Joe Moore

Joe Moore asked about the sustainability of the $21 million rack revenue run rate beyond the second half of 2026 and whether this type of business might shift over time, trying to understand the percentage of the 18-month backlog that constitutes full systems.

Answer

Hock Tan (President and CEO, Broadcom) responded that the sustainability of the rack revenue run rate depends on the compute capacity needed by customers beyond 18 months, which is difficult to predict precisely. He indicated that if demand continues, the run rate could grow even larger.

Joe Moore asked if the $21 million rack revenue run rate in the second half of 2026 is sustainable beyond that period, inquiring whether Broadcom will continue selling full systems and what percentage of the 18-month backlog currently comprises full systems.

Answer

Hock Tan (President and CEO) responded that the sustainability of the rack revenue run rate beyond 18 months depends on customer compute capacity needs, which is speculative. He indicated that the current demand reflects what Broadcom is seeing over that period.

Joe Moore inquired about Ambarella's gross margin strategy, specifically asking if the company would consider accepting lower gross margins in certain consumer markets to capture growth, and how this balances with the focus on increasing average selling price (ASP) and gross profit per device. He also asked about the renewed enthusiasm for the drone market, inquiring about new elements that could drive higher content for Ambarella over time, particularly in delivery and industrial drones, and their potential as a significant future category.

Answer

Louis Gerhardy, VP of Corporate Development, explained that ASP increases are driven by advanced technology and features. He stated that while the long-term corporate gross margin goal is 59-62%, the company is open to gross margins outside this range for high-volume consumer opportunities on a case-by-case basis. CEO Fermi Wang explained Ambarella's return to the drone market, citing geopolitical shifts opening the U.S. market and the suitability of their panorama camera technology. He highlighted the future need for powerful chips combining video processing and AI for autonomous (Level 3/4) drones, leveraging their autonomous driving investments, and noted that while consumer video capture is current, commercial drone opportunities are expected to drive future growth.

Joe Moore questioned Ambarella's gross margin strategy, specifically if the company would accept lower gross margins for growth in consumer markets, and the focus on average selling price (ASP) versus gross profit dollar per device. He also expressed enthusiasm for the drone market, asking about new elements driving higher content and the potential for delivery and industrial drones as a significant category.

Answer

Louis Gerhardy, VP Corporate Development, explained that ASP is primarily a function of technology and features. While the long-term gross margin goal is 59-62%, the company is open to margins outside this range on a case-by-case basis for consumer markets depending on volume. CEO Fermi Wang stated that Ambarella re-entered the drone market due to an open U.S. market and their differentiated video technology. He highlighted the future need for powerful chips for autonomous (Level 3+) drones, leveraging their autonomous driving investments, and sees growing opportunities in both consumer video capture and the commercial drone sector.

Joe Moore asked for clarification on the automotive segment's better-than-expected Q4 performance, inquiring about potential pull-forwards and current market activity.

Answer

CFO Richard Puccio attributed auto's strength to double-digit CAGR, secular content gains in ADAS and infotainment, and significant share gains in China. He noted the market's resilience and Q4 results being seasonal, with normal bookings, but maintained caution for Q1 due to tariff and volatility uncertainties, while still expecting a strong FY26.

Shane on behalf of Joe Moore asked about customer orders and pricing discussions for growth areas in Automotive (A2B, GMSL) versus the rest of the auto business.

Answer

CFO Rich Puccio stated that pricing has been stable and as expected, with ADI commanding premium ASPs for high-performance parts. Executive Michael Lucarelli added that the growth areas (GMSL, A2B, etc.) comprise half of auto revenue and grew over 10% in fiscal 2024, while the other half was down about 10%.

Joe Moore asked for assistance in triangulating where actual market demand/consumption levels currently stand, given that bookings are good but revenue is half of its peak, and then inquired about Microchip's hyperscale cloud relationships for data center products, specifically if they involve partnerships for custom ASIC development or if Microchip focuses on understanding workloads.

Answer

President and CEO Steve Sanghi stated he could not provide an exact consumption level, acknowledging it's between the peak and current levels, but noted the recovery has been slower than expected due to various market curves. Corporate VP of Data Center Solutions Business Unit Brian McCarson explained that Microchip has active engagements with all hyperscalers and OEMs but focuses on understanding workloads and building competitive features rather than custom ASIC products, as demonstrated by their 3nm Gen 6 PCIe switch.

Joe Moore asked for a characterization of the data center demand, specifically regarding the mix of QLC versus TLC products, and how BICS8 technology enhances SanDisk's presence in that market. He also inquired about current NAND fab utilization and any incremental supply from previously underutilized fabs.

Answer

Chairman and CEO David Goeckeler explained that demand exists for both compute-focused TLC enterprise SSDs and storage-class QLC products like the 128T drives currently under qualification. He noted that QLC is projected to grow significantly, from 20% to 40% of SanDisk's business by the end of fiscal year 2026, driven by the energy-efficient, high-performance BICS8 QLC node. EVP and CFO Luis Visoso confirmed that SanDisk's fabs are running at 100% utilization, pushing to produce as much as possible due to low inventory levels.

Joe Moore asked for a characterization of the data center demand, specifically regarding the demand for QLC on the enterprise side and how BiCS8 technology enhances Sandisk's presence in that market. He also inquired about NAND fab utilization across the industry and any incremental supply from previously underutilized fabs impacting the 2026 outlook.

Answer

Chairman and CEO David Goeckeler explained that demand includes both compute enterprise SSDs (TLC, faster interface) and storage-class products (QLC, like the 128T drives under qualification). He highlighted BiCS8 QLC as energy-efficient and high-performing, expecting QLC to grow from 20% to 40% of Sandisk's business by the end of FY 2026. EVP and CFO Luis Visoso confirmed that Sandisk's fabs are running at 100% utilization, with inventories down. Goeckeler added that industry supply growth is projected at 8% for 2025 and 17% for 2026, servicing mid-teens demand, while unconstrained demand is higher.

Joe Moore asked about AMD's readiness to ship MI308 products if regulatory relief allows, and the potential impact this could have. He also inquired whether AMD has existing product inventory to support that market or if inventory would need to be rebuilt.

Answer

Lisa Su, Chair and CEO of AMD, described the MI308 situation as dynamic, which led to its exclusion from the Q4 guidance. She acknowledged receiving some licenses and is working with customers to assess demand and opportunity, promising updates in the coming months. She confirmed having some work-in-process inventory for MI308 but would need to evaluate how demand shapes up.

Joe Moore asked about AMD's posture regarding MI308 shipments to China, specifically if there's readiness to ship if regulatory relief occurs, and the potential swing factor for revenue. He also questioned if AMD has sufficient product inventory to support that market or if inventory would need to be rebuilt.

Answer

Dr. Lisa Su, Chair and CEO, described the MI308 situation as dynamic, noting that no MI308 revenue was included in the Q4 guidance. She confirmed receiving some licenses and is working with customers on demand, promising an update in the coming months. Dr. Su added that AMD has some work in process for MI308, but product availability would depend on how the demand environment shapes up.

Joe Moore inquired about regional behaviors in the automotive market, particularly the health of the China EV market. He also questioned why the Nexperia situation isn't a bigger deal for ON and why tier-one suppliers aren't building inventory in response.

Answer

Hassane El-Khoury, President and CEO, explained that ON's customer diversification strategy in China EV is effectively de-risking market lumpiness amidst adjustments and consolidation. Regarding Nexperia, Hassane reiterated that inventory levels are critically low, and any supply chain disruption will cause a chain reaction, emphasizing the need for a replenishment cycle and safety stock, a lesson learned from COVID.

Joe Moore inquired about the automotive market by region, specifically asking about different behaviors observed and the health of the China EV market amidst recent volatility. He also questioned why the Nexperia situation isn't a bigger deal for ON Semiconductor, given the anxiety expressed by Tier 1 auto suppliers, and if it should be a catalyst for inventory building.

Answer

Hassane El-Khoury, President, CEO, and Director, ON Semiconductor, acknowledged expected adjustments in the China EV market due to consolidation, but emphasized ON Semiconductor's customer diversification strategy across top OEMs and emerging brands to de-risk lumpiness and maintain market share. Regarding Nexperia, Mr. El-Khoury stated that inventory levels are critically low, and any supply chain disruption will cause a chain reaction, underscoring the need for a replenishment cycle and safety stock, a lesson learned from COVID.

Joe Moore asked about automotive customers' inventory views, specifically if recent geopolitical issues (like Nexperia) are prompting them to hold more inventory, and if NXP sees any indications of this. He also questioned if potential shortages of other components could negatively impact automotive production.

Answer

President and CEO Rafael Sotomayor stated that current end customer inventory levels are insufficient for business continuity, but NXP has not observed restocking by direct customers, who remain conservative with working capital. CFO Bill Betz clarified that Nexperia issues do not directly impact NXP. Mr. Sotomayor added that NXP does not anticipate negative impacts on automotive production from other component shortages, as Nexperia-associated products are often second-sourced, and NXP's orders do not indicate production disruptions.

Joe Moore inquired about NXP's automotive customers' views on inventory, specifically if geopolitical issues are prompting them to hold more stock. He also asked if NXP foresees any negative impact on automotive production due to potential shortages of other components, such as those related to Nyxperia.

Answer

Rafael Sotomayor, President and CEO, stated that current end customer inventory levels are insufficient for business continuity, but direct customers are not restocking due to conservative working capital management. Bill Betz, CFO, added that NXP is not directly impacted by Nyxperia issues, and typical supply crisis signals like price increases are not observed. Mr. Sotomayor clarified that Nyxperia-associated products are second-sourceable, and NXP's orders do not indicate any impact on automotive production.

Joe Moore asked about the overall cyclical environment for the OSAT business, specifically if customers are concerned about potential tightness and any impact on like-for-like pricing. He also questioned if the strength in the smartphone business indicated any pull-forward or tariff-related factors.

Answer

CEO Giel Rutten noted pockets of tightness in advanced packaging (e.g., flip chip, wafer-level packaging) where lines are filling up, and some limitations in areas like substrates. Regarding smartphones, he stated it was difficult to predict next year's market but reconfirmed Amkor's strong footprint in premium-tier Android and iOS, with increased evaluation of next-generation products for AI functionality.

Joe Moore asked about Micron's HBM market share aspirations for calendar 2026, specifically if the company aims to exceed its DRAM supply share. He also questioned whether HBM gross margins would remain higher than non-HBM DRAM, and if current HBM pricing lock-ins could disadvantage Micron if DDR5 prices rise rapidly.

Answer

Sanjay Mehrotra, Chairman, President, and CEO, stated that Micron expects to achieve HBM share in the vicinity of its DRAM supply share by calendar Q3 2025 and higher HBM share in calendar 2026 compared to 2025, treating HBM as a robust portfolio component focused on ROI. Sumit Sadana, Chief Business Officer, explained that HBM's long lead times and stable pricing lead to higher through-cycle ROI, and while non-HBM DRAM profitability might occasionally exceed HBM, this would indicate an exceptionally healthy industry.

Joe Moore asked about Micron's HBM market share aspirations for calendar 2026, questioning if the company aims to exceed its general DRAM share. He also inquired about HBM gross margins relative to non-HBM DRAM and whether HBM's long-term pricing lock-in could be disadvantageous if DDR5 prices rise rapidly.

Answer

Sanjay Mehrotra, Chairman, President, and CEO, stated that Micron expects to achieve HBM share in the vicinity of its DRAM supply share by calendar Q3 2025 and higher HBM share for the full calendar year 2026, managing HBM for ROI and competitive advantage. Sumit Sadana, EVP and Chief Business Officer, explained that HBM's long lead times and stable pricing ensure higher through-cycle ROI, viewing any potential for non-HBM DRAM profitability to exceed HBM as a positive indicator of overall industry health.

Joe Moore of Morgan Stanley asked for more details on the CopperEdge outlook, including confidence in broader adoption and the types of projects underway with hyperscale customers. He also questioned if there were any supply constraints for 1.6T products.

Answer

CEO Hong Ho stated that CopperEdge is seeing strong traction with over 20 ecosystem customers for both scale-up and scale-out applications, with high-volume ramps at hyperscalers expected in Q4 2025 or early 2026. For 1.6T products, he clarified that significant volume demand is not expected until 2026, aligned with switch availability, and confirmed Semtech is not currently facing any supply constraints.

Joe Moore asked about the company's priorities for growing its diversified business, specifically the balance between organic and inorganic strategies, and the feasibility of M&A in the current market.

Answer

CEO Philip Brace stated that Skyworks has the financial 'firepower' to pursue both organic investments and M&A. He noted his focus for M&A will be on strategic fit and shareholder value. While acknowledging the M&A environment is complex, he confirmed it is an area he will be spending time on.