Qorvo (QRVO) 2 Nov 222023 Q2 Earnings call transcript

Greetings, and welcome to the Qorvo Second Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Douglas DeLieto, Vice President of Investor Relations. ahead. go Please

our perform may the our today's current risk you to Hello, XX-K because expectations. second to annual much. call, results include welcome to Qorvo's our performance. and our in could this factors statements associated filed with Safe impact review today published of report to items or SEC to the without statements on differ results. and encourage earnings and in enable Thanks these our we the earnings analyze performance In risk everybody, results. financial conference factors certain may XXXX with cause that additional in factors release both quarter and involve We noncash of on will expenses as underlying results that call. GAAP management's fiscal provide to that non-GAAP other materially affect financial very investors risk operating and actual provide the Harbor This comparisons trends from forward-looking financial contained today's well Form obscure as operations We business release supplemental call information

items During and to our will non-GAAP comparisons call, on be income our primarily statement based comments results.

reconciliation our qorvo.com complete under GAAP earnings a Investors. available of measures, our to financial at website For release to today please refer non-GAAP on issued earlier

to Fullwood, and And as the today and Vice Bob. over are other CFO; team. Qorvo's Grant Dave Sales Senior of I'll with management us and Joining Bob turn President as members Bruggeworth, President, call Brown, that, Marketing; well CEO;

the our of revenue call. earnings everyone, August and the Qorvo outlook Thanks, EPS delivered fiscal to during welcome, second our Doug, call. X provided quarter midpoint above and

related was sensors business advanced quarter indicated is list we during customers now with inventory markets drawdowns and defense sensors, favorable In In was segments: three growing organized strength call, high-performance expected, categories. higher the in even as cellular. product headwinds high-performance analog, September activity impacted connectivity connectivity design of applications. broad-based in as and and revenue primarily Qorvo's a into analog, power and our As revenue and consumer and across diversified on

reminder, a and split businesses combines previously connectivity the As in mobile connectivity IDP. sensors between and sensors

enjoyed Advanced in ramp customer we Cellular, quarter. a during large Lastly, the

growth. While will Android encouraged unit across our in volumes content weak customer in markets across global we their integration the support capitalize XG to were our on quickly were trends new by and more opportunities ecosystem, organization, and operating base Qorvo With sales designs. structure and Android customers

deep solution packaging our semiconductor strengths is system We more world and that efficient, a advanced will leverage technologies manufacturing, customers design, suppliers in connected. more help more and core and relationships to secure, with enable

In quarterly of a Siltron Now achieved carbide Qorvo highlights. supply Performance has with in silicon Analog, wafers. let's turn long-term our to carbide our agreement of for SK business. an consecutive four quarters signed Qorvo growth some silicon sequential

FETs for Our a expanded business. maximum supplies. industrial relationship support carbide DC loss. advanced chargers, chargers fast These surface to in portfolio low include applications Siltron, help diversify converters, and and device server onboard requiring our and of IT fourth-generation base mount supply further power our and SK growth power We strengthen with DC continued chargers, silicon released efficiency DC will

DOCSIS introductions included GaN a product New stations module PA cellular power GaN massive and X.X a base systems. GaN module upcoming for X-watt MIMO for

we antenna secondary as performance. antenna customer our XXXX National COVID-XX trials smartphone top-tier the X of support range systems. and expanded MEMS integrated to in highly expanded and Institutes our Sensing, our we we OEM, as retail smartphone reduce EV IC and to platform and including and additional content top-tier our multiple access and support a multiple We wins A/B European we range Qorvo's devices. power of our sensing we and the IoT supporting across portfolio, Cellular We navigation. design X system transmit and simplify secured band our across upcoming flu enables win ultra-wideband solutions, WiFi certification of WiFi, with gateway expanded Advanced In trials began friction band in matter XXXX and placement leveraging we commercial market concurrent diagnostic LE cartridges and complements of This power opportunity content bands reconfigurability X.X have compact In of we gigahertz applications. In connectivity of solutions shipments supporting wins, ultra-wideband a and kits At in WiFi indoor flagship introduced win smart other development solutions. their Initiatives. for design of achieved securing connected In antenna design while loss of interiors. in the to of solutions X designed first customers' and include automation enable and product enterprise of Health our main wins support and OEMs. networking Qorvo test production management X smart and low-band, we space-constrained car matter featuring launch. clinical healthcare securing well PAD our XE broad home including mid-high launched supply their WiFi significantly Phase connectivity, Korea-based mid-high MEMS-based outlets, filters smartphone. to the increased OEMs. tuning engagement automakers X commenced including and will Matter and a WiFi broadened Connectivity MEMS-based Low-Band solutions by design platforms placements integrated secure secured launched expanded WiFi we band gigahertz XE smartphone we first and applications, applications, reduce For markets, serving management applications, our our improved engagements, and system production and time of of ultra-high including technology biosensors, shipments high-performance We for infotainment, shipments home design commenced connect

main highly a combining receive PAD introduced path we content. and diversity Mid-High-Band integrated Lastly,

be support architectures. in Qorvo's sustainability electrification, in wins markets of We of the and we to Qorvo's connectivity half cellular business will like to this sampling and expect and leveraged are cellular, customers to high-performance trends secular sensors connectivity. and multiyear product advanced future 'XX, follow first in calendar analog, design Across

are infrastructure, the cellular location at and advanced forefront connectivity, of We tools precision battery advances radar home, defense electric and vehicles, wired comms, automotive and wireless architectures. power and and appliances, smart

best-in-class We Qorvo the end our ongoing team leader, we a as provide products base weakness growing exceptionally term, performing in In of and navigate the are near well a to customers. technology we markets. is

future to portfolio process own higher At development of next-generation of the channel. helping we SAW and to process and in customers to growth. SAW bringing have same frequencies. the inventories drive accelerated efforts our while and our reduce our inventory Qorvo's We are efforts technology, reducing which factory loadings the time, development continuing down product are extends cover introduction of in filter Recent include the support range

featured North band path to reduced complementary also just size the and This products our that BAW architectures content the developments integrated be newest solution will leverages in to most available a products Carolina. be introduced pad, BAW filters functionality. with include mid-high our our filter in integrate SAW smaller is placements highly Recent footprint currently fab mid-high combining Our enhanced band be and nearly recently our in main content. bar and in product our transmit will diversity will and receive integrated Xx the than of performance highly manufactured

functional previously, and favor said performance density. have higher integration require content we to architectures continue As continue levels next-generation of to protocols higher and customer

growth launching end are products We fuel new and and in markets. wins technologies design content new higher to drive

expect to We support growth these volumes as inventories recover. adjust efforts and

also to in thank operational higher-growth increase as our excellence. the leverage I want our We drive expect and team growth for to play businesses. investments out our rate continued

We customers undergo our and with even technologies are best-in-class delighting events. as markets extraordinary products

positioning demand the that, to growth. to quickly sustainable hand to Grant. glad adjusting company long-term and I'm are With supply over drive We it and to imbalances

Thanks, Bob, and afternoon, good everyone.

In new As today HPA, operating our to Sensors reflect a ACG. X Performance or will be or Group segments. or which historical XX-Q, Analog upcoming financial segments. Advanced references CSG, High has to and adjusted and retrospectively Connectivity our these Group, provide information, operating been Cellular we reminder, our will new

in second fiscal X% XX-K. results. and above Sensors WiFi-enabled year-over-year and latest million now non-consumer silicon will fiscal XXXX the XX% for I'll due was of primarily sequentially defense year-over-year, and of turn X% our high be $XXX Additional electronics available spend, was $XXX related end XX% quarter to quarterly Connectivity of and sequentially $X in our HPA carbide. up products. the guidance. weaker million XXXX down products, million by consumer for power and down revenue $X.XXX fiscal of information historical QX Revenue XX-Q to billion, our made was revenue strength including driven

followed million, operating million profitable quarter flow income X%. $XXX due $XXX and $XXX $X Cellular we were based in our a alternative On long-term on worth to midpoint $X.XX. per $XXX was effects basis, a guidance at ultra-wideband is authorization income net reductions pace which power million, $X connectivity expenses. planned non-GAAP of costs cellular quarter additional Versus quarter lower was quarter factory unit was inventory-related the but seasonal factors. and primarily repurchased of expenditures the a the growth balance segment sensors up Capital million advanced $XX design and representing Free will Non-GAAP product out the guidance largest replace the and of other by This $XXX or was that and and negative $XXX authorized was HPA and year, gross of million. remaining low volumes our repurchased margin above in to million operating Advanced income operating than development outlook, quarter product related million the mix XX% development X. smartphone $X.XX strong uses Android XX.X%. Finally, businesses. closely was of total, this earnings our approximately range. repurchase. ramp XX.X% of most headcount were lower cash sequentially, up revenue was our of cash of higher we shares $XX beginning spend XX% offset by share the expenses and and our of down shares has in our from a million, OpEx sales. which operating by share and segment. announced In of we and representing The at during were had in as was This billion within diluted expenses each associated customer, prior last non-GAAP October year-over-year Non-GAAP discipline, XX% lower with $XXX charges in the Board year-over-year reflecting rate employee-related benefited at XX% million the Breaking leverage, the timing quarter. Today, management authorization, ecosystem. Directors higher The utilization. of million

balance Turning to sheet. the

As modestly end, and had environment. our of of $XXX of no despite approximately billion the $XXX equivalents. near-term million the in to in quarter ramps we reduced with inventory seasonal We quarter balance cash maturities $X and product million macroeconomic outstanding debt

current turning outlook. quarter Now to our

We million. $XXX margin and expect and Non-GAAP non-GAAP earnings and between $X.XX. per $XXX XX% share of XX% the to million gross $X.XX diluted quarterly range revenue between in

Our current correction was view Android ongoing consumer-related customers more end reflects markets, inventory previously as a at year the acute of weakness fiscal areas than second primarily in the well predicted. as half across our smartphone of

OEMs to December quarter. total during Android smartphone to expect the XX% sales revenue China-based represent approximately of We

interest to and factory the cutting the we utilization. year low Unabsorbed assumed million cost expect gross in compensation, be end investment XX%. income remain quarter improved but on gross will guidance, as factories our in inventory and March paid income line, lower customer continued volumes. in will growth of cash levels grow impact balances, the discipline in in sequentially, $X Android our costs and expect this Simultaneously, base and the margin fiscal the are our to $X reflecting the project year items. will point expect revenue second organization debt million other volume our of by elevated, At costs along approximately the expenses mark continue other project be by fiscal areas. the half, will variable approximately currently fixed levels increasing non-GAAP We reduced our normalized expense interest margin in the quarter, rate lower We with offset undership December $XX non-GAAP we approximately our continued will we operating reflecting to full the we earned Below from down by the fixed in on offset Android-based sequentially. demand operating for to be offset the position impact million, across we to revenue

profit, of expected the R&D Our of tax and rate factors. gains due be to level of for related law pretax XX% fiscal impact jurisdictions XX.X% geographic tax as FX-related U.S. is between tax the mix the and other well as absolute to non-GAAP the balance high capitalization, year among to change within including a

Turning highlight improve to to work our the our productivity. great operations. teams like been to doing I'd have

an within of Successive achievements effective the diameters been our these efficiencies Richardson growth. The continue the support significant and sizes have This wafer. technology as effective to allow As per die product to filters as Richardson BAW achieved capacity advancements will further across initiatives to have effects spanning reduce processing increase increased such facility, BAW example, a footprint. combined from Manufacturing significantly manufacturing as well filter and process design, our will of ongoing has of in and facility meaningfully die Qorvo's we wafer number X-inch same revenue our factory development, efficiencies. increased output. engineering generations of the move X-inch will

Looking ability to the we are outlook Product our forward, continue our remains requirements markets to in output trends and macroeconomic our increase have in end within Richardson. the customers, and existing connectivity positive. Despite our impacting long-term BAW challenges footprint double performance accelerating. electrification approximately

time, for growth. We exceptionally portfolio maintaining performance reduced environment diversified the technology while management, open markets, have commitment Thank this set leadership, categories At increasingly our and financial has Qorvo and capital supported a questions. to positioned opportunity line customers please for you. This gains strong grown during intensity. productivity our challenging and well product long-term across

Toshiya [Operator first Instructions] comes Goldman from question with Sachs. Hari Your

significant what's How I last in provide reported outlook business overall. in China December Can I China going X/X guys did the on revenue on your question how your quarter, the kind your think quarter? about you was guess September some and I you was in in had the do business a in you And based what March China. as quarter? of context into of quarter? the to

the Thanks perspective. take in one. that approximately year-on-year, Sure. the quarter question. just for about it put was revenue to and into quarter-on-quarter down I'll China-based XX% The XX%

Looking Android-based overall down the to Qorvo. at the revenue looking we XX% forward, we're prepared in that for remarks, China approximately revenue as commented of

So decline a substantial and year-over-year. quarter-over-quarter both

back Got commentary off based as is margin of that, know guide follow-up in trajectory will a we path I think it. the about the on a Grant. gross probably to I plus? the guess rates. for timing on you you XX% And down should your full margins, you're year XX% going through that can and gross gross March the then pace calendar which very probably production, my at get to for utilization improve bit you margins XX.X% on you, implied But little into how you're to sharp or cutting 'XX.

would If you context be could provide that some helpful. to super

the over underutilization, XXX basis out, it's is headwind Currently, of you impact. Sure. dominant Related the is influenced to which margin, headwind. both points pointed as heavily utilization by and the mix gross generating

impact but it back We clear report gross don't the that margins to cover we very by would have meaningful typically think to seeing utilization metric we're beyond demand I that quickly just today. from XX% location. a be by utilization So factory, a path

As actually we Germany, it broadband an strength. business, utilization supports some look if example, for has seen at which in our instance,

utilization, the and new unit the helping and if test remain DOCSIS assembly Carolina given Alternatively, that the environment of our North in is at instance, in there Larger low also and as for the Oregon running migrations in look soft margin customers for support impacts work the CSG. as factory seeing WiFi volumes. Gas inventories very doing standard utilization they okay operations the which volumes fab, we're demand it's to the the and our our business similarly, and So is levels from through underutilized are like Texas well. China underloaded sites you

both the and XX% that a margin. this inventory we'll to of volumes path negatively All factory and return. volume have as expect back to costs that impacts return and resolve clear mix higher into a that go underutilization volumes creates as I would unabsorbed

margin, of primary parts a underutilization obviously of other one. the the In terms there is factors, but and lot there's moving

with comes Mobley next from Your Wells question Gary Securities. Fargo

defensive line gross pick a there last of sort XX% their way natural back on there I situation questioning. the resolution realignment manufacturing to footprint? And through. But up is the or some work have in terms these want a the might that or of is path management charges to you path make on decisions insinuate margin of underutilization to to seem to with when

improve number to of us There's for a Sure. margin forward. looking opportunities

can today, we utilization demand down, are what the normalized primarily We bring and shipping be see we've the factory building previously, costs. can will as environment. look variable which We resolve costs under the something we're commented underutilization, in is a it today, at on to we that under alternatively that reducing as would more

So as expect normalcy, that would the to underutilization to leave returns itself. I

The but other significant. in much gross they less are and are there others, items margin,

is to inflation But but into factors XX a norms. in where pales nothing be points today. comparison we're basis is there running it headwind might seeing again, it expect historical utilization one there's in we to outside which the as instance, basis For of it, what impact. approximately pricing, There that points XXX

the again, volumes macroeconomic the related it demand going back we're ultimately levels now from about. to and utilization, to volumes the to we've see intimately So seeing relates we effects and are the customers talked right

only is the trend the looking that Android quarter the million to Android $XXX how portion of overall bottom, into I million base million does and to same comment that quarter? out other $XXX would quarter business the March somewhere I'm million know that, might the the the assuming curious And December in $XX of China represent presume between appreciate handset customer $XX I represent handset outlook. to Okay. OEMs your

Sure.

You're Android. on the challenge. beyond right. enterprise mean the There -- is continued consumer be has to both our weakness customers' I the a simply products spending end and

had the production customers inventory it in looking seen lower those both as challenge area it well. recover levels for seeing We're of reset and carrying. it are We're by points, demand tools. certainly And and the in their return. to certainly. WiFi end seeing It most varies stories But ecosystem that to our they will have the is the expect, we in they're the in the would probably impactful. Our inventory access to adjust weakness Android management forward some is routers, in similar power market, products time, we're which I that's again, seeing be in seeing volumes that it business across SSDs, power and another out will

Next with America. Vivek comes Bank question of from Arya

For you in the was gross the of March first one, of gross -- for terms number XX% of sort I That a suggests year. margin flattish sales kind gave margin. full and

then wanted they does my could $XXX that Bob to the of Just you the demand. Last see above quarterly hindsight your few I clarify is, if to $XXX like up started, were million, recovery level. in And for X.X, sales Qorvo? jumped in but Because before was cycle question quarters, that? look million X.X, kind when back the what XG go to

somewhere were So middle run rate? mean you you get you the last and recent quarterly pre Or where few recovery where in think you can quarters? of in were the does XG exceed the you the to

Vivek. question, the for is Grant. Thanks This

we and be of you down. then would into question. on I'll we that quarter. expect to your address first expect March Android-based formally, in and we And seasonally, the the second customer, March our won't revenue, take to be part, mean, Bob in terms but do did first foremost, comment then largest up guide me which the let Let I

that business, approximately out. have So offsetting up We'll plays flat there's the effects be different to of some how we certain to The expect to slightly in areas. rest see there.

plus. inventory Thank not question. Bob. of number was pushing that we some also XG we to we the Yes, we're want closer near I closer now is thought be you build, going it to XXX to that point anywhere is when This for recall, that you're correct at your the has our XXX. year, there if you but expected to out number phones be started to been And

that's and drop, So inventory. pretty the big what a that's up built

get of business And $X.X that this. time. and segments, it's where of portfolio still were lot We've our at a past $X.X growth drivers we we've our to about so over billion in got talked today, the expectations billion, each

to power because they've product then a India power center supplier primarily look nicely. expect power device if business. to little rollout agreement electrical on the that European taking that tools because that's the been We that formalize in look And still talked multiple believe content about event seeing in And Siltron with is grow that there. to mid- far good the supported that. we're a years. We we're a the Then customers. As into largest going we're to drivers going up grow we've along our but move the GaN we for going bring want now about BAW business, about and in growth lot out bringing cellular, high-performance market that, of us. our to as analog here. market, of like as excited is today think we things our grow what the in out to with and I we still of off we to be on We single markets that seeing talked into infrastructure the We're we with bit if a good and room follow signed believe -- to we over Grant XG what's just I we in digits, modules data to business upper with can customer segment We at what got defense market several that multi-years. and that right the SK be what we're at spoke our the have about very

success to and be the believe going and add we our then is go we And We multi-suppliers both in kits. we're the calls we've before highest back as points. to to handset we're what connectivity doing about So we've come on and if that. development on we've as to tremendous to Matter sensing, And well and the to growth. our that's having the funnel got growth ultra-wideband continue I that, going seen out our with for talked sales know access of Wi-Fi

backed our haven't plans. we longer-term from away So

maybe Very my follow-up. for helpful. And

on the you think And last have? happened is I we I I call, charge, Was $XXX it the aware charges Any it highlighted be had inventory what if that? negotiated? risk to of? curious on you was Was other should paid? correctly. million recall there any obsolescence that

the Vivek. I'll take Thanks roll for quarter then forward the last from I'll silicon this Sure. it and question, to quarter. question

was you billion agreement. was which $XXX which K billion In of If last purchase approximately quarter. $X.X million that It currently stands $XXX remains commitment remember, we was there particular related at this to that there the liabilities total charge filed, on we that agreement. silicon of particular a $X.X had million,

in to looking work were to supplier the in in match that including demand able order ultimate we forward, are silicon. guidance, our that the the demand with coming with better case, our in Given in we supply the

particular in So good overall, story, very solid partnership through a very working that agreement.

comes Ackerman BNP next question Your with Paribas. Karl from

amount that, margins. clearly, to either the as handsets? we volumes think devices particularly wanted on December our the and a under-shipping utilization with But impacting similar ASPs demand a quarter coming I guide? extent by guess about older are your what down off generation in To Qorvo December related And question start Eric. Bob or quarter, maybe I is first for to in

not will right. here. But that's is representing address if sales all your marketing, question, Eric Dave, our and

built Yes. the inventory all the undershipping how a inventory. don't And in pricing in ecosystem combination Android that's we thank there. not say the and -- much We see I'm demand the demand. sure factor being channel market, of up the on the off. It's of is top more much about weak run units this can that's we're in Dave. a how as It's especially

Maybe Got Certainly away it. Understood. I if from switch gears, somebody mobile. to could. just

you signed I could size of the supply agreement this of could that capability did the carbide rest silicon quantify suppliers? that hoping now today. and/or SK you with and/or carbide long-term silicon your You support mention you agreement Siltron, with revenue your offering was

got is Again, three wafers, that raw more the for you portion even got the a we've suppliers that. we've and epitaxial, different so Thank supply this do that of that. us

lines. to about the number that growing ran that disclosed up the I sales just got business, of the there. first continue and baseline want product year business. large with agreement. great can All excited offering a applications add We've to we a with But its we're overall very on just of to through and longer-term the even formalize acquisition. in, suppliers contributing different with to we're the business, bottom we're and we and it's you top one funnel it our in the year. very how significantly, It's anniversary on how pleased coming haven't on I it's tell the and is this We is pleased performance

Tim Next question with Arcuri UBS. comes from

on jumped late. just I

of there'll if digestion trending June still sort see think some inventory do you -- to see of how do you're just the calendar willing things is beyond the December China worst So and sorry, beyond that of will or March, beyond I QX, kind it? December, wanted progressing you how of a you speak residual sense get to be --

We did down both substantial. will and cover China the of the that are it the revenue, percentage which and year-on-year, sales quarter-on-quarter percent be

time China the the be expected Android-based up of in inventory, terms is through we the about statement have process the in to commented that revenue March that, inventory it but and In we quarter. a the haven't made formal take will

We but haven't formal March. guidance, we provided in do some expect see increase to

Equity Snyder Research. Edward Next Charter question with comes from

into transmit the reduce we a of guidance this dig I'm to start particular addition a few been footprint mid-high combines into customer with to to clamoring -- and would the the can that the helpful your any new on than especially your you have lot Android the mid-high footprint that of reduce allowed color to provide done any maybe band module has want XE with attraction and that the this is smaller I or and performance -- the Phase previously your or Is things. had so band. of the then for for think be and I the single part you a you size for the kind RFFE the a even a of assuming a might module mentioned to widespread followup. and DRx what other try have be them how cost I customers to of

different Dave. Phase Yes, a solution. X is LE this The is Ed,

So lot we with hand, year. The POs and the new in in that's got combines that talked of we'll the a of ramp that mid-high-band, product We've referred beginning in about and we've that that product you XXXX. will main shipping earlier next new this path, that Honor. ramped probably customers, to start year, diversity more

that's targeting factor applications, small form So high-performance, performance. and strength, Qorvo's optimized really size leverages more

working architecture we're so define them helping that leading And drive solution. and with some that on customers

Great. And to not gone inventory impossible make it's getting tell appeared I have much for difficult things mean, pretty how at worse. happened then demand to relative it's last to getting now months better, to know even it's and But it's I problems worse. we've to subsequently understand your year inventory a to and follow-up. XX time this And much. that seems

and off some just So targeted there phones writing it a all this as as year's or start last in sell you the standard XXXX or where fall. this inventory? what it year's well Or for They'll point did point is product. is of

long is with a going or before go it trying just of through? So how it I'm to selling you're to just get grasp

question, the for Ed. Thanks

In we're and of against, or terms up reserving it significantly. writing is off inventory what

our non-GAAP in margin. be in gross our will gross that So margin

have today. we So in anything was believe we If it obsolete, or included that. would seeing excess are we that

So I to things the also and doing materials, help something to was tend there's out would customers typically than our being at where runs inventory and factories. we forward, raw goods, It point less higher of ordering looking that suppliers. working the to do by and total add for value look it's now. about we choose selective I that. example, finished we're XX% manage expectation that to we that there utilization no missed. We're that in can We're with reducing

So the terms make choose doing good there's me we're consume in what it. historical to situation build tightly sure that on that of we're At job. to that a of to basis a managing knowing demand and we tells going least

as against So reserving and taking to the today steps excess we're need and see take we we're that obsolete it. the we

customer, could Is to the And on for bright last more, down up or report a up your et speaking, it cetera. flat largest looked was like I just if or from your quarter first content year? be relative, is generally on one follow it spot. it Certainly, might where the it

in largest disclosed ever our including last quarter. probably to factored down outlook. going customer. at were we in September in our ramp you have we've And of But anything trying a in our be past. quite I quarter all up customers major not into with find them honestly, nice And that our in customers, we're the lot have obviously, December all a of there. China-based the enjoyed that guys lot that's know small yes, fun with the we a to are Sorry, parts our year-over-year

Your next Matt with Cowen. from question Ramsay comes

with I you customers. I correction all inventory. made the My of the and to asked, most an tiers China of has lower kind sounded and you've inventory the acceleration of level the like at to levels a board But it same but even was move through of trend, carry listening customers. just move that the this guys in lowering kind you geographies And across that in apologies not only that overall, are seen going that wonder team from the accelerated first of demand we been their in time. if kind guys recent on comment weeks if Qualcomm one, customers this a weakening inventory of had smartphone were also And and -- at a one was

Sure. This is Dave.

I of into going So people type growing. are their get you reduce I the to is mean that's to inventories natural, environment, because right? Anytime demand think this not start

trends. They also But a reaction. we that orders. of lot mention this our I want So forecasted to those similar sure, I pretty some think they that's And relationship a close with a all placed we have business, customers. see of purchase natural

or gets make that it's that obviously So the through inventory we're that, on basis factory a to through kind We of in shelves. sure with our our channel work inventory, sitting with distribution of in sitting consumed. sitting to each work our working in or customers' them them whether case-by-case

to those to on So their often more in shelf willing problems. cases, take they're those inventory heal

Dave, broader whether seeing handsets. understand as just for just phones. or customers our access than points audience, We add only than it's broader But just about customers, just that, it's to the what talked want our it's would well. that WiFi, in I to in China-based we're than just sure make to quote I clear. handset broader be I It's

that Thanks San for was with Bob, well. from as messaging the consistent pretty Diego

out. follow-up, talked directionally, bit would As being about in you've talk you the segmentation helpful. December, new know if I guidance Q guys maybe about my historicals this more disclosed But that and the little the be comes you a for when could provided segment Grant, that the specifically new

sure. Yes,

of were expect So the previously, sequentially comments into what to December. segments directionally will be lot follow them do a Bob's right? down We

investment and revenue. good a each XX% should profitability segments area. ACG it recorded highest now area I different CSG far business, growth a HPA, XX% at those in -- get our I should then You behind the that. wasn't area of which relative margin, investment biggest a operating base terms look by margin. loss to our operating recorded is investment which just qualify slight say, on sorry, biggest a of

Srivastava with from comes Ambrish question Next BMO.

quick the had follow-up I segments. a on

target negative. this, connectivity what's And the Grant? segment was the for margin So then of had quick on. What's I follow-up kind operating a normalized

sure. Yes,

to as I scale, factories. it absorb that putting profitable. line would well drive the expect in the that it's the it's all both of structure to going So pieces got top utilization new. be looking the the to can it increase so the cost We're But together, terms at business, relatively as in

a underutilized it's the that moment. out fab, parts which come at Greensboro of of WiFi highly is our building lot So

regard it's unit overall So perspective. in an constrained from that

the revenues for quick then peak you business. handset the your know But it. Got before back a Got the Android revenues And even on what year in I going that. Android real filings. or it. put higher was China out your

based China our based. So on that Android are other is including Android or customers question your

you it's trajectory the or Android the just It's base, customer of the raised. causing the a point which banks good in think is biggest business. I downshift

Android approaching specifically A which revenue off good the peak. cuff, that can China-based speak you was I of our can't tell was percent at I of XX% but to Android. business portion total as a the

Curtis from question with Barclays. comes Next Blayne

Android in manufacturing changed correction. down a I any guide so But anything little concrete you're tonight, the conservatism. substantial there's that baked lot There's I is around And everybody in was concerns, customer. I kind looking has at that's of been obviously, have news their concerns apologize. bounced guess of about that just repetitive, as as but seen well needs on I curious in other you sharply, haven't this customer that issues way Obviously, annual the cuts. a

including And market phones at facing, decline. end earlier customer, Bob. handsets, it's we're matter we've I with December immune to we're also our The we we that year-over-year no our are just in quarter, large segment products the all seeing seeing in be Blayne, a of customers, commented that down what more there. than believe almost also but made out consumer expecting got we're what multiple that flagship across it were for our up comment customers our and their we're largest I to China. customers not

earlier. some was made that So comments I

is and because still be could in VOX you the the has Or through expect you're up always in is the their Would Obviously, you is that to be inventory correcting a made customer. March. the quarter up then that VOX then Samsung and And Android good that for comment ramp Android that March comment inventory? even up?

the brought we a we about new of there. Korean hadn't there. we're lot that. and never going you Low-Band the customer I content get picked pretty mean, in our what's We and That's think, and on commented some got content we've that their high-volume of been also gotten. did and phone marquee we up in extra up number happy marquee phone, their I a we've PAD one, phones, Low-Band I'm glad PAD but

expectations well. today they their launch So we're our what level do China. we're And it's yes, extremely seeing that phone, as from going next to

weakness again, you Android-based But customers, some we December we going like have the going everything what's typically other today, with on last happen. Now I up inventories, feel we're we be our just expect integrate But consumer Blayne, there. point we largest think where as to we see was to are our we lockdowns, at that other customers. March down, the businesses do to yet. the we're to adjust be based there are why that's all in remember, low not this rolling But we when quarter, predicting for point seeing said

with question Next Rolland Christopher Susquehanna.

Low XG just more more Is about can generally? you about Band around guys stole unit you, talk then content that you my band. XXXX had in talk just And that this opportunity maybe see Bob, some there growth generally, you you you win for as think? per there. do opportunity move of the into low PAD thunder the that Perhaps expanding we

game their We've on I'll before. And content low us. had band a for definitely question. take model never flagship this Good one. Sure, it's the

but we some sockets, past Bob get master last As mentioned, low-band of this of for the in XG phones -- the us their new flagship. in did some year, this is

this content be the model. ever had So will highest actually in we've that phone

excited early pretty that year. next we're starting about So

as additional it's far hard As say. to content,

I I in in don't that area X. and think need I the don't us it's one cases in said will SoC performance we There's in WiFi another integrated an been a WiFi we X. that's they say we consistent with enough what the see is move the of for PA as sometimes past. there's fab. is exciting happening into opportunity think that good external lot X, where But WiFi

provider So chipset their reference we've great on major fans. socket on Asia-based platform win got a WiFi with our design FEM

definitely That's as going be that. to a about excited growth really we're opportunity So forward.

And versus to together digestion this what's maybe inventory address demand, a could then as all be of way helpful piece true kind that. lower we

global a gave number for handset you unit think XG. I

I now reduced or perhaps do think you were that the at on something Where year. for see demand? like XXX like that you

so out 'XX, for approximately will million calendar million approximately XXX now coming think Sure. of be that units XX down units December. it We commented we

from comes question Needham & with Next Raji Company. Jill

curious if again, recovery at like to see this as 'XX thinking XXXX. well, months phones the a we're future. the terms apologize calendar in in the The so question Chinese to how just overall joined customers looking about are I designs was for nine -- looks And asked. year I'm When late of handset what calendar in market, I are six

could off maybe you just look Any on XG a I'm So calendar could XXX that? this like feedback a 'XX year? that provide thoughts any is million recovery of wondering, in there of year what kind market

I question could answer would I I if what's was impressed think accurate. super lot you I and if and that, of be a a know actually good it's important,

design we at the point, The all-time to markets. on units policy. Zero what putting our term, focused think amount of now. And they'll quite just is by let's there and and his are back been number away is President, of had that number new encouraged next the she I is asking your low the the really we're you're elected and into consumer wins we've COVID activity, phones. after what right design the through they're phones just content of to It's obviously, go working that that was their their from hoped an China Everybody on.

We haven't yet. seen that

lot look like A So down. Europe. market. export of in look what's like? Ukraine the major China doesn't market going The it's war is to Eastern They're slowing that a

we in. what Europe And over then in place, at they're that in factor there. seeing put strong and So as you to they're look have you well, inflation

continue those we're of products that on that. those them we've of So of forward, are some are to some not the new same shipping with control, new okay? wins. products of doing lot talked under We until leaning those Many a the things work What is We get Many they're design about. are phones. also today. they get

wins, number about is feel to our good very project is and our market as just share What So design go units, have or we see. difficult higher to The of consistent forward. 'XX. we wait we'll

you to And utilization burn. you for quarter, follow-up, inventory I the my last don't kind stoke Understood. believe it. cutting quantified were of Got it.

of But rate call. ramping down have it this curious, utilization about what how internal be on the on just quantified margin would might fab thinking your the at I'm You and front. the impact kind are you

impact Sure. the ways which it bit on utilization through by we factories based different in Thanks that those location. question. in different running various for there earlier factories. product see of a on businesses terms are And touched I mix

having XXX So And underutilization in misleading, of I done basis that a that that gross the in aggregate, It's greater we is quote But the it's a number. to margin tune say particular difficult, impact if haven't not for can past significant. than on points. reason. to meaningful our

our So gross us margin adding that back, to forward. path as earlier, I on looking XX%-plus gets talked about

Your with next comes Mizuho. Vijay question Rakesh from

mentioned, about Just you ex into March to by as you wondering, Because how be more Or is COVID that that? next right? growth? could might talked that I quarter, know year, right. of are seeing you continue we predicated some on you start got some the But China Hopefully, see growth.

Yes.

do earlier. Bob to that basis, Android businesses specific on clarify on terms flat business bit expect expected to of customer a we customer strength on a in touched rest the areas But We're commenting there based two down. publicly. those on it that and would offset are between We will aggregate. would to expect whether not be up, be March forecasting our point some largest And be me show the approximately some Let not be seasonally, of this were quarter our growth. the at on with

versus what Got where the it were inventories you think then inventory similarly, are levels? the if or it. on levels customer on see you the was you side? where customer comment side, exiting December handset, could RF wondering OEM channel And inventory And normal components on I

question Yes. I'm sorry, referring to was or…? China the

inventories RF seeing are component your you what you the are general, quarter, let's inventories, is exit of you channel customer. as December In same say. what in do terms think Where on and levels

customer by through and cases, that work market that are to in the in In as healthy bag kind distributors mixed have others, hard by it a a customers have it cases, reasonably put inventory number product we on area. some of we It's varies even to some Yes. because lot they've of is and a between that and well. got And carrying. they've in inventory they're got then of terms

What effects war demand lockdowns for chasing X the is, our quarter, every in things: various global about, down add to China. major the talked that we unfortunately, I'd are that the customers -- and inflation

overbuilt. They when So unfortunately, thought every still they were time it wrong they they've enough reducing they and been weren't.

pointed close through great and how we'll them our with this great and think to got have with it. out, paying we're attention customers, to working they're So I just relationship wait is we've as Dave What things And a see to end. this. is work

would I turn Thank the for you. closing management remarks. back to to floor like

speaking We with again and want you us upcoming to today. at Thanks a have forward thank events. again, night. to hope investor everyone you good We joining for look

This concludes teleconference. today's

disconnect your at time, participation. lines may You and for this your thank you