Joseph Moore

Joseph Moore of Morgan Stanley inquired about the drivers behind the Intel 7 supply constraints expected through year-end. He also asked if Intel will get full value from its large 'construction in progress' balance.

Answer

CFO David Zinsner explained that strong demand for Raptor Lake products is the primary driver of Intel 7 tightness. He also noted that the company is ramping Granite Rapids on Intel 4/3. Regarding construction in progress (CIP), Zinsner confirmed a large portion related to Arizona was recently put into service for 18A, significantly reducing the CIP balance, with a goal to continue reducing it while maintaining flexibility in Ohio.

Joseph Moore asked about the drivers behind the Intel 7 supply shortage and inquired about the plan to utilize the large 'construction in progress' balance on the balance sheet.

Answer

CFO David Zinsner attributed the Intel 7 shortage to very strong demand for Raptor Lake products. He explained that the 'construction in progress' balance has already been significantly reduced from over $50 billion to the high $30s as the Arizona fab came online, and the company will continue to utilize these assets to lower the balance while maintaining future optionality.

Joseph Moore of Morgan Stanley asked for an assessment of the competitiveness of the Panther Lake and Clearwater Forest products on the 18A node and requested an explanation for the capacity constraints on the Intel 7 node.

Answer

Executive Michelle C. Holthaus confirmed Panther Lake looks competitively strong and is on track, with Clearwater Forest following in H1 2026. CFO David Zinsner and Michelle Holthaus explained that the Intel 7 constraint is due to unexpectedly strong demand for older Raptor Lake products, driven by customers seeking to maintain lower system price points amid macroeconomic uncertainty.

Joseph Moore of Morgan Stanley asked for the rationale behind the decision to make Falcon Shores an internal test chip and what Intel needs to do to become competitive in the AI accelerator market. He also sought clarity on the extent of the tariff-related revenue pull-forward in Q4.

Answer

Michelle C. Holthaus, Interim Co-CEO, explained that Falcon Shores was repurposed as an internal test chip based on customer feedback demanding a full rack-scale solution, a need that will be addressed by the future Jaguar Shores product. CFO and Interim Co-CEO David Zinsner confirmed that the Q4 tariff pull-forward was based on analytics showing specific customers in Asia ordering ahead of their typical demand.

Joseph Moore asked for practical examples of 'narrowing the product focus to prioritize x86' and questioned if this shift alters the IDM 2.0 model or the arm's-length relationship with the foundry.

Answer

CEO Pat Gelsinger provided examples of simplification, such as reducing server SKUs, streamlining the client roadmap, and integrating the edge business into CCG to improve efficiency and hit OpEx targets. He reaffirmed the commitment to the IDM 2.0 subsidiary model, explaining it is crucial for the cultural transformation needed for external foundry success, while the internal business provides the scale, wafers, and cash flow necessary to support a leading-edge foundry.

Joseph Moore inquired about the NAND supply/demand dynamics, including the extent of Sandisk's supply-side actions and the outlook for market rebalancing. He also asked for an update on the enterprise SSD market and Sandisk's confidence in its market share ramp.

Answer

CEO David V. Goeckeler stated that the market remains undersupplied through the end of next year, with the company extending fab underutilization as a prudent measure. He expressed optimism about the enterprise SSD roadmap and expects to triple the business revenue from FY'24 to FY'25. CFO Luis Visoso added that the company is tracking utilization weekly and is optimistic about demand driven by content per unit growth.

Joseph Moore from Morgan Stanley asked for more details on the high-bandwidth flash (HBF) partnership with SK Hynix, the strategy behind it, and the confidence level in the announced product sampling timeline.

Answer

Chairman & CEO David Goeckeler stated the partnership aims to establish HBF as an industry standard to accelerate adoption across edge and cloud applications. He expressed high confidence in the development timeline, which targets NAND die sampling in 2026 and a controller in early 2027, citing the company's extensive history in NAND development.

Joseph Moore inquired about the NAND supply/demand balance, the extent of recent supply-side actions, and the potential timeline for returning to full fab utilization. He also asked for an update on enterprise SSD market trends and Sandisk's confidence in its market share ramp.

Answer

Executive David V. Goeckeler stated that the market is expected to remain undersupplied through the end of next year, viewing the recent slowdown as a 'mid-cycle pause.' He described fab underutilization as a prudent, dynamic decision to balance the market. Regarding enterprise SSDs, Goeckeler noted consistent demand despite price volatility and projected a tripling of the business revenue from FY'24 to FY'25, expressing confidence in the product roadmap. Executive Luis Visoso added that they are setting structural capacity to align with demand during the BiCS 8 transition.

Joseph Moore inquired about any unusual pricing dynamics in the market, specifically if any segments were experiencing different pricing trends. He also asked for an update on lead times, questioning if they remained within the expected range or if any areas were seeing extensions.

Answer

CEO Haviv Ilan stated there were no unusual pricing trends, expecting a low single-digit like-for-like decline for the year. Head of Investor Relations Mike Beckman and Mr. Ilan confirmed that lead times were consistent with the prior quarter and competitive, attributing this to a strong inventory position that allows for high customer service and delivery metrics.

Joseph Moore asked about any unusual pricing activity, particularly in specific markets, beyond the typical learning curve price declines. He also inquired about current lead times across the portfolio and if any areas were experiencing longer lead times.

Answer

CEO Haviv Ilan stated there was no unusual pricing activity, with a low single-digit decline expected for 2025, consistent with trends. Head of Investor Relations Mike Beckman and CEO Haviv Ilan confirmed that lead times are competitive and consistent with the prior quarter, supported by strong inventory levels that ensure high customer service.

Joseph Moore from Morgan Stanley questioned the level of share repurchases in the quarter relative to cash flow and dividends, asking about the timing of buybacks and the willingness to take on more debt. He also asked about the practical implementation of the new tariffs.

Answer

CFO Rafael Lizardi explained that the primary capital management goal is to return all free cash flow over time. He noted the cash balance is lower now ($5B vs. $10B a year ago) because the company is 70% through its elevated CapEx cycle, making them comfortable with the current level. He affirmed that TI has plenty of balance sheet capacity to take on more debt when it makes sense. Regarding tariffs, Executive Mike Beckman and CEO Haviv Ilan reiterated that the situation is dynamic and TI's focus is on remaining competitive and supporting customers through its flexible global footprint.

Joseph Moore from Morgan Stanley asked for a detailed characterization of the industrial market, including whether the correction is uniform across its sub-sectors. He also inquired about the reasons for the relative underperformance of the Embedded Processing segment compared to Analog.

Answer

An executive explained the industrial market decline is broad, with most of its sub-sectors hovering at a bottom, though factory automation and motor drives are still declining. CEO Haviv Ilan addressed the embedded question, stating that the segment's cyclical correction started about a year after Analog's because it saw growth in 2023. He expressed confidence in the segment's future momentum.

Joseph Moore asked about Micron's HBM market share aspirations for calendar 2026, specifically if they aim to exceed or maintain their DRAM share. He also questioned if HBM gross margins would continue to be higher than non-HBM DRAM, and if existing lock-in agreements could negatively impact profitability if DDR5 prices rise faster.

Answer

Sumit Sadana, EVP and Chief Business Officer, stated that Micron expects higher HBM share in calendar 2026 compared to 2025, aiming to be near their DRAM supply share by calendar Q3 2025. He emphasized managing HBM for higher through-cycle ROI due to long lead times and stable pricing. He acknowledged that non-HBM DRAM could, at times, become very profitable, which would be a positive indicator of overall industry health.

Joseph Moore of Morgan Stanley asked if the long-term CapEx target of 35% of revenue is a reasonable guideline for fiscal 2026, or if the current market opportunity necessitates investing ahead of that level.

Answer

Executive VP & CFO Mark Murphy responded that Micron faces a generational technology opportunity requiring greenfield capacity expansion. While sticking to the approximately $14 billion CapEx plan for fiscal 2025, he noted that future spending on new facilities and equipment could be lumpy. Murphy highlighted that the company expects to generate free cash flow in Q4 and has a strong, flexible balance sheet to fund investments while also returning capital to shareholders.

Sought clarification on the aggressive inventory reduction target, asking how the company plans to decrease inventory from 158 days to below 120 days in two quarters.

Answer

The company clarified that the target of getting below 120 days of inventory by the fiscal fourth quarter is specifically for DRAM, which is experiencing market tightness due to AI-driven growth and the HBM trade ratio. They did not provide a specific Q3 inventory guide but confirmed that overall inventory days will decline through the year.

Joseph Moore sought clarification on Micron's inventory targets, asking how the company plans to achieve a significant reduction from 158 days to below its 120-day target within two quarters. He also asked if specific inventory guidance was provided for the upcoming fiscal third quarter.

Answer

CFO Mark Murphy clarified that the target of falling below 120 days by the fiscal fourth quarter applies specifically to DRAM inventory, which is tightening due to strong AI-driven demand and the HBM trade ratio. He contrasted this with the NAND market, where supply actions are still ongoing. Murphy did not provide a specific inventory number for Q3 but stated that inventory days are expected to decline through the year.

Joseph Moore asked for categorization of the fourth new AI customer (hyperscale vs. LLM maker) and the specific timeframe for the delivery of the $10 billion in orders from this customer.

Answer

Hock Tan, President and CEO, clarified that all seven prospects/customers eventually develop LLMs, making differentiation difficult. He stated that the $10 billion in orders for the fourth customer is expected to be delivered around the second half of fiscal year 2026, specifically in Q3 2026.

Joseph Moore from Morgan Stanley asked for an update on the potential impact of U.S. export controls on AI, inquiring if Broadcom's position of being unaffected has changed given the evolving regulatory landscape.

Answer

CEO Hock Tan provided a cautious response, stating that "nobody can give anybody comfort in this environment" due to the dynamic and unpredictable nature of trade negotiations and regulations. He admitted that he does not know how export controls will evolve and preferred not to speculate on the potential impact.

Joseph Moore of Morgan Stanley asked for an update on the potential impact of U.S. export controls on AI, noting the changing environment and seeking reassurance that Broadcom's business remains unaffected.

Answer

CEO Hock Tan stated frankly that 'nobody can give anybody comfort in this environment' due to the dynamic and unpredictable nature of trade negotiations and regulations. He said he does not know how export controls will evolve and declined to speculate on the potential future impact.

Joseph Moore asked about the competitive dynamics with NVIDIA's rack-scale products and how Broadcom's customers are architecting connectivity for large clusters of XPUs.

Answer

President and CEO Hock Tan explained that scaling to million-unit clusters presents a new architectural challenge that customers are actively solving. He noted that his hyperscale customers have developed multi-year roadmaps to scale their deployments, managing the complexities of 'scale out' architectures that connect numerous racks into a single fabric.

Joseph Moore asked about Broadcom's appetite for further M&A and whether the company's focus would remain on software or potentially shift back to semiconductors.

Answer

President and CEO Hock Tan responded bluntly that his hands are full with the ongoing transformation of VMware's business model. He expressed enjoyment and satisfaction with the process, which is exceeding expectations, and indicated it would be his primary focus for the next one to two years.

Joseph Moore from Morgan Stanley asked about the long-term prospects for NVIDIA in China, noting the country's significant role in AI software development, and questioned the importance of getting the Blackwell architecture licensed for that market.

Answer

Founder, President, CEO & Director Jensen Huang estimated the China market as a $50 billion opportunity this year, growing roughly 50% annually. He stressed its strategic importance, as China is home to about half of the world's AI researchers and many leading open-source models. Huang argued that it's vital for American tech companies to serve this market to establish the U.S. tech stack as the global standard and expressed optimism about the potential to bring Blackwell to China, following the approval of H20 for certain customers.

Joseph Moore of Morgan Stanley inquired about the scale-up of inference workloads driven by new reasoning models, asking how much of this demand NVIDIA can serve and whether NVL72 rack-scale solutions are essential for this trend.

Answer

President and CEO Jensen Huang explained that Grace Blackwell NVL72 is the ideal system for reasoning AI, which requires 100 to 1,000 times more token generation than simple chatbots. He highlighted that Blackwell delivers a 40x performance increase over Hopper, significantly reducing costs while improving response quality. Huang confirmed that NVIDIA is in full production and on track to serve most of this surging demand.

Joseph Moore from Morgan Stanley inquired about the ramp of the GB200, asking about the complexity, potential system-level bottlenecks beyond the chip, and whether enthusiasm for the NVL72 platform remains high.

Answer

President and CEO Jensen Huang stated his enthusiasm is higher now than at CES, citing significant shipment volumes. He highlighted the successful ramp of Grace Blackwell, which generated $11 billion in revenue in Q4. Huang described the process as incredibly complex, involving 350 plants and 1.5 million components per rack, but affirmed that NVIDIA and its partners, including CoreWeave, Microsoft, and OpenAI, are managing the ramp successfully.

Joseph Moore of Morgan Stanley inquired about the inference market, asking if it is expected to outgrow training and how the use of aging Hopper clusters for inference might play out.

Answer

CEO Jensen Huang expressed his vision for a future where inference is ubiquitous across all corporate functions and consumer applications. He highlighted the emergence of 'physical AI' for robotics as a new demand driver. Huang emphasized that inference is technically complex, requiring a balance of accuracy, throughput, and low latency, which plays to the strengths of NVIDIA's versatile architecture and broad ecosystem. He noted the high rate of innovation in inference makes the platform's stability and large installed base crucial for developers.

Joseph Moore asked about the strong coexisting demand for both Hopper and Blackwell, and how customers are approaching the transition, such as by intermixing clusters or building new ones.

Answer

President and CEO Jensen Huang stated that Hopper demand remains strong because cloud service providers have virtually no spare GPU capacity, as it's used for internal data processing or rented to AI startups. He emphasized that customers are in a race to reach the next AI plateau and are eager to modernize their trillion-dollar infrastructure. He noted that choosing Hopper over new CPU infrastructure is a clear decision for immediate operational needs.

Joseph Moore followed up on comments about supply limitations in aerospace and defense, asking for the specific source of the constraints and if they exist in other industrial areas.

Answer

CEO & Chair Vincent Roche described it as a 'high quality problem' driven by a surge in demand that is outpacing the deployment of new capacity and tooling for complex, proprietary products. EVP & CFO Richard Puccio added that tools are being deployed in Q3 and Q4 to alleviate the stress and that the rest of the industrial business is well-supplied.

Joseph Moore asked about the drivers behind the significant 16% sequential growth in the automotive segment and whether any of this strength was attributable to tariff-related pull-ins.

Answer

Richard Puccio, an executive at Analog Devices, explained that the Q2 automotive results were stronger than expected and were aided by pull-in activity, estimated to be in the high single-digit range. This activity was most notable in the Americas and Europe following tariff announcements. Puccio noted that this pull-in is the primary reason for the company's guidance for a sequential decline in the automotive segment for Q3.

Joseph Moore of Morgan Stanley asked about the dynamics of the automotive market, specifically questioning the impact of China's growing prominence on ADI's pricing, margins, and overall business potential.

Answer

CFO Rich Puccio confirmed that Q1 auto revenue exceeded expectations, driven by strength in Asia and particularly China, where ADI has significant share with major EV OEMs. CEO Vincent Roche added that ADI's high-performance technology remains highly relevant and well-compensated in competitive markets like China, despite the rise of local suppliers.

Joseph Moore requested clarification on the return of co-founder Dr. Chris Monroe to the role of Chief Scientific Advisor, asking what should be read into his departure and subsequent return.

Answer

CEO & Chairman Niccolo de Masi framed Dr. Monroe's return as part of a broader trend of attracting top-tier talent, including other recent high-profile hires. He described it as a "tremendous vote of confidence" in the company's integrated computing and networking strategy and a vindication of their progress, highlighting the collaboration between multiple world-record-holding scientists now at IonQ.

Joseph Moore sought clarification on the timeframe for AMD's 'tens of billions' AI revenue opportunity and asked how the increasing complexity of inference workloads is impacting the company's rack-scale strategy.

Answer

Chair and CEO Lisa Su expressed increased confidence in reaching the 'tens of billions' target but did not specify a timeframe, noting it requires gigawatt-scale deployments. She confirmed that as inference workloads become more complex, the importance of scale-up and scale-out architectures like AMD's Helios platform is growing, reinforcing the strategy to be a full-scale solution provider.

Joseph Moore from Morgan Stanley sought clarification on the 'tens of billions' revenue opportunity for AI accelerators, asking about a potential timeframe. He also asked how the increasing complexity of AI workloads, like reasoning and distributed inference, is affecting the market's need for rack-scale solutions.

Answer

CEO Lisa Su did not provide a specific timeframe for reaching 'tens of billions' in AI revenue but linked it to achieving 'gigawatt-scale' deployments with key customers. She confirmed that as inference workloads become more complex, the importance of scale-up and scale-out architectures, like AMD's Helios platform, is increasing, validating the company's investment in rack-scale solutions.

Joseph Moore asked about the impact of rising inference costs from new reasoning models and how this trend affects AMD's business. He also requested an update on AMD's strategy for competing with custom AI ASICs, especially those developed by its own major customers.

Answer

CEO Lisa Su stated that the rise of reasoning models and distributed inferencing plays to AMD's strengths, highlighting the memory bandwidth and capacity advantages of the Instinct accelerator portfolio. On competition, Su positioned GPUs and ASICs as different solutions, viewing them as not mutually exclusive. She argued that GPUs offer greater flexibility as models evolve rapidly, and AMD's focus is on providing a competitive Total Cost of Ownership (TCO), giving customers choice in a market where both training and inference are critical.

Joseph Moore asked for a breakdown of the forecasted $5 billion in 2024 AI revenue between training and inference workloads. He also inquired about how that mix is expected to evolve in the future.

Answer

CEO Dr. Lisa Su stated that the initial traction for the $5 billion in revenue has been 'primarily with inference,' given the MI300's architectural strengths in memory capacity and bandwidth. However, she noted that AMD has secured some training adoption and expects that to grow. Looking forward about a year, she anticipates having a 'fairly balanced portfolio between training and inference.'

Joseph Moore questioned Astera Labs' positioning between open standards like UALink and proprietary solutions like NVLink Fusion, and asked for the company's relative exposure to merchant GPU platforms versus custom ASICs.

Answer

CEO Jitendra Mohan stated that while Astera Labs supports proprietary solutions like NVLink Fusion, the key advantage of UALink is its open, multi-vendor ecosystem. He explained that while the company serves merchant GPU platforms, the scale-up opportunity with custom XPUs is significantly larger, with dollar content reaching 'several hundreds of dollars per XPU,' positioning the Scorpio X family to be the largest revenue contributor over time.

Joseph Moore asked if the company is seeing strength from reported tightness in AI inference markets and whether challenges in deploying rack-scale systems are impacting their business.

Answer

CEO Jitendra Mohan noted that inference and training systems use similar products, and the growing complexity of models benefits Astera Labs as the rack becomes the basic unit for both. COO Sanjay Gajendra added that the company's guidance conservatively models for deployment complexities and that their strategy is to provide a holistic 'AI rack level' connectivity solution to simplify integration for customers.

Joseph Moore requested perspective on recent AI algorithmic innovations like Deep Seek and asked for help sizing the importance of the Leo CXL product ramp expected in the second half of the year.

Answer

CEO Jitendra Mohan stated that despite innovations like Deep Seek, hyperscalers have increased CapEx, signaling confidence in AI's future. He believes lower inference costs will drive adoption, benefiting the entire infrastructure. CFO Michael Tate and Jitendra Mohan explained the Leo CXL ramp will begin in H2 2025, targeting high-performance compute initially, with broader general compute adoption expected in 2026-2027 as more use cases are deployed.

Joseph Moore of Morgan Stanley requested a qualitative discussion on the revenue ramp for the new Scorpio business in 2025. He also asked if the LEO CXL memory controller application, which can reduce server CPU counts, will be a material factor next year.

Answer

President and COO Sanjay Gajendra stated that despite long qualification cycles, Astera Labs expects the Scorpio product line to exceed 10% of total revenue in 2025. Regarding LEO, Gajendra confirmed that enabling large in-memory databases is a key use case with a strong TCO benefit, noting the technology is in a 'crawl to walk' phase with production volumes expected to begin in 2025.

Joseph Moore from Morgan Stanley inquired about the specific headwinds causing GlobalFoundries' Q3 guidance to be less optimistic than its foundry peers and asked for more details on the 'China for China' strategy, including the types of partners and customers involved.

Answer

CFO John Hollister explained the Q3 outlook, noting that while the base case for 2025 is growth, the consumer-facing Smart Mobile and IoT markets are managing inventory. CEO Tim Breen detailed the 'China for China' strategy, stating it primarily serves non-China customers who need to localize manufacturing for their Chinese end-markets, particularly in automotive. He added that it is also attracting Chinese customers seeking global sourcing options, creating a net opportunity for GFS.

Joseph Moore asked about the competitive landscape for the NVIDIA data center opportunity, noting the large number of partners, and how Navitas differentiates itself.

Answer

CEO Gene Sheridan emphasized Navitas's unique position, highlighting its comprehensive portfolio that addresses all three power conversion stages with ultra-high voltage SiC, high-voltage GaN, and mid-voltage GaN—a combination few competitors possess. He also pointed to the company's performance leadership, focused R&D investment, and the agility of its smaller size as key competitive advantages.

Joseph Moore questioned the timing for winning Blackwell data center designs that may already be complete and asked about contingency plans for cash burn if revenue remains soft due to tariffs.

Answer

CEO Eugene Sheridan responded that Blackwell designs are still dynamic with many new configurations, providing ongoing opportunities, and noted the customer project count grew from 40 to 75. CFO Todd Glickman added that the company is managing working capital tightly and expects cash usage to decrease as revenue grows, expressing no current concerns about their cash position.

Joseph Moore asked for details on the company's restructuring, including which end markets might be de-emphasized. He also inquired about the current pricing environment for new sockets given competitive pressures.

Answer

CEO Eugene Sheridan explained the restructuring involves a 14% headcount reduction to save approximately $2 million per quarter and sharpens the company's focus on three strategic markets: AI data center, mobile, and EV. He noted that technology developed for these core areas will be cross-sold into adjacent markets. Regarding pricing, Sheridan acknowledged market softness leads to aggressive pricing but stated that Navitas has successfully renegotiated its own cost structures, allowing it to compete effectively.

Joseph Moore of Morgan Stanley asked about the role of pricing in driving market penetration and how Aeva balances profitability targets with the need to lower prices to expand its market share in automotive and industrial sectors.

Answer

CEO Soroush Salehian explained that Aeva's unified perception platform, which uses the same core chip and manufacturing processes across diverse markets, creates significant economies of scale. This allows the company to manage different ASPs and gross margin profiles. He contrasted the over-$1,000 ASP in trucking with different pricing for higher-volume passenger cars. He also noted that the industrial automation market has ASPs in the thousands of dollars, enabling Aeva to blend margins across verticals, a unique advantage over competitors focused on a single market.

Joseph Moore asked about the ramp-up time for new customers in the laser displacement sensor market and whether lead times are expected to shorten as the technology proliferates.

Answer

CEO Soroush Dardashti stated that while the first strategic customer, SICK, took time to establish, subsequent engagements like the one with LMI Technologies have had much shorter time frames. He anticipates future customer onboarding will be a matter of months, not years. Dardashti also confirmed that Aeva is actively ramping up its manufacturing capacity to meet the growing demand, targeting 100,000 units per year, a process supported by the new strategic investment.

Joseph Moore asked about the OpEx trajectory as revenue accelerates and about the competitive dynamics of building a design pipeline in China.

Answer

CFO Derek D'Antilio stated that he does not expect a material step-up in OpEx dollars, as SG&A has remained flat due to efficiencies. Instead, the company will reallocate funds within the existing budget to high-growth areas. CEO Michael Doogue noted that while competition in China is increasing, Allegro's ability to win is based on a long-term strategy of offering differentiated, high-end products that provide system-level value.

Joseph Moore from Morgan Stanley asked for elaboration on the 'early signs of potential shortages' and questioned why there wasn't more evidence of customers pulling in orders given lean inventories and tariff uncertainty.

Answer

CFO Derek D'Antilio specified that potential shortages are in longer-lead-time raw materials, driven by a rapid recovery in data center demand, which the company is managing with its strategic die bank. CEO Michael Doogue stated that despite seeing increased bookings, direct conversations with customers have not indicated that tariff concerns are a material driver for the upside demand.

Joseph Moore questioned why there wasn't more tariff-related inventory buffering and asked about customer conversations regarding price pressure. He also inquired about the nature of the CSG segment's weakness, asking if it was a discrete fall-off or a delayed ramp.

Answer

President & CEO Robert Bruggeworth stated that the primary tariff impact observed was in the battery-operated power tool market, where customers are delaying production. SVP & CFO Grant Brown explained the CSG weakness is due to a large automotive program ramp being pushed from fiscal 2026 to 2027, which meaningfully impacts the segment's growth outlook for the current year. He noted the SoC business within CSG incurs about $100 million in OpEx against roughly $60 million in revenue.

Joseph Moore from Morgan Stanley asked about the Q3 gross margin guidance, which showed less flow-through than expected, and the long-term margin potential following the planned consolidation of facilities in Japan.

Answer

CEO Giel Rutten explained that margins are temporarily impacted by a manufacturing transition, including ramp-up costs in Vietnam, startup costs for new high-density fan-out products in Korea, and underutilization in Japan. CFO Megan Faust added that the Q3 product mix is unfavorable due to a high concentration of advanced SiP for the seasonal communications ramp. However, she noted that operating income and EPS are expected to more than double. Regarding the long-term outlook, Ms. Faust confirmed plans to rationalize the Japan footprint to improve efficiency, referencing a similar successful restructuring in the past.

Joseph Moore asked for the basis of Amkor's optimism for growth in the automotive market in 2025, questioning which specific package types could offset the prevailing macro weakness.

Answer

CEO Giel Rutten acknowledged the Q4 disappointment but explained that confidence for 2025 stems from a strong project pipeline in advanced automotive packaging, specifically for ADAS devices, in-car networking, and infotainment. He added that while visibility for mainstream automotive products remains vague, the company believes the market has reached a trough and expects a gradual improvement.

Joseph Moore asked about the company's visibility into the stabilization of the automotive and industrial markets, considering the high levels of inventory held by customers and in the distribution channel.

Answer

CEO Giel Rutten acknowledged that the inventory correction has stretched longer than anticipated, extending into Q3, compounded by slower end-market demand. He relayed that customers had previously called a trough in Q2, but it is now extending. However, he believes inventory is getting more stable and that the EV market, in particular, will start to pick up in early 2025, providing a good starting point for a recovery.

Joseph Moore of Morgan Stanley questioned if the new focus on Edge AI infrastructure implies a shift in resources away from the larger CV3 automotive ADAS opportunities and asked about the company's investment strategy for emerging markets like humanoid robotics.

Answer

CEO Fermi Wang affirmed that automotive remains a focus, with the CV3 family complete and software investment ongoing. He explained that resources are now available to also pursue edge infrastructure. Regarding robotics, he compared the current market to autonomous driving five years ago, noting Ambarella is investing resources and that its CV5, CV7, and future N-series products are well-suited for this emerging, segmented market.

Joseph Moore inquired about whether recent advancements in ADAS from competitors have stimulated more investment from other OEMs and asked about the growth prospects for the electronic rearview mirror market.

Answer

CEO Fermi Wang responded that demand for Level 2+ ADAS remains strong, but OEMs are increasingly cost-sensitive, which positions Ambarella's CV3 family favorably. Regarding e-mirrors, he noted that while the segment is growing and serves as a good entry point into major OEMs, its modest ASP limits the material impact on total revenue.

Joseph Moore asked for details on the drivers behind the strong Q3 outlook, questioning if it was due to content increases from CV5 migration or new applications. He also inquired if the recent automotive win was generating increased traction and conversations within the China EV market.

Answer

CEO Fermi Wang attributed the Q3 strength to new product ramps across both IoT and automotive markets. He specified that higher ASP products are being introduced in IoT, while automotive growth is driven by ramps like Rivian using the CV5 SoC. From a product view, the CV5 ramp and the recovery of CV22 post-inventory correction are the primary drivers. Wang also confirmed that recent design wins are helping build momentum and engagement with multiple OEMs in China for the CV3 platform.

Joseph Moore of Morgan Stanley asked for clarification on a prepared remark about market uncertainty potentially impacting the timing of portfolio optimization initiatives, asking what specific uncertainty was being referenced.

Answer

President & CEO Hong Hou clarified the comment referred to broad macroeconomic uncertainty, not tariffs, which can defer strategic deal flow as potential partners focus on other priorities. He emphasized Semtech's commitment to improving the businesses it currently owns to create shareholder value, thereby controlling what it can.

Joseph Moore asked about the nature of customer conversations regarding inventory levels amid tariff uncertainty and inquired about the company's M&A strategy in the current geopolitical climate.

Answer

CEO Matt Johnson reported that despite tariff uncertainty, there have been no meaningful changes in customer inventory behavior, with no one attempting to build positions. Regarding M&A, he stated that while the strategic desire remains unchanged, the current uncertainty makes it too soon to determine any impact on potential deal-making.

Joseph Moore asked if there was any scenario where the dividend might be reduced and requested the rationale for excluding the preferred dividend from non-GAAP earnings.

Answer

CEO Steve Sanghi gave an 'absolute commitment' that a dividend reduction is not being considered, highlighting the recent $1.45 billion mandatory convertible offering as a move to strengthen the balance sheet and protect the dividend. CFO J. Bjornholt explained the preferred dividend is excluded from non-GAAP results because it is an equity instrument, not debt, which is a common industry practice.

Joseph Moore asked for the portion of the 266 days of inventory that comes from internal fabs. He also questioned if the gross margin guidance fully reflects lower utilization or if there is a lingering cost impact.

Answer

CEO Steve Sanghi and CFO Eric Bjornholt confirmed that internal fab inventory days were higher, around 288 days. Bjornholt explained that while lower utilization does capitalize costs at higher levels, he expects gross margin to improve as large inventory reserve charges decrease. He also noted that closing Fab 2 will accelerate the inventory correction.

Joseph Moore asked about the key growth drivers for QUALCOMM's automotive business, which is showing strong results in a tough market, and inquired about the timeline for when ADAS will become a more significant contributor to that growth.

Answer

Cristiano Amon, President and CEO, identified the key drivers as mix improvement towards more digital cockpit content and the ramp-up of ADAS, noting five new ADAS design wins in the quarter. Akash Palkhiwala added that QUALCOMM is positioned in the fastest-growing area of the auto market—the digitization of the car—where silicon content is multiplying, driving their strong performance.

Joseph Moore asked about the drivers behind Qualcomm's strong automotive segment performance amidst industry headwinds and requested an update on the company's legal dispute with Arm.

Answer

CEO Cristiano Amon explained that automotive revenue growth is driven by market share gains as new car models launch with Qualcomm technology, making it less sensitive to overall market trends. CFO Akash Palkhiwala added that Qualcomm is confident its broad license rights for custom CPUs will be affirmed in the upcoming trial with Arm scheduled for December.

Joe Moore asked for the rationale behind NAND being the strongest growth area at a time when customers are cutting utilization, seeking more color on the technology transition drivers.

Answer

CEO Timothy Archer clarified that current NAND spending is for technology migration, not capacity expansion. He explained that upgrading to higher layer counts is a cost-effective way for customers to reduce bit cost and improve device performance. He emphasized that while spending is growing from a very low base, it is driven by Lam's high capture rate on upgrade WFE and represents the early stages of a longer cycle.

Joe Moore asked how U.S. Commerce Department export controls are factored into Lam's China outlook and whether the forecast is based on specific information or assumptions. He also questioned the source of confidence for the implied double-digit ex-China growth in Q4.

Answer

CEO Timothy Archer described the company's China forecast as being based on their 'best understanding and best estimate' of the regulatory environment. CFO Douglas Bettinger affirmed that the overall Q4 guidance is the result of their standard, rigorous, bottom-up analysis of customer demand across all regions, which provides the confidence in the numbers.

Joseph Moore requested an update on the enterprise solid-state drive (eSSD) business, asking if it is still tracking to targets amid market choppiness. He also asked about the timing for when the company will provide separate financial guidance for the two spun-off businesses.

Answer

CEO David Goeckeler affirmed that the eSSD business is tracking to its targets, including a 15-20% mix of the business, despite some quarterly choppiness. He stated that more details on the eSSD roadmap and separate company guidance would be provided at the upcoming Investor Day, pointing to the directional guidance already given in the prepared remarks.

Joseph Moore sought clarification on the procedural steps and timeline for the business separation, including the soft spin and Form 10 filing. He also asked about the company's resolve to complete the spin-off amidst external factors.

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CEO David Goeckeler detailed the separation process, explaining that the company is currently in a 'soft spin' phase, running two separate system stacks internally for a full quarter to ensure stability before the formal spin. He clarified they will report as one company for the December quarter, make the Form 10 public in the coming months to begin financing activities, and expect the separation to occur around the time of the Q2 earnings call. He affirmed the company is very focused on completing the separation as planned.

Joseph Moore pointed out the cited weakness in major trailing-edge categories like automotive, industrial, and analog, and asked what specific segments within ICAPS are still performing well to support the strong outlook.

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CFO Brice Hill identified power-related components and some microcontrollers as areas within ICAPS that remain stronger. He acknowledged that while some end markets are slower and fab utilizations are slightly low, the overall ICAPS market has remained strong. However, he conceded there could be some slowing of investment as the market evolves through the year.

Joseph Moore asked how KLA anticipates being notified of any new export controls and whether its 2025 outlook is already informed by such possibilities. He also inquired if KLA's China business mix is now more driven by foundry than DRAM.

Answer

CEO Rick Wallace stated that KLA receives little to no advance notice on export control announcements and therefore does not speculate or build them into forecasts, which are based on customer conversations. CFO Bren Higgins confirmed that moving forward, he expects the China business to be more weighted toward foundry/logic, with memory investment declining.

Joseph Moore requested the absolute dollar value for EV revenue, noting that only percentage growth figures were provided, and asked for clarification on what the company classifies as EV.

Answer

CFO Neill Reynolds did not provide an absolute dollar figure but offered significant context. He stated that EV revenue has grown from about 25% of Power Device revenue a year ago to over 50% in the June quarter, with an outlook for it to exceed 60% in the September quarter. He also noted strong growth is expected to continue into the first half of calendar 2025.