STMicroelectronics (STM) 27 Apr 222022 Q1 Earnings call transcript

Good morning. Thank you everyone for joining our first quarter 2022 financial results conference call. Hosting the call today is Jean-Marc Chery, ST's President and Chief Executive Officer.

Joining Jean-Marc on the call today are Lorenzo Grandi, President and Chief Financial Officer; and Marco Cassis, President of Analog, MEMS and Sensors Group and Head of ST Strategy, System Research and Applications and Innovation Office. This live webcast and presentation materials can be accessed on ST's Investor Relations website. available the be call. of will replay shortly conclusion after this A management's call that results cause from statements include to and risk materially This forward-looking could involve will factors that differ expectations plans. ST’s press also factors. review full to description for morning harbor in issued you encourage most release results, recent the was and We that the a risk ST's statement of safe contained these the in with filings this regulatory session, ask to limit ensure follow-up. have participants one during and yourself please Also Q&A question an opportunity to questions the to all a brief Jean-Marc, to President I'd the now like turn CEO. call over to ST's and

So our and QX everybody thank thank for conference earnings joining call. ST Good you XXXX Celine. you morning for

me some So begin with opening with QX. Starting let comments.

of business above midpoint reduced Shenzhen, demand by pandemic, our So ADG facility QX net operations revenues. range. revenues outlook in impacted offset due our specifically to of driven margin came of microcontrollers the XX.X% $X.XX by our temporarily revenue at gross billion performance This partially strong which manufacturing was in China the and

Looking Gross QX, revenues from increasing than billion, year-over-year outlook million. On revenues a basis, operating Revenue of is by is increasing sequential was were quarter to revenues substantially accompanied sequentially expected XX% XX%. of $X.XX income by Net X.X%. XXXX business margin grew profitability $XXX for by up second our margin flat. be margin at net and at net the about gross year-over-year growth improved midpoint and XX.X% at XX.X%, XX.X%. doubled XX.X%, our to more XX.X%. performance, from On

company and year to increased based plan on XXXX continue strong in based $XX.X capacity, the range XXXX the $XX.X revenue on will we full of billion a billion. full demand customer for drive the year to For a

better-than-expected subgroup. product the of to except imaging distribution. for revenues mainly net expected as let's by in impacted On was coming performance the in $X.XX and with basis billion, XX% three XX.X% Gross line decreased from to ADG for the XX.X% temporary XX.X% our our margin X.X% OEMs higher quarter. Gross review XXX to Net year-over-year product microcontrollers. largely substantially XX.X% pricing by outlook. reduced to at manufacturing in XX% MDG expectations. detailed a revenues by profit to Year-over-year year-over-year a AMS XX.X% and increased mix. groups midpoint whole efficiencies on basis, year-over-year was a manufacturing Shenzhen, Now facility increased with and X.X% increased first revenues sales increasing increased sales on our favorable move driven sequential sequentially operations our basis. This the above revenues up with revenues XX.X% improved the pandemic. subgroups decreased due driven China points

the similar points XXX our by driven and gross above midpoint guidance, first product basis margin pricing Our was mix sector. quarter of

and $X.XX quarter and First well $XXX QX more from product per $XXX in in and per respectively XX.X% operating reaching income earnings groups. doubled from year-over-year million diluted than net million XXXX three share margin in improvements supported Both increasing XXXX. all was $X.XX XX.X%, QX share by

XX.X% as by AMS Discrete. Analog product Communications. strong and in and growth MEMS, in microcontrollers revenue increased both decreased increased in year-over-year with both in in MDG the both groups. imaging expected. at growth revenues Looking Automotive RF growth revenues while performance double-digit on Power sales product sales X.X% XX.X% ADG and increased

After to Net increased activities AMS $XXX cash product $XXX operating million in ADG delivered it XX.X% margin QX the from XX.X% the ago increased first all was terms from strong of was to flow from $XXX X.X%. $XXX margin XX.X%. expansion. In operating ago versus to QX operating And in quarter. In operating free in million, MDG increased XX% investment first margin from the year the in XX.X% XXXX, CapEx margin, $XXX to to quarter. quarter. million. CapEx, million quarter the compared operating groups was million year cash million in $XX increased three year-over-year in XX.X%.

million quarter, at At During increase an debt share debt. we January repurchase ST's million. of cash of dividends million our $X.X of first as executed applicable financial we total XXXX total the $X.X XXXX guidance of in GAAP the XXXX, paid This to with XX, and net and GAAP convertible a X, position of financial and was financial non-U.S. X, current financial billion connection liquidity $XX includes net adoption buyback reporting to million debt $XXX billion. the in stockholders share ST's $XXX on program. December reflected part $XXX total $XX million U.S. position new was April

and digitalization vehicles The supply Let's expectations. continue The and strong of now with carbide Starting our the QX. devices across for vehicle discuss ongoing still the wins lower and manufacturing compared XXXX both well reflected Backlog electrification. the digitalization automotive car component electrification the of transformation see and during is market and Overall, dynamics transformation opportunities and the electrification additional planned towards strong. Silicon XX above the effect market, combined replenishment the continues we and accelerated to current business are geographies. during a of visibility initial produced demand and be above strong automotive worldwide of across industry us capacity. the chain more demand all quarter. of key with industry. customers in a QX months remain to number demand with inventories Bookings strong of

with maker as markets We generation XX of design power silicon module the projects and MOSFET line electrical to are with markets split a revenue automotive increased modules, for as vehicles, traction the over end industrial ongoing are applications. inverters number we equally silicon QX carbide our customers. the of targets. our well ST had number new between the and wins mostly with using in spread three a technology two XX, During These again for quarter, carbide in programs we

wins with carbide-based microcontrollers, the management battery designed of the had includes in Tier solutions electrical the and stellar range vehicles. deal and applications. This chipset ultrafast a sensors. for success LX Machine with automotive to maker electrical advanced a zonal player a China an ADAS MOSFETs, our automotive other We earned embedded first during sensor X win cooperation complementary Core in vehicle next-generation design-in We microcontroller business, had antitheft silicon vehicle for in software-defined for technologies silicon for and automotive signed our platform. from our Learning an carmakers application while electrical quarter, a also sensor a Autotalks wins we architecture dials. automotive for In across In continuing and a key vehicle secure We EyeQ with new VXX had digitalization we X-axis into we technology we for with with system, Mobileye car for address. in

all solutions, and our were point in embedded and high industrial. power at we as general and as are and as quarter content. our throughout inventory digitalization across both the our lead demand in Demand purpose in purpose with main OEMs. industrial pleased general analog announce families products Throughout with semiconductor I portfolio. of was we we and with automation, ranked leadership processing in home of that especially factory market In industrial energy processing, Also applications Moving XX-bit worldwide and In sales strong embedded am trends microcontrollers. energy are products XXXX we on well one as were well distribution, our to turns, markets MCUs. electrification in address increase We and strong geographies. management inventories the sensors product remain all building saw accelerating the secure end products see strong QX across distributors although industrial the to in now power building and control. number

We three STMXX family, a our an invest our particular connectivity, engagement, intelligence. to areas we driving our wins focus In accelerating customer and to solutions. continue wireless are ecosystem further offering design latest these product with with security artificial and on strengthen

for and We natural evolution offer. higher STMXX customers with power. needing microprocessor The are also building our momentum path our computing performances

and of processors lighting, modules, well a and power grid. we industrial IGBTs, including programmable number logic a carbide-based we controllers as, products management, Here applications, in and diodes energy such address of as with rectifiers. applications In processors, sockets silicon-based range as silicon smart won and

had of saving applications power number and renewable a across technologies. we energy including wins Here

where also applications focused. had power-line communication ours appliances. We new includes many control motion with we designs with in are industrial analog our and automation products home This factory

our industry-leading for outdriving galvanic Here products motor -- isolation smart power sorry control, and wins. design smart commercial controls

for for first generation with our introduced Unit sensors and in three with industrial-grade momentum Sensor sensors. waterproof our industrial applications products the like together launched pressure Processing wins continue our sensors. Intelligent MEMS We We

embedding accessories for true semiconductor in was for connected Personal and as especially The devices during features wireless seasonality hearables Electronics. market headsets. strong continues tablets market. Demand quarter Moving this driving now health to more to such wearables stereo line for end with be the content,

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

time-of-flight During motion charging the products flagship sensors, solutions. won sensors secure quarter, sockets ranging and new environmental display we smartphones and wireless in touch with controllers

broad strategic second leverage applications. our Our to objective to is portfolio address high-volume

and with had Communications PC as other satellite Computers end broad well market wearables watches programs to Here low and and as such continues continue In analog, of market. light demand. to show with motion products XG-related sensors from this approach of signs our had range we in Equipment of & and environmental The smart application services leading in as we wins adoption players. around strategic power objectives see to several globe. a orbit and microcontrollers normalizing of further We the deployment earth Peripherals,

applications custom selected portfolio. our or high-volume differentiated First, while target broad we leveraging with products solutions

for in MasterGaN key solutions high-power-density to well and New this as In would customer continue for platform as our adaptors. our well wins wins area, and we MCU trusted applications cellular further satellite I include communication charging with also secure progress General like laptops. highlight, program. to infrastructure. our designing, goal address sensors selected engagement purpose to smart with time-of-flight family here

move let's the our outlook XXXX quarter and year for our Now XXXX. to plans full second

representing second to of of a be expected the sequential XX.X% about net to increase XX% we expect at quarter, and revenues year-over-year QX For growth Gross billion is be X.X%. margin at the $X.XX midpoint, midpoint. the in a about

occur the by extended April. caused Our in power the to the operations includes Crolles, beginning reduced France of temporary the that impact guidance of our site at outage

first to strategic our further to first confirm we customer the XXXX, of planned initiatives, plan our on capacity the and to Agrate, about strong demand plans we for in focus a year $XX.X $XX.X our Italy. To to billion of range to support on quarter the fab full value our strategy billion, which XXXX XX% execution increase and on to plan capacity, wafer billion our invest investments in growth results $X.X drive increase production to billion accelerating our about underscore industrialization our tight company $X.X our XX%. revenues XXX-millimeter Based line the continue and conclude For and of to a includes based in new CapEx our XXXX proposition. of the representing for

plan, to sustain investments We are on of revenues our short growth with track terms objectives. CapEx XXXX both our long-term and in and

we May much XXth. Thank participation Paris person forward our in now webcast your answer live either Day are Finally, at to you via in very we look next Capital your Markets and ready or to questions. our on

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

for question finishing want microcontrollers. you ask taking I my the give thanks Maybe my number everyone. morning for general good to before question. one congratulations just purpose in my I Hey,

say back the for achievement a guide because leader to at not beat ST I your full amazing year ST. an When QX, With to and an Jean-Marc year. it's the the but important that, look franchise. last you've such that need the come XX-plus you wanted just back think in had raising would years QX on speakers full I you're

you intend you wanted were full XX% little I last of your year your -- running a that guide? bit at degree half Thank second think whether looks us even So, give unpack raise half XX.X%. your year margin And I guidance kind associated caution full last gross just in year of like to a enough sense that a with first excuse introduce you. you us to to about give guidance? that gross margin me, Do is quarter,

Thank you.

we we and So, all, I revenue. Lorenzo the indicated range first will No, okay, of at have midpoint revenue address which the the of let's to we the market grow -- because above will margin we is say say is gross the growth receive latest XX%, answer substantially answer will sell the point close a okay okay we on the our let's of about data XX.X%. market

of number well sell. this revenue grow two, Then the okay, range related will above backlog cautious close a XX% The demand. capacity to year capacity. planned point for let's absolutely XXX%. to So, is conservatism our we any are above to basically covering well point next the market number already say is we XX% manufacturing we -- one, our let's say And not have backlog have we on okay

the specific any not demand. overall It's absolutely customer and products. customers related So, engaged it's related to absolutely to not

related related loaded I okay totally chain like not events uncertainty give our as is in the in okay complexity when load absolutely we our to supply still QX. the okay increasing chain for that you simply to indication that fact a guess you as would to okay it's to supply usual is worldwide So, supply facing The your demand. overall QX insist I to have face revenue that range well. loaded and okay, chain at but or XX% range supplier a pretty maybe are plus the our the of we various execution, manufacturing when lockdowns business

one So, okay the guess okay well have of that you usual year have the year, anticipated visibility. we quarter noted as This July every we will I year. indication update as in

I will after July But appreciated. in think update okay it the completion. first this been well half we has

indication. So the is this year about okay

XX% product as an either maximum any So a which repeat is demand again above issue absolutely conservatism pretty year, to engaged of capacity concern loaded in the is takeaway already next okay, and any our I not with customer program. XX% on

execution about can because during the Lorenzo. our cautious margin event manufacturing capacity. of we the face normal lockdown level high the the of okay of About gross loading only Okay, okay

Good thank is margin. math the gross about morning. for correct. And you question the Yes, your definitely

we the visibility second of it slightly that will you expect say in Let's about guidance say more can to price in have What XX%. At we our this midpoint the at bit to of be respect gross in do that in increase the this say level some in done our stage say some dynamic elements. respect at HX, little will is in the a by increase be level pricing related gross second course, COGS. our to be enter year, margin to margin, QX stage, our of our we half able of the of at we But visibility this margin, a in let's respect, let's is should view in quarter respect, COGS I the gross impacted end, that, half. the the mix, on what to similar remain in above I have in this -- headwinds first to

think end, let's more the year the at XX%. So than overall in I the XX% that close say -- will be,

to next So of bit level gross year we point along uplift our at margin ability visibility little in the respect this in keep this our quarters. a the to

dot t's but i's. think the quick cross follow-up, if that I it, of Jean-Marc, Fantastic. just -- you could a just as and we to touched the on sure make Maybe I wondered I you want sort

One sort the lockdowns with it's introduced of quarter, night high China like of a caution your the sort regards peers in cuts. brush to feels of second the level of for broad US a last

lockdowns think lockdowns? I that you in baking prepared I you of your your the affected remarks QX from your in Shenzhen wondered impact how business. in if Thank said much revenue had some want guide in you. is the

current billion, face. So increase including material is sequential guidance, in headwinds already mainly. have say or QX all the we the XX.X% is to it and let's let's okay? implication subcontractor say from that included some test we It in clear QX, assembly the on facing is X.X% some impact provider, in lockdown our and Shanghai $X.XX are related of but We logistics so also assembly our year-over-year

and early So event the Crolles Shanghai lockdown April. of

my how No, Shanghai and question much without I Crolles be impact guess would was lockdowns? it the the the of

million our of based the end, so we two the our the is At sizing tens more less this end. have let's information few be estimate the trade dollars events. let's This the say is will of say at stage that in a the or line that that events top on at these

Perfect. Thanks much. very

please? Next question,

from Please ahead. Matt from The Ramsay Cowen. go next question is

very Yes. much. Thank morning, you progress. guys. congratulations the And on Good

up question. to on Just follow Didier's

US competitor their –they and to a it bit broad-based as last think night a revenue Lorenzo that's than articulated. I quite gave haircut characterize XX% expectations by your of you about sort more just

much business So wonder direct is your in greater their I to customers business distribution more using a cases just to much versus certain extent.

in year there how So have you beating China? lockdowns the into we as raise look are we year, for accounted to or that full calendar what's the that half Thanks. Is of substantially other despite could have? leading the half not the back of you first your year guys considerations the

okay, QX No. HX. face but and repeat still impacting in the basically various events I are QX, we in

So Crolles for more the lockdown, QX material some impacting complex logistics Shenzhen, impact to okay of okay. Again, planned HX. Shanghai are provider catastrophe also say lockdown. The let's lockdown. of never We in related impact mainly

is okay are range and in remaining our as supplier our our across And by facing our top fully for sales and full XX% repeat because plan complex our assembly and that again, valid supplier, on and shortage We themselves. equipment above of okay capacity year okay, are logistics well okay say it okay, just operating year okay test. let's chemical I facing gas full supplier, our putting material the we show saturated

all supply the chain under So is tension.

that So and planification because, sense we when it's we okay, range we of indication good manufacturing. provide do our give this of business okay a the believe simply

getting... messenger Jean-Marc. Don't shoot we're the just Understood. Thanks. the questions

are because simply I business repeat altogether there two I think concerns put you Right, on a cautious either okay. And I no. answer

manufacturing really event is okay impact. capacity our simply normal that and I an really, okay, with has and it's either single that loaded supply you each Okay, share chain

analysts this you with give and okay, you indication the provide So okay? our performed of it's we and normal you tranche, QX investors above when okay, midpoint see in share you an revenue. And slightly

an y of We losses. of some Shenzhen. have capability basically other to plants two was our weeks production wearable okay microcontrollers. impacted thanks been for [ph] to reallocate equivalent Shenzhen But to

in We microcontrollers. have overperformed

plus and our So you that's again minus it and range why provide have of to I we because okay always kind duty. this operating is think you reason an the

follow-up. you just for divisions. light shedding mind quick some the a as June Just guidance Lorenzo, by different the on do

just had be look June ADG some obviously the it. growth March think appreciate as by out would you the But as division I called I into color helpful. Thanks, guys. you in forward on impact quarter. some

a what fact some that is had due that these what or growth of substantially Crolles About mean the When hear the the have quarter ADG. be ADG contribute grow will MDG, quarter. But we in the say lower let's look our the you slightly be concerned will the in we growth, impact but be ADG. – to driver in to a let's And substantially contributing, this basis, will but Automotive by is for will in Jean-Marc growth impacted, be AMS flat. It the MDG will interruption growth of the more the Yes. on we I down say And sure the but And say. quarter evolution the -- second both revenue respect the the driver let's second much in due second to Power of group in described pace to the by let's of before to main that growth. sequential quarter and will lockdown. at the Discrete. slightly not AMS, this events, was quarter, in production will say

the will driver the in end, ADG. you growth the quarter from the this at So of come want driver real if

in Thanks couple weeks. Paris very a in much. of See You guys

question, great much pleasure. very you Thank with you for your Thank will Matt. be

Next question please.

Gardiner from Citi. is question ahead. next go Andrew Please The from

guys. question. Thanks Good for morning, taking the

in follow-up to such around of elsewhere the them as why of backlog if another result current to view, suppose, are not XQ today, these it challenges Another of from you those some which China a level seeing logistical the of I in demand, or want you're change face a way, placing global the if the are outlook. challenges sort therefore I confirm level of given I standpoint R&D impact? of on going China. of the not the point from that's And that parts logistical -- just the able activity an ask any your could lot sort and customer seeing your exceeds, you to backlog lockdowns to of you're a ship

events, no. said stronger. No, in confirm We despite is that dynamic QX, despite, and the the various I dynamic the purposely,

Our okay about is booking geographies. in well QX and customers all $X X.X. booked than with more QX, We billion in book-to-bill

turns. sales with increasing. continuing speech All okay Our is as high are monitor, the and point confirmed inventory of I during inventory lean we my

harbor it airport. the increasing So the okay we and we let's And clear after okay sign the not and have okay itself chain chain to lockdown booking the and sales value all Shanghai complexity to the to supply to the mitigate effect let's say customer. any that the from the is related seen say of and adapted both lockdown. KPI our order of okay adapt this the capability Then have

Jean-Marc. you. Thank

Just perhaps quick follow-up. a

mentioned happening you things been Given on then, think a the chain. specifically clearly Can where about That's on shed supply your through have Automotive in you replenishment within stretched. particular? some been you light Automotive, any in inventory what's market more comments I inventory talked incredibly

you're interested what So in there? seeing just be

variability know has XXXX, the is an you okay when electrification supply since a have during logistics so level sometimes EMS, specifically, semiconductors. X high operate and You which okay say moment, at and know because products carmaker inventory, basically, becoming that is this chain semiconductor introduction new it's time HX absorb related at And have capable been normal especially X, try and the very together that the they the And X in a quarters all normal we you of it okay of chain company to of sustainable are basically when are and X, complex. because not a digitalization, operating player XXXX. okay logistic the carmaker five partners you now Tier certain complex to EMS of Tier let's And supply QX EMS a to forever. distributor the

in sure, replenishment from for mainly in are the mainstream related order Tier we which the to part So that okay, of for convinced order order EMS, a there or is business, X to we inventory receive massively this the some safe in the shut okay stop easy and announcement regularly. all it's the and X to shut and not plant to down Tier condition planned to see a operate shutdown this social carmaker and for effect down about to because is for

So it's first situation. and clear booster to part of of weakness related linked to the back of a that yes, to come another the which business all, then to is growth is the Well, driver there the and growth. mainstream part normal is after

increasing based know we for okay of start effect carbide. system battery in power car, – that car we And very also, either to demand a the where first the battery silicon driver strong okay on see management to is content especially a are power digitalization. which related here okay The So switches. the electrical from power

So architecture action. change level of in okay a different

if bit is see XXXX, million data we production we And vehicle to of from even effects. XX the the then QX, point moving So reason million. forecast in for why XX receive the decreased the a two little

So a is, there decrease. say let's

with still is just demand I two very the So strong okay, you. shared for reasons,

appreciate I much. it. you Thank very

Thank much, you Andrew. very

Next, question please?

is next Please go from Paribas ahead. Exane. from Jerome BNP The question Ramel

quarter about said pricing. going is and mix? do ratio gross and the in increase demand you probably have to the still year, we margin the should seen Yeah. from on in Good mix further full one XX% volume of Is from price it or the last quantify that, price XX% on the think you you're for about same Could morning. a impact you increase. Quick question the

Jean-Marc. in question first in evolution the gross that bit Yes, take the level reflected our true it's pricing quarter. better the a little of see this margin I is we and also

as that, you would to to the is indication total is from I mainly before explained want pricing, volume say, we end coming at also to mix. in our between coming year. let's I substantially the for at the is was upgrade, related by as hand capacity the bit year, would you something Jean-Marc this our our If see have linked little mainly a say the expectation and improvement respect say the

is help respect. definitely that in that will So this something

maybe a update specifically XXX-millimeter quick the Thank you maybe qualification you. are And follow-up, your of where us, silicon wafer? and the Could on you on carbide. ramp-up

carbide. And Capital $XXX technical of No, and revenue through milestone on okay milestone accelerate we think go say, in a you, we revenue next years. at successfully anticipating our say – is Marco okay the carbide gross Okay. on that, to much deliver Day million be this factor the from two, silicon okay And clear for let's our three information. will ST let's is will key factor key that share you the know capability I success silicon that, too Market current Monti really okay I okay year deliver, will are it detailed What track. to without we can –

have our silicon You XXX-millimeter deploy clearly is by that then we key a And already infrastructure we have will say XXXX. next $X billion target continuing Geneva, factor success one okay to by in anticipated of Sweden year demonstrated we carbide revenue accelerated very And okay massively three capability let's know be to be years. in in path will for dynamic the positive. that our our the clearly

much. very Day. to Thanks. looking hearing you at Thank And Capital the forward Market Okay. more

you much, Thank very Jerome.

question Next please.

question The ahead. Please Janardan Jefferies. from Menon next go from is

question. taking Good my and for Hi. thanks morning

little Didier's also, from general just also on #X purpose fantastic echoing the the purpose of becoming is comments question on achievement bit microcontroller all earlier of my in First microcontrollers general side congratulations truly side. a My remarkable.

mix top assuming gross having general is, a would level expected. because there foundry internal saw from in your margin QX gross strength that positive be about that business. I in side impact you improvement Is better talk -- And at right mainly the was You've a from in margin higher said product the that you Or capacity when highest you was also that on QX? than saw the that purpose side? capacity microcontroller

that explain of strong when less guiding uplift? XX.X%, be that divisions? gross than the because you to you other in strong that that from margin is so will And are get XX% And why sort you're would QX division saying good

product So contribute the would fab first question. both the and customers. are external, between wide second clear microcontroller, question need year internal will equally it contributor micro we say the have Lorenzo is the growth production to is I will that answer that, And -- like answer and that let's internal it's group to say business. of this growth fragmented because in multi-source and a really will than about foundry XXXX the we to the this business, enable -- XXX,XXX more I the balanced, to to because we have of

in to let's will equally have level external the to, our XXXX higher So foundry appetite clearly, and expect demand and the and STMXX much, growth design internal at we we not we say, capability would is ecosystem the We the all thanks unfortunately because of have. related much wins foundry. the than be the

product the our in terms the gross definitely the of mix, about is microcontrollers our course margin. dynamic of No and of product yes, the of contribution margin line to gross accretive

the we be that said efficient sell microcontroller that to not the longer our to the saying will contributors quarter will quarter microcontroller our to for element more for gross over say, MDG, the of not of guidance was advice yes, was to I the one some is -- performing was not a it's diverting the guidance let's be at contributing terms operations at order second in run more QX there end were it true also the second this than our of of any fact assembled able was In in margin. So that growth. to thanks the in expected, Jean-Marc our end as as ability in be as way the by the in

will flat slightly substantially So This is remain our declining. expectation.

that of is, So the profitability. is microcontroller true in product our terms product accretive for it's of that lines mix one

you the of you imaging earlier on how course to the can would quick and the And expect reasons you But that remind it have it You out And will into do me a can business? down. I to is of rest that year down? the revert follow-up just be of the why over for -- XXXX? pulled growth had

we XXXX, -- new the And phone basically second profile XXXX, introduction one than say, because revenue of the not out year in of back the was, XXXX, delayed the QX, QX usually face. It strong revenue okay, XXXX push the half case coming across quarter. more, by pandemic, the profile we QX been has to in a in XXXX. XXXX In QX was usually okay, are where let's of

year we when material seasonality this versus next and reason why, year-over-year will HX okay, the to year compare growth. again that's of in growth XXXX contribute ST the About we sequential So usual okay, QX. again, this it's situation the well. Imaging okay, versus the as now, confirm, have that growth, unbalanced We HX QX

you very much. Understood. Thank

Thank you, Janardan. We've they're now if two time for more maybe questions, long, not hopefully.

please So next Myra. question

from from ahead. The Please, Sandeep JPMorgan. is next go question Deshpande

strong very mean, strong Hi. good. Yes. utilization, been margin, Thanks letting gross well has your is as gross margin, your very I me about clearly, for mix question as, My on.

So can into helping. whether the the channel talk sales that bit pricing little or mean, is in maybe product. about the mix helping, I is is distributor a you it

point? So I this the ST the participate the I to on best clearly, a in I mean, to have question. years, over whether wants question semiconductor any M&A path incredibly is on follow-up go path last in gross well And then the or growing few the own organically, ST whether margin. mean, a industry done has at quick thoughts Jean-Marc.

of the part want to first Lorenzo, that? you answer

on both sequential basis actually See, sure, for the a a level on on gross drivers, year-over-year pricing, margin, of component of basis are the let's say. margin, gross the and the

is favorable the environment. As said, a price we

are two component two that our product really in drivers These let's enjoy that mix. accretive the we enjoy that level say, the mix. are boosting very margin. These The gross drivers and other of is we were,

a foundry productivity, started pricing, and time, few, by the both not and the let's sure manufacturing contribution efficiency, terms of is sequentially, far being of the this months our we has at so that but, of OSAT contribution Because sequentially level not for for some it's let's significant. sure, material. as increased be ago. in we For say, when course, Still when there in -- was to at especially, terms -- look this impacted been, look say, we at or

was substantially, forward, each Moving we as other. let's will components offsetting that, say, think I saying be these before,

will of of we that, half of means the year. the it in the at level the substantially remain first half second So year the

see I overall, So, our full in the the gross I margin, year before, was XX% saying as range of XXXX. for

during company strategic fundamental groups bit company related Day can the of continue drive can the value is continuously are you convinced, region. Sandeep, more second trajectory, About to we the to as increasing we clear a that growth your Capital the and and I Market our question a it we various product detail to that will confirm okay, on a company. question,

like we of to would say continue strategy want I a okay, organic now, growth. So, to

Of and is the in bring the because a good the good is this for company activities blood. the all some course, company, time we our to the company acquisition bolt-on to have, the we've IP to for blood new the market. strategy, opportunities ongoing portfolio scrutinize on we convinced innovation it let's of are of new It with say, for bring portfolio

lane So, this strategy. acquisition major We in is growth not deal transformational do we are. organic the intend make and we bolt-on to do swimming what will

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Jean-Marc for gains broad-based share market and here take continue that expect very foreseeable from the the future? are to definitely gains So share that you the from

Thank you. Okay.

this I several you very your Capital Day Thank you for May of call nice you as much. your much questions. a listened the you Again XX. have answers today. on times, it as Thank and have so attention. hope Thank very Okay. during all [indiscernible] Markets

Thank you. Bye-bye. See you soon.