely or that under idea with and to yourself, can work the OEMs market companies further a OEMs. automotive impact your qualify automotive collaboratively have and bigger.

between have a Very has you logistics point also from of the and intensity really rate here. new depth collaboration I wins and design of way think and collaboration clearly, innovation the good all to the is often we on we with very that principle auto cutting significantly where indeed the to That a direct the are leads basis OEMs. up which these long-term companies deals, a us jumped also give into yes, here will with one there the companies. on cannot OEMs, shoes myself can bit a They OEMs. supply or from all very if you a of a them. the of I the assurance long-term sure focus is of game and takes against down put six few I believe select because assurance winner it And demand semiconductor they different eight NXP leaders, play be and is

Thanks Kurt.

from next Barclays. question Blayne Curtis come our of will And

Your line is open.

taking that impressive kind is margins. that just and question. flat. your Thanks it’s gross guys. the for Bill, I wanted actually on down of double Hey It’s much quite utilization my click to

So, pieces mix walk mix. through to is maybe sure per if us the just wasn’t accretive that I again. Obviously, segment, auto

to might I of if loadings wanted think can down, mobile that well. on you your selectively going also external down probably kind of that you helps. you I kind comment that as understand mentioned But bring that

Sure.

expect new talked are – by drivers and me What this Let major the introduction. we forecast. in are orders first, we product mix. then product favorable that what is again, Then we about see, serving. obviously, we see we customer clearly is to being our we building favorable, and it’s the driven And

term, the to starting will some continue to for see that of again, that are mix couple in richer We company. out But that. years longer a kick of

which variable remember And factories variable cost the we so would about XX% and you have significantly our forth, Versus the auto CMOS internal of fixed build improved and factories. fixed industrial versus finally, disturb then and utilization XX% are the the we last to of is wafers, remember, we has XX% which cycle second, which to this have and approximately two-thirds support would structure, And decade. over factories. and proprietary service bulk last past, you IP our our internal technologies. our Now down our realigning of

our specific basically going very the fastest growth that we two the industrial, technologies we are markets IT putting about over that So, to the service and decade serve. equipment core think auto that in, very next are to sticky,

then it. Got ask you wanted And segment. Comms the I on to

think I and the the the driver June you Kurt But driver same strength in seeing big bottom? being the mentioned that for the RFID for are off year. March is

comes doesn’t in lion’s Yes, additional and growth RFID. growth, been perspective. from really which into that the at now it projects is are demand, unfolding. have the leading really is many, lot not here cards, secure years, other for in point, pent-up from more the really between cards. share we a RFID, many the that secure working which difference incremental will are RFID and but and two is these Whereas somewhat RFID mean the again, cards, is of a That towards it’s some which separate tut secular But growing, secure supply the growth say stuff it’s

guys. Thanks

question next will come And next for moment Truist. Stein our William of one our And from question.

Your line is open.

understand. good Congrats And outlook. Great. better very results The results the question. than Thanks I taking good my sure want for on came to you expected. and make I

the so the through on still the that’s China right? was low am Is think down of in through idea in and China guys but correct? of because the what beginning a improvement trying that it you driver am distribution low, improved said that came of expectations that you channel. most for China. I call, at as I that I in the goes were to with the reconcile quarter, the is in thought percent sales this you channel in Is primary the what was an just And I getting

Yes.

So, of here mobile fearing really of than because a it I stance where one were then you And We it in what pretty it cautious we I indeed start a had much bad a beginning we it bit the the gradually, would. That’s, quarter. part industrial improved slow more is say took and than in think IoT. less would said. China, was feared what

comms other side is which into the and came more However, infra. auto supply,

did to auto million channel that more $XXX to infra, Blayne. also not as outperformance. the helped I inch. move the did, that then here just time, really in explained At this on also see So up we same important a MOS broad-based more And comms revenue it’s an the

part all performance true $XXX say, was the we yes, But really a China’s a better good in that China a demand revenue, of million. it was would how than were develop. fearing So,

this prominent Maybe about past. radar to like term. of highlight some couple have call a that would near-term of of with as talked Ultra-Wideband terms talked longer follow-up of to significant highlights I In the the controllers I technologies. domain in as high-def don’t content some of these markets. you and in been and have think in adoption in you Any talk new some giving of the growth about have opportunity and drivers autos, end zonal you drivers more about different in the an

Yes.

is automotive, properly I which great in in based first one and progress. I it’s are chip we in launched release, think radar now our also for very which moving the now, think industry’s is RADAR press production XX-nanometer

– number clearly now as in radar one market for company, Yole year. us automotive in last which think I one the – the radar, presented automotive research covers this

So, the are out. numbers

who XXX-meter sorry, of years object using radar, So, imaging I which which is a leading XD clear in today, is including now. about this as now thing dream a the innovation. It’s are and is you had classification. ago our NIO, number is I very is smart is end we measurement car which high in And this XXX-millimeter whole which a China, electric and Bill, release speaking one. radar, together – with the remember distance of we between is documented, nice automotive Then California radar are one press startups

the thing business it cars. in the I electric our That earlier and strong winning a have mentioned growing battery OEMs because it management good is when we these China. sits is in of to very for call, Now, comes Then China moving to electrification, in NIO cars. out, to strength designs think I bias the

So, anticipated. business, Android Ultra-Wideband. Ultra-Wideband is adoption the slower go but means they be BMS/electrification production least, ecosystem had mentioned standards, into though. business. fast-turning lot Last a think in that’s than our picture from you to helps automotive quickly fast-turning a mixed The we not continues design I for pretty

it’s later. think but I it’s – little it call already, little a on That we doesn’t last said later. doesn’t the little happen, a this that’s So, a mean

of very actually side also we is where seen a in automotive growth we Ultra-Wideband Ultra-Wideband now pace competitor yet. the see very, picking up haven’t While the enormously, side cars, nice so single the on

really it’s So, only NXP story. an

Great. you. Thank

of Sachs. moment next question. one from our for our Hari And come Toshiya question next Goldman And will

Your line is open.

I a recovery Hi. quarter linearity half-over-half increase the either you guys from the inventory something question. you growth that the follow-up Good overall months half to bookings second guess you talk channel from business, in I does the in morning. channel second And revenue the without half could China. on then in importantly, wanted perspective? more I Thank you talked when so about was than do to or have contemplate taking hoping in in inventory? recognition months, modest your for X.X speak about visibility an being much region. higher the recovery any first you X half, Kurt, above increase to or in

within Yes. Toshiya, question, we of the provide so segment on will first half your – quarter any not within details.

So, it here. has I gradually improved it leave quarter. the let’s mean through

important. is half your no. The really, of The answer is really question second

inventory. not general of our of comprehend increase does guide any Our QX or need $X.X billion

be it on specific, of to months So, sits general very inventory. again X.X

the uptick. However, revenue. into prepare that quarter see we we and the goes than inventory in more to will the $X.X channel then order liberty sell-through make we also when for take trend third strong But a if increase to that billion the will

guidance, X.X then the will but might We with in are which billion, revenue. higher months. go the higher, $X.X are still the connected So, we print also

And on Thank just then wanted lead my to clarify Understood. times. I you. follow-up, as

of longer. as hoping do was times XX guess What I target exiting average pandemic? year? that You is, of could to coming this mentioned I your third lead expect you Where well. be out you speak roughly for your products your And portfolio of in to a QX, number or that lead the times I think had weeks

for these a tricky largely example that is question already it’s ordered of the earlier is for it’s lead portfolio our – orders order, because covered And of I means an whole that if of orders. get confirmation because they ask This times for NCNR lead a fact amount which a automotive for now Yes. additional spoke we next they the the a course by about year have. NCNR customers, business, function that this out. are simply the only is product

this about all orders, have I the got business way is think our business NCNR weeks by So, later. our of mean to of was covered would you XX all if

orders. on that. we it. the sitting Now, just only of annual But are annual why to NCNR we don’t of part a of have XX-plus weeks years, based that’s a calendar as – It’s a of concept orders, have consequence lead long part sizable the It’s time. will portfolio we on stick they as our NCNR

by orders. the answer to your it do will that is enter So, I If the do NCNR XXXX, that. of calendar will we again we depends for way, – and into why, question, that expect we that’s concept

still of have weeks, with the lead part a will times We portfolio XX too. sizable above

think I to Now terminate operator, call got here. the we

at the the hour. top of We are

pieces revenue year attention. leads if for strong. to actually core today’s So, our trust call. segments a where with you. I point together, being weakness of we felt seeing of in that, of the quarter a this want are you we you parts while growing. put consumer-oriented we all be And just in navigating you above attention through our these half want all for and of And to successfully this your pivotal us cycle, all to navigating today, the large second second also see a also infra and each sequentially of the industrial, business where what change that that now comms business, guidance resilient into and first are Thank the I said which then thank in is automotive four I through at slope is that that thank half, to and the then we we your continue

very Thank will and you this you everyone today. for call conclude Thank our much.

disconnect. Ladies and you may now gentlemen,