Texas Instruments (TXN) 24 Oct 232023 Q3 Earnings call transcript

Welcome to the Texas Instruments Third Quarter 2023 Earnings Conference Call. I'm Dave Pahl, Head of Investor Relations, and I'm 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 will be available 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'll updates. following provide the

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

what our third Next, revenue results of insight end details to respect into quarter we're provide with I'll some seeing markets. with

the give quarter guidance an cover capital financial as well the on will share management for Rafael Lastly, results, XXXX. update as fourth our

Starting XX%. with expected the at of Processing our and Embedded year-over-year. a declined quarter. as quarter flat billion, Revenue XX% sequentially and grew from quarter. X%, a in ago quick segment the overview year $X.X decrease Other about declined came XX% revenue in of the Analog

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

and quarter, more a broadened. automotive During weakness Similar industrial quarter, this at informative performance last to sequential time. growth the on focus as continued I'll it's

down off next, market down enterprise Personal market across automotive teens. broadening all First, and nearly base. the low grew about systems weakness with was single And The mid-single to up XX% up was upper digits, mid-single sectors. Electronics grow was communications digits. equipment a And continued finally, industrial upper was digits.

remind Given now, a our of everyone to and where plan is of time market investments. the good areas strategic it's

positioned semiconductor these the of remains in secular content in and and confidence growth markets. high, in system, our well per automotive, First, industrial we're especially

capacity. XXXX. To billion be enable capital build-outs road per map to expenditures $X provides to Second, customers future year expect our geopolitically continue and our manufacturing these through long-term dependable associated with support about growth, we XXX-millimeter

growth on our In addition, with support our levels replenishment, inventory long-term provide made high of to service. objectives good customer and consistent we progress

outlook. and profitability, now Rafael? management our will Rafael review capital

Thanks, Dave, everyone. afternoon, good and

billion profit expansion and lower XX% was in gross Third decreased extent, capacity a to revenue. lesser From and a Gross year a ago. associated costs ago, down year $X.X factory manufacturing the loadings. reduced revenue or quarter revenue to XX% was quarter profit from due higher planned with $X.X of primarily billion,

the a to XXXX. from billion profit about in basis As in a were XX% quarter per in X% XX% margin billion quarter Net of as the was was income quarter. revenue. of included a that items billion down revenue and profit Gross XX% in ago points. basis, were in transition were from charges not the the for $XXX XXX the year $X.XX share quarter $X.X Earnings million decreased $X.X On our Operating cost per or ago fourth expenses or operating of a Operating reminder, guidance. expenses LFAB-related expected. trailing XX-month quarter year or up revenue third share. benefit $X.XX and original of $X.X was

and year In X%, commitment cash comment marking flow dividends the This to basis. management $X.X free a capital the now generation. the months. quarter with reflects our by in XXth action our XX-month $X.X time. was dividend and announced on of cash results, starting me to paid Capital our of billion. flow billion our a increases. we September, flow about increase on $XX $X.X Let and repurchased trailing continued in dividend would billion billion basis million our quarter, billion was in from XX $X.X owners we cash stock. over operations quarter trailing billion over on our In last XX-month consecutive were $X.X expenditures the Free $X.X our Cash return we

XX $X.X in the returned months. billion past have we total, In

the weighted debt outstanding average strong investments coupon the in was less million our up third third with a down X XXX, at than desired short-term billion end Inventory $XXX quarter, days sequentially. Inventory quarter end we quarter were quarter. inventory and $XX.X was with of Our versus the X.X%. $X.X the the levels. days of billion, balance of near cash at prior half Total the as sheet $X.X billion remains of and was the increase

began factory we our quarter, in is starts the additional in Therefore, third to charges impact comprehended income statement. in which to the lower outlook. results This

of revenue earnings of quarter, range $X.XX per fourth environment. and in share the weak the For $X.XX we to we billion in in a continue as billion to expect range to the $X.XX $X.XX to be operate TI

Lastly, about XX% to effective be we continue expect our tax rate to to XX%. XXXX

models your expect at tax will we what term. the current we looking XXXX. closing, it stay In add focused about remain law, on areas tax the are in rate you in for long value to XXXX, would that in based As effective our is

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

capital we to term. the and which focusing flow allocation opportunities, We cash on growth will long share to these free the strengthen disciplined through over enable believe will by best deliver continue per to us continue advantages

back With Dave. that, it turn to let me

for Thanks, Operator? you [Operator now Rafael. can Operator, open questions. the lines Instructions].

first the Our line of Stacy Instructions] comes Rasgon Bernstein Research. question from [Operator with

want first My I gross margin. ask one, did about to

for is bit the points year? a we to lower like how assume guess, revenue get different So the I of pricing? asking? what know that thinking the basis little some guess, there on is how trajectory go, depreciation of is give I'm I about Can drivers, impact And magnitude mean, more like we to compression, utilization, about I be that mix as depending more. I ought next for, Like feeling some into something of what us the of you where OpEx XXX getting maybe utilization. talked you I I'm

Yes.

Stacy. So thanks,

Let me try with to help that. you

range let fourth But the beyond. through quarter a of [indiscernible], -- I Of third course, me forecast, not for the quarter, which for applies of a what go for we pieces. on and -- give range revenue let me and some we said

capacity quarter I said quarter, component. with for prepared and the in as expansion, So manufacturing to that's factory depreciation profit is planned one primarily decreased the higher due third a namely lesser loadings underutilization revenues to driver remarks, and the reduce third there costs like first and the gross in main associated extent,

also prepared near starting other as in remarks, which [indiscernible] of the third levels I of in the factories the the the as coin, we Then lowering said side inventory, we is inventory, quarter. began

due quarter a there So third be in an that. fourth was there to impact will the income impact on to statement, due quarter bigger in that

we're a will well expectations on into that, course, Do year. not of but Beyond have follow-up? depend forecasting, that you revenue next

in you give gave even QX the color Can Do what us so little you year-end? And market Can a market that thoughts to like auto, on on continuing and and was QX? some still thanks. you do for I us it behavior strength into auto by qualitatively sounds particularly strong. see end the expect QX end QX? into

from -- changing take to suggest look there And it we And continue practice, guidance, would quarter at our X for was to in fourth the environment have we call operate the typical Yes, in to When is Stacy, next you just out was quarter. general. that we specifically anything in that significant don't highlight the that. believe I'll and we something if that. a weak

So thanks, next to and please. we'll go the caller

with Timothy the line comes of Our next from UBS. Arcuri question

bookings this question as are customers in seeing some what the And Or about more asked the question And there what consistent Dave, you you're in see of weak wondering had terms broadening X/X, X/X consignment the sounds I numbers on I'm because we split strike. is would into the of I with that that on is, like and side versus that I the in macro a sort autos. it's the of company? be that your It the least we're sell at auto seeing of also on strike same weakening this you guess would autos? despite see. is business? Do of more holding rest disti in that

And mentioned year-on-year. as auto the when look in was prepared up we remarks, up was Yes. XX% digits and you -- it mid-single was it sequentially, up Sure.

will market larger larger continued. be tend and I more say So have obviously, had those a customers, that growth biased that Automotive customers general, Personal In like consignment. Electronics would to to

in overall, perhaps a relationships it think So direct having include automotive customers, or we OEMs. we've customers X,XXX that close I to service moved we automotive would different than pretty automotive. to closer have with if industrial. But know, which market that probably you the more And we would to in like as I contrast have so

So there a follow-on, there. is quite we broadness Do who have in serve you Tim? bit a of

Yes. I do, Dave.

line you've cutting for when it weakens than know place this tree the I there into kind a revenues of to there the comments like take is to think for asked it -- in was was plan there. would around sand But you to weaken. CapEx. where would where CapEx? And there revenue while to the higher you plan? you a bit cutting because reconsider is -- some quite increased plan about any is what it Just the I Is consider revenue today. wondering if put would So actually some point, continue

the those that. requires We're capital investments. support the me increase semiconductor the growth with pleased -- geopolitically us coming we the let to management expansion that on that grow rate you manufacturing last our to talked very for for they know, ability And content at provide about the Yes, comment on provide continue customer capacity dependable growth if continues to progress XX% decade. as we'll and to market make that to at call, will

$X per year 'XX. 'XX, to 'XX of continue billion expect we and CapEx 'XX, So in

should you count So on that.

do benefits stack. from reminder, also they or give as these the gross are me a from include everyone, the not CapEx Let meaning ITC numbers chip grants

chip from in application Utah these be chips So in meaningful comprehended semiconductor for and grant will come. help we're our our process decision-making we the -- the to at support working grant will manufacturing growth through investments. office for program to decades was operations believe And from the the which funding and with Texas actively

Ross comes with next of Seymore question Our the Bank. line Deutsche from

that in a just at X%, the X%, midpoint it In the X%, third think you you your it came few in quarter, the like was guys Usually, by beat years first guidance. that. something of time I

could question is, my market, guess anything quarter, linearity that I either you in by bookings. end the strange provide? the in aggregate color Any on So just

environment which I'd that we have weak general, Nothing that guidance the as of And Do the built revenue we're a reflective say from that in, through I'd giving. follow-on? just say is we're a strange, in so quarter. obvious operating it's went you Ross.

I did.

XX% end things, end you could year-over-year give go about oftentimes us was or sequential markets, market by the said I know Automotive please? giving but of you year-over-year, you the On up side year-over-year. between

Certainly, certainly. Yes.

was was down Equipment down Personal XX%. and was about mentioned market mid-teens. System industrial Automotive about Electronics Comms about down up XX%, was down about So XX I XX. was Enterprise

about. talked we I that consistent that So think with environment weaker

So Ross. thank you,

of question line next Goldman Sachs. comes Our from the Hari Toshiya with

could pricing I on a hoping bit you was elaborate guys little the environment.

I the think up Asia. couple been a in environment, over have months of the many evidence couple past of of or picking quarters. us of pricing particularly Intensifying

You a don't is MCU side? margins year-over-year. pricing playing? to as on down But be the side really whether strategy what reason for kind and of the all, Has it or role at your give sequentially gross changed pricing be analog

Yes.

that. our it for clarify first, move products. a in that to reason thanks markets, Always or question. pricing So quickly customers doesn't with just that choose is our I'll helpful start be able to And primary

months So we're annual basis the to X out that's pricing to for an on year. typically following agreeing or

that. continuing move And through to we're so

as hasn't pricing Our strategy, mentioned we before, changed.

have going on a what's with pricing. regularly monitoring goal always to remain We we're competitive. So

meaning and into to for last has we balance some over And balance. the closer couple time demand expect said come like decline. would to low We've that pricing certainly, more behave decades, it that or single-digit of supply has

out move to we in see. what beginning as So we're that's time,

seen last changes So have a other really follow-on? what decades. we've back no over Do to couple of than going you the

Yes, do. I

up past revenue XX is about about XX%. And So I is down over the XX%. guess OpEx months,

we give how So as I a we about as could used updates, multiyear 'XX, calendar we had depreciation? extent OpEx. to us Dave, about -- was think and think to you should guidance or on are any to should about give hoping How there the you And you given 'XX depreciation. how hint I think 'XX to think

Thanks No. for the I'll Yes. address OpEx question. both and depreciation.

steady hand many a OpEx, we'll and on to held we've do so. for years, continue OpEx on So

running we point about And And to in ran then So to $X.X XXXX XXXX, billion we're to XX-month the at illustrate at trailing a ticked as up $X.X it of basis. 'XX, billion an example, OpEx. about $X.X now billion. from on

our hires hires, broad with held you of new we bit college in with have in So see company the few continue and reach steady just a of can and over the as that's, to the increase as of we on make portfolio investments and years. the And the strengthen a hand sales ti.com hand case case to steady our last the R&D, the channels. an

expansions Then caller. on We've with that depreciation, so are address talked our CapEx it the about unchanged. previous

years $X talking billion and per for X CapEx that about. beyond of been So that, next 'XX we year have the

when on to depreciation, depreciation. has more Now expect clarity we as to it passed, what on comes time have

So 'XX, we start quarter a fourth of seeing expect as basis we same rate for to fourth quarter, throughout at me about on let have increase the XXXX. depreciation quarterly what been

to for year XX-X, billion, the year. $X.X of the XX-XX end shy So that essentially, range maybe just we're in XX-X, going somewhere

billion. and billion caller, $X.X we update billion between an XXXX and go and to As $X.X next the be billion to be for XXXX, $X.X for please. to expect $X We'll between depreciation

Srivastava comes question Markets. BMO the next with Ambrish of Capital Our line from

factory inventory. a had question I on loadings and

if So upturn. now to until thought the we I'm wrong. the has ready I for got correct up thinking been me be

in And inventory of that. that And carry. the but did a so you inventory you target, have we're target much raise how terms you for highlighted over have quarters, to want we we're -- building not don't look, several

a want were which expecting a i.e., an it a make ago? reached the recovery of that I I'm reading So charge you've changing, revenues what you're perhaps taking reflection right because than that you is quarters for level in you're of ramp Is this inventory. sure to change, expectation slower your thinking desired couple that underutilization

you in. product by But want finish those products. chime where want we levels and that have and if start, be to of we to and for Dave, me targets goes Let inventory by of state

a -- that So we products sell majority for more for long example, the have, of to long, They are last customers. than they of the many time. different many, those catalog, vast XX,XXX meaning

our have the set So many to or based years and level those. so level, goods chip internal at levels, in that's inventory cases, we on both can many of finished at process

and specific those are -- number. the and $X what up level guiding and billion in what been is we've the at to talking about. we've very that's happens really part-by-part billion, on been what But $X.X So matters that's aggregate, added kind of to to a

So for as this have have those per million. inventory X quarters, levels you near and then about we and level quarter, see million -- last our quarter increased $XXX levels, inventory $XXX

of as on primarily then test a because but operations. levels, assembly we we factory So that near deceleration clearly, down that's have there the those also that is with growth, fab, slowed and purpose starts, goes the with the

then that will into quarter. And fourth continue we slowdown

So they the the underutilization factory of is side reversed charges. other your loading slowing

your we're upturn you a higher investing, really get side factories Capacity that -- know as what this we until we've the years are not the we and we on gap really at but near bridges for upturn. that to And on the an as those really ready level. inventory. doing course, of just So a been other of is levels, of but be now bigger happens number it's you for inventory driver, cycle cranking

just Yes. decade stable, over and we've our add management capital high availability of now, high. to times inventory is keep really service, And objective I been that our with saying to back I'll think, maintain our for, levels a customer keep product lead bring

for products times all immediate stable. talked we essentially as are ti.com, shipment. about available our really catalog of are So earlier, Lead

upturn it so And are prepared next for what we that come. does

a You Ambrish? follow-on, have

Yes. Quick Dave. one,

not where I double-digit at I just perspective year-over-year multiple versus we think quarters you your is have this other on decline? about could folks and investors double-digit know think seeing back X, kind X and that are same, the I seen of decline, years. looked X kind negative we've had have in of looking been but double-digit cycle a longer be to just cycle help wanted many the times, quarter, just of no quarters. Just the -- year-over-year what but about quarters year-over-year that how potentially give many fourth They cycles and

over time at The really seen think different as all all course, one bifurcation Sure. I markets is recovered. the They're Yes. studying have behaved the and same students they're the is of with cycle of all the know how same lined And when and unique, that the the We've unique. up being they're very with we and years. markets thing well differently. cycles

So PE was was recover the and first early to very on. strong

markets other followed after Automotive The very and that shortly last. was

and many in midst people when weren't to showrooms remember, you As are their we factories to manufacturers struggle restart the of pandemic. the automotive going

yet was and automotive in So really, there. things followed have other roll that's still then as by It we've was over, seen markets, we Electronics to Personal begin the hanging first.

So I time learned shows I one portfolio the think the to studied the that's the unique preparing upturn be best But as and changed has is well as product thing time. and our that's it over for think we've cycles, before up.

busy So been position to the to support we're and next share. we've and to great continue doing a gain we that's what upturn think in

of comes Vivek Securities. of Arya the question next Our line with Bank from America

to to I said. sure what go comments that back imply wanted with that you no EV is your of just headwinds largely in environment traditional terms QX I to seasonal And Automotive, that understood surprising you're seeing if Do make isn't macro orders is that that the sector case, I in given understood or the changes correctly, it to if facing? customers? a

or Vivek, quarter question fourth quarter? your third on was on

there -- mentioned abnormal, being you if it. was So you what you were think is would before, asked anything have when I said that

normal. didn't mention So I it, that because assume is you it that

Yes.

do that. we that said describe there however want something that needed you was to it, would outlook the So or or unusual explain yes, what I to we is

finish out quarter fourth you the stopping what in I'm Do follow-up? And at So quarter. and intentionally. that have report a happens the we'll up point

changing. delta, doesn't be driving then to I about Because incremental your million or is that so kind revision? of year-on-year I CapEx what million, that $XXX $XXX of depreciation, Rafael, On think is, if it's seem part B And the take 'XX. in Yes.

the run X wanted rate, at just to a I current revenue I that got make those to X-point X points margin. headwind So that's gross to sure right.

Yes.

reason. the -- down And before to So down is is said $X.X had I $X billion changing, more is I the so had pointed we has billion, $X billion. which from 'XX, $X.X to expect. reason, for what said, out, have from XXXX, and time billion, before. probably the we you And to billion $X.X that not just clarity on what as you said not for that's so as $X.X said CapEx It's that

So tools for and on tool. start starts. then It's qualified that doesn't example, the only depreciation until and received but depreciation therefore not installed

happen of that then So we're more various tools providing number for But have doesn't receiving process as how all factories, depreciation. we're with that update immediately. the an the learn we works to that on

to X- Gross margin I It's have the on gross right? headwind. Is -- a headwind margins? X-point that calculation, did

Well, margin. so we've calculate gross to you given the tools

everybody me So is. let remind that what

revenue. is First

So believe on horizons. several any a lot longer and if takes, over you quarter, pick of years, in the going the are to works basis, to revenue this a there but better next it happen course, of but is that quarterly you for do puts and

new millimeters. way, dependable XX% XXX the fall So putting capacity we're you reflective of is is place, through all that start in geopolitical by which, fab the you with that to that revenue, XX% only it capacity but not great that then is at

as and cost a the benefits structural grant in is to the getting we're is that installed has So United that advantage. States. ITC Not -- mention

through added -- account to so need you fall then but XX% you that XX% to depreciation. for So the then at

year, be XX. you just then to going probably next to $X.X And is billion. close year this give I to XX So

your take added to want then you for a between if point get that, depreciation XXXX. So you

is quarter, now And But in high back it. the that of but right any loading when comment underutilization. more quarter, that other of the we're in that a a given at but it be way, them that increasing So course, especially does does of a some seeing comes one then level, tailwind takes. any Hopefully, side, that's what happens that a year, given quarters. headwind, and puts other also a that But given have you question. your then And that even what -- right in tactical and now on we're is that's can right? we're answers but the that and in is

from Stanley. comes Joe the next Morgan with line Our question of Moore

you but you you seems charge. Can with the walk underutilization if think cost I pulling would talk pull wonder of months, the of forward. you're mean how how it I about much to it on could inventory, determine through the you I in that [indiscernible] us impact just like see forward? calculation the X

the -- that maximum wafer an that number producing and fab and process percent it's it's so accounting determined operation is what's you capacity wafer -- the -- that divide by generally below essentially and below Well, normal starts the by get, when Yes. is that considered units you that utilization in and capacity. and you're of you're your that out you're that the assembly can you test as the

depending which be inventory. then a instead take establish normal, to XX%, You that, XX%, going whenever and situation. of the you take That go and normally where be. then straight you're percent that that fixed XX%, the you P&L below to costs below is those you're into you expect And could

some them only it's not of costs that come depreciation, fixed costs, of in depreciation. but some are will So those

You have electricity, for example, is largely fixed.

XXX not long about it's as production used plugged whether [ is electricity ] You running or X as in. the

you So the P&L. put this just the And at you balance going P&L linked into of case, account. that money take sheet not quarter as essentially or And end that, capacity you then a into is not that the directly the it of when it's portion charge day, because do producing. creating the the on you're in

just But up, low a operating right? that, Joe? tremendous have it's of at from you heard cash way about cash cost. the then revenue, spend down, tremendous it. Do XXX-millimeter the on on fixed, way they're the you Because on very when us you think costs fall-throughs up, the gives the standpoint, follow-on, it that on other a fixed capacity leverage don't right? of get particularly side way more comment, more So one Now on they and

infrastructure on and the business both isn't focus soft, weakness? about can comm you but driving quite a know guys, for quarter-on-quarter what's Separately, that you that seemed talk business year-on-year. I

and -- X% Joe. about Yes of year revenue, was it our last

great So we Comms opportunities Equipment. can find in

We the markets industrial, growth fab. secular continue to other has that we like invest, automotive just think it don't

So we investments make we earlier, that continue work adjust the to that as We talked XX%. it's be And believe levels to they're And inventory there. about as one tends that this just as it's years, quarter. mentioned we've continuing down their choppy. to over market our way through I

So that's pretty a significant drop.

think long market great So well so of types overall. again, have will there, and yes, but term, a we moves it's we're positioned these it

Stifel. Our with next from Svanberg comes question Tore

Thank Thank Yes. you, Dave. Rafael. you,

So declines. consecutive versus about of bookings in environment. X where current goes trends, color Ambrish's about you back Just the weak a on this even give double-digit operating think consumption you maybe also quarters to Could us to some is? rate question understand, run you talked and trying

So yes, on be bookings color any helpful. trends would really

Yes.

as of think I on question linearity, inside unusual that. mentioned, I as was part another nothing there So of revenue order

as weak. that demand. we tells we customers. strongest a shipping Secondly, is The orders above are have the we don't we're environment And or obviously, get below system describing us, we signal that from being

go the Electronics market quarters talked of first about a earlier, downturn. market to we as couple Now Personal the was that a We've market. had or of like growth inside into of Comms,

seeing are we But trend. as base. a weak very a of that off it's Now

that, a half call compare had of begin of quarters industrial about say, If market, couple that that was that it, we the broadening. seen let's you this we to it ago, let's saw really quarter the weaken that, to weakness is sectors

adjusting markets equipment we inside of as like inside like inventories we Comms that said markets they're of such. So that customers, believe, their

that next tactically, because inventory us both support Do the capacity provides follow-on? place will be certainly to to again, have opportunity and it more come. upturn a with the able building you putting the So in strategically building, the

of the for few you Follow-on to numbers us an for and timing there? anything for to thank the in relation Do depreciation chips update especially also have and Rafael. the ITC on years. the Rafael, depreciation, offsets you the the new next act

the on a So nothing credit everything frankly. that is which spent is ITC similar, new, is the to fabs. U.S. is about The on in XX% CapEx expectation for XX%

said we $X that's $X billion in roughly CapEx, February or tonnes that so going for be ] what that billion is of [ to back billion the So $XX more. the

billion that about we're of on about roughly going get back offset. to X-year ITC $X So

Of accrued balance sheet. that, the we billion already on have $X.X

So you'll that cash, see the assets. balance time get we flowing that that, some year, is to expect our on quarter that's fourth sheet on we year will will of A next the by long-term probably get portion when next when cash so start in.

mentioned the I are question, in an an earlier we call, earlier for on As actively applying grain.

be the to funds, of we're to Department the believe then receiving planning not that don't and funding positioned Commerce makes But very are have wait addition apply, and comprehended going decision. and support the ITC. to grant that. in be meaningful we the candidate in have We're operations our that's semiconductor to we well numbers to chip on and Utah a until was firmly counting objectives the So great of you on Texas for the We have will to and any that, on there from you manufacturing believe to are those ships because in we we decision, program receive office. we're growth that

the from Sur of comes with question next line Harlan Our JPMorgan.

to shipments first experienced the China most has the significant XX% This of or of half geography headquartered decline. year. this about

is QX? of first here XX%, broadening in this that like out what contributing Much geographies of the down Is trends? your of the in China half year. contribute focused on seeing the And XX% was year-over-year sort weak it think other industrial. to you weakness are this business is I to geography of this industrial to continuing

Yes.

to industrial So we weak. including in -- what the to quarter. I'll and general, let me And China just remain saw in speak continue third

if having which have hasn't significant came to think us I a most expected ago So or think materialized. there out would this call be so, I just year of a COVID we're more as rebound, China of

at on was look a regional Japan. So the the compared ago, up only think year when that with you yes, I was region basis

down. regions the So other were

in that Harlan? so have a And as broad just being described follow-on, weakness again, you very nature. Do

Yes.

up So up months, business right? X% XX your continues relatively embedded well, to Trailing hold it's year-over-year.

You've changes those normalized. cited talked assume quarter, about the some fully have constraints. positive and I constraints that also Last strategy you embedded.

continuing hold with starting of this So easing? anticipate weaken Or capacity segment do embedded do anticipate to to the here up? constraints you potentially from you some

Yes.

that far. As have so say before, product inside focused I'd had on talked we're we had we that about changing embedded. the of we the very with results we strategy pleased

first objective business. and was contribution it growth to has we Our in cash flow. potential we that believe it to free And continue to long-term stabilize invest because

very going. where we're with pleased So we're

think more heavily on saw begin see to We that that about talked as tactically, more we business foundry to I free suppliers. capacity us. began for quarter, up rely does we last

different analog, that to service place it And think I was our there own in we because capacity overall. had capacity

So Yes.

So is driver again, future. in think be we for going term business to long the that a great us

we've for more you. So think And caller. thank got time I one

from Stein of Securities. line with Truist question William the comes Next

the a calculators, very others? segment remind perhaps big market so than was down year-over-year. can what's calculators know it's and besides in was seasonal from end I other but Dave, there you drop us much the more why that

Yes.

Products that So we have Digital or our Processor in there. calculators, besides DLP are

you season. follow-on? So way those their calculators And make to products had are a weaker correction Do a overall. inventory back-to-school have continuing this through

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Yes. Sure.

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right. All

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

will own like who We act will company owners the decades. for

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and good Thank have you, a evening.

disconnect you for at you your Thank time. lines conference, today's concludes this and your participation. may This