Texas Instruments (TXN) 26 Oct 222022 Q3 Earnings call transcript

Welcome to the Texas Instruments Third Quarter 2022 Earnings Release Conference Call. I am Dave Pahl, Head of Investor Relations and I am joined by our Chief Financial Officer, Rafael Lizardi.

For any of you who missed the release, you can find it on our website at ti.com/ir. This call is being broadcast live over the web and can be accessed through our website.

In addition, today’s call is being recorded and you will be able to get it via replay on our website. forward-looking TI’s involve from results expectations. include that and management’s will cause could to call statements risks that uncertainties current This differ materially encourage description. as TI’s forward-looking recent SEC notice earnings We a published most review more for in complete release well contained the regarding as today filings to you statements the Today, we updates. following the will provide

First, I quarter. the start will with of a quick overview

our the some customers into for details provide XXXX. markets. Embedded grew and XX% as I XX% insight and sequentially third came of and with segment quarter’s quick respect overview $X.X Processing in our results Analog Other results seeing will with of quarter, Starting Rafael in expected to what of the lastly, grew revenue quarter. with grew X% the year-over-year. about ago and we And XX%, of to XX%, quarter will billion, third from are revenue Next, revenue a fourth at come an year quarter guidance our the increase

provide I’ll quarter revenue into some third by market. insight Now

more will This it’s performance as at this our time. sequential I focus on quarter, informative

quarter. personal as was market. mid-teens electronics continue second we see about weakness market remains in automotive First, The about we begin the in even was as the sequentially to weakness XX%. we described industrial saw to broaden declined Industrial the and strong

high finally, systems, enterprise And was up single-digits. single-digits. equipment mid was Next, communications up

market. that we of the will fourth, Turning end expectations of sequentially expect most exception the to automotive for our with decline our the markets

and system. geopolitically especially capacity, pleased content additions. February in which of long-term expansion our of our of manufacturing Lastly, capital will manufacturing dependable Customers our per secular the our remain our semiconductor customers trend progress outlined the the support increased and value footprint we management call with was of

production in expect production now and in LFAB later year. this RFABX are in We

SM-X now and review outlook. Texas planned. profitability, in of In continues our and Sherman, as management capital addition, construction SM-X Rafael will

afternoon everyone. and Dave Thanks, good

quarter expenses or from production. was revenue. charges the XX% with and were at $XX profit a from quarter expected. X% quarter expenses and third million, year move a billion XX-month trailing year the profit revenue factory a revenue mentioned, in third ago. are year. of associated basis increased LFAB margin acquisition charges will $X.X billion year Operating time. to $X.X about of factory associated last gross or The up with points. XX% XX% From a operating same As up $XXX Dave assets purchased we begin Restructuring were the of $X.X to in were that a October in cost the Gross ago we of start revenue. the the of These was as as basis, XXX billion, depreciate in quarter ago, On million will

not in billion was a $X.X Moving included Earnings the quarter from Net that in XX% XX% our was the or up share. Operating quarter for on, income profit were of year items guidance. per quarter. benefit the operating third or was in per $X.XX share revenue. $X.X $X.XX billion original profit ago

increases. year September, months. $X $X.X would of XXth marking stock. and the $X.X billion returned in of Let quarter, were basis our flow expenditures increase on me XX billion. quarter. our we our quarter have was $XXX billion by and flow repurchased results, million capital total, the was last XX on cash billion the $X.X In In dividends billion past operations management In dividend cash we Free with Cash the months. announced we billion $X.X X%, paid the now from our XX-month in a Capital $X.X in our starting in consecutive comment over generation. dividend trailing we

return to by $XX authorizations our commitment also flow our our to repurchase We cash share These reflect of increased free billion. owners. actions

sheet In investments of short-term was issued third quarter, at balance end the $XXX with we $X.X of quarter. remains the outstanding and from billion average Total and Our the $X were the and weighted up Inventory a debt to cash X.X%. of days XXX, million $X.X million below billion higher quarter strong in $XXX levels. coupon prior dollars debt. days X up these with billion sequentially were

$X. in expect $X.X per in fourth range to comprehends to previously market conditions the that the $X.XX be Dave This the share mentioned. billion $X.X quarter, For we and of TI of billion earnings revenue to the outlook range

expect continue our tax to We effective XXXX about XX%. be to rate

changes remain without above a profile. would law, at tax looking it what our additional As your for are we is effective models similar quarterly expect tax you in with to to XXXX, rate XXXX

quarter XX% and in lower third statement will we stay closing, areas credit investments a make accrued the research balance in comments sheet about receive on tax that combination and associated depreciation the in million flow that more due development This CHIPS the We $XX now will in factories. The In investment value to will signing the investment was U.S. the the for tax the well some recently me Act credit, eventually our to make for Let as few the we of on as future. will focused the as grant add benefit the industry competitive. long-term. U.S. in cash law. semiconductor funding help

in our advantages, broad invest a manufacturing are diverse our long-lived which and technology, to channels continue positions. and reach We portfolio, and product competitive of

long-term. opportunities over to let through and will us these believe by flow deliver to the disciplined it With focusing me capital free back Dave. continue best enable allocation to that, will continue to on strengthen advantages turn which growth we the We cash

Session the [Operator for Operator, can lines questions. open Instructions] now Rafael. Operator? Thanks, you Question-and-Answer

from Arcuri sir. We take first UBS. Timothy will [Operator Instructions] you, the question Thank from

Your line is ahead. open. Please go

inside distribution? within segment, get I also I is sort the better Dave, of the go to one pull demand Maybe distribution sort from trying thanks. And Hi, other? any detail consignment can is versus cancellations inside wonder in if into as consignment? there of distribution by what pull differences into am at or any of – any measured bookings than demand is you

Yes.

between see through first So direct the Tim, back distribution. on the business different part, we going anything really didn’t

As we effort over – to few with have customers. you years have an know, our close relationships the direct to direct had past

So of today. going much through the amount distribution is lower revenue

our to follow-up? goes about So of We through work XX% revenue did Do distribution. to increased needs. just probably customers actually quarters backlog as only see have the you align cancellations the in a their

of will take America Vivek question Arya, So we Securities. next Bank the from

ahead. is Your Please line open. go

Thanks for my taking questions.

of are of that bit first the question QX. what are different, Do bigger consumer you again we And the know I same And consumer consumer something QX? mid-teens. right in do exposed because you is, further should highest I consumer cyclical we or the said your seems worst So case, down out, you is I your that there picture a terms it the peers, of if downturn exposure? to wanted to think need decline for now. guess is do in consumer but you you seeing check I double-digit to versus electronics given past have QX, in headwind? I just the the expecting it’s mix the think is seasonal more area TI And down about the one, in little kind headwinds like of be biggest the imagine

clarify. Yes, Vivek, thanks for opportunity the that to question and

XX% last electronics was our year revenue. of personal So,

the market personal a memory. at electronics, the more semiconductor little XX% market look than overall, without you If of

So we than there. half less exposure have of the

If that XX% inside our And the up XX% you of of and market. at industrial market, look automotive, revenues. makes that’s of the

of by resources accident, our that’s automotive not really to and industrial and both emphasis are is we highly exposed than and more automotive we industrial So allocating ago, the a there. more and decade began probably to

be will content added our be we into very we And believe where just So there those are systems. more pleased exposure. that that, with will

opportunities those Now personal and that great communications you enterprise decades of will systems tailwinds industrial secular automotive. average just than inside electronics, but Vivek? inside the said, more equipment there and have have a is Do ahead, we follow-on in of

Yes. Thank you, Dave.

investors automotive, sense QX. suggesting of of balance you similar grew again in in we correction among been of then has automotive, over are very suggested And to last automotive supply-demand X kind hit eventually grow auto area concerned in rolling sequential which can customers? a that seeing kind going the QX. strong that Tier OEM which XX% So and but of X on is your What’s your interestingly, the you Many are to it in question, the years. are semi the kind X

of kind what’s end of your what this the So market? in sense you. balance Thank automotive is supply-demand

of look the be at Yes. I inside us trends of I grower secular it we think broadly. are will know I’d investing think and automotive, for very us that a all when great say you first,

with position. So we are thrilled the just

happen, strong. very It mean, to sure have there to long-term. we continue quarter we what of trying on second roll ship If happens. off request are they got to making you been predict eventually look will not XXXX, just that when that at the will. has, in over product focused the bottom, very, customers growth capacity our And for we it. really are over? market we I that’s them And place as the Will will

So we are worry about trying that will when to happen. not really

we please. go next the to and caller, Vivek, will you, thank So

question from Next Cowen. Buchalter from Joshua

Your line Please is go ahead. open.

on us conservatism my materially into macro by Did taking the I Thank it is was on the a quarter? Anything double-click baked through for change there change what’s about wanted think the you. material on Thanks the guys. or customers’ we in I guess, or question. guide, give anything can market. really more, geography? order industrial patterns? your Hey, to you linearity As

at had for the inclusive in and thanks as that Yes, came results the expected. of across Josh, I quarter would board look we if say quarter third you question. the industrial, also

about at the what sequential of you not that. began we described, – to weakness unusual broaden inside even expecting. is were If into industrial, and look we But as that’s

And we to there weakness conclusion see So there into of that we put weakness group with or one was place say in that well – one quarter, could wasn’t broaden we different signals broadening. we the auto. on that of exception of of that fourth into to customers, but course, other is that to move fact, most markets inside the it finger one as just expect did is the it us thing leading as is that of

are what we rates. it’s really seeing, order that’s So

weak quarter-to-date. but consistent are order you If of our look rates quarter-to-date, outlook, they at course they are with

to short-term those that leading shipments that so to inform in be. types the are our really really, of a types And are of those you Joshua? and the outlook. And have in going the quarter follow-up, what it’s are signals best the signals Do

that’s very also wanted on I the Act. helpful. Yes. to CHIPS Thank comments you, the clarify

that more get there is manufacturing CHIPS know And guess, $XX should I bucket only? if balance you on when I mentioned manufacturing was when Because incentive on of you’ll the portion from million a sheet. – You would the how to accrue much incentives. Was you. able accrued tax Thank the second clarity credit not, for investment to, expect be the Act? for

Yes.

prepared back. XX% the Big as for first, semiconductor investment me in will the assets more into for are picture, So that the tax to, help. credit XXXX that in the and the talked We that let the combination well million was the step remarks research about funding was competitive. that you million. beyond. is U.S. manufacturing for as – investment we grant development of service actually referred $XX And accrued that that that will for and go $XXX is

lower point we it quarter in depreciation. receive some what It is lower flow But accrued will in taxes. we So that the as P&L, will flows. at through that the from the future of government

seen you what Well, I about to? referring manufacturing talking CHIPS the about talk referring of but separate grant it’s are maybe is Is answer grant is investment think you more. what that tax to you’re that part be remains them. when portion. from if the to But you’re credit the Act, maybe that the as

those, for application February. the until apply doesn’t window open will We

get. confidence the call, capital growth since that earlier. grown, talk So management for At capital big That as know. benefit we confidence we that. And trends in our overall we more, February, chipset, around you what next Dick will and our will last feel management the we that secular good we long-term will we so talked investment about the about will prospects picture, industry, same only quantify to apply And to call, has will the the those. try the when really let time, the about learn get we

benefits any the So stack about impact net numbers we at of next two, you will tell our those the based and the growing confidence chip changes management that. to the between on call capital the and

So I think off. you dropped

you. Thank

next please. the go caller will to We

We the Timothy Arcuri, will UBS. from follow-up take

ahead. go Please open. is line Your

lot a let come for Dave Thanks me back in.

linearity of I’m talk signs follow-up you Are was these announced? seeing your pull-ins a like on changes result you if seeing China where high there. getting the also, push-outs sort about you of can business teens my bands being talked see think wondering of as around China. that or in still Thanks. any of consumption had any it? So And Is of the of Are And you your you I about bands. some product.

on really much, to overall any any, and those – to add the restrictions to list you to to changes if But of the So the that the companies on Rafael, it. We to bands, of that. there due don’t expect that were maybe from that? recent changes that or want impact the there entities is Anything added from add in bands, overall. really some in

the just category on the nature Yes, fall the types sell. correct. our given that parts lowest we of very of restrictions, XX% of of parts

don’t So on restrictions have those. we

there to FDP, comes course, the And of entity specific restrictions that. that are course, to regulations about, There is we, another the that’s hear entities. you list. Of when it follow lease all the

or restrict how that that when to there, meaningful into according account and we don’t law. goes impact given loss. we an revenue export So to shipments those works, listed the expect entity our But as in with take any significant

first your question, Yes. And the of was part that Tim.

part second our China. you teens, mentioned it’s revenue based that from comes customers high are about XX% The of in had actually

that’s you, So number. the Tim. Thank

the We next will go please. to caller

Research. Bernstein Rasgon, Stacy from one Next

Your line go ahead. is open. Please

taking my Thanks questions. for guys. Hi,

wanted there of have you in QX? Lehi the environment? points embedded a in any it’s near I’m guess implied getting to that, are of basis hundred And sequentially. to the medium-term current headwinds given online to just down just first coming plan verify, I changes CapEx one, trajectory that I my the any Because few margins do changes you gross are So QX. coming, to those starting in the related And said

Yes.

one first So one let first. answer me last the – the

you move about see that once put of it that to chosen are – on quarter, because in $XX qualifies it there in that million cost our before third So revenue. all cost P&L, we costs Lehi will restructuring of is those charges to qualifies the of

move will gross it So margin. to

in Does that Is QX, in happen QX or QX? though? that

Well, it will QX. during happen

course, Of changing. It not doesn’t affect EPS.

all X, of lines, right? and if in it in go will move going of then we don’t and for the quarter, be in right? guide there all So fourth If third will qualify to COR quarter. it it’s you – and just qualifies in move first December into But XX, all specific it will it December of that then restructuring first will quarter, of be then

moving third just Just to In in the profit. it’s that’s above already quarter, lines the clarify, there. It’s gross profit. been into

profit time in year. the entire being It’s profit. gross this from Into all operations of

I XXXX X puts But that our picture, – what picture, expectation we tell would in The That all talking well, you have CapEx for takes. for capital about we XXXX. first billion update this great billion for at legislation. as is your earlier, short-term, part of not $X.X the year. expect big Act, to about the the billion with management this question, changed. our CHIPS is will $X depreciation, I’m and an I $X.X – year; months change give said you Bigger

trends have input the long-term months customers. the XX growth only based investment the and the as based our secular States. going to from X very basis. investments alluded because last is on reduction net the grown our a I manufacturing to on to about investments our confidence on on hand, That But We’re excited get our decrease that. around a in XX% from qualified going we’re United over earlier, that other prospects to

about about So we two that. effect of our plans, you we The that will feel whatever really those in CapEx net does to February. excited and that tell

a have Stacy? You follow-on,

I do. to about ask OpEx. Thank I you. wanted

are why And I wondering now So are such it’s keeping now as plus up where range, forward It of frankly, an ticking in falling. been been revenue or did of going the increasing there. inflationary guide guess is and people environment. Because it running a long-term you’ve in while. I quite revenues flat OpEx. revenue, before is just for if is going it’s but $XXX picking up, so minus, for below still it to something do about how it it would what it is you’ve what the happens talked your XX% like forward? hold increase on in of terms kind million targets

Why the that? growing go about going think we do And where forward? do about it now how might how think versus we is range So before?

Yes.

years, Step OpEx basis, steady for that it running we So consistently, XX-month is to X.X last prefer trailing we’ve it. time. Pretty the which billion. over $X.X here’s at back, how we’re hand how look about I been really a really, on at think

It’s hiring our during a And up to the $X.X billion, quarters last growth. R&D to expect it years inside This as that first And it’s been actually XX-month the the consistent continue investments. And over clearly on been Our we long-term up that and playing inside trailing $X.X that. has our ticked that consistent has but driven on by higher And inflation but SG&A of of moved continue very basis. I ticking for next a, has billion time. is down up. really by time, is moved that, is wage investments, that would up underpinned quarter stepping that inflation. on a many expectations factor.

that. immune not to We’re

to affecting is affect also continue that and will So those trends.

Okay, thanks, Stacy.

to caller. you. go will Thank next We the

Curtis Blayne Barclays. have from We

open. ahead. is Please line Your go

negative said, you but Hey, on taking Maybe of two I question question. a didn’t just had for off net my two. I guys. anything hear because to positives. Stacy’s Thanks though, clarification,

and curious, to I’m were there. inventories. will kind it electronics industrial like brings, back just guess see going building in to want where what seems ‘XX. on you’re And get you that. It like comment is if kind personal of back you I point, happy and at least I’m But March at is to that we So seems ‘XX, of

more than capacity demand. had You

you’re levels and in we if still the So build view trying you and those more go the still the and adding inventory that capacity you’ll roll for is I’m ‘XX out do to like do back capacity, understand just long-term. ‘XX to

Let didn’t Frankly, I answer understand. that. and me try fully

capacity. I way the You several me let just premises threw and in But there. best enable can address

So capacity, we’ve been adding quarters. capacity a of for number incrementally

Lehi a few X to Fab is within months. in start our Now is production about production.

clearly, capacity time, still below been increasing quarter, levels. incremental higher these our same we million $XXX now inventory but are At we up. So recently, more is going inventory the this slowly. we’ve last very in added And of

mind, Keep of sell in many our are Okay. customers. many, model major vast the such our is to business targeting where we parts

So in product life they broad products of of parts the in nature. decades in years the inventory, last many The are cycles them. themselves XX most very times, is

So very inventory the risk is very, potential low. very inventory selection upside of ready of The for the that is having high.

to that’s more inventory. than why we prefer less have So

would next not point. comes I be $X.X before, I quarters several invariably adding billion for positioned the at of said the another us some inventory billion, next over upturn uncomfortable, So that $X well as to get

You follow-on, have a Blayne?

you segment. want the just to on I And Thanks. auto specifically ask

not is down. longer taking to that that market well it’s said one it’s You that’s only correct? any that’s than, so a more say, But industrial bit And on just very why comments known tight. been the obviously,

Yes.

it through high I I standpoint. had pandemic, of the from mix correction end. manufacturers deepest auto starting think the as point we the – a went think to as The well documented,

are trends. all those those that inside secular EVs that adding mix got You’ve to of that to are

that our as So across investments positioned make businesses. we’re I think well we

and powertrain, include would hybrid. vehicles We’re investing in which electric

We’re ADAS investing systems. in

systems. We’re investing infotainment in

calls then excited on That doesn’t also talked We’re we get a BMS get invest lot lighting. we systems. investing and And in turn about in about where body as do about signals, we conference systems. safety

that we that very broadly. probably believe to decades service. X,XXX us got that close different are for. we’re we’ve automotive we growing really ahead And So We’ve got we of of preparing growth OEMs

thank Blayne. you, So,

will next we the to please. go Now call

Deutsche have We from Seymore Bank. Ross

go Please line ahead. is open. Your

Can a XX%. guys on market that little if your year-over-year SIA? it’s think the for be up And XX% Analog as don’t Because is like of expect explain Thanks you be midpoint-ish there that business. of q on. guidance. you question. lose would of what I – roughly the a to unique guys. ask something something by are, seems you you the this might mean let unless me running It in half is broader about about year why Year-to-date, undergoing bit is high-level you going Hi, A you at. That’s your one this amount with market revert? defined share year

So that any explaining help in be great. would

sure. Yes,

and the whenever twice that it’s be market. rate think comfortable more lot to that it I’m up when question, I always asked a answering of were the

longer really You at over look to need of it period time. a

the at because growth versus very those against a we look numbers. it’s picked that fourth just look very, quarter So of industry us of ‘XX. the of rate good And from I number. pre-pandemic

were, to as pandemic, remember, inventory. So build we went the we you we into as continued

looked very, initially strong as us. So customers product pulled from the numbers very

where look coming you manufacturing you and how around excuses. where look that’s that coming look and that the of some making manufacturing is sequentials at the and our geopolitical when on. footprint were and positioned, when harder, at footprint footprint But excitement addition So the not customers at that locations is customer are dependable look we you of

very are share in going confident longer where the of our term. market is trajectory We

got a you So, follow-up, Ross?

down, part other into the Lehi wanted unique revisit X are just I gross margin do. But into the revenue in midpoint or go or any just earnings sequentially appears there moving gross implied I would points X have going guide aspects guidance. of better of points. any guide COGS Because whether it at to I know there your OpEx parts? roughly if moving to is are the if same that that and not. Not side. the other your margin charges the to want is

million. would point to year-on-year actually with quarters. we of our the the quarter that $XX guidance and On that – increasing Yes. that was No, you just the sequentially, the a we finished number I pleased increased we is I $XX flow is you can very statement, performance. cash have actually basis, you, has see for XX%, to given gross higher in margin fall-through would than as million sequentially What depreciation is third a are tell is,

So, quarter, this million. $XX-some last

course, is Of a direct that we the investments of result that CapEx making. are

so billion. expect ticking continue said be call, depreciation this in year you $X we close And should up. to to earlier I to the expect

you obviously up and So, clearly, get that that math then picking the can cost do revenue. depreciation fourth goes quarter depreciation into is bulk of there. of the But and

Thank you.

Thank to the we you, next Ross and go will caller please.

One Joe is from Next Moore Morgan Stanley.

open. line Your Please is go ahead.

environment I your few the levels, you. the talk delinquencies of past Thank with Has back gone about you about there or have or below has hotspots if quarters. you changed? if time are to in could wonder kind talked Yes. where that that? out lead being know I now, you normal

Yes.

hotspots. quarter. still in of got we probably inside any we we talked of same about products immediate get much hotspots, environment the times quarter change But pronounced have still So, didn’t at third have ti.com. before, have customers to can have still market most And do we Lead do second them on time, availability as automotive.

have you Joe. dynamics going follow-up, all on. have you So, those of kind a Do

that. for Yes. Thank you

And that guys affect you about – industrial your mean might of Is you automotive from that held. stock see? you normal what that state We something TI? think think are it to Do just historically hearing how some going customers than that’s companies do a hold safety that forward? desire Is higher affairs? think do of you I have and

Yes.

We that where their been at those taking before. chains, they are the to when hard is the technologies what have on, look they product at know They supply XX really built that customers that are putting We nanometer. of decades have they technologies. are That’s at we XXX supply nanometer for in why, and discussions place need in come. that seen those look capacity and some being heard from, built know the ensuring got of they product reason their coming being to a capacity part and

So, work. not about just supply it. excited on inventory And that as It hard will the supply, as they change balance a But capacity oftentimes to when take be they do able is the simple see get to long really it’s time to carrying overall. more chains sheet.

work probably get will and be chains. there of some restructure will And the back So, customers that that hard supply be probably we into imbalance, normal it some demand fall those supply of just and that once there kind do practices. so

So, that do time I you will have… as think plays out. And tell Rafael,

I day, nature for that the what welcome of hold many, many want that to sell inventory, just do, it’s end us in of believe is nature they do are given the customers add. that we inventory do the that customers. No, Yes. to they At hold position that. will inventory, more can And to are catalog What we want will in a great more to to if course, to do right. of they that,

more So, we of off be better we are needed. off, inventory, our will it it’s and direct can and all hold customers better most when we where that

we – inventory. continue our earlier, said growing to I as why, is that’s goal So,

and to below quarters come, we are inventory ready We be higher next add will still these levels, over significantly upside. the for more the

Great. Thank caller go you, the Joe please. and we will to next

We Truist will from Security. take Stein William

Your open. ahead. is go line Please

to from X% I taking of In channel sales how of gone wanted than less Great. even that from about I ti.com. Thank ask to percent you question. for had XX%. you think much about my revenue talked quarter ago, maybe over quarters, a Hi. very past

I X-year occurred a about think timeframe. that in

the You just mentioned a immediate go moment ago, Dave, that can this where is availability. the customers for channel

softening they a when things that do assume anticipate that the you start quarter? that at that channel to or as to Did that alluding that would happen in the two I perhaps during price see So, call precipitous more quarter get and And decline. availability on you coming a we this are that sees quarters?

something Yes. that was was the did quarterly see management. decline capital finish there, and how provide we out our did an so. the And but there on be will will And we we reporting on year not it a basis, a for be year, that And update decline a it up won’t and there. unexpected,

and fantastic Now, very a of term, levels to number longer on are a customers it’s engage channel customers pleased.

So, even and are to there that the will be customers. very fluctuations pleased quarter-to-quarter, us we what channel with even with get year-to-year. over maybe doing long-term, more directly it’s engaged But

you Absolutely. Will? have a Do follow-on,

Yes.

was has call to people product, of might there companies Sort of channel you speculation this perhaps that their and along still TI such by you. is brokers customers. of made around Thank it, is the whether it been hands regard better reason sort that have wonder some maybe same inventory on any get still press, floating with a for in market or be have the parties on for that waiting end lines, and gray you and to observations distribution to sold found example, that to track some that to has you been measure there and the a acquired that call I that?

inventory in owning spent is Rafael in always believed a and in you there career about, we been that and controlling as Yes. well, And know, our our I market. talked sales, X advantage. long have years brokers as my strategic And have

of customers orders as back source that, door take non-cancelable they going So, the brokers. policies things and that like need, in having the product typically don’t that’s product for of like that out

might pretty it. sources can. to brokers But be to and on to they go can get that comparison that’s able in products, ti.com minimal So, other they get

majority will engagements So, customers that are service overall, have directly. customers with we Thank go you we the please. we large and the caller, next that of

C.J. We from Muse Evercore. will take

Your line Please is open. ahead. go

sequential down at taking a kind least into If tracking strength adjust businesses for looks for on you auto, your I XX% the I markets all the the other Thank in guess mid-teens. are like afternoon. question end it Good Yes. of December. down question.

curious are So, would down that – one. in the of of the And parts market seeing? what terms are down the you maybe – seasonally? calculators would other be the cyclically are what I more correction think what’s

talking about fourth And C.J., just quarter to clarify, you the are guidance?

Yes.

Yes.

each inside So, by of provide again, guidance quarter market trying to or are that. not we by

than fourth weaker typical We the overall, are obviously, quarter. a with is it guide fourth a quarter

have talked inside other personal we we weaken as the about, auto, will electronics, well. markets will as of but of to that we exception the with continue see see So, weakness

So, trying get we that. specific on are to not

do quarter have a So, the the those Do we and markets. we expect broaden out. up that follow-on? But weakness will to across you report finish

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we just came RFABX coming, So, that online. have

broke going one of Lehi to we each the mega in Our four factories, new RFABX. size factory have and site the Sherman in that just ground that’s

puts So, the States in in China, very strong us that it’s United whether against position to compete okay. in really a or anyone,

of Rafael? up, wrap and Thank you, it C.J. With that, we Q&A will End

Yes.

me our wrap growth of engineers, free best and share. of technology is metric value up. the our it owners So, ultimately, let the objective we for progress and long-term company, measure per cash to flow our the and foundation generate are core, is but At

we While to ambitions. three objective, will to achieve we continue strive our pursue our

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our We employees, will communities are evening. changing. When and that’s customers, world a owners company to would neighbor. And and that succeed a successful, and will a our all in Thank good a personally we be proud be have adapt as of we are benefit. part and you we ever want

event. Thank participation. you for today’s That your concludes

now may disconnect. You