Christopher Rolland

Christopher Rolland sought clarification on the OpenAI agreement (if it's non-binding like NVIDIA/AMD) and asked about the outlook for non-AI semiconductor revenue, specifically if there's an inventory overhang and when growth might resume.

Answer

Hock Tan (President and CEO) clarified that the 10-gigawatt OpenAI announcement is an agreement for alignment on development over 2027-2029, separate from a committed XPU program with them. For non-AI semiconductors, he noted broadband's recovery but stability in other markets, with no further deterioration expected, though a quick recovery isn't anticipated, possibly due to AI's impact on enterprise spending.

Christopher Rolland sought clarification on the OpenAI agreement, asking if it's non-binding like agreements with NVIDIA and AMD, and then inquired about the flat non-AI Semiconductor revenue, specifically if there's an inventory overhang and when growth might return.

Answer

Hock Tan (President and CEO, Broadcom) clarified that the 10 GW OpenAI announcement is an agreement for alignment on development for 2027-2029, separate from a committed XPU program with them that is progressing rapidly. For non-AI semiconductors, he noted strong recovery in broadband but stability elsewhere, with no further deterioration in demand, suggesting AI might be absorbing enterprise spending. He expects stability rather than a quick recovery, apart from broadband.

Christopher Rolland asked about competition on the ASIC side from U.S. or Asian vendors and whether UA Link or PCIe has a chance of displacing Scale-Up Ethernet (SUE) in 2027.

Answer

Hock Tan, President and CEO, expressed bias for Ethernet, citing its proven nature, openness, and ability to achieve low latency, dismissing 'cooked-up protocols.' For ASIC competition, he acknowledged its presence but stated Broadcom's strategy is to out-invest and out-innovate, leveraging its IP and low-power design expertise.

Christopher Rolland from Susquehanna asked a high-level question about the core driver of the current AI demand acceleration, questioning if it stems from better ASICs, inference economics, or another factor, and if it implies a faster market share shift to XPUs.

Answer

CEO Hock Tan asserted that the primary driver is the urgent need for hyperscalers to monetize their massive capital investments. While training makes AI models smarter, he explained, it is inference that generates revenue and provides a return on investment. This push to monetize platforms is what is currently driving the strong demand from Broadcom's key customers.

Christopher Rolland of Susquehanna asked for the high-level driver behind the acceleration in AI demand, questioning if it was due to technology improvements in XPUs or economic factors like tokenomics, and if this would speed up a market share shift from GPUs to XPUs.

Answer

CEO Hock Tan provided a straightforward explanation: the acceleration is driven by the need for hyperscalers to monetize their massive investments in training large language models. He stated that 'training makes it smarter, you want to monetize inference,' and the push for inference is about generating a return on investment by creating AI use cases and consumption.

Christopher Rolland asked about the recent acquisition of Seagate's hard disk drive (HDD) SoC assets, inquiring about the strategic rationale and its potential to accelerate Broadcom's storage business.

Answer

President and CEO Hock Tan described the transaction as a strategic collaboration reflecting Broadcom's belief in the long-term sustainability of HDD storage for hyperscalers. The goal is to combine engineering talent to create a technology roadmap for 50-terabyte drives within five years, supporting Seagate and the broader industry.

Christopher Rolland asked if Marvell might transition towards offering system and rack-level solutions, similar to a main competitor, given the increasing complexity in the market.

Answer

Chairman and CEO Matt Murphy affirmed that Marvell approaches the market with a rack-level solution vision, providing a comprehensive suite of optical interconnects, switching, and XPU-attached circuits. He emphasized working closely with customers on an end-to-end strategy. While no system-level revenues are projected for the next two years, a comprehensive market approach is strategically imperative.

Christopher Rolland from Susquehanna Financial Group asked about Marvell's biggest opportunities within the "scale-up" interconnect architecture—including optical, CPO, and active copper—as AI processor architectures evolve, and when wins might materialize.

Answer

Matthew Murphy, Chairman and CEO, confirmed that Marvell is actively developing solutions across all the technologies mentioned. He emphasized that the scale-up opportunity represents an incremental Total Addressable Market (TAM) and a revenue upside, rather than a replacement for existing technologies like DSPs. He described it as a "big opportunity" that will be a focus of future company discussions.

Christopher Rolland asked about the 1.6T DSPs, which are beginning to ramp in Q3, inquiring about the expected profile of this ramp through Q4 and into fiscal 2026, as well as the potential economic impact for Marvell.

Answer

CEO Matt Murphy confirmed initial shipments of 1.6T DSPs are starting but emphasized that it's still early. He positioned the 800-gig platform as the high-volume workhorse for now and into next year. He stated that the exact timing and ramp profile of 1.6T adoption is hard to call, and the company will have better visibility closer to the end of the year as customers finalize their calendar 2025 deployment plans.

Christopher Rolland requested an update on Ambarella's infrastructure opportunity, specifically regarding the N1655 product. He also asked for updates on two additional opportunities: the home security market with AI feature integration and any design activity related to humanoid robots, acknowledging the latter is a longer-term prospect.

Answer

CEO Fermi Wang reported strong design win activity and customer interest for the N1655 in the infrastructure market, including both video-centric and non-video-centric applications, affirming Ambarella's commitment to this market. He confirmed unannounced CV75 design wins in the price-sensitive home security market, noting slower-than-expected development for Edge AI-based Gen AI cameras. For humanoid robots, he described it as a long-term market with intermediate robotic steps, where Ambarella offers video-plus-AI solutions (CV2 family, CV72/73) and central processors (N1655) for various robotic applications, with humanoid solutions requiring advanced domain controllers.

Christopher Rolland requested an update on the infrastructure opportunity, particularly regarding the N1655 product. He also sought updates on the home security market with AI feature integration and the company's progress or design activity related to humanoid robots.

Answer

CEO Fermi Wang reported strong design win activity and interest for N1655 from various customers, both video-centric and non-video-centric, reaffirming commitment to this market and its future roadmap. For home security, he mentioned CV75 design wins but noted the market's price sensitivity and slower-than-expected development for edge AI solutions. Regarding humanoid robots, Fermi Wang described it as a long-term market with intermediate steps, offering solutions for video plus AI (CV2, CV72, CV73) and central processing (N1655 type), anticipating that humanoid solutions will require a central domain controller similar to autonomous driving.

Christopher Rolland of SIG Group asked about the significant outperformance of Ambarella's IoT business compared to its automotive segment, questioning if this signals a strategic pivot towards IoT and when the automotive business might eventually outgrow IoT.

Answer

CEO Fermi Wang clarified that while Ambarella remains focused on winning L2+ to L4 autonomous driving projects, the shorter design cycles in other Edge AI IoT applications are driving more rapid growth. He noted that the fundamental hardware architecture is identical, allowing for strong R&D leverage. Wang projected that automotive could outperform IoT in the 2027-2028 timeframe, contingent on securing major OEM design wins, but confirmed IoT will be the primary growth driver in the foreseeable future.

Christopher Rolland of Susquehanna International Group inquired about the moving parts of the full-year fiscal 2026 guidance, specifically whether strength was being pulled into the first half from the second half, and asked for clarity on the expected sequential growth profile for the October quarter.

Answer

CEO Fermi Wang stated that the wider guidance range reflects geopolitical uncertainty, not a concern about second-half weakness, and noted the high end of the range implies normal seasonality. VP of Corporate Development Louis Gerhardy added that the dollar figures for each quarter would likely increase and confirmed it's reasonable to expect positive sequential growth in the October quarter (Q3) and a sequential decline in the January quarter (Q4), consistent with typical seasonality.

Speaking for Christopher Rolland, Aaron Nackvill questioned the perceived conservatism in the mid- to high-teens fiscal '26 revenue guidance and asked which geographic regions are expected to outperform.

Answer

CEO Fermi Wang attributed the conservative second-half outlook to uncertainties around potential government policies, such as tariffs, rather than any weakness in product momentum. He stated that the company will continue to focus on the U.S., EU, Japan, and Korea, while maintaining its China consumption exposure at around 15%.

Christopher Rolland inquired about the current geographic revenue mix, the potential impact of Chinese EV tariffs, and sought clarification on the 'legacy processor' comment that weighed on gross margins.

Answer

President and CEO Dr. Fermi Wang stated that current revenue is majority U.S. end-market focused, with China at about 15% of total revenue. He views geopolitical risks as industry-wide. He and CFO John Young confirmed the margin pressure came from a temporary rebound in lower-margin legacy products, and they reiterated the long-term gross margin target of 59-62%.

Christopher Rolland inquired about the opportunity in vision language models (VLMs), Ambarella's architectural differentiation, and its relation to the CV3 product family. He also asked for a reconciliation of the strong Q3 guidance with the implied weaker-than-seasonal Q4 outlook.

Answer

CEO Fermi Wang confirmed that VLMs are a key opportunity, noting a successful demo on a CV3-family chip at CES attracted significant customer interest. He added that the CV72 chip can also run smaller VLM models, a unique offering. Regarding guidance, Wang explained that the implied Q4 outlook reflects a return to normal seasonality, which historically involves a 7% to 10% sequential decline, as the inventory correction period has concluded.

Christopher Rolland sought clarification on customers integrating linear equalizers on PCBs (high-volume vs. test case) and whether LPO design wins with hyperscalers are new or existing. He also asked for an update on LoRa Gen4 momentum and its multi-protocol capabilities.

Answer

CEO Hong Hou confirmed that linear equalizer evaluations on PCBs or connectors are for high-volume, high-speed trace applications with multiple customers, bridging signal integrity from host to port. For LPO, he indicated broad adoption, stating it's 'not if, but more like a when and what platform they're going to be using it,' with acceleration expected throughout 2026. Hong Hou highlighted Gen4 LoRa's tremendous momentum, particularly its multi-protocol capabilities enabling YSAN and security applications combined with LoRaWAN.

Christopher Rolland asked for an update on customers integrating linear equalizers on PCBs, inquiring if these represent high-volume wins or test cases. He also sought clarification on whether the LPO design wins with hyperscalers were the same as previously discussed or if new customers had been added. Additionally, he requested an outlook on LoRa, specifically regarding new use cases enabled by Gen 4.

Answer

President and CEO Hong Hou confirmed broad-based interest from more than three to four customers in integrating linear equalizers on PCBs for high-volume, high-speed traces. For LPO, he indicated widespread adoption, stating it's 'not if, but more like a when,' with acceleration expected throughout 2026. Regarding LoRa, Hong Hou highlighted the tremendous momentum of Gen 4, its multi-protocol capabilities, and plans to enable YSAN and security applications combined with LoRaWAN.

Christopher Rolland of Susquehanna International Group asked about the outlook for the January quarter (Q4), questioning if LPO or ACC ramps could offset typical seasonality. He also inquired how the significantly reduced leverage ratio impacts the company's strategy for potential acquisitions or divestitures.

Answer

CFO Mark Lin acknowledged the typical Q4 seasonal decline in high-end consumer but pointed to strength in industrial and data center as potential offsets, with LPO and ACC being incremental. CEO Hong Ho added that the improved balance sheet allows for more aggressive investment in growth, and while portfolio optimization remains the top priority, small tuck-in acquisitions are a possibility.

Christopher Rolland from Susquehanna International Group asked for an update on AI connectivity, focusing on progress with CopperEdge customer engagements and the revenue timeline, as well as the ramp for LPO and the broader optical business.

Answer

President & CEO Hong Hou reported significant progress, with over 20 customers evaluating CopperEdge and meaningful design wins expected to ramp to volume by the end of the fiscal year. For optical, he noted that LPO deployments are anticipated in the second half of the year, with Semtech's TIAs winning the 'lion's share' of designs and new LPO-compliant laser drivers gaining traction.

Christopher Rolland asked about the impact on the IoT business from a competitor's exit and another Chinese competitor being placed on a block list. He also questioned the sustainability of the strong $37.1 million LoRa revenue and inquired about the opportunity set for handset-related products like TVS and proximity sensing.

Answer

President and CEO Hong Hou confirmed that a European competitor's exit and a Chinese firm's placement on the DoD list are providing significant tailwinds, leading to increased customer engagement and design wins that will convert to bookings. He stated the $37.1 million in LoRa revenue is for chips and believes the growth is sustainable on a year-over-year basis. For handset products, Hou asserted that Semtech is gaining market share in TVS and PerSe, with growth outpacing the broader smartphone market.

Christopher Rolland asked for details on the Active Copper Cable (ACC) ramp, including Q2 revenue levels and the go-to-market strategy (direct vs. channel). He also inquired about the status of potential business divestitures.

Answer

CEO Hong Hou and Executive Mark Lin clarified that Q3's high-single-digit million ACC revenue was the first significant volume, with Q2 being minimal samples. The go-to-market is through cable suppliers to fulfill demand from a large AI company for rack shipments, not channel sales. On divestitures, Mark Lin reiterated that portfolio rationalization remains the number one priority and the recent growth inflection across businesses should aid valuation without delaying the process.

Christopher Rolland of Susquehanna inquired about the market opportunity for Linear Receive Optics (LRO) and whether the combined LPO/LRO market could be larger than the one for Active Copper Cables (ACC).

Answer

President and CEO Hong Hou explained that LRO addresses customer concerns about multi-sourcing by using a DSP on the transmit side while still leveraging Semtech's high-performance TIA on the receive side, offering significant power savings. He confirmed that both LPO and LRO are wins for Semtech. Hou stated his belief that the overall optical opportunity is indeed larger than ACC, as it targets the vast existing market for DSP-based retimers, not just DAC cable replacement.

Christopher Rolland asked if Lumentum would strategically use its limited EML supply to drive new transceiver customers and qualifications, and if customers were expected to stockpile EMLs ahead of 1.6T ramps. He also questioned the decision to add more Indium Phosphide capacity, considering potential overcapacity from competitors ramping 6-inch wafers and the eventual shift to SiPho and CW lasers.

Answer

President and CEO Michael Hurlston stated that Lumentum is consolidating supply and its customer base around long-term agreements, prioritizing partners due to demand exceeding supply. President of Global Business Units Wupen Yuen clarified that 200-gig EMLs are used by customers not reliant on 102.4T switches and that laser allocation is based on probability. Regarding capacity, Michael explained improvements came from throughput and yield on 4-inch wafers, not significant new capital, and sees no end in sight for demand for the next six quarters, with capacity being interchangeable between CW and EML.

Christopher Rolland asked about Lumentum's strategy for using its EML supply to drive new customer qualifications for 1.6T transceivers, and whether customers might stockpile EMLs ahead of 1.6T ramps. He also questioned the potential for overcapacity in indium phosphide, considering competitors' 6-inch InP ramps and the eventual shift to SiPho/CW, and what prompted Lumentum's decision to expand capacity.

Answer

President and CEO Michael Hurlston clarified that due to demand far outstripping supply, Lumentum is consolidating supply and customer base around long-term partners rather than broadly adding new customers. He noted that the capacity expansion came from improved throughput and yield on existing 4-inch fabs, not significant new capital. Michael Hurlston also stated that while CW will ramp with 1.6T, EMLs will also increase, and the absolute numbers for both are expected to be 'stratospherically high' for the next six quarters. President of Global Business Units Wupen Yuen added that their capacity is interchangeable between CW and EMLs, allowing flexibility regardless of market share shifts.

An analyst on behalf of Christopher Rolland of SIG asked for details on the 50% sequential growth in the optical transceiver business, including which customer programs were driving it and its sustainability. They also inquired about the ramp timing for 200-gig EMLs and their potential impact on 100-gig products.

Answer

CEO Michael Hurlston attributed the transceiver growth primarily to a long-standing customer and expects the business to continue growing as manufacturing issues are resolved. Wupen Yuen, President of Cloud and Networking, added that 200-gig EMLs are expected to ramp by the end of the calendar year and will be an additional opportunity layered on top of 100-gig EMLs, not a cannibalization, due to continued strong demand for 800G modules.

Christopher Rolland of SIG pressed for details on the vertical integration timeline for lasers into Cloud Light transceivers and questioned why EML capacity is only being increased by 40% given the intense demand.

Answer

President and CEO Alan Lowe explained that the integration timeline is influenced by customer requirements to not change products in flight and a strategic decision to use constrained EML capacity for external sales rather than internal CW laser production. Regarding capacity, Lowe stated that adding EML capacity is a capital-intensive process with a long lead time of about 1.5 years, but they are adding capacity as fast as possible, with plans extending beyond the initial 40% increase.

Christopher Rolland questioned Skyworks' strategy regarding mergers and divestitures, particularly in light of the Corvo deal, and whether the company still aims to diversify beyond handsets and its largest customer. He also asked if there are themes for future mergers, such as analog or IoT, and if the company's outlook on Android has become more optimistic.

Answer

Phil Brace, CEO and President, clarified that the Corvo deal provides both scale and diversification, reducing customer concentration and focusing on wireless, which he views as a significant transformation. He stated no major transformational activities are expected in the interim. On Android, Mr. Brace highlighted a strong footprint with a Mountain View-based customer (Google) that values Skyworks' performance and integration, reaffirming a focus on the premium segment and a strategic move away from lower-end commodity spaces.

Christopher Rolland questioned Skyworks' strategy regarding mergers and divestitures, specifically concerning diversification outside of handsets and a single large customer, and the impact of the Corvo deal. He also asked about Skyworks' optimism regarding Android.

Answer

Phil Brace, CEO and President of Skyworks, clarified that the Corvo deal provides both scale and diversification, expecting a reduction in customer concentration and a focus on wireless rather than just handsets. He stated that no major transformational activities are anticipated in the interim, emphasizing the significance of the Corvo deal as the largest in the company's history. Regarding Android, Phil Brace highlighted a strong presence with a 'Mountain View-based customer' (Google), valuing Skyworks' performance and integration, and reiterated the company's focus on the premium segment of the Android market.

Christopher Rolland from Susquehanna inquired about CEO Phil Brace's strategy for diversification beyond handsets, potential M&A targets, the financial impact of the Woburn facility closure, and the outlook for operating expense growth.

Answer

CEO Philip Brace emphasized that diversification is a priority to mitigate customer concentration, with a focus on gross margin accretive and 'stickier' revenue streams. Interim CFO Robert Schriesheim noted the Woburn closure was a decisive move to optimize the business for the future. He also stated that OpEx is expected to trend lower in December and that the company will maintain cost discipline in fiscal 2026.

Christopher Rolland asked if IoT could be a target for adjacent market expansion given the new CEO's background, and also requested an update on the company's progress and traction with its BAW filter technology.

Answer

CEO Philip Brace declined to comment on specific adjacencies but highlighted the broad potential of Skyworks' core technologies. He affirmed that BAW filters remain a critical technology for the company, with significant ongoing investment, a robust roadmap, and good market traction.

Christopher Rolland sought more detail on the projected 20-25% content loss, asking if it was due to sharing a socket, whether Skyworks could win back previously lost sockets from Qualcomm, and if the content reduction applies to all new phone models.

Answer

CFO Kris Sennesael confirmed the content loss is primarily due to moving from a single-source to a dual-source position on an existing socket. He noted that while they have won back some other slots, the share loss on this one important socket accounts for the decline. He added that the 20-25% range depends on the final product mix across new and legacy models.

Christopher Rolland inquired about ON Semiconductor's involvement in various AI applications, specifically asking if they address or plan to address solid-state transformers, PSUs, 48-volt bus converters, and hot swaps. He also asked for details on silicon carbide growth outlook, including geographical and industry-specific moving parts, and the company's capability to convert to 300-millimeter wafers.

Answer

Hassane El-Khoury, President, CEO, and Director, ON Semiconductor, confirmed that they already address all mentioned AI applications across the entire power tree, highlighting this comprehensive capability as a key differentiator, and plan to continue expanding their portfolio. For silicon carbide, he noted new opportunities in AI data centers and plug-in hybrids, where ON Semiconductor is gaining share. Geographically, SiC growth aligns with electrification and AI deployments (China, US, Europe, Japan). Regarding 300-millimeter wafers, Mr. El-Khoury stated it's very early in development and primarily offers throughput advantages, not new applications, emphasizing that their 8-inch production is full-on and shipping in 2026.

Christopher Rolland inquired about ON's current or planned involvement in AI applications such as solid-state transformers, PSUs, 48-volt bus converters, and hot swaps. He also asked about the silicon carbide growth outlook across geographies and industries, and the company's capability to convert to 300mm wafers.

Answer

Hassane El-Khoury, President and CEO, confirmed that ON currently addresses all mentioned AI applications and plans to expand its portfolio. For silicon carbide, he highlighted new opportunities in AI data centers (PSUs, JFET, MOSFET) and automotive (plug-in hybrids), with geographical growth aligning with electrification and AI deployments. Hassane noted that 300mm wafer development is very early and not for short-term models, but ON's 8-inch silicon carbide is in production and will ship in 2026.

Christopher Rolland asked how onsemi's flexible footprint would allow it to handle potential reciprocal tariffs from China and questioned the strategy behind the current low levels of distribution inventory.

Answer

CEO Hassane El-Khoury explained that the company's global footprint, which includes manufacturing sites and foundry partners within China, provides significant flexibility to manage potential tariffs. He clarified that the low dollar level of distribution inventory is not a new strategy but a reflection of disciplined management amid macro uncertainty. The goal is to maintain inventory within the 9-11 week target range, feeding the channel more as a sustainable recovery emerges.

Christopher Rolland from Susquehanna asked if the company's emphasis on Long-Term Supply Agreements (LTSAs) caused a delayed reaction to the downturn and if these agreements would be renegotiated. He also inquired about the performance of the image sensor business.

Answer

CEO Hassane El-Khoury asserted that the downturn was not related to LTSAs, as the company has been consistently and continuously renegotiating them for the past few years to match real demand, not just in Q1 2025. On image sensors, he described the business as stable, noting the strategy has been to focus on higher-value machine vision applications rather than pursuing market share, and that the company is ramping its 8-megapixel products.

Christopher Rolland asked for a geographic percentage breakdown of automotive revenue and questioned if onsemi was becoming more open to lower-margin consumer markets, similar to some peers.

Answer

CEO Hassane El-Khoury and CFO Thad Trent declined to provide a regional revenue breakdown, citing complexity, but offered directional commentary. Hassane El-Khoury strongly reiterated that the company's strategy remains focused on providing value and maintaining margin discipline, stating they will not chase top-line growth or utilization at the expense of profitability in any market.

Christopher Rolland noted a perceived hesitation in MaxLinear's optical guidance for next year and asked for more detail on the outlook, including factors like competition, laser availability, and bundling, to understand what could lead to 'hypergrowth' versus 'solid growth.' He also followed up on broadband comments, asking if DOCSIS 4.0 would be a significant driver of new upgrades or if the fiber opportunity is more meaningful for the business going forward.

Answer

CEO Kishore Seendripu explained that availability of optics and silicon is a significant factor, as is the timing of design wins translating to revenue. He stated that current growth assumptions are based on what's already ramping, leading to 'very solid growth,' while 'hypergrowth' would require gaining much more market share than currently planned. Regarding broadband, Dr. Seendripu indicated that DOCSIS 4.0 ramp has been delayed by major players due to network upgrade complexities and stability issues, suggesting that 'ultra DOCSIS 3.0' (3.1) will see massive deployment, particularly as 4.0 is a North American phenomenon. He added that meaningful broadband growth depends on the DOCSIS 4.0 ramp and the timing of other fiber PON wins, including a large North American operator currently ramping.

Christopher Rolland followed up on broadband comments, asking if DOCSIS 4.0 will be a significant driver of new upgrades or if the fiber opportunity is more meaningful for MaxLinear looking forward.

Answer

CEO Kishore Seendripu stated that it 'depends' on the DOCSIS 4.0 ramp, which has seen delays from main players due to network upgrade complexities. He conjectured that ultra DOCSIS 3.0 will see massive global deployment, while 4.0 is primarily a North American phenomenon. He also highlighted strong fiber PON design wins.

Christopher Rolland asked for details on optical DSP design wins for the Keystone and Rushmore products and questioned the drivers behind operating expenses, interest expenses, and the timeline for the Silicon Motion arbitration.

Answer

CEO Kishore Seendripu detailed that Keystone wins are with major module makers for front-end networks, while Rushmore shows strong future potential. CFO Steve Litchfield explained that OpEx was impacted by timing shifts, interest expense by a $4M FX charge, and that the SIMO arbitration is expected in Q4 2025.

Christopher Rolland inquired about supply chain risks related to potential tariffs on broadband equipment, mitigation strategies, and the relative strength of bookings across MaxLinear's business segments for the upcoming quarter.

Answer

CEO Kishore Seendripu and CFO Steve Litchfield explained that direct tariff impact is low as semiconductors are not included. They noted that most broadband equipment manufacturing has already moved out of China, reducing risk. Dr. Seendripu emphasized that their 16-20 week lead times limit any immediate impact from tariff changes and that the company is seeing a broad-based strengthening of demand and bookings across segments, with the exception of some weakness in industrial markets with China exposure.

Christopher Rolland of Susquehanna asked for an expected optical unit forecast for 2025, whether the company's low-power advantage will persist against competitors on more advanced nodes, and how efficient open-source AI hardware might impact network demand.

Answer

CEO Kishore Seendripu expressed confidence in maintaining a power advantage through architecture, not just process nodes. He stood by the $60M-$70M revenue guidance rather than a unit forecast. Regarding AI hardware shifts, he stated the market is huge regardless, and disruptive innovation ultimately drives more consumption, so he is staying the course.

Christopher Rolland asked for management's view on what normalized revenue levels could look like for the broadband and connectivity segments. He also requested a breakdown of optical design wins by customer type, such as transceiver providers, hyperscalers, and systems vendors, and their qualification status.

Answer

CFO Steve Litchfield projected double-digit growth for both broadband and connectivity next year, driven by new PON wins, cable upgrades, and the Wi-Fi 7 transition. CEO Kishore Seendripu stated they are working with all top-tier module makers globally who target major data centers. He noted that while some qualifications are complete at Tier 2 data centers, they are still in process at Tier 1s, with a significant AI deployment boom in China expected to be a driver.

Christopher Rolland inquired about Knowles Corporation's specialty film capacity, demand outlook for next year, and the specific design activities underpinning the company's high-end growth targets across MedTech, Precision Devices, and sub-segments like EV.

Answer

Jeffrey Niew, President and CEO, detailed specialty film expectations, including a $25 million energy order ramping in Q2 2026 and an existing backlog of $25 million-$30 million, projecting $55 million-$60 million for next year. He also outlined growth rates for MedTech (2-4%) and Precision Devices (high end of 6-8%), emphasizing broad design win activity across MedTech, industrial, defense, and EV.

Christopher Rolland asked about Knowles Corporation's specialty film capacity, expansion plans, and revenue outlook for the next year, including confidence in new high-volume customer opportunities. He also inquired about the design activity underpinning the company's high-end growth targets and expected performance across MedTech and Precision Devices segments.

Answer

President and CEO Jeffrey Niew detailed that the energy order for specialty film is on track to deliver approximately $25 million starting in Q2 2026, with an additional $25-$30 million backlog for other specialty film applications. He projected specialty film revenue to reach $55-$60 million next year, supported by ongoing capacity expansion. For segment growth, Mr. Niew anticipated MedTech and specialty audio to grow 2-4% in 2026, while Precision Devices is expected to be at the high end or slightly above its 6-8% organic growth range, driven by strong design wins across medical, industrial, defense, and EV markets.

Christopher Rolland of SIG Group inquired about the key drivers for the strong Q3 guidance, the demand outlook for the thin-film opportunity, early thoughts on Q4, and the potential for gross margin expansion.

Answer

President and CEO Jeffrey Niew attributed the strong outlook to a third consecutive quarter of a book-to-bill over one in the Precision Devices segment, with broad-based strength across medtech, defense, and industrial markets. He anticipates both sequential and year-over-year growth to continue in Q4. SVP and CFO John Anderson added that gross margins are expected to improve by at least 100 basis points sequentially in Q3 and Q4, driven by higher factory capacity utilization.

Christopher Rolland requested more detail on booking trends and back-half visibility, and also asked about the company's strategic focus on organic versus inorganic growth opportunities.

Answer

President and CEO Jeffrey Niew confirmed a strong, broad-based book-to-bill of over 1.15 for the Precision Devices segment and noted that orders for MedTech and Defense are being booked for the remainder of the year, providing good visibility. On strategy, Niew explained that both organic and inorganic growth will be detailed at the upcoming Investor Day. He highlighted that the M&A team is now fully focused on new opportunities following the consumer MEMS divestiture and that the company's strong balance sheet positions it well for future acquisitions.

Christopher Rolland from Susquehanna Financial Group asked about the potential for continued margin expansion at the acquired Cornell business, particularly through pricing, and requested an update on the industrial market's inventory normalization and geographical trends.

Answer

President and CEO Jeffrey Niew confirmed significant margin opportunities remain at Cornell, noting pricing gains will exceed $5 million this year with more expected in 2025, in addition to future manufacturing improvements. SVP and CFO John Anderson added that supply chain savings and system integrations will also boost margins. Mr. Niew addressed the industrial market, stating distributors hold about three months of excess inventory, with weakness concentrated in North America and Europe. He noted new design wins are offsetting broader market softness in electrification.

Christopher Rolland asked about Coherent's market share outlook for 800G/1.6T transceivers amid Chinese competition, potential pricing pressure, and capacity expansion plans. He also inquired about the new Vietnam facility and the strategy for silicon carbide.

Answer

CEO Jim Anderson asserted that Coherent gained share in fiscal 2025 and is well-positioned due to its technology roadmap and resilient supply chain, including its U.S. footprint and vertical integration. He described pricing as stable and confirmed they are ramping capacity. Anderson also confirmed the new Vietnam facility enhances geographic diversity for materials, including silicon carbide. He noted that SiC demand has stabilized and is not expected to be a headwind in fiscal 2026.

Christopher Rolland asked about Coherent's transceiver manufacturing footprint, specifically its capacity to serve U.S. customers from its Malaysia facility versus China. He also inquired about the increased emphasis on EMLs, the timeline to achieve self-sufficiency, and whether the CW laser market is becoming crowded.

Answer

CEO James Anderson confirmed that Coherent currently serves its U.S. hyperscaler customers almost entirely from its Malaysia facility. Regarding EMLs, he stated the strategy is to continue using a mix of internal and external suppliers for supply chain resiliency, rather than aiming for full internal supply. He noted that Coherent has produced CW lasers for many years for its telecom business and is ramping capacity to support future data center applications like CPO, leveraging its new 6-inch platform.

Christopher Rolland of Susquehanna asked a 'big picture' question about networking intensity, the timing of the 800G peak versus the 1.6T ramp, and whether recent AI news or product pushouts could affect the outlook. He also asked about pricing pressure from Chinese competitors.

Answer

CEO James Anderson stated that Coherent has seen no significant changes in customer forecasts or ordering patterns and that 800G will continue to grow even as 1.6T begins to ramp, as different customers are at different stages of adoption. He characterized transceiver pricing as 'stable' and as expected, and reiterated that while progress has been made on gross margins, there is more work to do on cost efficiency.

Christopher Rolland questioned if Coherent would commercially ship its own EMLs for 800G and 1.6T transceivers and expressed concern about potential capacity constraints. He also asked about the potential for margin expansion in the datacom business amid competitive pressures.

Answer

CEO James Anderson stated that Coherent will continue to use a mix of internal and external EMLs, alongside other technologies like VCSELs and silicon photonics, and is actively ramping capacity to meet demand. He sees significant opportunity for margin expansion in datacom transceivers, driven primarily by product cost reductions and yield improvements rather than pricing.

Christopher Rolland asked for an update on Microchip's typical seasonality for the December and March quarters and sought clarification on the 'better than seasonal' comment for December. He also requested an update on the revenue contribution from AI and which specific data center products are outperforming expectations.

Answer

CFO Eric Bjornholt clarified that typical seasonality is down a couple of percent in December and up a couple of percent in March. CEO Steve Sanghi reiterated his expectation to perform better than that but did not quantify it. On AI, COO Richard Simoncic did not break out revenue but noted the fastest-growing AI use cases for FPGAs are in vision systems for factories and people detection. He did not specify outperforming data center products.

Christopher Rolland asked for an update on typical seasonality for the December and March quarters and inquired about the revenue contribution from AI and any outperforming data center products.

Answer

CFO Eric Bjornholt clarified typical seasonality is down ~2% in December and up ~2-3% in March. COO Richard Simoncic stated they have not broken out AI revenue contribution. He noted that for AI-related products, the fastest-growing application is currently vision systems using their FPGAs, rather than specific data center components.

Christopher Rolland asked about market share dynamics in the MCU market and whether Microchip expects its share to increase. He also inquired about AI as a percentage of revenue and if new AI products could be needle-moving.

Answer

CEO Steve Sanghi stated he 'absolutely' expects Microchip's MCU market share to increase. COO Richard Simoncic noted that AI-related revenue has grown from about 4% to over 6% of sales. He also announced the creation of a dedicated AIML product group to coordinate development and accelerate the integration of AI features across the company's portfolio.

Christopher Rolland asked about the company's data center product portfolio, including PCIe and CXL, and whether the data center segment is expected to grow as a percentage of total revenue. He also inquired about long-term CapEx and the status of the CHIPS Act funding.

Answer

CEO Ganesh Moorthy stated that while the AI subset of data center is strong, the overall segment's growth is constrained by squeezed non-AI budgets, but it remains a huge long-term opportunity. Executive J. Bjornholt projected that fiscal 2026 CapEx would be even lower than fiscal 2025's $150 million estimate. Moorthy added that they are optimistic about finalizing a CHIPS Act agreement by year-end, with benefits expected over a 3-5 year horizon.

Christopher Rolland from Susquehanna International Group, LLP asked about potential product pruning, areas of pricing power, and plans to strengthen the company's channel presence. He also requested more detail on the improving order activity, backlog, and channel inventory levels.

Answer

President & CEO Rahul Patel confirmed he is evaluating the product portfolio and will provide a clear direction at the 2026 Analyst Day, noting that engineering talent can be repurposed for growth areas. He outlined a judicious approach to building out the channel strategy as the customer base scales. SVP & CFO Ken Rizvi added that the company has been investing in its go-to-market engine and confirmed that order activity has improved, the backlog is healthy, and channel inventories are lean.

Christopher Rolland of Susquehanna Financial Group sought clarification on whether the company was still on track for a $10 million sequential quarterly revenue increase, given the new tariff uncertainties. He also asked for an update on the Broadcom acquisition's performance, revenue contribution, and any new design win traction.

Answer

Interim CEO Ken Rizvi avoided reconfirming a specific quarterly revenue increase, instead highlighting the strong Q3 results and the healthy Q4 guidance of $280 million as evidence of a positive trajectory. He noted business fundamentals are strong despite tariff concerns. Regarding the Broadcom acquisition, Ken Rizvi described it as a 'fantastic transaction' for long-term SAM expansion into AR/VR, smartphones, and audio over the next 3-5 years, embedding its performance within the broader Core IoT results.

Christopher Rolland from Susquehanna asked about the long-term potential of the Mobile business from the Broadcom deal, given the long-tail Android opportunity, and inquired about the significance of the acquired UWB (ultrawide band) IP.

Answer

Interim CEO Ken Rizvi confirmed that the expanded field of use into Android smartphones presents a significant opportunity for calendar '26 and '27. SVP of Wireless Venkat Kodavati added that the technology also targets high-end IoT markets like automotive and AR/VR. Regarding UWB, Kodavati explained it is currently IP in an advanced 7nm node, providing the foundation to develop standalone or integrated combo products for the Android and high-end IoT ecosystems as the market develops.

Christopher Rolland of Susquehanna Financial Group inquired about the timelines for new product roadmaps, particularly the broad market chip, and sought a breakdown of the impressive Core IoT funnel growth by product line (Wi-Fi, Bluetooth, processors).

Answer

President and CEO Michael Hurlston confirmed that product timelines are on track, with the Wi-Fi 7 IoT chip and the broad market chip set to sample this quarter. He stated the broad markets segment is tracking toward its $150-$200 million revenue goal for 2028. Hurlston detailed that near-term Core IoT growth is driven by high-performance Wi-Fi, with broad markets contributing in FY26 and processors in FY27, while noting the BLE strategy is currently tracking behind schedule.

Christopher Rolland asked about the company's strategic focus on GaN for AI data centers, the path to becoming an approved vendor for major players like NVIDIA, and the specific products and content opportunity. He also inquired about the growth outlook for the industrial segment and the timeline for returning to double-digit growth.

Answer

President and CEO Jen Lloyd detailed a multi-pronged data center strategy, leveraging their GaN products for auxiliary power supplies and developing solutions for both current and future 800V architectures. CFO Sandeep Nayyar added that they are engaged with all ecosystem players and their system-level products offer superior reliability. He also stated that the company expects to return to double-digit growth next year after the current macro adjustment, with all four segments expected to grow. Jen Lloyd identified their main competition as discrete designs using MOSFETs or silicon carbide.

Christopher Rolland asked for the company's outlook for the second half of the year, considering typical seasonality and the added volatility from trade policy. He also inquired about inventory levels across the four main business segments and whether any were positioned for replenishment.

Answer

CEO Balu Balakrishnan stated that while tariffs create uncertainty, the Q3 order book is currently developing normally. He maintained that without a significant tariff impact, the company's expectation for mid-teens annual growth remains achievable. CFO Sandeep Nayyar noted that while overall channel inventory is at a normal 7.9 weeks, the consumer segment is below normal levels, suggesting it could be a candidate for future replenishment.

Christopher Rolland asked about the GaN competitive landscape, questioning the potential for commoditization at the low end and the sustainability of the company's high-power advantage. He also requested macro commentary on tariffs and Chinese subsidies.

Answer

CEO Balu Balakrishnan asserted that Power Integrations' system-level product approach provides a strong competitive advantage against discrete GaN competitors and expressed skepticism about the cost-effectiveness of 300mm wafers for high-voltage GaN. CFO Sandeep Nayyar commented on macro factors, stating they are monitoring the potential impact of tariffs on end-market demand and that the full effect of Chinese stimulus programs is not yet clear.

Christopher Rolland requested a segment performance ranking for the Q4 outlook, an early view on Q1 seasonality, and clarification on channel inventory dynamics, particularly the sell-in versus sell-through for the appliance market in China.

Answer

CFO Sandeep Nayyar indicated that for Q4, the Industrial segment would be flattish in dollar terms, while the other three segments would decline. He noted typical Q1 seasonality involves a dip in high-power and cell phones, with a ramp in air conditioning. Nayyar confirmed that overall channel inventory rose because sell-in exceeded sell-through, driven entirely by the Consumer segment. CEO Balu Balakrishnan added that appliance customers in China overbuilt inventory in anticipation of a government stimulus program that ultimately had a limited impact, leading to weak demand and a slowdown in orders.

Christopher Rolland of Susquehanna inquired about the significant outperformance in Q1 results versus guidance, asking whether it was driven by conservatism, better units, content, inventory builds, or tariff-related pull-ins. He also requested an update on diversification efforts in PC and automotive markets.

Answer

CEO John Forsyth attributed the strong results primarily to robust demand for smartphones, which incorporate more Cirrus Logic content than ever before. He acknowledged that demand was sustained during a typically slower period and that tariff-related pull-ins likely contributed, though the amount is difficult to quantify. Regarding diversification, Forsyth noted that automotive is still early-stage but showing progress with a new timing product design-win. In the PC market, he highlighted that revenue is expected to nearly double in fiscal 2026, driven by new designs and expansion into mainstream, high-volume laptops.

On behalf of Christopher Rolland, Aaron Actel asked if the expectation for High-Performance Mixed-Signal (HPMS) revenue to surpass audio revenue still holds and about the potential timeline for this shift. He also inquired about the size of the automotive market opportunity and when revenues might become significant.

Answer

CEO John Forsyth reiterated his long-term belief that HPMS revenue will eventually surpass audio, but noted there is a temporary pause in that ratio's shift due to a recent major refresh of audio components that increased audio content value. For the automotive market, he described it as a long-term opportunity with a potential additional SAM of nearly $1 billion, driven by innovative audio, timing, and haptic solutions.

Christopher Rolland asked if management still expects High-Performance Mixed-Signal (HPMS) revenue to eventually match audio revenue and inquired about the R&D investment and potential revenue ramp for new battery and power products.

Answer

CEO John Forsyth affirmed the long-term opportunity for HPMS to reach parity with audio, noting HPMS represents a larger portion of the company's future addressable market. Regarding power, he stated that while some products are shipping today, new R&D is focused on power control, conversion, and sensing around the battery. This IP is currently in test silicon and is being socialized with customers.

Christopher Rolland of Susquehanna Financial Group questioned the larger-than-typical seasonal decline in Cirrus Logic's December quarter guidance, asking about the interplay between content gains, build patterns, and the outlook for March seasonality. He also inquired about the company's wafer purchase obligations and related inventory build.

Answer

CEO John Forsyth explained that the December guidance comparison is affected by three factors: a later September quarter capturing more of the peak ramp, the prior year's December quarter being 14 weeks, and higher Android production in the prior-year period. Interim CFO Ulf Habermann confirmed that Cirrus Logic expects to continue building inventory into early fiscal 2026 to fulfill its wafer obligations, stating it is all long-term sellable product.

Christopher Rolland asked about the opportunity to refill channel inventory and its potential size, given current levels are below target. He also questioned the company's strategy for handling potential tariffs, specifically whether costs would be absorbed or passed on to customers.

Answer

CFO Dean Butler explained that while they intend to rebuild channel inventory from 51 days toward their 70-75 day target, strong sell-through has made it a gradual process that will take a few quarters. Regarding tariffs, he stated the potential impact is modest, and the company's intention would be to largely pass the costs along to customers.

Christopher Rolland asked for an outlook on the second half of the year, particularly the September quarter, and inquired about the performance disparity between the Industrial & Commercial (I&C) and Home & Life segments.

Answer

CEO Matt Johnson stated that while Silicon Labs only guides one quarter at a time, all indicators like customer forecasts and bookings are behaving well, with growth driven by specific design win ramps rather than a broad market recovery. CFO Dean Butler added that the I&C segment's outperformance was due to faster-than-expected ramps in the smart metering business, which continued to show strong momentum.

Christopher Rolland asked for Silicon Labs' perspective on the Synaptics and Broadcom agreement for next-gen WiFi, and whether the company considered those assets. He also questioned the state of distribution inventory versus competitors and what could be done to prevent future cyclical swings.

Answer

Chief Executive Officer Matt Johnson stated the Broadcom assets are focused on the handset market and are not strategic to Silicon Labs' low-power IoT edge focus. Chief Financial Officer Dean Butler and CEO Matt Johnson clarified that their primary inventory challenge was at the end-customer level, not in the distribution channel. They aim to have distributors hold more inventory to service short lead-time orders and believe they managed channel relationships well through the cycle.

Christopher Rolland of Susquehanna International Group asked about the high FPGA attach rate in XPU racks, the broader hyperscaler opportunity, and distribution inventory normalization. In a follow-up, he sought clarification on tariff impacts and potential opportunities in AI networking components like retimers and SerDes.

Answer

CEO Ford Tamer confirmed high attach rates (70-130 FPGAs per rack) across hyperscalers due to Lattice's low-power, processor-agnostic solutions. He stated industrial inventory is on track to normalize by year-end. Regarding tariffs, Tamer explained that country-specific tariffs are expected to supersede broader ones, mitigating impact. He positioned Lattice as a 'companionship' to various AI infrastructure components, including networking chips, leveraging its strength in small FPGAs to manage system complexity.

Christopher Rolland asked for an update on inventory digestion in the Communications and Industrial segments, channel inventory levels versus targets, and how new CFO Lorenzo Flores's strategy might differ from his predecessor's.

Answer

CFO Lorenzo A. Flores explained that the company is shipping below consumption to reduce channel inventory, but normalization may take a few quarters longer than the original mid-year target. He highlighted a significant drop in internal inventory. Regarding his approach, Flores emphasized focusing on fundamentals, accelerating new product revenue through ecosystem and tuck-in investments, and driving shareholder value.

Christopher Rolland asked for an update on inventory digestion, particularly in the channel for the Communications and Industrial segments, and how current levels compare to targets. He also asked new CFO Lorenzo Flores to outline any differences in his strategic or financial approach compared to his predecessor.

Answer

CFO Lorenzo A. Flores stated that the company is shipping below consumption to reduce channel inventory, but achieving normal levels may take a few quarters longer than the previously stated mid-year target. He noted that internal inventory saw a significant drop. Regarding his approach, Flores emphasized a focus on fundamentals to drive growth, wise investment in R&D, ecosystem development, and considering advantageous tuck-in acquisitions.

Christopher Rolland of Susquehanna International Group asked for CEO Ford Tamer's perspective on the role of FPGAs in AI and networking, given his background. He also questioned whether Lattice would reconsider integrating hardened Arm cores into its FPGAs, a strategy used by competitors.

Answer

CEO Ford Tamer stated that Lattice FPGAs are already in numerous AI-related applications, including server control functions, IoT, and client devices, primarily in supporting roles. Regarding hardware integration, Tamer explained that Lattice prefers to partner with microcontroller and AI accelerator companies rather than compete with them, which he views as a strategic advantage.

Christopher Rolland of Susquehanna sought to confirm commentary from a channel partner regarding slower apparel retail growth but solid food and logistics growth. He also asked about a specific Asian partner's softer Q2 sales and questioned the economic model of Gen2X, asking if it provides direct margin benefits or primarily serves to accelerate the transition to M800 ICs.

Answer

CEO Chris Diorio affirmed the market trends described by the North American partner, noting they align with Impinj's observations. Regarding the Asian partner, he expressed long-term confidence despite a temporary correction. Diorio clarified that the primary goal of Gen2X is not direct economic uplift but to enable new enterprise solutions that were previously unsolvable, thereby creating a 'virtuous cycle' of demand for the M800 platform.

Christopher Rolland of Susquehanna sought to confirm that Impinj does not see lower retail volumes due to tariffs and that the current elevated channel inventory is the 'new normal'. He also asked about a competitor's market share claims and inquired about the biggest needle-moving opportunities for 2025-2026.

Answer

CEO Chris Diorio clarified there is a 'wobble' in Q2 due to production shifts, with enterprises currently undershipping consumer demand, but if demand holds, bookings should grow. CFO Cary Baker confirmed some partners are holding more inventory for strategic reasons. Regarding market share, Chris Diorio stated Impinj took 85% of the industry's 2024 unit volume growth. He identified fixed reading in supply chains as the key near-term opportunity, with food being a 2026-2027 driver.

Christopher Rolland sought clarification on the "aggressive price shopping," asking if it was between Impinj and its IC competitor or involved other parts of the value chain. He also asked for broad thoughts on how the inventory dynamic might impact seasonality.

Answer

CEO Chris Diorio clarified the price shopping is happening between enterprise end-users and service bureaus, and between service bureaus and inlay bonders, driven by bonding overcapacity, which in turn delays orders to Impinj. Regarding seasonality, CFO Cary Baker reiterated they only guide one quarter at a time and are taking a prudent approach by modeling zero turns for the endpoint IC business in their Q1 guide, despite strong January bookings.

Christopher Rolland followed up on the Qualcomm topic, asking if Impinj could directly monetize reader ICs in mobile devices or if the benefit is purely from driving endpoint IC adoption. He also questioned if tags on low-cost food items could be reusable.

Answer

CEO Chris Diorio clarified that the primary opportunity from RAIN in mobile is driving broad endpoint IC adoption and a larger ecosystem play involving cloud services and software, rather than direct monetization of reader ICs in phones. He stated that tags on food items will be disposable, as reusability is not feasible, and noted that falling tag prices are what enables the food market opportunity in the first place.

Christopher Rolland requested an update on the timeline to achieve 50% gross margin and a breakdown of the contributing factors. He also asked for clarification on the savings from fab rationalization and whether the strong guidance reflected demand pull-in at the largest customer, questioning if it assumed 30% internal modem penetration.

Answer

SVP & CFO Grant Brown reiterated that margin improvement will continue into fiscal 2027, driven by fab closures and mix improvement, and clarified that annual savings from the North Carolina fab closure would exceed the one-time startup costs. President & CEO Robert Bruggeworth declined to comment on specific customer architectures but expects internal modem use to grow. SVP of Sales and Marketing Dave Fullwood estimated a modest $15-30 million inventory buffer, primarily in Android, related to tariff uncertainty, which is factored into guidance.

Christopher Rolland from Susquehanna asked if the 'flat to up' revenue forecast for Qorvo's largest customer includes potential wins like the PMIC but excludes integrated modules that have not yet been awarded. He also inquired about future capital needs and uses of cash.

Answer

CFO Grant Brown clarified that the forecast is based on the entire portfolio of products already awarded, which gives them confidence in content gains, but declined to comment on specific unreleased products. He reiterated that the capital allocation strategy is unchanged, and the manufacturing strategy of leveraging outside partners is designed to limit future capital intensity, with needs focused on maintenance and process improvements.

Christopher Rolland inquired about the March quarter's seasonality, asking how the outlook might compare to the traditional 10-11% sequential decline. He also asked for more details on the anticipated growth in SAW filters and the strategic dynamics between SAW and BAW technologies.

Answer

CFO Grant Brown advised modeling a 5-10% sequential revenue decline for the March quarter, with ACG down more than the average while HPA and CSG are expected to grow, with HPA growing 'substantially.' CEO Robert Bruggeworth explained that growth in SAW is driven by their next-generation LRT SAW technology, which performs well in certain mid-band frequencies, opening opportunities beyond traditional low-band applications, including in transmit paths and for Power Class 2 requirements.

Christopher Rolland asked about Credo's expected product mix in three to five years and inquired about potential supply chain bottlenecks and product lead times amid rapid growth.

Answer

CEO Bill Brennan projected that while the copper AEC market will remain large, Credo's significant investments in optical technology should lead to that segment growing beyond 10% of revenue in 3-5 years. Regarding supply, Brennan expressed confidence in the company's ability to scale, noting that ramping AEC system-level production is less complex and has shorter lead times than semiconductor fabrication. He credited close relationships with supply chain partners for their ability to meet demand.

Christopher Rolland asked about the project-based nature of large customer ramps and whether to expect a 'handoff' between customers as projects conclude. He also inquired if the perceived failure of analog copper cable solutions in the market created a larger opportunity for Credo's AECs.

Answer

CEO William Brennan stated he doesn't see a 'handoff' but rather a diversification of shipments across multiple customers in fiscal '26, as projects transition between technology generations (e.g., 50-gig to 100-gig) rather than ending. Regarding analog copper, he noted that those solutions were primarily relevant within the NVIDIA ecosystem, a TAM Credo is conservative about, and that Credo has not been competing head-to-head with them at other customers.

Christopher Rolland asked about the competitive landscape, particularly at the high end of the smartphone market. He also posed a philosophical question about why AI has successfully driven higher ASPs in mobile and whether that trend can continue, contrasting it with suggestions that the same isn't happening in the PC market.

Answer

Cristiano Amon, President and CEO, stated that the competitive landscape has not changed, highlighting a stable relationship with Samsung and a two-player market with MediaTek in China. On AI, he explained that on-device AI is driving clear use cases and value on phones, similar to the feature phone-to-smartphone transition. He believes the same trend will occur in PCs as more applications move to the edge, which will highlight the NPU's value and drive adoption based on performance and battery life.

Christopher Rolland from Susquehanna inquired about developments in ADI's optical connectivity and AI power solutions, and also asked about other emerging new product or market opportunities for the company.

Answer

CEO Vincent Roche confirmed strong progress, noting their 1.6T optical controller is now shipping for AI systems and that vertical power solutions for GPUs will ship to a hyperscaler in H2 2025. For other new opportunities, he highlighted the growing convergence of clinical-grade wellness and consumer devices as a key growth area, as well as early-stage developments in quantum computing control systems.

Christopher Rolland asked for more details on the operational incident at the Durham fab and inquired about the level of equipment redundancy at Mohawk Valley to absorb a potential failure.

Answer

CEO Gregg Lowe described the Durham incident as a "facilities issue" that has been fully rectified and is now behind them. He affirmed that Mohawk Valley has "significant amounts of redundancies," including power, water, and that the vast majority of tools have backups. He expressed high confidence in the modern fab's ability to withstand potential incidents.