Cody Grant Acree

Cody Acree inquired about market concerns regarding ACC reliability and whether these contributed to any delays in program ramps, which were previously expected in Q4 but are now pushed to next year. He also asked about strategies for ensuring capacity availability on the wafer side and potential dedicated capacity commitments or investments.

Answer

CEO Hong Hou clarified that he is not aware of any current reliability concerns for ACC, dismissing past 'chattering' from inactive players and emphasizing extensive qualification by hyperscalers. He stated that the ACC ramp was always anticipated for mid-2026, with supply to cable manufacturers starting three to four months prior. Regarding capacity, Hong Hou explained strategies include qualifying manufacturing from other sites and countries for silicon germanium to unlock additional capacity and enhance geopolitical robustness. He noted increased CapEx investment in the backend (e.g., testing) but primarily works with partners for foundry capacity.

Cody Acree inquired about market concerns regarding ACC reliability and whether these concerns contributed to any incremental delays in program ramps, which were initially expected to begin in Q4 but are now projected for next year. He also asked about Semtech's strategies for ensuring capacity availability, specifically on the wafer side, and if dedicated capacity commitments or investments were being considered.

Answer

President and CEO Hong Hou denied awareness of any current ACC reliability concerns, stating that significant ACC deployments have occurred without issues and hyperscaler qualifications are thorough. Regarding capacity, he explained strategies involve qualifying manufacturing from other sites and countries for the silicon germanium platform to unlock additional capacity and enhance geopolitical robustness. He mentioned increasing CapEx in backend (e.g., testing) but primarily working with partners for foundry capacity.

Cody Acree of The Benchmark Company sought clarification on the ACC ramp timeline for cloud service providers, asking if the early 2026 expectation was a change from a prior Q4 forecast. He also requested an outlook on gross margin and OpEx spending trends.

Answer

CEO Hong Ho clarified that while some platform timing is tied to switch availability, which has shifted slightly, the ramps for 800G ACC and 1.6T ACC for scale-up are still expected in Q4. CFO Mark Lin added that gross margin remains mix-driven, with accretive data center growth offsetting some headwinds. He assured that OpEx spending would remain prudent while funding key organic growth opportunities.

Cody Acree of The Benchmark Company asked about seasonality expectations for the second half of the year and inquired about the primary drivers for gross margin and operating expenses going forward.

Answer

President & CEO Hong Hou noted that outside of typical consumer seasonality, he expects a broader market recovery in industrial and accelerating capex in data center to drive the second half. EVP & CFO Mark Lin stated that gross margin will remain dependent on product mix, while OpEx will be driven by continued investments in R&D and the expansion of the technical sales force.

Cody Grant Acree asked for gross margin and OpEx expectations for the full fiscal year. He also requested elaboration on R&D spending priorities for fiscal 2026 and which areas are expected to be the primary growth drivers.

Answer

Executive Mark Lin stated that Semtech only guides one quarter at a time but noted that data center growth is accretive to gross margins and OpEx remains prudent. President and CEO Hong Hou added that R&D spending will increase in fiscal 2026 to capture opportunities, with a focus on data center, LoRa, and PerSe (person sensing) for applications in wearables and robotics. He assured this spending would be disciplined, while SG&A would remain largely flat with a focus on leveraging AI for efficiency.

Cody Grant Acree questioned the specifics of the NVIDIA Blackwell opportunity, particularly regarding the 36x2 rack platform, and whether changes at NVIDIA were impacting the broader ACC market. He also requested a breakdown of the data center opportunity between Fiber/Tri-Edge and ACC/LPO.

Answer

CEO Hong Hou confirmed that the 36x2 rack design is a baseline for a leading CSP using Blackwell, but emphasized that counting 200-gig ports is a more relevant long-term metric than tracking specific rack configurations. Executive Mark Lin declined to provide a specific product breakdown for the data center business but stated that all product lines (ACC, PMDs, Tri-Edge) are experiencing robust growth.

Cody Grant Acree from The Benchmark Company inquired about the increased Total Addressable Market (TAM) for Semtech's Active Copper Cable (ACC) solutions, seeking details on the calculation and the factors driving the upward revision.

Answer

President and CEO Hong Hou clarified that the previous TAM was a 'floor case' based on a single customer and platform. He stated that the opportunity for that specific platform now exceeds the prior forecast and that engagement has since expanded to multiple other customers for similar ACC opportunities. Hou emphasized the vast potential market as data centers inevitably upgrade from passive Direct Attach Copper (DAC) cables to ACCs to meet higher signal integrity requirements, with shipments expected to begin in Q3 and ramp from there.

Cody Acree from The Benchmark Company LLC sought details on the number of RADAR and vision programs ramping in late 2025 and 2026, and the basis for management's confidence. He also asked if the eMotion3d acquisition would create a separate licensing model or be integrated into existing products.

Answer

Co-Founder, CEO & Director Donald McClymont expressed confidence based on linear execution and initial trickle orders, particularly in vision. He clarified that eMotion3d's software will be sold alongside Indy's chips under a separate pricing model to preserve its value, generating 'multiple dollars per instance,' and will not be given away.

Cody Acree asked for details on the competitive landscape and business velocity in China, particularly in the context of recent tariffs. He also inquired about the current state of channel inventory and its effect on visibility.

Answer

Executive Donald McClymont clarified that his earlier comments on competition referred to the OEM level, where Chinese automakers are gaining share, not at the semiconductor level where indie's products remain differentiated. He stated that tariffs have not had a direct impact due to their 'China for China' supply chain. He also noted that there have been no material changes to channel inventory in the last quarter.

Cody Grant Acree noted a peer's more positive commentary on the macro environment and healthier inventory, asking why indie's view seemed more cautious. He also questioned the company's visibility for the remainder of 2025, given the lingering macro issues and tariff uncertainty.

Answer

Donald McClymont (executive) acknowledged the mixed feedback from peers but stated that from indie's perspective, the macro environment remains choppy despite improvements in their own inventory levels. He affirmed that the company had already factored a muted market into its plans and remains confident in its 2025 outlook due to a strong pipeline of new product introductions, even with some slower ramps in Q1.

Cody Acree questioned why the strategic backlog growth of 12% wasn't higher given major vision and radar wins, and asked for more detail on the program ramps expected for those products next year.

Answer

Executive Donald McClymont clarified that while new business wins were substantial, the net backlog growth figure accounted for some well-publicized program pushouts. He added that machine vision is already ramping across many OEMs and models, and radar is expected to ramp with multiple OEMs through 2026, becoming a significant growth driver.

Cody Acree requested more detail on the application wins and ramps driving strength in WiFi. He also asked about the potential timeline for challenging the company's prior revenue highs from 2022, given the current trajectory and design win pipeline.

Answer

CEO Matt Johnson highlighted the Roku battery-powered camera as a key WiFi design win, showcasing their strength in long-battery-life applications. While declining to provide a specific timeline for reaching prior revenue peaks, he emphasized the significant growth potential, noting they have secured over 6 billion units in Series 2 design wins that have not yet shipped, on top of the introduction of the next-generation Series 3 platform.

Cody Acree asked for the expected revenue split between the Home & Life and Industrial & Commercial segments for the June quarter and requested details on which end markets are most exposed to potential tariffs.

Answer

CFO Dean Butler stated that the revenue mix for the June quarter is expected to remain consistent, at approximately 55% for Industrial & Commercial and 45% for Home & Life. CEO Matt Johnson explained that due to Silicon Labs' broad exposure across numerous customers and applications, it is difficult to identify any single end market that is uniquely susceptible to tariffs as they are currently understood.

Cody Grant Acree asked for a breakdown of how much of the consensus 2025 revenue growth would come from the three main drivers (CGM, ESL, smart metering) versus the rest of the business. He also requested details on gross margin puts and takes for the year.

Answer

Chief Executive Officer Matt Johnson advised against over-indexing on just the three named applications, pointing to significant growth from WiFi, Bluetooth, and Matter as well. Chief Financial Officer Dean Butler projected continued gross margin improvement toward the mid-to-high 50s target, driven by higher revenue absorption, new design win ramps, and a recovery in the broader, higher-margin industrial distribution business.

Cody Grant Acree from The Benchmark Company questioned what the flat revenue outlook implies about underlying end-customer consumption levels and asked for an early perspective on Q1 seasonality and first-half order trends.

Answer

CEO Robert Johnson clarified that the market has not yet returned to true end-consumption levels, as some customer inventory destocking is still ongoing. He emphasized that future growth will be driven by design win ramps. CFO Dean Butler added that an increase in short-lead-time orders has reduced visibility into Q1, but noted that significant design win ramps are expected to be a key factor, potentially offsetting typical seasonality.

Cody Acree from The Benchmark Company LLC asked for more detail on which business segments would drive sequential growth in the second half of the year and whether the company was fully booked or had available capacity for near-term upside.

Answer

CEO Russell Ellwanger identified RF Infrastructure (silicon germanium and silicon photonics) as the primary growth driver, noting SiPho revenue could more than double in 2025. He also highlighted a strong rebound in RF Mobile, continued strength in Power Management, and growth in Sensors. Ellwanger confirmed that while Fabs 2 and 9 are focused on ramping new capacity, their 60% utilization rate provides room for immediate upside business, complemented by the flexibility of Tower's global manufacturing footprint.

Cody Grant Acree inquired about the new Envelope Tracking business, including its size and accounting treatment. He also asked for an update on the Silicon Photonics (SiPho) business outlook, the impact of tariffs on customer sentiment, the status of the previously discussed India project, the ramp at the Agrate fab, and the manufacturing location for the new power management business.

Answer

CEO Russell Ellwanger explained that the Envelope Tracking business is a high-volume win accounted for in Power Management, but declined to provide specific revenue figures due to customer confidentiality. He confirmed the SiPho business is on track to double its 2024 revenue in 2025. Regarding tariffs, he noted customer concern but no impact on orders, citing Tower's global manufacturing flexibility. Ellwanger clarified that Tower had withdrawn from the India project months ago, rendering recent media reports baseless. He also confirmed the Agrate fab ramp began in Q4 and that the Envelope Tracker is currently produced in Japan, with plans for New Mexico.

Cody Grant Acree asked about the expected contraction in the RF mobile market, the impact of fab ramps on margins, the weighting of revenue growth in 2025, and the outlook for operating expenses.

Answer

CEO Russell Ellwanger clarified that the total RF mobile business is expected to decline in the 'upper teens' for the year, driven by Android market weakness, while the Apple-related business remains stable. He also guided for a significant acceleration in growth in the second half of 2025. CFO Oren Shirazi explained that margin headwinds from the Agrate fab ramp were fully reflected in Q4 2024 and that the Q4 operating expense level should remain flat throughout 2025.

Cody Grant Acree of The Benchmark Company sought clarification on a new $350 million investment, asking about its payment timeline and the incremental revenue it supports. He also inquired about the nature of customer agreements for RF SOI capacity and asked for color on potential market volatility for active copper cables related to changes at NVIDIA.

Answer

CFO Oren Shirazi clarified the $350 million investment will be paid in installments through the end of 2026 and is already incorporated into the company's long-term $2.66 billion revenue model. CEO Russell Ellwanger explained that RF SOI commitments are based on strong, long-term relationships rather than take-or-pay contracts. Regarding active copper cables, he confirmed a minor production hold for a mask change but stated it would not materially impact overall volume.

Cody Grant Acree of The Benchmark Company asked for a prioritization of optimism across Atomera's various market opportunities, including GaN, advanced nodes, and power. He also requested details on the newer data center strategy and questioned how the company manages its resources across these diverse segments.

Answer

CEO Scott Bibaud countered the idea of stagnant progress, emphasizing the move toward production with ST, deeper engagements in advanced nodes, and the addition of GaN as a new market. He detailed the data center opportunity via the MST-SPX product for 48-volt systems. CFO Frank Laurencio explained that resource management has improved through learnings from ST, strategic hiring in epitaxy, and increased productivity from TCAD tools, allowing them to pursue multiple opportunities effectively while remaining fiscally conservative.