STMicroelectronics (STM) 29 Jul 222022 Q2 Earnings call transcript

Ladies and gentlemen, welcome to the STMicroelectronics Q2 2022 Earnings Results Conference Call and Live Webcast. I’m Myra, the Chorus Call operator. I’d like to remind you that all participants will be in listen-only mode, and the conference has been recorded. The presentation will be followed by Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast. my President, hand Head it’s Berthier, to time, Vice Group of this pleasure over to Celine At Investor Relations. madam. ahead, go Please

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

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

our joining earnings everyone, you for QX call. Good and Celine. ST morning, you, XXXX Thank conference thank for

with begin Let with comments some starting QX. me opening

margin came was from and This growth grew year-over-year product On driven outlook at at revenues demand X.X%. accompanied XX.X% XX.X%, up QX above billion revenue doubled continued from of midpoint revenue gross was income business XX.X%. by net net $X.XX sequential our portfolio. a of XX.X%; in to increased The million. profitability; range the revenues our net and than margin margin operating gross up XX.X%; strong So more net of for by basis, improved XX.X%, $XXX

gross On XXXX, XX.X% by and XX.X% income billion groups growth net the $X.XX of On year-over-year QX by revenues was outlook quarter first third to margin XXXX, and our increasing of margin net a XX.X% XX%. a was half $X.XX increased all business $X.XX and midpoint HX XX.X% year-over-year for billion revenues billion. in as about operating by driven with is sub-groups. product sequentially, net of

year billion $XX.X the full full high on year. of now XXXX, For to in for year company-based plan revenues anticipate We about expectation. for gross margin previous our drive now above the full to be XXXX end $XX.X the the range billion will we XX% the of the

manufacturing partially of driven by a increased XX.X% input basis move was detailed XXX to sales XX.X% review and and profit On sequential second mix basis let’s basis. year-over-year our points revenues and XXX The by above groups basis sales midpoint on a in higher offset Gross favorable inflation a X the revenues sub-groups. OEMs all costs. product to increased quarter. billion outlook. to mainly XX.X% XX.X% X.X%, year-over-year margin Now $X.XX with Net product year-over-year increased XX.X% year-over-year increased our improved net pricing of distribution. points the increasing Gross by of

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

$XXX in year-over-year in $X.XX, and XX.X% QX net product million to income diluted per double diluted up earnings from income more $X.XX. million, increasing increasing XXXX with from from quarter share $X improvements doubled $XXX income share operating earnings reaching groups. billion, per than was Second to X operating all and XX.X% margin with Both net

ADG on product revenues year-over-year XX.X% Looking AMS by increased on Imaging revenues the increased sales. MEMS RF Discrete. growth XX.X% Communications. performance both was and growth product either in and sales Analog, XX.X% revenue MDG at in Microcontrollers grew groups. on in both Power and Automotive

margin operating to billion, $XXX net In million XX-month increasing demonstrated ago million $X.XX from to $XXX flow XX.X% XX.X%; the cash million margin, billion operating up up in $XXX terms strong margin in all $X.XX year-ago million increasing MDG cash CapEx, free QX quarter. X.X%; compared of year expansion, After with operating in quarter. AMS cash activities from XX% XX.X%, $XXX XX.X%. groups $XXX for the billion. a second totaled was the $X.XX Net in investment compared margin million and year to activities On to product from ADG quarter. basis, CapEx year-over-year increased operating operating in trailing of was quarter from XX.X%, versus the ago operating from of the in

ST quarter, $XX share million program. second share the $XX we our to cash During stockholder. of dividends under current And million executed repurchase paid buyback

position July financial reflected It April $X.XX X, of compared Our total XXXX was billion. XXXX. to million total of liquidity financial at X, debt net at $X.XX billion $XXX $XXX million and

products of Overall Let’s the and the now strong. discuss to be demand ST market continue quarter. dynamics business for

data me with points. a share few Let you

of Book-to-bill planned Our type. existing product quarters X above on well capacity to is the depending is covered backlog parity. QX X

markets, From for Our of demand there what ST the selected road automotive end strong the industrial in manufacturing part infrastructure call market demand electronics in remain this market. by some remains business-to-business in automation, softening and products for robotics semiconductor target market areas, pervasion in where driven we and capacity and In but consumer is industrial we structural fully signs and both strong the factory standpoint, of are an transformation. saturated. PC the

ongoing chain strong visibility see detail the automotive electrification to with inventories now and combined automotive the and geographies. planned to accelerated still the in and the XX demand of of capacity now QX. is on in and drive our the digitalization, we electrification above wins market, through and and well more industry QX and transformation The the ST transformation pervasion of across from manufacturing reflecting automotive Bookings digitalization continued semiconductor Going continue months replenishment effect XXXX. remain current industry. across strong during supply Backlog customers all above of

car and billion carbide the two XXX application. silicon carbide include our rectifiers, power electrification, roughly MOSFET we silicon in These and had we a XXXX. well traction power discrete. silicon between revenues industrial We are maker, again XX ongoing For are carbide generation and related customers. electrical the increased of onboard for module spread carbide launch programs in markets of in the X silicon between new have line number over split silicon and of $X revenue a This projects wins We equally the end and target modules inverter, number ACEPACK automotive with carbide now with of silicon market. design charger vehicle with as diodes and ultrafast QX dice other projects,

within the new X-axis Stellar Volkswagen and next sockets of sensors. and ICs the parking application our conversion for generation our usage for a with address digitalization, charger, digital Stellar Both had called solutions. and won and wins the platform architecture This microcontroller week at car in Core new Group announced applications the car DC-DC our devices Automotive system-on-chip power-management also with multiple on-board Volkswagen brake electronic Stellar development in include we business, joint project. Group, which for Learning Automotive direct sensor last model Volkswagen microprocessor. MPU will high multiple We our for our Xs multiple system-on-chip embedded MCU this is zonal the Trinity Volkswagen cooperation family, including will carmakers. the family, performance yard the microcontroller automotive of Machine we sensor Tier In In family

gain We family product continued shutter design-wins. traction for to measure OEM-program of with global automotive

Moving now to Industrial.

on wins connected design sales robotics, terminals, broad are embedded OEMs power saw accelerating cleaning Here we we content. and energy we for Application across management, main These such logic air high products, NFC such would from with specialized see voltage products, lean announced appliances, an of incorporation demand with power industrial turbine. robots, energy, which increase multiple both Plastibell. which example, by into business-to-business and includes and power solutions just low quarter important trends industrial, industrial solutions. transformation. home programmable trends controllers, distribution industrial major product I and of devices a buildings, power energy the addressing, includes wind the the high includes industrial, healthcare, remaining have sensor, point systems, the switches, in power in as as one largest address we in segment, and all driving smart and syringe end areas, intelligent our MOSFETs are of industrial industrial for In improvements. and consumer of highlight And portfolio. In market. areas. the healthcare. industrial, business-to-business our like market power and charging two efficiency inventory processing building in industrial STMXX innovative appliances, items. Digitalization path, market, conditioner design transformation robotics, in In we applications wins more and wireless tools. storage these automation, inventories part, systems. and for three are to this wins in We specialized Consumer example where focusing home strong Across we tools, supply, and Across structural families semiconductor consumer distribution the NP The tag a three our business-to-business a

few build announced launch, number Azure with support Before addition we words Services, NanoEdge in on extension our Microsoft we closing of when Web processing, from position our to across to Intelligence our industrial, product to Artificial one on the RTOS and continue of security our offer XX-bit Studio. where and MCUs, Amazon enhancements a embedded

market, on with we high application, for smartphone Personal the applications. above expectations. smartphone products, also custom focus our Moving broad while to address selected to our volume areas our Electronics. market In high differentiated addressing into them Demand we target leveraging in volume portfolio this products was now selected

these secure we display sensors, ranging quarter, sensors, sockets time-of-flight touch solutions. and the in motion devices and with environmental During won controllers

wins progress charging In with services low solution made deployment Communication continue see Equipment infrastructure and products, We also orbit wireless to Computer around smartphones and programs, globe. of satellite with earth smartwatches. flagship and we the in and Peripherals, our of XG

portfolio. selected leveraging Here broad while for we application and solutions, again products our target differentiated with custom volume

for confirm include family key here pressure with hard cellular in our for adaptor. satellite I MasterGaN the addressing would disks, like sensor continued for in high-power-density sensor time-of-flight charging communication in infrastructure. customer wins engagement applications laptops New world, selected progress and to

quarter XXXX. move XXXX plan and let’s the our third for outlook to full Now, year

billion Gross respectively. at margin be XX.X%, XX.X% third is mid-point, net representing mid-point. the and to year-over-year the the sequential about about $X.XX to expect we expected quarter, XX% For revenues growth of be at

the on drive about to of revenues based to We at plan a gross range $XX.X of representing plan on billion XXXX the company $X.X XX%. $XX.X net This billion our XX%. Looking to can of billion. year, see XX% margin billion CapEx full the range XXXX investments of $X.X we’ll now in includes growth to about

with multi-billion-euro approvals, DG highlight together significant This that values to European millimeter including collaborative millimeter agreements project XXX Before support facility facility an the Commission’s execution a regulatory is the financial subject project in a The concluding the announcement ST’s is of from the manufacturing GlobalFoundries. of include to I recent state made We semiconductor will definitive signed France. existing we to XXX from France. Competition. want investment to new MOU adjacent create Crolles, and

by of base manufacturing initiative. Crolles, supporting our unique of which already wafer fab our in transforming a billion ambition. with XXX-millimeter our we’re expansion plus will XXX We millimeter revenue this $XX know, be measure enabler position capacity, a significant have in you ST’s important strengthened a further As

communication XXXX as to our in advance in nitride and even saturation as objectives continue us automotive in into silicon our millimeter fab This manufacturing. European all to end in ramping our in vertically of enable near the HX activities invest well Agrate, XXXX well an end Italy, global expected by support and integrated our gallium as focus new We industrial facility and across up infrastructure. to carbide our new and with wafer XXX Milan, will leadership markets, full more as customers

targeting Importantly, make we this sustainable in to fab new leader semiconductor are manufacturing.

XX To to strategic ecosystem. for go reinforce and faster, business greenhouse For financial ultimately emissive example, of conclude, year Europe in restrictions, working the FD-SOI the terms core XXXX the us allow lower and QX results full European and focus with high world. in on areas. in align that and rest the with project similar of the And, designed to targeted our to our be growth less of plan course, it will ST’s times XX GH gases, is

connectivity. realize management, and smart and to power our in energy and IoT continue We early investments mobility

are our relationships, device we we with by market strategy. revenue the manufacturer Markets and end billion $XX on outlined are foundries suppliers, Thank at integrated our initiatives We Day. complemented application Capital ready to the unique model answer support strengths world will your now established plus of customer question. partnerships and building and These and ambition you, the

[Operator will Please Société Alexander Générale. We first Instructions] begin ahead. The Peterc now question-and-answer the from session. is from go question

Good taking for morning. you question. Thank my

The hikes first the guidance, I previous some constrained question third year already be of And full strong the very suppose. into traction price in really your for may rest be upgrade would the although guidance in the supply year. quarter, baked there on with those the

internal from internal coming could better improved you where efficiency this access in foundry the more So explain capacity bit for capacity. of revenues extra

in on Although if year? explain much you on remainder quarter OpEx, this sign your changes was should be bit for about driving so we’re in the year? which we would below expands for a where expectations the in no follow-up there. just quick of actually the Thanks additional bit little undue pressure lot. line the And pretty little my came think HX cap below inflationary How of second revenue what’s expectations a a OpEx for

patience. thank you your for So

our of on indication About cumulative second we for One moving let’s supply add say, there two So OpEx. improvement through basically is to is manufacturing. which our Most of year It capacity secure are to supposed say, for Lorenzo that own with effect. answer clear year. set equipment is answer, up the will the let’s the chain. able were I was the in our, course, effect,

have So now, visibility. better we okay,

will forward So, of an QX. production increase was QX to XX.X% versus The increase HD example, to in okay. by it the value our opportunity manufacturing, as

our we this to okay, this capability why, So is target. the have reason increase revenue

is mix to is We the for mix. contributing have Lorenzo, Well, favorable say. from and revenue additional effect full still one pricing this OpEx? second target and Clearly, better support answer we the €X month, you year. the I a partner, have the on have on pricing also billion And and to

to morning everybody. good Yes,

for we QX. in of to previous including the terms for net In what we in OpEx, OpEx, other expenses the will similar now the quarter more one OpEx, and current have to also than that had be QX quarter income

between So now we are, million. $XXX $XXX let’s say, in million and a range

benefits also from the seasonality Of quarter, well know, this our course, there most the expenses, as is we as you are Europe, because benefiting exchange in for expectation for rate. and as these

if the landing are or the For is year would and more with less see let’s say, $XXX between usually for that will expenses where is and in range say, year. million today, the the this level million. total $XXX say, share what I year, I in This full our stay you the we the year, the average, you as I know, average in would for that I look quarterly expenses

usual average that to back this increase into do that. be and seasonality we will as the So in an QX the due that means

very you much. Thank Right.

Adithya The Please Suisse. next question Metuku is from go from ahead. Credit

Yeah, great on good morning, firstly the guys. Congrats, guide.

questions. two Just

you of wondered, like looks growth give can in X-year the on guide, by you’re versus seasonality thinking us Firstly, the the XX%. at I the growth I fourth of quarter the look year? of secondly, fourth it quarter and you’re just of color your how midpoint the for And in some sequential the X% when third rest quarter at for assuming seasonality division

be assuming Thank fourth your Or color of is underlying assuming demand in driven planned? driving quarter? So is that by Any helpful. capacity the that that you. increase some you’re that What kind would slowdown? seasonality you’re

seasonality? half on group I by Maybe on and the you question the comment comment second

Yeah.

that HX, No increasing QX definitively of problem. which comment. you usual are HX, power here, capability see let’s engaged in to then but program, by ADG increase grow and in will chain. customer our Overall, I QX. manufacturing can know is continue discrete, automotive a and QX this so, we clearly HX AMS our a it in and to supply for say strong and is attraction our more in clearly sustained both growth

clearly Analog group here the capacity. also similar We and have MEMS, RF whole as And related but capacity. but engaged will our of on limited to division customer to seasonality. we will MEMS, well Analog go limitation And field by this grow you for and are Microcontroller, we products comment we we in quite our materially grow Communication Lorenzo, program.

if you a more but ever at little bit I end the color covered, QX. think about want you

Electronics driver growth. For strong seasonality sure, a our our is is QX for Personal in there that

current the it’s driver is quarter of definitely So basis, AMS Anyway will all it growth. the MDG. more let’s of grow, the on as the question one we in the at AMS. in groups say, know, at the end, half traction enjoying, recovering, strong traction of so be continue well end, sequential we as [ph] to see the the say, our But growth was Electronics, to exposure Personal in let’s growth let’s as to alone, is driver will will the you ADG be current would the a contribute group, that evolution. quarter, QX say, in and continue second on the also

it. Got

essentially, and quarter third will followed ADG in driver be the then the growth by So AMS MDG. main

right. All

at well that groups say, strong QX two a contributing as all let’s us confirm in this is this I contribute, the second Personal half, end groups be ADG will in Let’s not the in Anyway, will say, is for and because group. surprise to Electronics a driver. now and particular the MDG I

it. abnormally the this AMS growth that you say in be quarter? Would strong Got would

strong. abnormally are means what know don’t I

or… sequentially mean You

strong. Sequentially

think we’re significant revenues quarter, growth? there in third any content content need growth when about modeling to AMS any the Is Yeah. we that

Sorry? Maybe you it… said

growth. Content

in Electronic, variety I a say I Personal would content, in contributing really, the here, let’s now would the matter have know that what say growth. this growth content let’s say is. I we would that, it about that is volume the are AMS of content products, The say you to a is say of

HX revenue see in abnormal don’t profile the any related the between and signature to we of introduction. Now, device and the new HX,

normal absolutely, seasonality. So

Thank it. Got you.

Adi. you, Thank

Next question, please.

Stoss is go Craig-Hallum. Please question next ahead. from The Anthony from

be orders on or having non-cancelable My you guys. talked on XXXX. strong on through you the then be this side as I’m to if mix, for wondering visibility margin to XXXX gross could that the XX% congrats you percentage can when into maybe comment look you at Jean-Marc well Do XXXX? downshifted. execution. level think continue morning, about you confidence based of in are can your gross margins Good into year. And risk exceptionally on what again impressive percent think the grow

will data points gross Lorenzo comment about margin the XXXX. So, for

Okay, fact our with I you hands. are we the share in

to So, we backlog I spend months a CapEx the XX we by capacity, defending our this capacity is spend next family XX where and between I have to which requested lot we to repeat the basically of are CapEx the year intend the have our that to covering planned related say not existing and planned of product customer capacity year.

the So, first is sold basically sold out which we out, depending is on out particularly okay, sold of XXXX group have sold either product all, XXXX okay, of out. XXXX the of okay, capacity and automotive, have full or we

time, there’s capability to, inventories. let’s So to believe when your back normally why come do that reason replenish okay, question no we say, we’ll when about

XXXX. and always okay, in not then before I of of XXXX say Okay, end is course,

of this our is So during confirmation the with then HX I what So you? can what we are have, the let’s say, data order. policy this say we exchange of year, points share

And say to detected the And we have was very rolling. because it to really very, it order make we this up potential I important, so schedule to now exercise, ordering. have was okay, months that double XX for XXXX, us marginal. So on

to terms let’s level I’m level using. at we a level sorry, is are the – below the double higher in standard very make ring So say, lean absolutely inventory okay, are not standard we our are business. of inventory seeing, distributor channel, The

this the So, inventory to time. tool huge. of spoken about capable the industrial demand that address there And end then, market, is and pressure the automotive present have the replenishment, are in potential do customer my field but or I during of of BXB. is at the still we The not

above QX Chromebook, Well, We of sell, every to we and confirm yes, Notebook, in low smartphone, have, every famous okay, middle supply week and multiple on silicon we the not our PC, XXXX on sign have solution to HX. this taking be youngest too share win solid them. circuit accessories, customer, know I for find we end softening, can call We some seen the in day, much carbide you. data are was I in $X But and least new the okay, the billion we pulling in we at customer all we’ll revenue, points and cycle are in expectation with is XXXX.

gross margin, about to So Lorenzo.

the a help. we definitely about margin, at for in some What right that is remain XXXX. rate discuss to gross it for stage, will to be sure, sure, and product will let’s this mix, The this have the bit early definitely, tailwinds at say, About respect. say go in direction let’s this will the will can that say, be mix exchange will the I level

that, half way will are XXXX, range inflationary let’s XXXX. inflationary in that the or project second and of year the For I that, of say, by XXXX already XXXX that in sure, say see I What costs, our margin. of be another the XX% costs is what let’s impacting can put it year in we will say, in these is yes, is terms will can us and gross say be the between

helpful. for Thanks guys. Very detail, Great. the all

you, Tony. Thank

Myra. question please, Next

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

to increasing than particular much With guidance. how pricing that, seeing at your year-on-year in revenue the end coming the in from for Hi, the almost XX% and for still Thank is is increase year-on-year. other guidance is quarter, much increases end you. pricing and growth unit your letting that in markets markets growth all increase, is some guidance you’re your How as end in congratulations strong of ask thank from you pricing higher similar pricing regarding much me terms markets? question corollary or in of And increases product? really

Lorenzo will answer.

talking the for look there for three revenue, Thank Yes. here, mind for let’s sure the of let’s that yes, of of are have increase, say, but increasing in let’s at any want on first XX dynamic if Sandeep. guidance rest current in so that you When for explain the question, do When one there that more look price half, actually, you range term for price or are less we significant our say, side basis, on say, could XX%. components we we increase would the significant. the I We we and on current the reason, not pricing this the year XX-XX, year for are price been any at when the well mix, quarter, because the look the XXXX mix say But sure, was the is sequential increased no is sequential to that do pricing increase that at component year-over-year not another because there’s there expect significant a compare I that previous important increase. volume and as basis, during ingredient. is as because an price

or more mass that by we significant, in let’s material, we increase that, in distribution we respect demand sure, higher driven the when there stable Well, are where the a in we have of I were to what price to say, dynamic be let’s automotive we when course, would in at fact the able the terms look of have pricing that. differences there mainly is for the in also of produce. that, at market. say say, market, look of different when is increase, will We say, to level less let’s yes, respect that is a price area highest

like markets is at maybe have or we past these the in price we acceleration, have market significant more stabilization there respect that I increase, of I price but that not would while no pressure. some, to overall than we course, more price there of price the that say is strong say, While Personal Yeah, increase. Electronic, when look would pricing, in

less We will say more we say that we less – or or more so are can stable.

reason the everybody’s production And XX.X% why increase sequential will Sandeep, so XX.X% by QX growth is ST In QX. of of the of this number. preparing QX, and show supporting I

Yes.

answer Sandeep. it question, Does your Sandeep?

yes. Probably,

Okay. so. I Probably, Myra, next hope question, please. yes.

is Cheuvreux. question from Kepler Please ahead. from next go Stabowitz The Sébastien

Yeah. Hello, the everyone, and question. taking thanks for

growth forward second CapEx to your in Regarding fab little of the kind of a more growth up the add with Thank granularity in sequentially question this one GlobalFoundries, specific on expect sequential you QX? on going division our build fab? Could the for is And main returning by should the QX. can we bit to we provide model you. XXX-millimeter what do of kind

That’s about complete $XX the GF we CapEx, the project with our is simply with consistent ambition. intend to plus billion

is adjacent making But And $XX plus also the to both advantage. a will, scenarios the fab course, GlobalFoundries ambition. prepared scaling scenario consistent with clearly. call give okay, significant from to build manufacturing the and ST say scenario simply in with we with many to this on then, Of assisted billion GF will be the have I competitive say, plan, support okay, is France enable supplies billion an when have let’s to CapEx, we we of to this $XX plus that No, ambition.

growth, the And Lorenzo? sequential maybe

Sorry.

okay. No, Sorry.

products said is AMS Personal also quite driving group And growth. one through of and if before, one definitely say, significance let’s surprise our have As is sequential important say, the let’s exposed imaging of will that I is think not let’s that. the that of will are our AMS we is that a on MEMS a year, that imaging is with half that main, Electronic second definitely the really, Analog be, let’s our lesser contributions In I be be growth. say imaging. say, the the that program But will the a customer for customers are us. engage for inside driving these that I There this say,

end, say, the wanted AMS. the is at end only there So in the one to not the growth AMS. at from there comes that let’s But I repeat

well. in the significant We MDG growth and have as still ADG

continue Let’s to groups. say, we see will these growing

Thank you, Sébastien.

Myra. please, question, Next

Equita. from Bonacina Please go Gianmarco from is question next The ahead.

good Yeah, morning.

announced I a the clear Just announced cooperation example Group, within was the Renault. how Volkswagen. for Volkswagen It with is recently on cooperation a not because very for you it broad ago me you important time some clarification with know

just So OEM. it’s changing future to then impact. this, to Capital related have just, already I you platform minor you Day on And basically with Volkswagen think, the say, you broad understand, automotive if collaboration that interact a the a Market mentioned are it’s with will way the let’s that or

continued let’s in to wanted know the month contract you. you? new Thank just say, long-term with, if have attractive pricing you So, a last for sign to

First of to across vehicle a the public okay, in software-defined Volkswagen develop basically have, Volkswagen and all, will in let’s this the full. all today. okay, at Trinity this and here, participation we’d zonal. say, called Group, ST platform, board be project And is here, deployed architecture And the aiming

what have called Stellar, And time of TSMC, processor, say, of, but of manufacturing we Mobileye. the components. develop system-on-chip the developed, into ST which model product Stellar the the MCU say, technology, are chips performance present two wanted let’s to I Okay, a which of critical love on in MCU. with very architectural on embedded real are XX also development high complex exactly processor, we ownership let’s MCU, with is participating in then, ST, okay, in The is which ST of And system in okay, FD-SOI our technology. cooperation engineering, is similar the our PCM also okay, so technology, the manufacturing the this which the IP in embedded,

our starting Volkswagen to had TSMC MPU level XXXX like for will we we MCU full plus and Volkswagen capability, be the car system-on-chips when okay, Mobileye. manufacturing that Group deployment, of material at The cooperation So ownership it in self will with ST. or have the yard the

change, other relationship Okay. LTA of to continued Thank that you kind let’s OEMs, the with And you. have contracts? the say, on

that clear It’s clear we and say, let’s relation us. of traditional the It AMS carmaker evolution see either and in the X X of between model is ST. in carmaker that the Tier preferred, an our ecosystem Tier with is

time. very infinite and has okay, course, that everybody no value operate, commodity lead the the Of capacity guess semiconductor the changing okay, are a chain I understood with not way short

this that we basically part on visibility And understood chain if the plan the is we increasing that there okay, two carmaker type using AMS, you but and some to like to and what you are system okay car to But But the the clearly, better where with specific value and seeing, as start device to system have in to case when of carmaker car, more and is Tier model it’s have in architecture has operate of to the the must maker, that the we will the everybody some keep this semiconductor models Then is. a okay, use. imposing have the much us an the future. be of smartphone, seeing definitely. the between evolution you with have ourselves, there trend, is then, it marker, where some EMS guess, for okay, is design clearly, the an done. semiconductor, IP you car investment, carmaker plan I are will capacity, see X, of the the speculation we give it have will in some that will see So, evolution agreement any the

Okay with the the Tier X. agreement of

Thank you.

you. Thank

the depending two We for on length. or have more questions, one time

So question next please.

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

Jean-Marc. the Hi, morning, good for Thanks morning, Good taking question. Lorenzo.

in the clarification want saying year, XX% right? in of to we’re just pricing to Sandeep I earlier of of that of of that year-on-year this the you’re half seeing in make pricing. a I Just it correctly, is growth second revenue sure from coming is terms Lorenzo, heard your the that response,

volumes, yes, at say, growth there XX% price; said. are other three and the year-over-year. say, is one The on components for one Broadly, in we pricing, look overall let’s mix; one a look is, is component terms sure, of the the component pricing revenues, that Yes. is let’s of range I in there of when is in the we the when a sense

it. Got okay.

pricing. quarter reason why sequentially is The Well, this at are stable increased. the year-over-year, you when substantially look

your for a into further got business, where and next like-for-like longer essentially basis? said rises visibility visibility you you’ve rises price the price into contracts. got next of these you’ve are you that year terms year I related into into fully term OEM particularly presume on in further booked And as given

say the Then visibility let’s have little be contracts we some pricing, terms what probably say pricing. our the of evolution the of bit is, let’s today, would will than more of say, that a of evolution defining that course Well, this are is I market, stable terms in year in mass pricing. this today of

quarter, one this CapEx made thinking the in there a capacity into terms with capacity us of But pricing Okay. about in the blocks building XXXX? production start XXXX good And and then starting XX.X%, about year. capacity based continuing clearly, to relation a not you’re reasonable start to you’ve those plus is – you’re for in that any growth production element into invest volume capacity of looking of to internal reason kind year that build the next in third the just final comments rise later increase to on kind of that’s to that sort point

next okay, we first are, it to we of position terms that XX for time most chain the above say, the some time for, supply that etcher lead well, for film where deposition, is is – thin tool test more or in is on our say, and whole for is we assembly is, providing let’s over, basically company our simple months. and all, of know know process the okay, today, scanner, of that basically No, year constraints XX months, clear and months then XX you so let’s reason or want feel

process faced, okay, But investment poor because secure, this the the the their delivery quick semicolon. take Today, okay, okay are equipment all also that Don’t this constraints. put of So year maker. they in, on in now, as are contribute diving we it’s orders, own And a okay, it by we reliability the will and to have we have a level we visibility of order table clear today potentially, okay, really we clear that are we next on year. in a to the they joke. because limiting deep are a thing system

is In rolling. are quite change it XX confirming we to which fact, exercise said, our a a to order it, mandatory that make complex, an the hand we as it months now, policy but also on and because I is to customer is

definitively. of important XX.X%. again, forecast January you. have spent, the say, Well, on the reliable usual, we secure okay, $X.X this we okay earnings. us and of exercise year to as XXXX, have, in by of deliver of and HX for overview is, maker. say XXXX. QX, we will very spent – let’s indication, this QX And a January during on billion. our QX, QX end CapEx Also let’s and is the is will it’s But HX, equipment Thank QX, CapEx what And and in provide going let’s So new will increase visibility we from say, the benefits of and year important an volume last QX we capacity beginning the

appreciate guys. next a it. you, year. try bit about more and Thank had I to ask I

with Thank you. not final a And question we take it. to stay

So question Myra, we one. now, take a very last the final

go for last ahead. Please Didier Scemama from of America. is question The today from Bank

That’s lovely. for squeezing Congratulations. me. you thank Oh,

Jean-Marc. you, question Just for one

year. driver So in of the is be clearly, imagining a going this half to big second

was to your You’ve said XXXX. through – extended at engagement customer year going top least with previously that calendar was that

to the in I ask question, wanted later if that were part you XXXX. you contract a So to just lose of

sort Given I’ve would you calendar and follow-up. terms margins XXXX? in much do capacity, of to the your top-line or Thank got of that you. current book there be quick in think a impact backlog company year

is not scenario existing. This

to next back I’m going cleverly. So very you tried question, Andrew’s question, go to

I’m a very going try So clumsily. to

probably take it? way there. right pricing year, to add least a to the that billion depreciation billion. then, I presumably And capacity, everything flattish being of will guiding $XX Lorenzo $XX in revenues said I’m next equal of up. And being your go your probably if QX about you’re bit So effectively sort at for Is cautious think

do a So you would on even you next Would be think margin stable? year? gross growth would gross revenue decline margins think big

want you take Lorenzo, to that one.

let’s end, see At at said the time that, there don’t know let’s is I why let’s we that being decline. kinds will what of There is today this exchange for sure, rate, we I be impacts are, I what related tailwinds the the that cost, the these should we say, mean, manufacturing some say, stage, efficiency. costs, some that negative are our in things. say, improvements to for inflationary

next gross moving say, year. this another think see, year the I as before, XX% the to year – we is XXXX. assets Let’s I XXXX said in XXXX, billion will that be margin next to where path $XX

Great. Okay.

much. very Thanks Okay.

Thank you.

conclude very questions. for Thank if think we the call. I everybody our you much