Analog Devices (ADI) 21 Nov 232023 Q4 Earnings call transcript

Good morning, and welcome to the Analog Devices Fourth Quarter Fiscal Year 2023 Earnings Conference Call, which is being audio webcast via telephone and over the web. I'd now like to introduce your host for today's call, Mr. Michael Lucarelli, Vice President of Investor Relations and FP&A. Sir, the floor is yours.

Good morning, everybody. fourth XXXX our call. joining for quarter conference fiscal Thanks ADI's call Chair, CFO, With the are Jim CEO Interim me on ADI's today and and Vincent Mollica. Roche;

financial you anyone find For the investor.analog.com. release, missed it who relating schedules at can

statements materials to release On statements, includes reports and risks uncertainties other which our described further other certain forward-looking and reflect to periodic discuss from as obligation with we're These the except filed the could subject call law. the in disclosures, materially information and the Actual about to are by statements, our no expectations and earnings SEC. forward-looking our today. results differ these as undertake as required only information. We update

measures free measures our which today's to these a items operating most directly Our gross special Reconciliations cash periods. special earnings performance, of non-op GAAP additional also prior excludes margin, will are and expenses, to be hysterical When to included in non-GAAP their our our and results on measures are comparing EPS from our and basis, references information operating flow items. and non-GAAP tax release. excluded comparable non-GAAP about rate,

And X we CEO before to quarter. align This remarks. turn changes each in XXXX to web I'll our X of Chair, markets lower. And We go to adjusted other slightly years. last on schedule quick reflected better end second, markets. over ADI's that, the changes reminder, our results in it with These quarterly resulted are with XX-week first Vincent. customer for more mapping the a is quarter end and the in slight increasing industrial section prepared revenue in our comments mix Two market of the

management market's more all. performance that quarter led of automotive very execution by double-digit pleased period EPS Mike, quarter. of the good for growth year-over-year . Fourth to share challenging and to in employees' very preparing The moving deliver us enabled much, Though of was high margins of recovery. we're operating a revenue through and commitment while you $X.X expense $X.XX strength billion, our preserving very of you industry our sector. financial business and XX.X% the the our I'm is Thank cycle, careful obviously to the for of combination to standards morning a the

new $X.X For the in again the highs fiscal a XXXX, in free we by This with $XX.XX shareholders reaching exceeding from X% and return Notably, sectors. year, of supported billion automotive 'XX $XX.X to watermarks flow set billion, year revenue high in ago. a our record industrial XXX% EPS up returned target. resulted all-time cash

of $XX closing billion ADI over market the or cap. nearly ago, of roughly X returned Since has XX% years our shareholders to just Maxim

share the our and per share more time, Over than X% dividend count XX%. same increased reduced by we've our by

dynamics the Now looking uncertain. remain near-term 'XX, to fiscal

first half you will Consistent the conditions ago, and last markets we through geographies, a of times. reflecting our days recall, lead macro to correction customer outlined the all deteriorating year. persist we overhang our As improving quarter, across XX and inventory expect broad-based the view the with inventory

Challenging limit the free the can decline. flow to deliver times to products our Building low volatility foundation, upon diversification the solid while cash XXs wisdom profitability. business actions confirm business despite took that our and and we ensure of The and better customers, like of the in applications operating helps across strength preserving these we model. margins revenue

markets strategic and have That making on increasingly enables to our us simply is hatches. we're investments inflects as a many very a future depend to however, longer-term this geographies expect near-term to key and expanding commitment to enabling the the the been business to I've is over when their across the about why on they play challenges, edge financial allow they necessary role replete the are and with the in strategic resilient customers opportunity, that continue our past not customers capitalize us ADI my intelligent share partner. heartened A success. optimism Despite Importantly, with us the by battening higher. down the focus model confidence that quarter. they conversations upside clear

which Our momentum optimism That double by pipeline, our design continued ahead Maxim initial in is customers' in increased expectations. is enhanced our in the XXXX. our reflected expansion of synergies sustained was by again revenue which growth win of pipeline, tracking digits

We revenue combination synergy on with than from revenue $X creates in expect our more span with path more XXXX. our and life synergy-driven design of putting that's growth 'XX us barriers product high or acceleration of opportunities. a strong both which SKUs, XX,XXX goal The a decade of our resilient by revenue in billion a to win streams rich entry recurring have with growth to business average achieve

increasingly let additional recent solutions. delivering more I/O our for automation In complete Industrial value across we we're configurable me factory examples solutions digital top At position Now example, isolation recently you. leveraged some attach share to connectivity. a anchor Automation, power, supplier, software wins of in with and

bill As and wins secured the platform. captured their across we of a design materials entire result, Xx

Instrumentation, Industrial increased design SOC and wins memory our In test at leaders. we've market

by high-performance throughput testing for incredible artificial memory GPUs density critical are complex, consumption an channel systems. per increased compute reducing solutions, These high-bandwidth to and XX% next-generation and up while system. intelligence for parameters Our energy

customer, EV XXXX. solution wireless a our customers our begin momentum down Looking improved enables next-gen we'll This Last for greater while quarter, ownership deploy solution now to and their weight, our EVs battery for scalability system. total ADI's novel cost driving to automotive. in XX in productivity, lower our content. increasing In of OEM, secured management manufacturing the we top wireless fifth continues electrification,

has won the furthermore, year, past systems which franchise, power. at These growth power high-performance year. to from top our another wins automotive, during for electrification position strong in-cabin in benefited suppliers To Now our next-generation momentum reinforced X ADI across connectivity. we save and industry-leading that end, vector automotive add functionally ADAS this

year, our portfolio. been North of leading connectivity awarded ADAS American, the systems. we across for were winning fastest-growing areas major of X has revenue GMSL GMSL and robotic generator OEMs. us. proliferation our X last synergy industrial areas high-speed increasing a is In in European our This our expanding We're also -- wins such opportunity and adjacent in multiple as wins and autonomous design ROI, new areas Asian benefiting

systems [indiscernible] per and support efficiently control Our AI a data to their to in And is connectivity highest solutions of growth high-performance in next-generation generation. AI level to solutions upgrading platform. benefit and precision ML are designed connectivity, our and beginning require now second necessary our cloud large the systems. the infrastructure business in power challenges power from into Notably, requirements protection hyperscaler

Maxim and a secure in power won lastly, portable our ultra-low management of continuous technology this and Healthcare, We for our a truly a key We application wins. power consumer, these technologies. customer. suite year. our leveraged cell sockets customer relationships And and In technology design customer we power multiple wins industry-leading glucose the solutions, in combinatorial These win optimized to show acquisition strategy. of at secured AFEs, our monitoring leading switcher, strengthened personal a comprehensive sensor Maxim's microcontrollers process and cost adding monitoring

to thereby center, from the robustness, their and weeks. days power to glucose accuracy increases solution its extend helping of efficiency Our life

of revenue year summary, of we're another So proud earnings. record and in

to results delivers the of business through business all continue cycle. phases We the demonstrate which power of model, our

and hybrid customers in of model opportunities and ADI investments customer to strong continued technology the and business take innovation, our manufacturing the positions business engagement, at edge when arrives. maximum Our the our advantage intelligent recovery

to call to Jim. over like pass the I'd Now

a on has number Jim Over understanding possess. a ADI, the and that breadth across very of roles leadership taken business to XX develop years, him our past very, critical of financial depth of few enabling

joined on to call. today's pleased I'm team you, to Over Jim now my to leadership by So him on have and be Jim.

that our Starting XX.X% me moderated last excited my today, Vince, fiscal for third be year. to margin introduction, a you $XX.X X% of consecutive from of marking call. of recap and here XXXX fourth to Thank results. brief Gross to XX.X%. year's increased quarter add record ADI's welcome results with Revenue I'm billion, record let earnings

record roughly the points, of of EPS Operating XX expense to told, gross a decline All margin margin, half control. increased $XX.XX. X% strong reflecting decreased XX.X% operating basis

year-over-year, XX% operating XX% Industrial midpoint Revenue quarterly despite challenging environment. revenue, to billion outlook Now moving the the and of declining fourth of our $X.XX XX% declined year-over-year. of quarter represented results. above finishing XX% XX% sequentially and sequentially

as broad-based across adjustments inventory customer our continued expected, weakness experienced we diverse base. As

year, increased with For the result straight across full and Industrial defense. aerospace X%, its energy record achieving third test, instrumentation, and strength

sequentially XX up and revenue represented marking of straight double-digit year-over-year, XX% XX% of which down was Automotive, growth. slightly quarterly quarters

third were connectivity than XX%, result, year, record functionally growth solutions. battery more management the strong straight also these power, Automotive across achieved with XX%. For up our and in cabin its safe Collectively, increasing

sequentially X% and Communications, quarterly record XX% which quarter versus declined fourth XXXX. of revenue represented XX% a

versus steeper wireline. year, declines XX%, Communications decreased the wireless For with in

And XX% in X% represented driven ongoing decreased revenue, quarterly sequentially fiscal XX% and corrections. XX% Consumer weaker XXXX, lastly, inventory by demand Consumer of industry-wide down year-over-year. and

to on the margin by product million, quarter were and by the savings lower mix, factory These quarter variable revenue. and P&L. down OpEx XX.X%, was lower and of was expense disciplined Fourth utilizations unfavorable rest Now down in significant management driven gross the year-over-year sequentially. driven sequentially $XXX $XX compensation. lower million

came outlook XX.X%. at our As the in a higher margin of result, operating end of

outlook. EPS at tax the All above quarter slightly was Non-op rate was XX.X%. the for million told, expense finished and our $XX $X.XX,

$X the net billion to by nearly sell-through. a cash million We also ended on sheet. driven sequentially, ratio approximately of goods. sell-in manage and less actively $XX the cash X.Xx. as Channel and inventory declined leverage than quarter with we of be to Now Inventory decreased equivalents balance finished

revenue, target channel slightly, X inventory ticked within lower days ] weeks [ XXX X our of to weeks. up ending Given increased to range and

are do quarter not XX% the was billion items. investment and billion. revenue. tax and billion, U.S. credits was Now CapEx for was respectively. fiscal related was year the for $X.X and include CapEx $X.X cash Chips These Operating quarter $X.X cash year free figures, the and the XXXX cash our on Full grants or to both European flow Act. numbers for the moving of or benefits the $X.X $XXX of billion to gross flow million which

we XXX% During and returned of billion via the in cash share in repurchases $X free flow roughly billion dividends. year, $X.X

Now on basis. to which the will for moving a XX-week quarter, guidance be on first the

than expect to by again, is to the sell-in. the higher down be revenue sell-through plus be down to $X.X sequentially. minus most, Once or expected Comms markets At to midpoint, followed quarter faring Industrial $XXX is be all the First Consumer and we expect billion, Automotive be end with million. we expected best.

Operating expected basis minus XX.X%, be to points. margin XX plus is or

to rate based plus be on expected inputs, XX% or to EPS is these is expected tax XX%, adjusted $X.XX Our be $X.XX. to and minus

update my brief the operating I current a on with remarks will conclude backdrop.

and a continue and we macro geographies mentioned, Vince customers As backdrop. to weakness inventory stressed broad-based markets across to reduce as work see

times Importantly, through bookings the the are we've half will the levels XX seen to lead our Encouragingly, quarter, fall cancellations our customers and confidence given XX% correction taper year. normal of confidence stabilize. products and shipping within timely high the of weeks, that inventory ongoing with during now back greater first fiscal us our gives This supply. fourth

actions our As last time, integrity cash we and statement, sheet balance discussed our taken to income of preserve flow statements. our the we've

areas. me Let provide these an update in

lowering of with in once internal first significantly reducing again the are We year. the inventory half goal a of utilizations

to decline positions hybrid the gross starts. decline healthy in swing significant unique help revenue manufacturing from external moderate deliver in ability ago. despite will the ability to The and Our us wafers margins a model us year factory

years, model manufacturing our we hybrid expansion our over and the to made now back-end X facilities. plan fabs the last of to enhancements internal the slow Given

expect a XXXX. result, $XXX be to down million and XXXX million XX% about As we or between versus CapEx $XXX

our gives source does to locations reduction customers not compromise CapEx multiple this ADI that long-term resiliency growth efforts Importantly, supply. or

our decline lower slight lastly, in actions, with to spend structurally result in week. sequentially And with variable quarter took comp additional we steps the combined even seasonally OpEx and in reduce the first extra lower OpEx. will These a

that, which and durability So we've in back Q&A. model franchise low how with over closing, give in were the the of our And operating last previous margins demonstrates Mike for operating our time. enhanced ability to our in I'll generate the to it this cycle XXs, highs

It's the have to to call. great Welcome Jim. Thanks, you.

additional to participants Now we limit question have time you get let's this that, Q&A the in allows. first please. session. our yourself question to allow call for will morning. We order [indiscernible] the With that on ask X to if

with [Operator Srivastava Ambrish Instructions] BMO. comes question Our from first

remind bottoming pushouts, at decline like regarding My process. Vince, does margin a been restored understand we And Jim. line. XX% cancellations, but Analog with yet, help a you a year-over-year cyclical us on has downturn what the following holding can go that, you've not profitable should looks -- -- then diversified in there related And talk down it is structurally to cancellations, needs metrics built of you're we're question is order normal been looks is more past with double-digit about operating has you, how to backlog, to think it like kind if did I cycles, look world XX% you as there? very company low and industrial just us you that? or And about automotive know

question. thank and Ambrish, for you the

So we new we yes, inventory And would information of have, last our last the issue noted to X we actually grown. I'd believe digestion that that quarter X that conviction the has say, quarters. given

our we that direct reduce And observation, across we've careful the inventories the analysis through well. customers continuing inventory have, and our we're We and at across channel to all segments seen largest various as board support. accelerate digestion

very with which saw fourth times, XX% requests within sharp in normalized encouragingly, lead We backdrop, quarter. against our customer below shipping the book-to-bill we've that and improve the that So bookings We very, of very in was I a see [ quarter, sequentially. cancellations, as did ] though even unity kind a we're of think normal. said, is drop

lot a going confidence us to what's gives on. that as of So

way. Regarding are Automotive. that in continue per drop car. about and Automotive, by because fact, in The could there XX% more share -- about grow in And I'm ASP I'm the know cars that sure is the we we silicon not that year. not assumption a to be the you're double-digit in consuming making sure, automotive

So sense XXXX. XXXX, fare will elements could strong we we our in still a during is macro what And against of own all. have very that backdrop that automotive, them of of be we'll all my pretty that the challenging portfolio, grow confidence expect best

please. Next question

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

some April that positive. could bookings. made year, remarks, also Vince, fiscal I'm could like you about sounds trying the think comments That in half to the were first I said stabilization that reconcile prepared of a that some persist the through the quarter. be But a sub-seasonal in suggesting headwinds

you're be what taking as seasonal, really know X.X% did and give the but of at be about to extra so out specifically you guiding seasonal? is Can be think right we I So way it puts April. whether And April, we look not takes that push, out that the week April? also to this not January, it from should that

sense way to shape for us help up April any us very how the would could a So give helpful. be

time I of quarter, for Well, at question. Yes. think next it's you -- a the been will It's the that the Vivek, in thank start have May our quarter to by which overhang is say depleted What expect inventory third year. of I here. contextually X we is

outlined. the So, dynamics we confident that, still pretty given just remain I that about

macroeconomic But everybody the other and parts is semi think from that business climate cycle in pressure of the really the -- the we're particularly decline of I seeing China. is

the what is But in is that will of here. in so think macro Jim will all or year. happens that the be confidence as on will underpin particular half. said, to of the lot answer second mean in the us quarter terms possible piece. isn't give well I But assumptions a our give more statistics I some you second the let the I half another And that governor what that's piece understood. the So well

unpack times Yes, just let Vince. lead let me first. speak -- to me bit Thanks, a

And And XX in where of steady improvement I are XQ were, and have stabilized the refreshing our basically [ As in products to ] lead said, shipping lead fact, our XQ. now seen shorter side times times XQ kind XX% we both adjusted XQ. versus back of of lead in up now are a to customer we've rates basically from weeks. within order is quarter from viewpoint, And in those fourth times. guess customers that the picked in they

us. So the customers that's signal into have for news good us their shopped and as

be of low book-to-bill our lines first said, is there, Vince it but there. still As will the on kind

shorter very were probably fence were in the for time a fourth And first meaningfully very, Additionally, cancellations also on quarter close cancellations time a the year. down low. to and

So that's us. good for

a From perspective, we're being cautious. channel

channel the in sell-through, me well viewpoint, for to All that a on market Yes, We less into Mike, our close an let us basis. it. that's basically XQ the upswing will continue end else? ship markets will which when And occurs. than just point. basically from be on down position quarter-to-quarter anything

bookings you're Yes. around said, to XX-week how XX- There's add have some, getting like about feels grow And kind and still of I right, is better. X% it's X%. Vivek. probably commentary basis a a and given but been some should still to very going don't likely. confusing XX-week from card, inventory Normally, think overhang to about up an that, inventory overhang XX-week think what with on. XQ that. XQ we I'll And It Why?

if flattish, about about you to extra about the sequentially. down probably the That XQ, in were week, way if XX-week think X% that's So include it's it. minus you think XX-week means minus, plus XQ or to to or plus probably

So I . hope back to little confusing. a please. that with it we And our bit is helps next question, because that go

Moore question Morgan Joseph Our next comes Stanley. from with

a basis design to obviously that raised on people of like-for-like seeing mean win versus during downturn cycle, are I we is that kind wonder, what new -- severe approaching looks last Are pricing? revenue saw I people conversation in the you you back? And give you're of terms more the than prices that activity? kind that a different of upturn. And asking are Great. in now you a

Yes. Thanks, Joe.

is think I we something build of more I so resilient, overall, the every you existing to stable. is at look capturing our note portfolio legacy, pricing -- And stable. the is look, it's of if generation that very think well value. as new And very that So product very very,

You got is new end get legacy to we, a this at margin innovation revenue a curve, value franchise. new growth. as that critical our gross capturing company, look high structure tremendous the any see change. particular the socket. stability. us And very, We're of our enables premium We've And and which per part the don't I at more play performance very of

in to is new inception cutting that. continue on very, get that to and edge said established as seeing rewarded product for I at well designs. products our stay of We But more fight as the well design Joe, And pipeline we're to prepared remarks, speaking, the intensely to new we the quarter-by-quarter, invest as continue very job the our wins generally sure make grow of year-over-year.

I confident years prices. over X.X the increased those that the cost reflect last we to feel So that pricing to couple goods. years, have that We'll about they're of hold managed increase the of

overall, where what we the future. So we're bullish in pricing and the environment holds are about

Our next from Research. question Stacy Rasgon comes Bernstein with

I had gross margins into a question OpEx on QX. and

even with OpEx you So week. extra said the slightly down was

a is a -- that I I rolls I of if OpEx So it some is we through maybe into XX, [indiscernible] week little the the are level lower. we about that when that right QX are XX-week little rate the normalized maybe kind the right the of would those downstate below would revenue ex guess XX, to OpEx you're going Once think drop year margins numbers implies of don't be other it off, steady-state implied XXX in here? thinking gross the like about imply is maybe drivers? and as right, go sort get know, if a like to little maybe, run bit, And some as QX around, through running sort there

Yes, Stacy, Jim. it's

the levels. levers a that's one as take bit. revenue inputs. try for margin. many then the just let unpack first, to There's the and priced, factory There's talk margin utilization me gross mix loading me many OpEx And there's the quarter. I'll There's to Let about that

Vince mentioned side, stable. that's basically, pricing on the

move So that's not a forward. drag as to gross we margins

On a down XX% of first from XX-week on is approaching basis the -- down, the quarter we're revenue peak. side, our midpoint basically, our previous guide

us for Mix So well. a as headwind there. basically, is revenue basically is unfavorable

quarter will first As quarter. prepared was a be XX% year-over-year down and and on in basis, XX% in sequential last my and again you that heard Industrial down remarks,

a So mix is us. headwind for

puts year gross of these When margin the together, those trough you first XX% fall expect put all in the basically at takes half and we'd levels. below will

I is something think if this about to range in revenue range, probably the XX% a XX% for you range. think trough good

margin. So that's kind of the gross

about was lower of I down side, XQ OpEx the was reducing comp. the This discretionary million and, variable On a on our sequential mentioned, spend basically OpEx much as $XX combination basis. of a course,

to X% reduce structurally week. well. reduction to down to we can a about Looking actions XQ, X% well into as relates typical took OpEx seasonal in you probably fair that This spend expect XQ be with think say there. again And extra we the to as it's even as to the lower that that

was but to down XQ, when some at XQ give XX- reductions look XQ from guide a be best probably And of when structural to compare looking the XQ, 'XX, comparison. to OpEx made, there, percent don't XQ like sense XQ, you're levels. the that to to the operating you expect it's a We we'd just you few which we a given XQ modest at had in versus XX-week

helps. I hope So that

Thanks, appreciate question. Stacy. With next question, please. that, I one-part X-part your . always

Citi. from with next comes question Our Chris Danely

sector overall you macro the in it's expected? is than is Can seems maybe like worse out or just bookings able there that the you falling think thought? for because XX% fiscal to worse more Industrial Historically, this do you'll you Just than and hold pretty revenue And but situation the be about been worse gross than 'XX? floor a is inventory on guys the has for margin the -- it Or guys, the why just speaking, is strong revenue that you a are decline company. question talk Industrial. the broader

Chris. Thanks, Yes.

when exception, look to all segments hit So weakness for X But defense suffering things. inventory momentum I sector of the broad industrial expect in the side true the and various in began industrial 'XX, customers see market to I'd half the a we second quarter, say half we of say the given it's who at and the the weaker come here. for are the aerospace that off think And through sector. first XXXX, the record most we've on fourth And the market backdrop, area. particularly order year continue yes, we macro and with into to slow in and broadened look, the ADI digestion

So I said, Jim trough assumptions of think, period gross over as the talk if gross margin for weaker XX%, you for the will we And when time. margins, XX% half year, like, kind the the first the in of reasonable about period impact gross margins. mix, that industrial weaker here, we're that of thinking as

year, really it first customers how the we at adjustment fast point, half a you determine this to again, recovery Jim, to this growth year. the inventory behind will of the do us second of on the macro. a experience expect is, during of overhang to inventories true I it's back do half an think So the say, our want it's But to we and take of pattern at this comment? get get more and normalized in

Chris, think XX% couple about the just I range. Yes, for Gross revenue, at in gross the talked trough of to Vince margins at there. the points a year. XX% XX% margins

revenue terms comes the more the to A a guide was depend question of coming that -- when demand so really first year, of we think lot don't dependent that's but the for back part as level. that upon your normal back in probably of I will well. upon

few a add just though. points, me Let

XQ. them We're XQ. in going to -- bring again basically in them brought levels are utilization down down We

XQ You XQ. And than a $XX in inventory see is a reduction in XQ, going now I guided to hybrid expect bit a in which reduced the that of we're similar to little million last we're what think strategy. doing be inventory better again was at quarter, we manufacturing level also and you're activating

the swinging gives well. we're that gross margin moderates back a in-house, of bit as side a So which external wafers from little cushion on factory load, actually which

here. So in just quarter expect you more as us the color bit second little can for what a

Stifel. Svanberg Tore Our next question with comes from

and Thank question environment. I Yes. you tough in had results on the congratulations about this CapEx. a

about So that in. capacity of investing competitors talk dependable X your geopolitical this they're

a little CapEx to year. of doing going you're to have for a feel bit the what spend that forward? for way, partners as complete much You're sort [indiscernible] lot your your us are founder reducing this comfortable all are in -- understand you going doing CapEx you partners don't Help

in, so I'll Why Yes. answer some color. Thanks, Tore. that take don't we

-- CapEx me let for just second. take on and a me back pause let So step a

at So CapEx we trend high for range Day, our XXXX. Investor to in actually term, elevated and outlined XXXX back long digits. mid-single would basically then down single-digit And that the

that $X.X CapEx, we're half second the we fall year, there. seeing this past a about . This the I demand the of said, bit a I in short-term slowing basically saw of as which on CapEx year. was expansion the As our actually and higher basis, given basically kind about off year, said, we're sales, was our capacity to which billion of gross is XX% that due revenue

or this So from expect 'XX. figure that our Chips FY million any Act. a of CapEx drop And benefit viewpoint, either we're European in U.S. to as the noted, to by about the going $XXX reflect from doesn't I

we'll thinking footprint the capacity demand macro to the viewpoint, the by But From able basically outlook, Originally, to mean? time and that. does XXXX. comfortable our internal be we're that that more XXXX That a double that take in given with what period. means place capacity was we still were going

all need term. basically capacity in we So the don't short that

a ability customers. the that creates that product of options and for as customers swing from internal to to good rich multiple be the to and From to our with chain us with swing in-house really a allows viewpoint, coming source, a our additional internally, XX% customers a for goal dual factories external a supply viewpoint, margin able well. our bit capacity our then gross viewpoint, gives resilient to is swing from That's basically portfolio this And our from moderate fabs. customer because it

So we're Vince comfortable ? with that strategy? I don't know if

morning, said. of what of pieces add a color Jim has Good to me let Yes. Tore, just couple

and nanometers on today are most above. So built ADI's revenue of process is XXX technologies that

more in currency. digital technology contemporary very, old its very in the XX process years node. in process That's that very terms Now a that's of old terms, Analog space, But technology. a than still is

is So XX% of than manufacture give terms as where we've of expansion our major flexibility a technologies Jim we process to and And how internal little a more process produced said, today us technologies. XXX through on nanometers and agility gone revenue in more those and at above.

And we've made wafers. all fabs that XXX-millimeter the investments we're making are internal on these

tremendous that return and So expensive, we're the on the decades are less we're on investments tool able making. to investment get many many, chains over

for external say, model So very, alternatives at geometry hybrid I manufacturing make let's line piece are the of think who partners good below we the we a important the, work. really very in have very, that, our with very how final nodes,

anything across nanometers that it's with we kind [indiscernible] that multiple and and is sources wafers, secure production the below, So XXX-millimeter of globe.

Our . UBS. with Arcuri last question comes from Timothy

quite a it the I days, bit It Inventory. of depends of you're you bring is. a what on but had XXX sounds planning from revenue on course, is like target down question it that to base the And here. mentioned

of to sell-through? get you answer, if of also and some below particularly much how from know maybe inside a inventory? much quantify then more you It also down to So is kind it this seems here? out maybe question like million can couple you distribution? metrics, hard you take plan of a hundred quantify dollars is could -- more selling can how but I come of And your

Timothy, let that. take me

Just let me what said. of to step back I kind that be clear,

that quarter-on-quarter we million, was So That basis, amount. fourth inventory that a inventory finished And at on then $XX a That's do plan on a In take there. we'll quarter to was again goods days down in on not XQ, and by basis, all a level. in down the XQ. to clear dollar almost compare. basically, similar be was just

So over X be fourth the range million the $XXX half 'XX, inventory in the for expect quarters, of to down that. course we of and plus first quarter

[indiscernible] fourth quarter, than was probably number the I'd channel million similar lower expect probably it sell-through. mentioned, as And of a in And sell-in range. to In terms there in the the our yes. that, I $XX is our first channel, quarter, in with And

question of XXX close would inventory. your the today. days target was on our We're to say XXX. and I Tim pre-COVID

the to on of Tim. going long-term think that, both inventory future model And are but we'll days a at dust them call. I the [indiscernible], when you re-up be settles, wrong of with all kind

this copy will joining website. available appreciate of Thanks in joining I Thanksgiving. the for ADI, for Thanks, transcript us our A call. a everyone, great have the interest on and morning. be your

Analog call. conference Devices today's concludes This

now disconnect. may You