STMicroelectronics (STM) 28 Oct 212021 Q3 Earnings call transcript

Ladies and gentlemen, welcome to the STMicroelectronics Q3, 2021 earnings release conference call and live webcast. I am Moira, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. [Operator Instructions] The conference must now be recorded for publication of broadcast. my President, hand Investor it's Berthier, to time, Vice Group Relations. this pleasure over to Celine At Please go ahead, madam.

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

statement was Also morning the in a review all you in regulatory filings on factors. Development. on from of Marco today press ST's that this factors Divestiture safe be full Strategy this the results ensure contained are, the for expectations description Marc We management's that and harbor Chief live statements Cassy, these release and most with Services recent Communication, risk encourage the to investor call. ST's to also issued relation question and have this a Jean-Marc, of shortly This of Financial participants Grandy risk Marketing, (ph), to during materially Jean will involve presentation be Joining one could website. questions Q&A and brief plans. session, and CEO. call and cause President forward-looking opportunity ST please to to yourselves A follow-up. and completion ask Lorenzo the a call include that With available Officer, President turn Sales, Finance, replay materials President accessed ST's like webcast of This and I'd results limit to will now call the the an differ after and to can over

Earnings you tweet Conference for morning, joining, thank for XXXX So good through everybody. Call. And walked

sequential to increased comments. opening $X.X X.X% Starting billion. with on begin Net me Let revenues with some basis a QX.

overall reduce at business college, in volume midpoint offset facility customer more expected was than line pandemic. engaged by by partially automotive of revenue our So by to low programs operation global strong our the manufacturing performance certainly human electronics. intestinally due caused was the all and mostly with This through wealth driven by than the management in revenues

above Our gross of margin at launch. the XX.X% points came XX the midpoint basis in

over XX.X%. Looking from managing increased revenues year XX.X% of those at at our and year margin net operating XX.X% respectively. improved XX% XX.X% performance, and Of

nearly point Net XX.X% million. year-X to basis. net $X.X -- subgroup. On income except by communications XX whole growth product increases, billion revenues %XXX doubled driven Our Zohydro frequency groups in

quarter $X.XX both margin While of our gross eat representing first at XX.X%. of the about XX.X% X.X% a months assay QX an to midpoint sequentially. of expect midpoint, XXXX of billion we representing points. increase to XX% margin of be of at nine the in be to margin was the But $X.X billion sequential value. the Hope and It net the on we basis increase Gross network. is outlook, XXX expected income about

investment strong plan guidance, based XXXX, the representing $X.X July. This remain in of we XX billion QX year increase full advise. Capex the [Indiscernible] Our the now For end midpoint year-over-year expected the a at growth expect be And, of of on markets, we their we of dynamics full-year end revenues continuing unchanged. provided launch, by driven in XX.X% all XXXX to for $XX.X about is about billion of

the in by OEMs detailed was to Year-over-year demand The Personal performance review programs sales of engaged in increased subgroups the strong annual third to our to revenue year-over-year, XX.X% three of customer partially impact a by Malaysia. all sales expected XX.X% larger groups Frequency X.X% Electronics, our Communications with move let's quarter. driven in and Distribution. Network and subgroup. -- renewals increased by as the pandemic except Now, global offset product

lesser IMS Chipsoft net midpoint growth of extent, to mainly the our to outlook. driven MDG revenues basis Chevy by a up sequel the was in This XX.X%, with On increased showed X.X%. line X.X%. and up

While our pandemic. at to Malaysian caused decreased facility the manufacturing X.X% more IDG due operations mostly reduce by anticipated than by

into X was XX% from automotive effect pricing. XX.X% of revenue -- $X.XX manufacturing, and positive negative your net basis. as better XX.X% aging. $X on increases the partially billion, by sorry, [Indiscernible] increasing million driven of were profit drivers mainly mainly income the related a Specifically, and well [Indiscernible] joint more both effects as both [Indiscernible] loading, impact year-over-year assessment, Gross our by favorable value efficiency of net These [Indiscernible] offset subgroup. joint initial upto for

XX.X% With double-counting factor from first diluted product of groups, the gross reaching above was our year three was from QX Such margin midpoint over per $X.XX driven basis $XXX margin in all million XX -XX. improvements Our mix. QX-XX. points cluster doubled guidance in XX.X% and million nearly product $X.XX earnings both and respectively into and share net $XXX per share income by year

revenue Imaging and growth. increased growth Analog, Looking double-digit on higher [Indiscernible]. by all redemption from to in a in XX.X% recorded on tonnage B flow call Communication. and partially cash X.X%. to [Indiscernible] from on a the million issued exercise to activities Automotive was more Free is at $XXX on performance, quarter. XX.X% product the quarter. [Indiscernible] group doubled $XXX quarter [Indiscernible] basis, margin in offset increased compared MEMS year-over-year heavier revenues year-ago increased year-ago Microcontrollers, QX. in negative on XX.X% MDG Byproduct dollar showed increased XX.X% QX third the expected groups bond operating product in from revenue operating million Frequency product in decline increasing Radio ADG XX.X% in XXXX. and in in $XXX margin XXXX Power million than cash groups XX% year-over-year compared million convertible the all increased [Indiscernible] to $XXX from Net our million the growth Discreet. sales. XX.X% million improvements to $XX in We operating to $XX of improved in option the to XX.X%. Capex -XX. MDG

fully of bond, this the X.X principle delivering billion $X.XX $XXX includes which rate paying amount. million third In multple a of exercise of quarter, bond million tled total the about [Indiscernible] shares amount bond. and million the the As cash, consequence, $XXX set we treasury in conversion the

$XX million third quarter, share and of this $XX in million new program Xst our the executed we share During year. to buyback initiated dividends of we shareholders, repurchase on connection cash with paid July

million financial depth at XXXX, position billion billion. was liquidity net financial Our total $X.XX affecting $X,XXX of total October of $X.XX and

roles now and Demand of We continued remains overachieve And Let's still Similar dynamics. the backlog showing. for Quarter, to to continues. global bookings discuss your QX planted straight manufacturing capacity. well be demand backdrop and of the just XX demand. chain, market strong remaining business months the supply the about covers and Second above

in This X [Indiscernible] country the ship been biggest us. in an challenge also on of quarter of the testing production. pandemic accounting One XX% the for assembly impact had worldwide the for the has a Malaysia,

the to was all, [Indiscernible]. deepest with operational mostly in in impact our reduced it situation Then, and while site providing of unanticipated of First outlook. of in impacted regret, our business when QX operation our our impact became July August, there [Indiscernible] and the at employees families worsening facilities their the XXXX

We XXX% [Indiscernible]. [Indiscernible] period Our to of website went through partial or supported pollution capacity complete a closure.

reach wins now XX Overall announce and to our our digitalization. Moving added know quarter pipeline One In of equally $X programs billion with of [Indiscernible] target split to liquification, ongoing XX during renews based we landed. the now and carbide of projects engagement and market in XXXX. already strong pleased on list to candidate and industrial gas automotive. that year customers We again dynamics. anticipate increased am to design of our silicon I our classification between

There domain, QX family. in wins navigation sockets Gateway [Indiscernible]. microcontroller automotive with complete digitalization, an view include In high we comp of and - ressor. in of during design silicon New silicon had boody system. wins and [Indiscernible] include our our for they MOSFET, number number the These carbide System as In as for low-voltage quarter, from saw [Indiscernible] multiple [Indiscernible] design applications chipsets technologies. and electrical like win had applications we XX-bit with Battery a well in audio electrical Management [Indiscernible] a a Smart microcontroller climate XD we control Generation-X includes success

business, Automotive grade [Indiscernible] metrics, showcase sounds steady Although with will in across unit we such our as door cell navigation. and multiple applications, in automotive control,

both strengthen we well at with our the distributors power high solutions, our continue products, with as the our all market. field see Inventories management ecosystem. energy broad as sensor with demand, to line in be [Indiscernible] highly-fragmented lean Industrial, in to approach our of and [Indiscernible] year, We products Processing. across through to distribution high-end [Indiscernible] whole offering an leadership continuing inventory consumer We're processing continue And and portfolio. to in now [Indiscernible] very industrial strong products. Moving in Family sales. the

on focus and mentioned have security, before, we particular As artificial I have wireless intelligence. connectivity, a

bills We well faster. support a achieved We the discrete volumes tools, Shunning [Indiscernible] wireless artificial world broad of Thank increasing In are additional design for design success across with to that software with for base. new we've go at line, We a our you. the a new then a as management, well customer SDN wins we towards methods and released well power with number intelligence energy televisions. developed seeing product had QX. wins achieving think portfolio. that as

industrial CRO, energy conditioning with welding, adapters, voltage low appliances, the with air gallon storage and Applications inverters, MOSFET [Indiscernible] see we example, supplies. include systems, power distilled lighting, and For in solar with Bitcoin IDA and IGBTs, Diodes. home modules and

electrical vehicle [Indiscernible]. won charging also power We an station module for [Indiscernible]

We control. many appliances. grid, with industrial [Indiscernible] also and and Smart add factory motion new our analog our products designs automation, like with

phone specialized and We in continued with business in some like tools devices, such with power application metals. our cell

we Moving other true and now game In including strong QX, demand connected devices, Electronics Personal stable see hearables, smartphones tablets, wearables, headsets, consoles. and to continued to wireless the market. for for

smartphone to products in differentiated selected solutions. lead Electronics applications in strategic Personal Our high-volume objective with of custom is

we motion again. object autofocus, ranging time-of-flight laser number of secure the for code charging once touch light and controllers wireless quarter, sensor display sensor, The devices solution. with sensors, During products,

broad leverage to volume address is objective second portfolio high application. to our Our

computer, that In launches, yields adoption mainly solutions/augmented with and on still wins communcation environmental a homepage wth equipment, for confirm focused of notebook. we several laser assisted we as smartwatches, our following light, sensors, well microcontroller useness on recent power the of analog and cable such and products, shoes. for we've as broad a PC, the and as players as had scanning reality. I head as applications to beam see smart XG our engagements that leading set programs Here, are of in motion continue Moreover, well headset [Indiscernible] schedule. enterprise range and We're related

our leveraging cellular We in we push a also have new communication X radio products solutions target we area, in strategic to is awarded this portfolio. sockets in were this to TV shuttered stricter satellite selected application [Indiscernible] In of diesel with custom and high-volume foster broad while design One chill. address opposite Novod frequency end market. application

time-of-flight Our in include, stream wins the power unfilled here laptops, challenging [Indiscernible] adapter. designing, world, with foods, sensor StealthGas as family well as for must MCU win enu, control managed for the much a

output. let's discuss the quarter Now, forth

markets midpoint. funding sales markets strong yellow we upon of when cluster reflect end stems July. the dynamics points of conflicting lot XXX launch a For be basis Net free over the in provided are IEO this is new the billion Revenue To plan XXXX into for expected midpoint, customer Drivers Income our well-engaged translate at we I'll midpoint, quarter, at ER, in we $X.X end X.X% all net will to the from resulting all revenues the profitability. value This the we XX.X% programs. growth $XX.X focus dosing, wealth the sequential And continuation Gross of groups year-over-year Based year-over-year results at stays customer flow. our and year in fourth of year-to-date and and programs. sequentially. and margin midpoint net in year XXX be the expected basis engaged on at full-year increase the revenues a X.X% mix customers. expect of a end do in growth address. at expect address continuing of growth of and plan and and the expected about and QX in resulting billion opioids the about conclude growth cash XX% points strong over we to humble respectively.

demand. We continue surplus home to adapt support our share their to

continue Thank [Indiscernible] worlds. XG wide-scale management. also leading-edge answer provide to sustainable enable and more deployment the energy a smarter technology efficient we are More ready And and We innovation product question. power and your to you. The to in mobility.

question-and-answer use the begin [Operator Instructions]. now only to Instructions]. Participants [Operator Instructions]. will while We session. requested handsets a asking [Operator question. are

The go first DODO question Stephane is Houri from from ahead. please

Actually, questions. Yes. Good morning, everyone. have two I

was demand update than current more last an that supply. said is you one first The quarter because XX% end above the

QX. second this gross revenue years, honestly, growth? a on the margin So feasibility question about update many I can XXXX for is ever. comment for guidance And you in seen haven't please statement is and many, that, the your level XX% if

can sustainable level bit of elements gross So very little a a and seen you Thank the if this as you on can much. level this margin going comment evolution, be forward?

you questions. Thank for the

take perspective, I take I related one confirm So years, will seeing can XX margin. to the that one revenue the gross and the will Lorenzo for unconstrained which say, really we'll the about manufacturing improve material. the into next can we I are here but well definitively, About gap SS XXXX capacity will be what will above and still say. mentioned. our plan year Things launching XX, quite

to by supposed no following the the Basically, elements be think market I sale would X%. we offense. increase ,

okay, we the the either planning, of planing We're Looking Again, at both are based backflow wall on coverage. capacity the manufacturing of investments.

[Indiscernible] the next the the, year. the fresh to are will for planning And we next start doing start fresh investments, are contributed we've contribute we and year, We for

we I communicate, intend very will than can And do are say I the than next the will number we resale the again, we to for and year. market. will for capex and provide detailed confirm better that in materially SG generally that the But premium. better markets we the perform though confident indication to much confident that perform the for we XXXX very a are can

that positive have of I price in QX. XX% driven of we margin. about helping margin. respected guidance mainly A question and for in that we We the everybody. this And maybe our X still elements environment XX.X% an margin quarter. morning last see post margin, improvement, the take one the quarter our gross gross is is by gross side, Yes, a to current second is the dynamic on gross the the Good the

we capacity our and in our running back efficiency. improved on efficiency. of also as, be [Indiscernible] more in -- These Malaysia, will have well Plenti As end full in especially anything including, course, the at [Indiscernible] especially our at full plans,

Looking at come XX%. QX total midpoint for gross the the a the of margin total year, range in if our the let's year of say will guidance,

the remain room have our productivity would we a margin price into of moving and some backlog the definitely, And gross Moving situation moving better business, product definitely course, I forward, and, say we Anyway, mix environment that for the that XXXX, has have seasonality the quarter-over-quarter. gain we positive. the manufacturing next considering also still of for in year.

in We reflected not there have cost are also to consider that moment however progressively cost, the these margin our the full-year next will QX. This in in gross materialize increase is the quarter. in yet that our inflationary at

that Additionally, also have investing. consider are to we you

your time and is increase Let's as and can depreciation say, the of of in our increased moving. XXXX. our investment [Indiscernible] of there you say you Capex, look margin, will course your we have efficiency production to a lack a production full opportunity increase we we improve have when between coming I ingredients yearly think investment. that when Anyway, all to expect these gross I in together, at the and so moving let's definitely that all quarter have

much. very you Thank Okay.

Next question please.

Next question ahead. Ramsay Matt Cowen. is from Please go from

that quarters? lot, guess, headwinds this question, in couple in in or, guess, the how seeing margin do get And, think where us some is asked in even quarter? and Yes. I see much. pricing transitory? maybe through you're increase you of cycle much -- more reason everyone. bit. could if this a next business, year, about quickly you the I and the is I what for following just supply, AVG now the driver the much Thank the for are of than of you fourth bit Good of how better a morning, half on specifically the could a the very guys of guess congratulations, heck increase walk margin I question pricing the environment maybe I what a is you plan Lorenzo, recovering guys. I level. second a right And you you seeing, the question guess, how gross is kind that your little my increases first XX price on little material sustainable how potentially that And, through is business Malaysia. demand and Thanks. materially just versus Joe guess, Mark, obviously talk guys that in you how of

I let's ingredient is is margin think at sure to for there the margin an before, gross look pricing. gross one -- the when that I as related the was saying we of say

if say progression our even is look from gross in drivers of in both before, would I say say there look in sequentially, If is I overall on will term, let's our much also side repeat X look that many side I saying the product our over and all, way I at -- think is here say medium let's situation think more you or These I cost. customers, the let's would are side, we what want I short XX-XX. inflationary let's say all I course I if look main environment, organization said mix an I price? environment, these what when and say less is for both here, the was stay the but about here said of because our price as before. when also margin How at, the pricing sustainable, the the two manufacturing on I other other that. the efficiency. the one are I that, impact components

and I say let's Let's in say, are gross to think think course, pricing headwinds this on term our year supplier, the of efficiency, to of fees profitability room that the discounting, of margin from price I gross looking environment, moving year margin progress there of together, level also the that is the at related that mainly compared manufacturing combining to side, XXXX, our XXXX. this other year,

some that and in of say the we gross in respect is half to seasonality margin the half. in bit have a in general second following course, kind gross lower normally first quarter Of first which, let's in margins the little the

key the for So the be in will that on this about group yes. can to Automotive, a QX growth I us. question second confirm contributor

material for as thousand a fee. Just XX

mainly has So our guidance, in was embedded is group. that of mural that my our already embedded what the we billion, guidance speech during But already billion. I impact the mentioned we what $XXX Automotive $XXX been in product impacting

So of on automotive you million see on microcontroller. And a total $XXX automotive, on impact mainly $X.XX mural product.

now all resume our September, So are during completely the vaccinated. operation all people

We full agreement and adult. any authority down allocated the have in closure avoid It's n let's the load. pressure to a protocol of any with lock say, Malaysia on work

So key be contributor yes, Xk I QX that gross would of very am the year. okay, next ADU a in and confident

Thank very I you appreciate guys. much, it.

you. Thank

Mara? Next question, please,

your from is question Johannes Schaller please Deutsche from go next The Bank, ahead.

for Thanks questions. taking my

in on, I tight some in product market. already overview PC that distributor and companies mentioned very seeing consider have thing maybe few that And you are maybe if be Can the give of about any PC that's already. there here strong should seen then supply your us where a components smartphone not lean product such groups Firstly, But and channel, mostly an we portfolio couldn't product restocking. think the relates we on built. inventories. also any have secondly, you see the you're in it for of demand very recovered a dynamics market of -stocking businesses in but your are final environment. talking de inventories there of bit on But smartphone, to semiconductor this And you components was even the then or

idea this the the half you about can maybe business you. a in a in better half you may think year talked us of understand imaging be scared sales, to of give an the XXXX, give is market second to in and that update when of the compared flat dynamics year maybe us year. also just growing you second last Thank now quick little imaging how ago bit about I a

you Thank question. [Indiscernible]. your for you, Thank

Now, first about customer all, computer. okay, electronics of and

strategy is our address this selectively [Indiscernible] custom market, a know, you solution. to As design

and looking store, because we we So have we our solution inventory forecast you customer. the seen sales connection a inventories. a have because no with any no are have we possible okay, real design time And we say inventory custom as not and better let's change have

will. We

personal know market, And taking also senior have I the You the addressing we inventory non-GAAP well computer, care like in let's even MCU to on wide opportunity are power. great world to related that smartphone no that have post-project say are and fluctuation or some on seen we in electronics as portfolios of this pipeline. recall or there accessories. if clearly adjustment let's would say we the like market markets overall

is So let's very kind is strong. say dynamic, very all this stuff of

delivering one seen So is [Indiscernible] this and QX. year, we let's bit compared bit the [Indiscernible] a little remember to is that. [Indiscernible]. year year have HX coming QX you because exceptional, was is This say to, back year a a [Indiscernible] absolutely last there of related mainly between little of normal. last of not the normal if was notably were HX program well, which a profiling and Because to delayed, measure customer,

have profile with revenue contribute a materially year, a on why a way X will that is group sale number the I QX basis. in okay. have will would many the Group of of In reason that also year-to-year So the the modification. growth confirm on 'XX. I our QX the and like seen guess And you QX versus the Last quarter not that basically year, the communications QX, down to and XXXX Company. but the we growth, between I contribute of me, is count last IMS well architecture this product compared that balance days By lower. simply That's them of not day comment. you lot have quite less sequentially system we the and for [Indiscernible] [Indiscernible] to definitively the up on Basically, some while least, QX okay share we this is the different the both

a of medtail, for we the the with be Nutrogo that said contributor new have have, completed, I materially a the key of growth. sale. than all companies as We confident And better Imaging year visibility the as efficient really Imaging opiod model. we seeing contribute will gross I'm we the next you'll few we'd plan markets that target. to A

Okay, that this net will capital the team disclose of our [Indiscernible] marketing. share of

That's very clear.

So Marc, you. thank

one maybe at the see in question. any follow-up Just now quick in constrained, in your is maybe view on anything you supply even components some there inventory chain there where that supply or nothing Is less smaller automotive, the inventory your slide route right customers? really

we the no seen day we simply QX, inventory the chain. we and SD, they renewal we a closures. their facing wholesale for in QX and share, If that from we that list and let's for have slight Then to time But component they don't The let's push with just of say, model due to capability to to year. have say of And inventory how own is operation. day VBT have the the In of with business many being, semi-public operation displeased of the And the facing supply way automotive supply consignment the for of you life wide. visibility our [Indiscernible] have increase not customer consignment industry support components our their because stock mainly prepare our automotive the out -- makers know to the know, have fundamental their quite we the the then sale our this [Indiscernible] car whole may the we they next behave stock. and fact a shortage of,

during supply, will strong to we months wafer stop why? that course,of automotive let's strongly to be we all next few the the absorbed, will recover, we thanks say, and this from have issues believe We demand industry. have welfare Because decided not the okay, the

helpful. much. That's so very you Thank

you much, Thank Johannes. very

Next [Indiscernible] question, please

from Didier Please Bank of America. The question next go is from ahead. Scemama

and thanks Good to margin back morning, and just gross takes. I to puts my question. come your taking wanted for

just quite to was to I want useful. thing think calendar I understand one year it regards with XXXX.

etc. about for inflationary your fully come guiding talking already remember need I through recall understand pressures as those from the are -- yet as But you I I and You're materials, far coming the a I far which it and there. was 'XX call I since stick. have thing costs XX% so it to started gross you highest think second third XQ XXXX margins quarter, sub-contractors,

you So for question that look which 'XX to was starting you pricing as contracts up is case re-priced starting to move is, XXXX. or the you my suspect at well, when guys get week, in to not long-term per

in gross the you above XXXX at or up bids your trying above Yes. words, depreciation XX% that pass that you on why what you to your margins if -- be other to there want have going not pass-on. inflationary well to So just for XX%, more into cannot, your missing. least go assume I'm would is to or Did are than that either massively like you I'm pressures get from subcontractors understand materials? and

questions think is big I quite Yes. your question. a

different reflected in the R&D in our by Even our costs were this inflation entering dynamic -- expectation margin I of margin, but that gross gross progressively are gross current When year, let's see protected are at of course. side, gross the on our some our were sure. we were already during if margin, agreements, we not correctly gross in fully expiring. XXXX mentioning, in one agreements say. long-term long-term they on because elements also this were Of look as there The you for that our managing, progressively

let's come a true say, XXXX. it's inflationary portion these inside yes, costs of So the will that,

manufacturing, our moving even in in that our XXXX mix, positive in It's coming true on impact coming from the improvements gross on other have we margin from see our we efficiency, side, product back-end. in

and one year in next see be And the is in to that So, was the we this gross in let's will what say, impact. mentioning that have seasonality side XXXX. as what this I improving for offset at we we year margin on during think the There will XXXX our negative will before. average looking respect be, year average the

to progress opportunity in gross So next in let's year. say the still we see, margin

details macro-environments. also about well. a Very I little bit on you for that. to ask Thank the wanted the

so some cuts of we've power And seen reports in China.

wondered us give you the I sense little So ground on just there. the situation over if of a could

you have you or said China in regards with with economy or from business, of to distribution slowdown region? in You the distribution, negative lean. your power inventories impact activity were sort that any business seen, OEMs or Have negative cuts those direct any

Absolutely not.

happened absolutely I what in i in China, [Indiscernible] think but with Malaysia, t's not.

was maybe tiny Okay, one short. one this since And one then brilliant.

You can said sort it QX? QX? you that a give for number Is QX days. Is any is normal short us by of there for more six quarter

Yeah.

qualify be days QX That XX What a would say, for similar, QX it's really longer us. will normal think. year, was let's is I not normal let's days. was like be quarter This will year. because a quarter XX this last say, and So calendar QX as base okay. was XX QX, -- days, that I QX

Thank you very much.

Romel from is [Indiscernible], next The from ahead. question Jerome please go

capacity also [Indiscernible] to up see I morning. [Indiscernible] think update these own of are programs nitride, [Indiscernible] ramp Good Yeah. you. we material for gallium the to Thank Chris, capacity become could when your coming specifically from and us on you under going the

their will commitment turnover they to can that carbide, is HX, the that. is market automotive we to continuing say, personal in carbide industry let's batching of ship following support us. of because h industry. -- okay silicon come that we foundry manufacturing specially concerned part the the taken during assembly -- growth allocation there point, such already I been as are increase month, more one plant want course as in okay, the decision capacity to microcontroller, would the there loan As silicon I from quarter-after-quarter At the next up all and on sales of receive said, year And news support far off packages. PCC, few support More about why I our to treatment applications, increase s confirm our both volume on are in some for the on one are last modules, good the than non-recurring [Indiscernible] to capacity the below. explained [Indiscernible]

now and Singapore. [Indiscernible] Kenya, our increase to in doubled we Qatar, continue have We capacity in

off increasing We is Got so are connection one, it. our close and in strong our of capacity demand especially, -- customers with ship very speedily [Indiscernible]. our with of to supplier

Okay.

our on You go a know foundry. strategically fast with again, using that to market as was TSMC

are doing. is what this So we

we we to More in XXXX, you say That's grow start our let's is KX beyond. parallel with year for [Indiscernible] XXXX along there revenue. and XXXX capacity, [Indiscernible]. [Indiscernible] and CapEx So next building contribute to will XXXX, will are

OpEx a you. How you. follow-up the QX? maybe for should just be Thank OpEx. And model Thank on

million July. to in some in of Anyway, is take course, the QX, location. In of average they what of for say expenses, by are you was let's X benefiting expenses other OpEx, QX X, you $XXX on expenses QX, and OpEx the remain let's the will that per will terms you income range in year say when $XXX XXXX in confirm see I seasonality an and When of in we of OpEx, -- saying the split we there including respect increase I model the quarterly full and of OpEx, quarter. range -- stay will net net

you. Thank

you have question, much. next you Thank very please. Is Okay.

from question Francois is Bovinet from UBS, next please The ahead. go

everyone. questions. two have Hi, I small

is one first on the Silicon The Carbide. coming back

So said you you also X is you in your capacity, But which about billion, XXXX expect today reach helpful. versus to XXXX. talk that

what this can to it Is helpful. And automotive, sorry would map? customer? have I or kind that. driving the around road that can industrial? give a be more of pass the So about coming wanted the drivers slightly, is question is to one like it accelerated accelerated of back sense Is specific Anything you you this second inventory explain

inventory demand? increase or Just I from to going you. how product, here? how see be of by would inventories sense next mean, should You we experience, about inventories your should in your to to should quarters. we the how about development but inventories given slightly we be your the you different think the helpful. situation have expect inventories talked the That about of Basically, with forward. Thank think view the that have to wanted high I now, these

Okay.

-- strength next recently, look the data now of the of the [Indiscernible] electrical logical years market you we [Indiscernible]. at lot clearly, First increasing for is can of vehicles a when the very few of worked the all, combine and on component you

Okay? What so. was or one year expected,

of an is parameter advertisement, vehicle, first we way, input the first vehicle. vehicles. data electric from has of what in that not adoption any in the aware I in which three the electrical sold been I of acceleration the but make First a the you're is received that all, point and years. next [Indiscernible] By Europe, is the will guess September

an okay, of plan a the production it you'll of within forecast. let's say, sign vehicles, electrical is overall, So clear of acceleration see

point number So this one. is

okay driver opportunities fly duplication. there's film. clearly well. to is coming main steel the electrical other we on volume it's of was in where we're one-billion-dollar to XXXX. gauge And is I guess So perspective will for customer that, news a we no years is we you the really that next let's okay Then sole our to Well, revenue start it on for The in number to is And there no, have the volume perspective. pull contributing we ST, market more of all have level And for increasing. programs running can for famous this suite, very automotive. market ongoing the we increasing. values related full-year contribution confidence is the already fantastically say, deliver that it's with as and then very, where of vehicle from high a And to fragmented. our sure, mix assess okay, have few bolt-on Then new near clear

industrial In of you. everywhere simply world. U.S. the to the full-size. expectation tell decrease. inventory, the in expect strong Then Europe, loss you [Indiscernible] on leak in a here station stations this about charging electrical charging a support what market, I order proliferation from Thank the can However, because we

chains inventory tier today tier is system not X, EMS, supply ask many situation in you of JetSuite. X, distributor, between So supply chain sustainable. complex When OEM

congested similar. the X, there let's air lead cannot the increase book, play basically These also are say is these going guess you in prediction also by to to flight. inventory. the of manufacturing aware in in will of bit and related really or because the security Air a number big operate logistics, is of Dallas flight sub-XX today time congested, now if little of logistics. it all logistic number are world Point VX that Point very but to to no vote inventories. of action smoothly have is the the logistics flight all increase constraints armor number X, I totally you or the push the traffic all operations. by -- sheet, You world is the by conjunction of

me, is the some driven for So the strongly demand that's why by which reason off Semiconductor, mega trends.

logistic, XG?IOT, [Indiscernible] be smart we efficiency, a which? is situation which much today more sustained. And will connectivity, again, of Okay, the very, last top of in becoming mobility on constrained inventory, the okay. really is following

material For guidance.

Thank you very much.

you Thank [Indiscernible].

last We have time for question. one

from The Deshpande question Morgan. Sandeep is from Please ahead. last JP go

but not to And be me it to on for 'XX? costs. you've terms in viewing your follow-up And on. thanks based is been Malaysia the supply. your actually year, then in will in 'XX cost also revenue 'XX looking you. But what able to your into of Will clearly, -- and on regarding front, Hi, question backlog, letting is etc. into continue supply-constrained to being is continue view your your to depreciation this the be follow-up what only related 'XX? is is Thank supply-constrained My issues, what in on you

far very on may your question. position, first the you not so will out well We come captured but have

off Will CSU delivered you centers question XXXX. like France of we what's in get bank the add consent,

okay. to that -- constraints the clear do plan perspective, we we a well. think all have Yeah, It's More constraints. have slot Basically, somebody likely hedge at bit that wait this type, I far a or to let's maybe our feedback okay month fleet in these equipment, shorter equipment little for to material the I for you they're supply our for can assembly, supplier most debt. say, today Equipment team equipment No. we delivery have we also by that towards it now semiconductor overall showcase back-end, scan we still the completed have in and managed so it's have fab. to limited delivery, a wafer the case, you as but so process so may self XXXX. not then why care okay why less while Is as supply confirm process that's have tool. demo if And you want

on long-term forecast, materials, in XXXX. let's the we And millimeter swayed, situation process long with very the and and well on, XXXX strong. for that's our allocate but keep provide say, term are is for close see It silicone to stretched frame because supplier are the nice quite demand as quite quite to the gadgets, valid XXX is distribution engagements. chemicals. to for

have [Indiscernible] Company. So, as building clear be let's is semi-conductor that It to say, our [Indiscernible] we plan. very

be our infinity to chain capacity. would because supply check Okay, operate think a full we at big that mistake to

So it is not the [Indiscernible]. case. And

inventively depreciation that expect There million next have like doing let's are our investment above and similar have the about Question with amortization. say we say range slightly to XXXX. our lease then increase where then in will there I are have continue XXXX. XXXX, DCR that in we Mainly depreciation we not they smoothly and a $X.XX will, of the full plan year. XXXX. similar in [Indiscernible] expected that's say increase the you chain around be increase coming would We done in will XXXX to So in let's billion. balanced, do And we and will before will stretch capacity XXXX. back I you and before. supply on time for of $XXX situation that invest of a -- and flexibility, depreciation, in the add in those ways

Understood. Thank much. so you

much. very you Thank

will the question was our this conclude think I call and that [Indiscernible]. for last

you. Thank

much. Thank very you

Bye-bye.