STMicroelectronics (STM) 22 Oct 202020 Q3 Earnings call transcript

Ladies and gentlemen, welcome to the STMicroelectronics Q3 2020 Earnings Release Conference Call and Live Webcast. I am Alessandro, the Chorus Call operator. [Operator Instructions]. At this time, it's my pleasure to hand over to Celine Berthier, Group Vice President, Investor Relations. Please go ahead.

Alessandro. you, Thank and XXXX everyone, for our joining Good results thank conference quarter financial call. third morning, you Hosting the call Chief today is Jean-Marc Chery, Executive ST's Officer. President and

regulatory could ST's now turn the to President statements live Services Joining results differ Finance, Sales, review Marco Marketing, results like on the this Strategy today expectations that and of Lorenzo risk Jean-Marc Deployment. and a most This also call Cassis, President in conclusion management's description full you materials harbor ST's that Jean-Marc, Infrastructure these to and will cause safe I'd be release available ST's Chief and contained statement materially morning Grandi, and to and plans. factors. from will can A website. the replay call that the factors President be Communications encourage with presentation risk in Financial to This Instructions]. after issued involve accessed We of webcast over press Officer; and filings are for the [Operator Relations include CEO. call. on forward-looking call recent ST's of the Investor of this shortly was

ST Thank call. and you you, on earnings thank Celine. XXXX our for Good quarter joining third morning, conference

Starting Let comments. begin me with some with QX. opening

this XX% of due XXX main above was As high factors charges. as points our performance result. end net X, the to quarter, the as up outlook conditions programs significantly well revenues unsaturation basis, This for Microcontrollers engaged in customer through contributed XXXX, a at expected announced market basis revenue were sequential included the margin October Gross XX.X% of Electronics products, on were Automotive better about $X.XX demand on that Personal billion, range. than our to

was XX.X% income was margin net and million. our Our $XXX operating

to of billion, X.X% For first X net $XXX and operating income a year-over-year with net X.X% of grew an million. months, $X.XX the revenues margin

about gross the charges. about be including of expect to representing and XX%, midpoint net At QX at of unsaturation our about revenues points we to be billion, margin of $X.XX growth about XXXX. Looking basis guidance, XX XX.X%, sequential

the expect into with the year-over-year net $X.XX QX now performance. of at 'XX about X.X% operating billion, midpoint XXXX, translating margin a our growth full For revenues guidance, double-digit year we of and

Our at billion. CapEx we invested million. for plan XXXX is $X.X unchanged Year-to-date, $XXX have

to move third detailed let's quarter. review a the Now of financial

net increased with preannounced net X.X% Communications, sales MEMS During points lower conditions XX.X% QX, progressively X.X%. our and OEMs distribution revenues come revenues our sales market Discrete. higher revenues range. groups decreased year-over-year, September, X, versus Net Year-over-year high Automotive, above midpoint In QX Power end X.X% Microcontrollers, sales by in increased Analog, and to on in that October we and to came basis, XXX expectations. partially all outlook we Imaging double-digit. sales of as a On improved of and, increased sequential RF early revenues the the of basis grew communicated and would revenues guidance in above offset net product

million, $XXX year-over-year. of a was profit decrease gross Our X.X%

points. quarter of charges. unsaturation decreasing pressure of charges at came third basis about Our XXX Unsaturation midpoint in were year-over-year, price and due gross XX% XXX the margin to mainly our points basis guidance,

$XXX transformation the Moving we entering when what expenses to sales R&D, operating expenses, on marketing at them. to and we operating we million our initiatives. continue execute below Net were to In and parallel, manage continue quarter. programs, anticipated

ADG year-over-year quarter basis. basis point margin operating Both on while was margin operating decreasing a Our third XX.X%, MDG margins AMS and decreased, XX improved. operating

respectively, and in compared ago $X.XX $X.XX share, income and Our million $XXX to per quarter. to net million decreased year to the EPS $XXX

in increased on weaker MDG were higher, reflecting Power the while basis. Discrete, revenues X%, ADG Automotive Turning AMS and sales has Analog Microcontrollers revenues while of a on in groups RF lower. now performance X.X% product Imaging XX.X%, revenue and to Communications. the growth decreased with double-digit year-over-year legacy increased revenue and both MEMS demand in

further product flow the margin bond XX.X%, million. paid the margin to cash of million to the for year issued capabilities million paid the of strengthen Tranche period. while compared year-over-year cash the QX increased X.X% operating connectivity basis. and year on compared XX.X% third of wireless $XX in XX.X%. free XX.X% million in ago compared $XX was group XXXX million year X.X% was period. from cash to margin operating $XX to in million settle quarter convertible operating quarter ago and decreased outflow operating XX.X% company's to MDG acquisition margin quarter. by to million interest activities the of a $XXX $XXX $XX the in In compared million ADG to XXXX, to in After we CapEx negative $XXX decreased the cash to $XXX totaling AMS A positive million Net ago decreased $XXX dividends in to QX, compared the terms to accreted In from in operating

of the due option issued million new bond XXXX. During redemption - of call with $XXX convertible sorry, dual-tranche for quarter, ST 'XX 'XX the its option, billion Simultaneously issued convertible Tranche ST unsecured the XXXX. the and A senior call exercised in the early bond a exercise $X.X of the

expecting in Europe market up which to expected business increase volumes, This the and by acceleration picked dynamics. driven production than China U.S. were Let's we was in faster discuss In faster Automotive Korea, and first. and continued the than car now in in demand what July. South and restarting Global

X semiconductor delay although These of a for X+. million hybrid visible and respectively. new car per in design estimates In digitalization, quarter. strategic focus in dynamics key had QX, trends X our we is increase Level the digitalization, for of progressive X such accelerating saw for is electrification, may carbide X areas. pandemic production and ADAS on during Level the million car, demand The are achievements acceleration but are content about vehicles. Also, on-board XXXX mix. the in during latest wins vehicle trend In and and X market electrification in and again driving electrical vehicles, we the car application Importantly, for electrical different number MOSFETs a electrification, a charger deployments, with Level silicon car our clearly positive,

for an for also has with carbide with number VIPower our carbide technologies, body MOSFETs complementary We engagements a of increased belt generator, won system, MDmesh platform quarter. the low-voltage silicon battery sockets and ultrafast starter transistor integrated our such with during products management electrification silicon as customers and our a Overall, diodes. in again

XX are we with customers in ongoing today, programs. XX engaged of As

extending vehicle starts with quarter. are electrical the our with important reach We production during carmakers, in Asia

X. November architectures. solutions car You focused digitalization, and supporting communications the and hear more car are solutions Capital driving, driver assistance for we during new will on embedded session Markets Day of technologies our VXX and processing ADG In on autonomous

Here, we for manufacturers a won software-defined ADAS for applications radio. Asian designed digital for power-supply output with platform tuner multiple design a and a a

in MCU we to an million access communication already acceleration control in embedded keyless Level chips solution. Level X are years. in designs With XX-bit we automotive seeing our XX mentioned, Intel-Mobileye, our and processing vision trend have X X+, the on a processing solutions, application As won market partner, over the with past delivered, and an where together we integrated

We business which MCUs the support our devices announced microcontroller, called on additional evolution had real-time independent Automotive architectures. further future for Stellar, phase-change our this integration I of how application. show review, key applications. ST ensure awards memory XX-nanometer recently has to to car the demands. automotive-grade with also like and To Bosch execution to phone of We conclude details Stellar multiple we our meet sensors developed sensor this accelerometers OEM with mention motion that new expanded technology would for also

and market strong during now. home the Industrial The but This dynamics to Demand quarter. mixed, was power improved geographies. visible appliance Industrial applications. for was across remain Moving trend all gradually tools

positive We of applications, ST. motion control power-related go-to-market important in of which strategy our element dynamics continue and see automation, all areas for are factory is an to focus Industrial. Distribution in

up families. Europe, In with is with in trends of in our up the channel healthy distribution sequentially and improvement the product point In channel in of sale year-over-year, sequentially. recovery accelerating. a levels situation all ongoing, Here, is point-of-sales remained inventory of the Asia, Americas across strong, the

is levels realm, with inventory analog We and power sensor, product management address markets in general all to also, end this families. across energy secure MCUs, Here solution. back and healthy our purpose

the One around the Industrial family connectivity, XXXX and presentation, we we of of In objectives month, detail we is artificial Day processing in our solution. STMXX our in strategic leadership term embedded embedded Last security of wireless how module intelligence. strengthening in offers are held MDG. Capital covering Markets first processing our the

top-end machine connectivity, acquisitions including and support several partner and strengthen AI supporting Micro the During learning a wireless further strategy, we had BeSpoon microcontrollers. announcements tools deployment quarter, higher-performance of to to Riot from this

RF addition, With And for announced our map last and we to of the acquisition move, front-end we front-end connectivity market. role amplifier ability In for IoT week, major in module reinforcing XG. play power strengthened Semiconductor, RF our are specialist. this we modules front-end a the SOMOS RF road latest a

Another our for designs analog won Industrial. several In our we in with accelerate strategic new QX, and growth objective this of products is kind to Analog application. for sensor

for as STMXX motion integrates product, new well STSPIN with For smart our and a example, metering awards microcontroller. as we control received which automation platform in an

players. for our sensors inclinometer our expand to continue large with with a also We industrial of business number wins in

for is in expansion management. power objective us industrial third The energy

wins conditioning, Here, IGBT, such solar many MOSFETs silicon were high-voltage home and power air products, silicon in These metering, for motor and power appliance, our control. wins MOSFETs, customers TRIAC capture power power and diodes supply, applications tools, we for as pump modules. discrete carbide intelligent

a for wearables, In and strategic smartphones, and now Electronics, combined Personal driven X hearables market. for stay-at-home This to steady we QX, have consumer Electronics demand health by fitness was the devices. consoles. growth in Personal objectives. restart part strong the by In in demand effect by was consumer of and game there tablets, Moving

with in products to applications differentiated lead First, high-volume custom smartphone or selected solutions.

we controllers include with success detail Samsung give products, time-of-flight ranging ESIB Ultra devices inertial smartphone, near-field which and pressure Here, our multiple have as you on more use Ultra stabilization, to to time-of-flight the last is Galaxy communication. confirm like measurement NoteXX one motion NoteXX can I MEMS would and solution the display sensor, mentioned secure charging multi-zone EEPROMs. quarter. for NoteXX units flagship in I and image wireless in for wins both it such now I sensor. Also, ST sensor with sensor, win AMS CQ with and continue direct touch

our Our devices. is [indiscernible] leverage high-volume smartwatches, address bracelet second to to wireless true applications, headsets, objective such as broad and portfolio gaming

worth sensors MEMS during as of record had the analog products mentioning we number that sensor, we microcontrollers. It's well power and quarter. wins Here, as shipped a for

development the the demand also augmented-reality We of potential homeworking-related We scanning accelerate launched another for as In during see the so reality, and LaSAR ecosystem augmented an the application. continued demand for as to product, drives quarter, Peripherals, this while was high-volume disk Communication laser softer. eyewear hard Alliance, growing for Equipment applications. Computer to we see

address to communication satellite One and cellular this approach X infrastructure. Our market objectives. selected is in applications end has to

a combines would smart power product, for like with and Here, our a our application. in ASICs was XG for had also I for RF-CMOS GaN-, area, new a based awards win our gallium-nitride-, GaN set. we This microprocessor awards, a infrastructure. STMXX In which STMXX award new capture communication infrastructure microcontrollers this driver and to MasterGaN an multi based product on mention the we new

leveraging differentiated I disk. product while electronic Our to motion And other objective with FlightSense mention personal and custom or address with products, are our application like broad wins here, computer fuses solutions to and sensor high-volume in would our hard selected portfolio.

of the the all including about at unsaturation XX is reason. expected on RF billion. In Communication obvious XX.X%, for to XXXX. year charges. growth except expected revenue delivered move is sequential the by we net subgroup, to XX% let's a basis quarter, to full Now expect the to of the be comments about midpoint about $X.XX Gross groups, fourth margin revenues about and brief be discussion of be fourth This quarter product points

$X.XX Based the plan, at midpoint year-over-year. operating upon year, growth billion, For be margin expect performance. report a X.X% double-digit this about expect we the to to now revenues translating full we into net

billion. are our We $X.X maintaining plan at CapEx for about XXXX

let X; for points. module you MDG our We XX; concluding, you are remind conclude, to Capital Thank Markets the XX. update, first strategic X December modules. November September Day, on reinforce conducting session. The X are X. I and upcoming that X Before virtual To would key upcoming November through on ADG, modules like attending had to me on overall which AMS,

health we utmost both safety and pandemic, and the continue the continuity operations COVID-XX will of for ongoing customers. our First, priorities global our remain in importance for to response These of ensure of to us. our employees business

we've ago solid. market principle trends underlying stem strategic fundamentals from societal of The strategy made needs. decision are changed, ST and addressing have to growing we The Second, not are serve. our now secular determined years make sales ST questions. key operating Thank answer markets outperforming stronger, remain and the to And plan we continue our to we ready executing and your you.

Instructions]. [Operator

first from The JPMorgan. question from comes Sandeep Deshpande,

you coming, understand these us terms of buckets, of in could et the increase Personal granularly to million about the of third $XXX if fourth revenue. Where help quarter. $XXX Electronics, in approximately million Automotive, revenue from cetera? of terms additional It's Maybe in terms are quarter

So thank you, question. Sandeep, for the

question the to will Lorenzo. I Okay. address

quarter, coming to see, were that let's before, we we yes. in all Imaging, revenues our significant do where do expect mainly revenues. do in the Where we Analog. As QX. the We in coming Indeed, we sequential expect a term contributed from saying driver term Sandeep, expect? groups increase in driver? in we growth But coming say, see the of of revenues from

continue our that secure both means microcontroller, will and also microcontroller. to in grow a We significant MMS, in way general-purpose

our said, I all grow groups. product as revenues our, also will We in

see even as will will Automotive growth a bit So and will quarter. less contribute little if MEMS in discrete in and well we power extent, the also contribute.

said, we is we significant only headwind mainly subgroup to related our X RF... the quarter. As That have in

Communication?

revenues. groups, decline which will Communication we

see in is sequentially On is expect MDG revenues. this - definitely, but we I tell So on the This groups growth expectation year-over-year for group, a QX, for of ADG, grow, looking will our a that - will sequentially, term basis, while we next substantially all not quarter, current dynamic be will will AMS flat. this that do that, the you basis that grow, the in group year-over-year grow. we can

from Stoss from comes question Craig-Hallum. Anthony next Your

XX% guide With just thoughts silicon carbide And thoughts can a XXXX? and goal the of XX.X% on for you in revenues Any gross to margin think held end for mind you not wouldn't out you on XXXX. too if you'll any for long if getting where that December, for ago, you that margins. gross also, XXXX attain sharing

So for thank you the questions.

the first second will So Lorenzo to the I and address will question one. I answer

In following. what gross XXXX, for term of I can the margin say is

quarter. quarter, gross next margin You see that, - our the next

QX. I'm always talking quarter, I'm but next Sorry, on actually, referring to

our by, quarter, I at guidance current the For a significant XX.X%. define, QX, This you amount still is see unloading. impacted would that is of

We basis the at if fabs will situation, This running different capacity. a fully our at full of have have a today, look are we XX various in some point quarter. comes loaded, I where, impact that fabs, on unloading very from the

to other, see even next related suffering at Some less QX continue We extent mainly are situation continuing. be most still products, in year. will QX, likely, our least that unloading. situation this and for This legacy for

more understand market also time our For the there me some and gross will the next be of say, let's allow for order year, in how of give level to evolution next the of revenue me, year. margin to

silicon this about million. not year, the achieve carbide, $XXX will we So well,

not The We we be because, why unprecedented situation HX products. as of know, these well along is reason will the above we achieve value year. you all last chain in okay, will face

let's million, is this Now and say, what let's run is, say, rate our say, current $XXX is, demand well-aligned target. great, with current let's revenue

Paribas. The from from next comes Jerome Exane question Ramel BNP

help better could in once You've OpEx? you Maybe Yes. us model again. the expected QX than been to

for for give model us a should year. going next little how forward? could if So OpEx maybe you bit And we again

Jean-Marc. Yes. I question, will take the

Lorenzo. Please,

Okay.

OpEx. For

kind $XXX range - year, million For by of divided the OpEx the OpEx between year in quarters, $XXX a to for as things. quarter some the quarterly OpEx, due dynamic total guiding the these X, mainly I - different you remember, if with million, was different in of seasonality,

say, rightly are bit you better. little As a we coming

onetime to bit the midpoint extraordinary onetime actually be is have This will I we one extraordinary our so mainly say, event, driven, say, Because do for our is QX, quarter, saying this we repeat, repeatable. have the we year, so? the year, XXXX range now let's impact. average. will QX, see the Why and that material in for the not if onetime million, I in that I $XXX for than but for, it's we XXXX. of will QX any will if below the catch-up well We grants of a let's an as $XXX be will between item. average. in So this million be, by for full in quarterly OpEx, That say, and that jurisdiction OpEx means average little expect in expect OpEx, I'm exclude OpEx $XXX related it's year the our that item in an say, without let's impact, normal we million expectation term would QX the lower

be. level be the So we will at expecting we were that to

Next will year, be OpEx. term of in some there increase definitely

- bit in to There Now to increase of the there normal be that is cost also take honest, that ingredient the term labor. be fact will anyway it's salary. will There X a the One needed the to early activity. some to increase be model. are There consideration. little will related related ingredients increase X we of be to into

terms to of move - these expenses. bring little higher a be us So will to bit in

factor As you This range the we to in. rate $X.XX. today, that well $X.XX, as that, our see of for something sure is in exchange going have

and an into this, this impact in modeling want In of million FX, margin between half margin to operating for $XX keep around quarter impact of X you eurodollars, an and in half to change And idea, may per $X to our of percentage this impact. this Just of has point consideration OpEx. give term split million. gross in

per is impact quarter, right? The

quarter. impact is The per yes. yes, Yes,

ODDO. Houri from from Stephane question Next comes

Yes. double-digit Can you help next can other. moment QX have comment pretty with scenario? a given you is assumption the please growth some the and customer XXXX? point and the comparison credible give is a you ending like us And carbide at point engagement And end the high if for at visibility for year in year what your silicon about us the you for of large next program given starting HX, especially visibility understand or basis,

I like will very will I market year next a take September. of grow course, a again. ourselves And about that flattish, I X%, again. very, growing expect, can I say, we view is repeat XXXX our to question. year, what okay, okay, minus be the let's let's This Yes, okay? X%, but could would where still a But we year, let's question, next No, have assumption basically difficult what to year plus say, say, year be to have it's okay, good say? market early say, the with, say.

know to about confidence okay, the And communicate saying say, will Now okay, fixed plan strictly And we have our detailed year, too the January, early our a model, last have, follow be we indication preparing preparing full give year you. year. December we will say, we year, like to the to that done know communicate color. you company have CapEx today we about we that, budget, where will grow of milestone, this with update communicate XXXX, the more first is which market and address end in okay, takeaway, next year X, our level assumption honestly, communicate about April will for this will we next we strategy, billion. a during with process. Then which again. let's be, as so I But for okay, the again, our the would during let's our year is earnings. our QX you we have the will drive that, $XX about the

The next question Stanley. from Olszewski Dominik Morgan from comes

came First ahead one, revenues just this on the gross in quarter. for margin. Obviously, significantly

quarter's to separately, dynamics on parts was quarter-on-quarter So versus there? pressure bridge charges. your moving maybe unsaturation then maybe mention a could the pricing just there you top this of some And just help sequentially, understand us of gross margin

there? So or products divisions describe maybe affected could you were just which

Lorenzo?

also chance will yes, question. of not give QX, take See, margin the question to only take would of the the QX colors color like some gross gross QX I the our on margin. but this to also I some dynamic to moving about from

revenues. accounted that Product exactly lower the we notice guidance with some the offset and of ones of the the the level suffer. year, were in entering due much quarter. quarter of These of will And you quarter, not QX products optimal totally manufacturing charges in lack more not impact the had came, in because, were QX was expectation we what let's the lower lower respect for efficiency, much point. unloading the our - unfavorable an has rate. our and particularly, manufacturing top - our in in QX, the on And Automotive QX at and in legacy in impact, a even of charges much negative exchange a product charges margin margin that, at in of was unloading of in better in extent, this mix in in we gross This definitely sales level was the of of gross this As slightly the product lower Why to accretive also came, decision. that midpoint say, mix mix, quarter? level by unloading from loading first been higher a of by of part basis end, the suffering XXX quarter higher by product the characterized in our level

know, one you this impact As due the the gross on to margin impacting delay our with inefficiency of is inventory. quarter

why, actually, significant not we the in this this see higher is quarter benefit the did of So by level revenues. reason

Moving the of second question. part to the

efficiency The that we don't our in our a price some normal to, on see, let's drivers will net pressure the and as in decline. this see, loading mainly is negative increased really mitigated headwind this And policy to that will price we QX thanks the basis sequentially. stage mix and in QX? want price product impact significant points the are will We reduce underline XXX improved what let's decline. say, The gross any margin rate. say, by let's decline basis remain, point. from we to is of say, better a moving case, - Definitely, I why of The say, have Let's market, decline exchange price XX this XXX slight better but - hedging, from fab. the at by of norm. loading only, prices, the will

So what QX, difference to and impact from I would product a end, to respect say significant the was this to in QX. QX, definitely the to the better to at from QX moving it explain will mix. will that, be driver quarter - I happens unsaturation lower trying you level much and in will on be what happen on that in

The Ramsay next comes Cowen. from from question Matt

going about vehicle in been you're very set that challenging you revenue division bit profitability you've forward electric that investors that targets your how particularly silicon in the questions is Jean-Marc, and the could long-term Maybe I've a as Automotive Yes, about growing around look a execution on of getting the one forward. out. carbide Automotive hybrid growth towards and been in space business, versus the the you in thinking talk particularly just little what's congratulations from grows as environment. of profitability, your revenue

to So I Marco complement. will will start, answer okay, and

the is from, we to company from total Automotive, new legacy what our say, which application, approximately that say, and XX% the power-related present, connectivity. revenue, it we - heavy - have the microcontroller-addressing domain. of okay, let's are, so remember, ADAS. - say, it clear digitalization, related transform at It activity electrification, and in XX% is today, is Automotive and to It to do is let's activity you in to, is Now want weight, let's it's

we okay, is where want So to go. this clearly,

we mild this car, consider device, both on-board let's charger, address the the so car. Now MOSFET, carbide MOSFET to say, all to silicon enablers low-voltage address electrical silicon to hybrid power push electrical car, as we that the the powertrain well, carbide the of have but strategy from

as for the in GaN charger well. the have will near future We

are with external we in source modules, serious serious power OEM. one, we the competing our the internal have but have Now we of offer various really last and with - IGBT. a really or Shenzhen now both field a And least, critical are in in partnership we not

have ECU, this will also we the our say, large-domain a demonstrated really drive great for ECU, but memory, grow key is all This have already we domain Automotive feature, drive which profitability. believe need driver least, that parallel. strategy a car announcement to of moving a we architecture XX-nanometer, So demonstrated specific, of have more push part you have. let's profitability say, microcontroller to repeat of we the we I you the And which in ECUs enablers powerful we will let's increase. have embedded More XX% to phase technology, but very our XX have FD-SOI, that clearly, And revenue our this in fragmented with seen automotive. future this with have activities is capable in to Bosch. - the Last of that real-time of this our set the part be we the, to some of not present from term okay, change do device,

the that you. share this overview with I So is can

So to you want Marco, points? complement some

- I yes. No,

moving in to improving as do will that, an this with I where Just portfolio, add a moving And is our you like outperform we towards said, are we market. profitability. bringing, that the together obviously, towards electrification, And the believe bring direction would innovation see product will the change that we more digitalization. market we

Generale. from Peterc from comes next question Aleksander The Societe

have of here. One, few the revenue could specific quantify I headwinds points. percentage Huawei just if in in terms a you the quarter fourth

on in lastly, does Is have overall view evolution? automotive And market we unsaturation a year? charges do this how growth? one, semi Automotive market should you will And half or this some year-to-date quarter? compare lingering going what be Second the to first then it the year's capacity, revenue first next anticipate just beginning still like of ancillary the the for just into your

well I revenue question, the first will I for understood, first you Lorenzo, and quarters I About consecutive with guess quite will revenue question, have growth X. take one. the Huawei, Marco and be XX ST QX After clear. of So the from Huawei been take have I other if QX, will in

to ship PCs the from Huawei the XX, to Product in with September any compliant stopped the being U.S.A. have foreign-produced Rules We direct Direct BIS a -

our we course, have received at for continue to support any feedback. not But to this license we customer. have applied day, Of export

be the X So subject. I our on will revenue QX. guess am quite I in clear

have okay, when Huawei one. But So no, revenue percentage weight say, only it's that communicate in mid-single-digit ST, quite X. again, we well-known year, not do percent, weight our overall, QX okay, weight let's this overall they customer, let's of only with Huawei, are we in And at was, say, XX%. above

Okay.

take the we from was And light what for Automotive, of vehicle confirm the QX we again we our year. view full have see, production bottom. moved So up that do

between terms of the thanks Lorenzo, what million means XX - due is between we to we want and clearly, X range in the digitalization and the XX cars. and of which you $XX content more $XX accelerated more million, car. to complement provision half trend in the XX probably market car, which - thanks electric of... semiconductor of QX, were see market, million midpoint electrification to terms and are acceleration cars in Now in which electric see cars, if X a million, the to of And of increase a are and we of the overall, but nearly further ongoing which around million to seeing we where moved million - $XX the hybrid were million to

charges the confirm the Yes, will charges, - If I question year. what of before. half moving next Unloading how the that, I a I said well in yes. in is unloading forward first understood be

Now likely, even to some in charges unloading in that yes, progressively have and down, QX. expect do to also QX we still if going

Let we what moving do QX sure, fully the cannot and is me This as be was this during least, of our I do we to is say are not some that, balanced QX, suffering QX - a more what other expect due for stage, will before, some for still say, unloading unbalanced continue at in charges this for And that that well, have demand let's say, fabs which our fabs as have what very loaded we progressively the QX do. for is of which and let's capacity. at demand course situation saying forward. we between start is to, we are than the will corrected

you Just an to give idea.

progressively one Let's say XX%. many so fab the in during of the of situation, quarter, level, during the level, peak current let's XX%, But at QX, in is this And this the the be of saturation in XX%, level also suffering optimal average, we the so the of in we saturation you QX, will the were, level one, in say, will in more half repeat, with very with was that sure, level not continue, and that immediately are not reducing, quarter, QX, above range the see but XX%, still, some for different improvement. I X in reducing.

of America. from next Metuku The comes from question Bank Adithya

questions. Two Yes.

how some the just different change? would puts follow-up that bond. your Would XXXX. next What convertible share XQ? key I factor possible, the the Any led into year the in here appreciated. you numbers. anything figure looking us also be would that for much we going at be you would there given could then of if give we expected figure color in for XXXX in the disclosures and a has that count could year. versus OpEx color color a beginning just us to just of being the Should the look the takes? what, the OpEx on Any wondered if Just so And get in you what to redemption and view, And also, changed. really should so were give quick Firstly, on we appreciated. exact sense grants at expect if what's

the per Adi? the So is OpEx is average your of for This level XXXX. quarter question, question on on

Yes. what what different the given has to I know But And changed? earlier. that were then you what numbers expected? was

Yes.

year, full the If say Lorenzo it's for can... you

Okay.

line take it range year, I our expenses, said, full income of divide the income do impact QX, but other of that we $XXX by QX. it material if the will the before we and the million, of have reduce will we expect that and item quarterly you at including impact the it's full range other do will million and onetime significantly value X, in the expenses, as In XXXX, be a positive, expect of in the in positive onetime. the average expenses For expenses, expenses, that $XXX you end in

say, So onetime, then, grants, one law, grants. It's fact repeatable. at these to the the not legislation end, us that to that let's thanks we allow a be recognize new But have to will not of repeatable. let's say, catch-up be will this is a due

we our without course, guidance, to are impact. in this So there, respect of original

in some part gave be million, has to you due onetime What we sure, would expenses For million, sure, changed? of the the say, pandemic this the guidance, for savings. year. $XXX decrease in $XXX impact, have seen a have our lower that this what also we average will QX, to of will our because I when original we had consider

the normal were at to not travel would beginning way. of happen, in let's say, we a This let's sure, thinking For say. the year,

core So kind at we some was is had especially let's programs say, But this happens, R&D this activity, you even can pandemic. our there, not What of were the let's particular end, the we R&D discretionary our, on expenses. in the what that, under of in tell was activity if I savings, the say, programs. done, in it situation

a discretionary this we that traveling, there course, less savings in like - sure, life, not company, less have, put was expenses other less situation, you of the and meetings, of For in normal did incur. because

pandemic, not supposed be, for some the On to the were items kind more masks, had like of things. that expenses protection other we these for some side,

this exceptional bit actually but at if before with were bit the to if want, less, discretionary, were, a or line more we our answer So A in catch-up, completely little more less your I end, expectation. there. substantially the extraordinary little to related question. pandemic, this know the don't on you and we expense on

just And follow-up. do. quick a They

fourth count quarter share number we in the the look in whether that XQ number, when at bonds factor count changes the or should convertible the quarter. anything share you we that Just whether the on for is really reflective did of the

share the You The of count? share count mean company? the total

Yes.

Yes. reflected. It's

reflected. It's Yes.

number well have the of been has shares which provided, share. as provided We treasury

Okay.

it time, conclude this, I very think this at call. I you our With Thank with think we much, So conclude at the - XX:XX. everybody, are this, earnings for attending.

As is usual, we - Investor available. team remain Relations

follow-up some not have hesitate. you question, If do

is November Yes, next and meeting X. the ADG,

is your November Yes, Marco and with Monti. Solutions next Power to Automotive meeting answer question all on X

Okay. Bye-bye, everybody.

much. very you Thank

you. Thank

Bye. you. Thank

Bye, bye.

Call, conference for over. thank the now for participating gentlemen, you and in Ladies Chorus and choosing Thank conference. you is the

now You lines. may disconnect your Goodbye.