Mehdi Hosseini

Mehdi Hosseini sought clarification on the mix impact on ASP for the fiscal Q3 guidance, given the significant jump in blended ASP with low single-digit bit growth. He also questioned why customers aren't showing more urgency to commit to long-term NAND supply, despite intensifying shortages and long fab build times, especially with substantial AI investments.

Answer

Luis Visoso (EVP and CFO) explained that the ASP increase is driven by a better mix, stemming from strategic customer allocation and partnerships that value SanDisk's products, rather than solely end-market changes. David Goeckeler (Chairman and CEO) acknowledged the urgency, noting a dramatic shift from decades of quarterly NAND auctions. He emphasized that data center becoming the largest NAND market, with NAND as a strategic component in AI architectures, is challenging traditional business practices and accelerating changes in customer commitments, despite the inherent difficulty of rapid industry-wide shifts.

Mehdi Hosseini questioned the mix impact on blended ASP for the upcoming fiscal quarter, given the guidance for low single-digit bit growth and a significant ASP jump, particularly with scaling SSDs. He also pressed for an explanation on the apparent lack of urgency from customers to commit to long-term memory/NAND supply, despite intensifying shortages and long fab build times, contrasting this with commitments in other parts of the AI supply chain.

Answer

CFO Luis Visoso explained that mix impacts on ASP are more related to customer prioritization and strategic partnerships, leading to better gross margins, rather than just end-market changes. He noted that a mixed breakout would be provided next quarter. CEO David Goeckeler argued that urgency is indeed present, with dramatic changes occurring in a market traditionally driven by quarterly auctions. He highlighted the data center's emergence as the largest NAND market, shifting it from a commodity to a highly strategic product, which is challenging traditional business practices and driving quicker, albeit relative, changes in customer engagement.

Mehdi Hosseini requested an update on the Ultra QLC 256 Terabyte product, specifically regarding its ramp with a tier-one data center customer. He also asked for clarification on the 128T qualifications and ramp timing, and whether an accelerated mix shift towards cloud is expected as the 128T ramps, assuming no significant wafer capacity additions.

Answer

Chairman and CEO David Goeckeler clarified that the 128T drives are currently under qualification, with a ramp expected mid-next year, while the 256T product is likely to hit the market mid-to-late next year. He confirmed that SanDisk is working with five hyperscalers across its enterprise SSD portfolio and expects sequential growth in the data center portfolio throughout fiscal year 2026, leading to an exabyte shift in that direction. EVP and CFO Luis Visoso added that BICS8 wafers contain significantly more bits, allowing for increased supply without additional wafer production.

Mehdi Hosseini requested an update on the UltraQLC 256 TB product, specifically regarding a tier one data center customer expected to ramp in the first half of the calendar year. He also asked if, assuming no new wafer capacity at the JV, the ramp of 128 TB drives mid-next year would lead to more bit allocation to these customers and an accelerated mix shift towards cloud.

Answer

Chairman and CEO David Goeckeler clarified that the 128T drives are currently under qualification with multiple customers, with ramping expected mid-next year, while the 256T drives are likely to hit the market mid to late next year. He confirmed that Sandisk is working with five hyperscalers across its enterprise SSD portfolio. Goeckeler stated that sequential growth in the data center portfolio is expected throughout fiscal year 2026, implying an exabyte shift in that direction. EVP and CFO Luis Visoso added that BiCS8 wafers contain significantly more bits, allowing for increased supply without new wafer production.

Mehdi Hosseini from Susquehanna Financial Group asked about the impact of ASML's EUV capacity ramp on booking trends, specifically whether customers are waiting for confirmed capacity before committing to bookings for 2027 and beyond. He also inquired about the factors required for ASML to achieve the high end of its 2026 revenue guidance, and if China's backlog, with its shorter lifetime, would influence this.

Answer

CFO Roger Dassen stated that customers are aware of ASML's capacity plans and appreciate the flexibility built into the model; if anything, they tend to book earlier if they perceive a potential supply constraint. For the high end of the 2026 revenue guide, Roger emphasized customer readiness (fab completion) as the primary factor, followed by ASML's execution and supply chain alignment, and strong demand for upgrades. He reiterated that China is expected to be 20% of revenue across the entire guidance range.

Mehdi Hosseini asked if ASML's EUV capacity ramp impacts booking trends, specifically if customers are waiting for committed capacity before placing orders for 2027 and beyond. He also inquired what factors, particularly China's contribution, would be critical for ASML to hit the high end of its 2026 revenue guidance.

Answer

Roger Dassen, CFO, stated that customers are aware of ASML's capacity plans and appreciate the built-in flexibility, suggesting that if capacity becomes a choke point, customers tend to place orders sooner. He reiterated that hitting the high end of the 2026 guidance depends primarily on customer fab readiness, ASML's execution, and strong demand for upgrades, with China's revenue share remaining around 20% across the range.

Mehdi Hosseini asked if the incremental investment driven by AI, coupled with increased customer concentration (especially one logic customer), leads to higher volatility in ASML's bookings, backlog, and quarterly revenue, thereby limiting visibility. He also inquired about the working capital intensity, noting increases in inventories and accounts receivable, and whether shipment strength improvements are expected to lead to better cash from operations.

Answer

CEO Christophe Fouquet acknowledged that the primary concern with customer concentration is potential supply limitation for the market, but highlighted that the broadening customer base in AI (logic and DRAM) is a positive development. CFO Roger Dassen explained that inventory increases are largely due to High NA's long installation cycle, while down payments are the offsetting factor. He stated that reducing cycle time, especially for High NA, is the biggest driver for improving working capital and cash from operations.

Mehdi Hosseini requested an update on the throughput for the NXE:3800E system and asked about ASML's long-term capacity planning strategy, specifically regarding the balance between reducing lead times and building a longer backlog.

Answer

CFO Roger Dassen stated that the max throughput of 220 wafers per hour for the NXE:3800E has been demonstrated and is being rolled out to new tools and upgraded on systems in the field during the year. He explained that the long-term capacity goal is to offer customers a 'normal' and manageable order lead time. ASML is building the necessary infrastructure and securing long-lead-time items to have the flexibility to respond to accelerating demand without creating excessively long backlogs.

Mehdi Hosseini requested an update on the throughput of the NXE:3800E system and asked about ASML's long-term capacity planning strategy, specifically how it balances managing lead times versus building a larger backlog.

Answer

CFO Roger Dassen reported that the 3800E's maximum throughput of 220 wafers per hour has been demonstrated and is being rolled out to new and installed systems. He explained that the long-term capacity strategy focuses on securing long-lead-time items and infrastructure to enable flexibility, with the goal of offering customers normal, manageable lead times rather than building an extended backlog.

Mehdi Hosseini asked about the increasing CapEx on a quarter-over-quarter basis, the dip in depreciation in the December quarter, and whether a step-up in depreciation should be expected going forward.

Answer

CFO Gianluca Romano stated that CapEx is aligned with the 4%-6% of revenue target, currently at the lower end, supporting the HAMR transition. He explained that depreciation will follow CapEx, based on a 10-year useful life model. CEO Dave Mosley added that depreciation is not as significant a cost driver for Seagate compared to other fabs, with other cost pieces being more manageable.

Mehdi Hosseini asked about the increasing trend in CapEx on a quarter-over-quarter basis and whether a step-up in depreciation should be expected looking forward, given the recent CapEx increases.

Answer

CFO Gianluca Romano stated that CapEx is aligned with the target range of 4%-6% of revenue, currently at the bottom of that range, and supports the HAMR transition. He explained that depreciation will follow CapEx, with a 10-year useful life for assets. CEO Dave Mosley added that CapEx is higher than two years ago due to a different demand environment, with initial priorities being maintenance tools.

Mehdi Hosseini from Susquehanna International Group asked CEO Charlie Giancarlo what would be required for Pure Storage to scale its hyperscaler shipments to account for 1% or 2% of the overall enterprise SSD market, given hyperscalers' role in driving demand.

Answer

CEO Charles Giancarlo explained that scaling hyperscaler shipments requires navigating long design cycles and changes in hyperscaler technology/operations, despite Pure Storage offering superior solutions in power, space, performance, and consistency. He believes Pure Storage will gain significant market share as supply chains normalize. CFO Tarek Robbiati added that success hinges on existing customer satisfaction, expanding offerings across price/performance tiers, and broadening market reach.

Mehdi Hosseini from Susquehanna International Group asked what would be required for Pure Storage to significantly scale its presence in the enterprise SSD market, aiming for 1% or 2% of exabyte shipments, particularly given hyperscalers' influence on demand.

Answer

CEO Charles Giancarlo explained that Pure Storage offers a superior solution to both hard disk and SSD environments, requiring hyperscalers to adapt their technology and operating processes due to Pure's different approach. He highlighted ongoing POCs and engineering meetings with top hyperscalers, emphasizing Pure's value in power/space reduction, performance increase, and consistency across price ranges. CFO Tarek Robbiati added that scaling involves making existing customers successful, expanding offerings to multiple price-performance tiers, and broadening technology reach to other firms.

Mehdi Hosseini asked for the estimated exabyte shipment in the current fiscal year (FY25) to better contextualize the scale of the double-digit exabyte shipments expected from the hyperscaler win in FY27.

Answer

CEO Charles Giancarlo responded that there will be no substantial shipments in the current fiscal year, with deployments limited to very low volumes for test and pre-production environments, perhaps in the range of one or two systems.

Mehdi Hosseini asked if Pure's traction with data centers is primarily being captured in product revenue while the Evergreen subscription model is still scaling.

Answer

CEO Charles Giancarlo clarified that Evergreen//One is sold into all environments, including large enterprises, MSPs, and other clouds. He noted that the run rate for smaller, 'commercial' Evergreen//One deals is very strong and that all such sales, regardless of customer type, are included in the TCV forecast.

Mehdi Hosseini asked about the trending of the wireless segment for the new fiscal year, inquiring if there are any catalysts for growth in FY 2026 or if it should be expected to trend sideways. He also followed up on the adoption of 1.6 Terabit per second wireline, asking if it would lead to additional growth or acceleration for Keysight due to upgrades or pricing.

Answer

President and CEO Satish Dhanasekaran expressed optimism about wireless growth into 2026, driven by stabilization in 5G and early results from advanced technology investments, even ahead of 6G inflections. He noted that Keysight's strategy of developing first-to-market solutions for higher technological complexity, such as the 1.6 Terabit wireline, plays to the company's strength, with a plethora of inflecting technologies across the AI stack positioning Keysight for continued momentum.

Mehdi Hosseini inquired about the expected trends for Keysight's wireless segment in the new fiscal year (FY2026), asking if any catalysts would drive growth beyond the sideways trend observed in the previous year. He also followed up on the adoption of 1.6 TB per second wireline, questioning if it would lead to additional growth or acceleration for Keysight due to potential upgrades or pricing benefits.

Answer

Satish Dhanasekaran, Keysight's President and CEO, expressed optimism about wireless growth into FY2026, noting that 2025 exceeded expectations due to 5G stabilization and early results from advanced technology investments. Regarding 1.6 TB wireline, Mr. Dhanasekaran highlighted Keysight's strategy of developing first-to-market solutions for higher technological complexity, which plays to their strength, and noted a plethora of inflecting technologies across the AI stack where Keysight is well-positioned.

Mehdi Hosseini of Susquehanna International Group asked for an update on the scale and sustainability of the wireline business orders and questioned the disparity in operating margin performance between the CSG and EISG segments, despite similar revenue growth.

Answer

CEO Satish Dhanasekaran stated he expects record bookings for the wireline business this year, driven by a sustainable AI-led acceleration in technology refresh cycles. CFO Neil Dougherty explained that the EISG segment's margin expansion was aided by a favorable product mix, given the wider range of margins within its portfolio, and noted that tariff impacts were reasonably spread across both segments.

Mehdi Hosseini asked if Keysight's content per unit increases as the industry migrates from 800G to 1.2T and what the magnitude of that increase might be. He also asked for clarification on the operating margin trajectory for the rest of the fiscal year.

Answer

CEO Satish Dhanasekaran stated that as complexity increases with higher speeds, the value Keysight provides to customers in early R&D also increases, and these overlapping technology waves support the company's long-term 5-7% growth target. CFO Neil Dougherty indicated that operating margin would be range-bound in the near term, with a seasonal uplift from Q3 to Q4, though tariffs will affect the incremental flow-through.

Mehdi Hosseini asked if Keysight's content opportunity increases with the migration from 800G to 1.2T and the shift to optical technologies. He also requested an outlook for the full-year operating margin considering guidance and tariff impacts.

Answer

CEO Satish Dhanasekaran confirmed that as test complexity increases with higher data speeds and new technologies, the value Keysight provides also increases, supporting the company's long-term growth model. CFO Neil Dougherty indicated that the operating margin is expected to be 'range bound in a pretty tight range,' with a seasonal Q4 uplift partially offset by the near-term impact of tariffs.

Mehdi Hosseini posed a long-term question about the competitive landscape between 5G/6G and satellite communications, asking if satellite could become a larger commercial force and what the net impact would be for Keysight.

Answer

CEO Satish Dhanasekaran characterized satellite communications and non-terrestrial networks as an incremental medium-term opportunity. He noted that historically, each new technology generation like 6G has expanded the total addressable market due to growing complexity. He expressed confidence that Keysight's sustained R&D investments position it well to capitalize on these future growth drivers.

Mehdi Hosseini asked if the 10 AI platforms adopting Scorpio products also implies a diverse set of customers adopting ULink, the open standard.

Answer

Sanjay Gajendra, President, Co-Founder, and COO, confirmed strong momentum around ULink. He clarified that the '10 customer' comment referred to those using PCIe-like protocols for scale-up, but noted that these customers would also likely consider ULink as an additive option for platforms requiring higher data rates and as an upgrade path.

Mehdi Hosseini sought clarification on Scorpio's revenue contribution, specifically if the 10% full-year target implied a 20% exit rate in Q4, and the ramp acceleration of Scorpio X.

Answer

Mike Tate, CFO, confirmed that Scorpio's 10% full-year revenue target implied an exit rate closer to 20% in Q4. He stated that Scorpio P Series would continue to grow with new designs, while Scorpio X Series, currently in low initial volumes, is expected to ramp materially in 2026, ultimately becoming a larger opportunity than Scorpio P. Sanjay Gajendra, President, Co-Founder, and COO, clarified that the '10 AI platforms' engaged with Scorpio products include customers developing their own accelerators and hyperscalers integrating third-party accelerators. He noted that while these engagements primarily use PCIe-like protocols, UALink is seen as an additive option for higher data rates and an upgrade path for these customers.

Mehdi Hosseini inquired about structural changes in test insertions, focusing on wafer level tests, design wins, and increased penetration, specifically asking if Berlin on a wafer level was part of these design wins. He also asked how the company's 2028 EPS target of $7-$9.50, provided earlier in the year, would be affected by the current design wins not yet embedded in the guidance.

Answer

CEO Greg Smith highlighted System Level Test (SLT) as critical for late-stage defect detection and mentioned new technologies like CoWoP requiring extensive system test and burn-in, viewing these as a contiguous market. Regarding the 2028 EPS target, Mr. Smith stated that an update would be provided in January, noting that while the long-term destination remains similar, the market composition is shifting to be much more heavily dependent on AI-driven data center investments across compute, networking, memory, and power.

Mehdi Hosseini asked about the impact of structural changes and design wins on Teradyne's penetration in wafer-level tests, specifically inquiring if 'Berlin on a wafer level' was part of these wins. He also followed up on the company's 2028 EPS target, asking if current design wins were factored into that target and how the market composition might shift.

Answer

CEO Greg Smith highlighted SLT as critical for preventing latent defects in data centers and noted that new technologies like CoWoP require extensive system test and burn-in, viewing burn-in and SLT as a contiguous market. Regarding the 2028 EPS target, Mr. Smith stated that an update would be provided in January, emphasizing that while the long-term destination remains similar, the market composition is shifting heavily towards AI-driven data center investments across compute, networking, memory, and power.

Mehdi Hosseini of Susquehanna International Group asked if 2026 could be a major inflection point with growth catalysts in mobile, AI, and robotics all converging. He also questioned the near-term impact of a key HDD customer's doubling of CapEx on Teradyne's system-level test business.

Answer

President & CEO Greg Smith affirmed the strategy for midterm growth across all business segments, including Semi Test, IST, Product Test, and Robotics, highlighting the plan's resiliency. On the HDD topic, he stated that while strengthening demand is expected through 2026, the impact will take time due to long lead times and existing idle capacity, and will not mirror the customer's CapEx doubling.

Mehdi Hosseini inquired about the strategic partnership with Infineon, asking about the benefits for both companies, and questioned the strategy for the Industrial Automation business given its financial performance.

Answer

CEO Greg Smith explained that the Infineon partnership allows Teradyne to accelerate its roadmap in power semiconductors like SiC and GaN, while Infineon can focus on its core chip design business by moving its internal test development to a commercial ATE company. Regarding robotics, Smith stated the business is accretive to earnings above its new breakeven point and that the company is focused on improving efficiency and customer experience, not considering a 'Plan B' or divestiture.

Mehdi Hosseini inquired about the System Level Test (SLT) TAM for 2024 and 2025, Teradyne's position as the market diversifies from smartphones to compute, and whether escalating AI chip test times create an opportunity for Teradyne.

Answer

CEO Greg Smith explained that while SLT TAM is hard to measure precisely, Teradyne is adding compute customers in 2024 with a more meaningful revenue contribution expected in 2025. He noted that SLT helps limit test time growth from device complexity, and Teradyne's primary opportunity in AI compute is with Vertically Integrated Producers (VIPs) and the associated networking devices, rather than gaining share on specific parts like Blackwell.

Mehdi Hosseini asked about Corning's longer-term revenue opportunities, specifically if incremental revenue could reach high single billions quarterly or $30 billion plus on an annualized basis by 2026-2027, given the success of the Springboard plan. He also inquired about Corning's solar strategy, including the acquisition of JH Solar module manufacturing capacity, and the affordability of producing entire solar modules (from polysilicon to module) in the U.S. for domestic customers, especially with declining subsidies.

Answer

Chairman and Chief Executive Officer Wendell Weeks stated that Corning would provide an update on the Springboard plan early next year, as they are currently evaluating it. For solar, he confirmed Corning's focus on ingots and wafers, with a go-to-market position in modules to introduce innovations that boost conversion efficiency. The goal is to establish a U.S. supply chain that produces competitive products against overseas imports, aiming for economical and rapidly deployable U.S.-made solar power, particularly for AI's energy demands.

Mehdi Hosseini requested details on the Hemlock and solar business strategy, including the revenue mix between polysilicon, wafers, and modules, and the capital intensity of this segment compared to others.

Answer

CEO Wendell Weeks explained that current revenue is almost entirely from polysilicon, with wafer and module revenue expected to ramp in the coming quarters. He compared the vertical integration strategy to Optical Communications, where each component level must be competitive. He noted that modules are not capital-intensive, while polysilicon is the most capital-intensive, though the assets are largely in place.

Mehdi Hosseini asked for details on Corning's solar strategy, specifically the revenue mix between polysilicon, wafers, and modules, and the relative capital intensity of scaling this business compared to other segments.

Answer

Chairman & CEO Wendell Weeks detailed that current solar revenue is predominantly from polysilicon, with wafers and modules set to contribute more in coming quarters. He compared the strategy to Optical Communications, where Corning is vertically integrated but also sells components at each level. He noted that polysilicon is the most capital-intensive part (with assets already in place), while modules are the least.

Mehdi Hosseini from Susquehanna International Group asked about end-market demand trends from TV panel customers and followed up by questioning why Corning isn't more aggressive with share buybacks given its strong confidence in the 'Springboard' plan.

Answer

EVP and CFO Ed Schlesinger stated that the company expects flat TV unit sales for the year, with market growth driven by larger screen sizes. Chairman and CEO Wendell Weeks noted that Q1 panel maker utilization was slightly high but is expected to normalize. Regarding buybacks, Schlesinger confirmed that repurchases are ongoing ($100 million in Q1) and will be the primary vehicle for returning cash to shareholders, balanced with the priority of maintaining a strong balance sheet.

Mehdi Hosseini requested an update on different TAMs, including buffer chip companion, CXL, HBM IP, and the inclusion of MRDIMM, asking what the TAM would look like in 2-3 years. He also inquired if MRDIMM margins would be comparable to product or IP margins. In a follow-up, he asked about trends beyond December seasonality, specifically if better-than-seasonal server and AI trends would apply to Rambus in early 2026.

Answer

Luc Seraphin (CEO) outlined the product TAM: RCD market around $800 million, companion chips around $600 million (half PMICs), with the market growing mid-to-high single digits, plus tailwinds from increased channels and DIMMs. MRDIMM adds about $600 million TAM, expected to hit the market late 2026/2027. For silicon IP, Luc Seraphin (CEO) noted it's hard to estimate TAM but emphasized Rambus's central role in AI (PCIe7, HBM4, GDDR), confirming the business is on track for double-digit growth. Desmond Lynch (CFO) stated MRDIMM is a chip product, and its margins would be comparable to the product business, targeting 60-65% long-term. Luc Seraphin (CEO) projected mid-to-high single-digit server market growth into 2026, driven by inference and Agentic AI, noting typical Q4 inventory prudence but expecting a return to normal in Q1 2026, while cautioning on visibility beyond one quarter.

Mehdi Hosseini requested an update on Rambus's various Total Addressable Markets (TAMs), including buffer chip companion, CXL, HBM IP, and the impact of MRDIMM, projecting the TAM outlook for the next 2-3 years. He followed up by asking if MRDIMM margins would be comparable to product or IP margins, and about server and companionship trends beyond December, specifically if better-than-seasonal trends into early 2026 would apply to Rambus.

Answer

Luc Seraphin (CEO, Rambus Inc.) outlined TAMs: RCD market at ~$800 million, companion chips at ~$600 million (half PMICs), with mid-to-high single-digit market growth and additional tailwinds. MRDIMM adds ~$600 million TAM, expected late 2026/2027. For silicon IP, he noted it's hard to quantify a TAM but highlighted focus on PCIe7, HBM4, and GDDR, targeting double-digit growth. Desmond Lynch (CFO, Rambus Inc.) clarified that MRDIMM, as a chip product, would have margins comparable to the product business, aiming for 60-65% long-term. Mr. Seraphin projected mid-to-high single-digit server market growth into next year, driven by inference and Agentic AI, with typical Q4 inventory prudence followed by a return to track in Q1 2026, emphasizing favorable tailwinds for Rambus's business.

Mehdi Hosseini of SIG asked for details on the product revenue mix between DDR5 RCDs and new companion chips, and whether the growth from new products would continue. He also inquired about the drivers for the sequential increase in silicon IP revenue and the long-term opportunities in the PC market versus CXL.

Answer

CEO Luc Seraphin clarified that new companion chips contributed a low single-digit percentage to Q2 product revenue, expected to rise to mid-to-upper single digits in Q3, with momentum continuing into 2026. CFO Desmond Lynch explained the Q2 silicon IP revenue increase was driven by more customizable IP sales, reflecting strong demand for HBM4, PCIe 7, and security solutions. Seraphin added that MRDIMM is expected to address memory expansion use cases, while the client PC market represents a separate growth vector for companion chips.

Mehdi Hosseini asked about the cause of the sequential decline in product gross margin, the outlook for product revenue, and the potential for a material revenue step-up from HBM4, questioning if the lumpiness in Silicon IP is due to product migration or customer diversification.

Answer

CFO Desmond Lynch attributed the slight Q1 product gross margin dip to normal, annual mid-single-digit price negotiations, and projected stronger margins in the second half from mix improvements and cost savings. CEO Luc Seraphin explained that HBM4 licensing is ongoing but lumpy, clarifying that the Q4-to-Q1 revenue fluctuation in Silicon IP was driven by the timing of customer tape-outs rather than a specific technology or diversification trend.

Mehdi Hosseini questioned the recent increase in R&D spending and its expected revenue timeline, and also asked about the revenue recognition model for advanced IP like HBM4 and GDDR7.

Answer

CEO Luc Seraphin attributed higher R&D to accelerating the product roadmap for AI opportunities. CFO Desmond Lynch projected R&D would remain 23-25% of revenue. Seraphin clarified that for Silicon IP, revenue is recognized upon licensing, not end-product shipment, and that strong HBM IP adoption drove an exceptionally strong Q4 for the business.

Mehdi Hosseini of Susquehanna International Group inquired about the drivers of the 2024 incremental product revenue growth, the outlook for product gross margins, the IP content differences between HBM3 and HBM4, and the company's expected operating leverage.

Answer

CEO Luc Seraphin attributed product revenue growth primarily to DDR5 market share gains, with a growing but still modest contribution from companion chips. CFO Desmond Lynch projected full-year 2024 product gross margins at 61-62% and noted that while R&D spending will increase, SG&A should provide leverage as revenue grows. Seraphin added that the main difference between HBM IP generations is increased speed.

Mehdi Hosseini questioned whether the increased concentration within the $8 billion WFE for every $100 billion of incremental AI spending might give customers leeway, reducing the urgency to rush purchase orders (POs) for capacity. He wondered if this concentration lessens concerns about running out of capacity among suppliers.

Answer

Tim Archer, President and CEO, explained that while facility construction lead times are long, the recent surge in AI infrastructure announcements creates a ripple effect through the supply chain to ensure capacity. He emphasized Lam's focus on executing to customer needs, but did not directly confirm if it leads to less urgency in POs.

Mehdi Hosseini followed up on the $8 billion WFE for $100 billion AI investment, questioning whether increased concentration among customers might allow them more leeway, reducing the urgency to secure capacity or release purchase orders, given the long lead times for facility construction.

Answer

EVP and CFO Doug Bettinger and President and CEO Tim Archer acknowledged the complexity. Tim Archer emphasized that Lam Research and its customers actively work with the supply chain to ensure capacity is available, especially in response to recent AI infrastructure announcements. He reiterated Lam Research's focus on executing to customer needs, ensuring capacity exists when required.

Mehdi Hosseini asked for a framework to understand WFE spending by investment type (strategic vs. capacity) and questioned the sustainability of the high operating margin drop-through.

Answer

CEO Timothy Archer emphasized focusing on Lam's long-term outperformance driven by product alignment with key technology inflections, which he sees as more critical than short-term WFE shifts. CFO Doug Bettinger explained that the strong profitability reflects deliberate R&D investments to capture growth opportunities and that the company feels good about delivering record operating margins while investing for the future.

Mehdi Hosseini of Susquehanna International Group asked for the key drivers behind the implied corporate gross margin improvement for Q3 and questioned why Dell doesn't scale its higher-margin services business more aggressively to boost profitability.

Answer

CFO Yvonne McGill attributed the margin improvement primarily to second-half seasonality, with a strong fourth quarter expected for the high-margin storage business, particularly Dell's own IP products. Regarding services, COO Jeff Clarke responded that they are actively trying to scale the services business, and the most effective way to do so is to grow hardware sales and attach all forms of services to those products.

Mehdi Hosseini from SIG questioned the durability of the massive $12 billion in AI server bookings. He asked if this backlog is expected to cover the entire fiscal year and whether investors should anticipate a sharp decline in orders in the next quarter before a potential rebound.

Answer

Jeff Clarke, Vice Chairman and COO, responded that it's still early in the year and that Dell's five-quarter pipeline remains significantly larger than its $14.4 billion backlog. He clarified that the backlog includes orders with delivery schedules beyond Q2, based on customer readiness. The company's job is to continue converting the large pipeline into new orders throughout the year. CFO Yvonne McGill added that they remain optimistic about additional opportunities beyond the current backlog.

Mehdi Hosseini of SIG asked about Dell's underlying assumptions for the mix of server architectures (HGX, DGX, MGX) as key customers migrate from the Hopper to the Blackwell platform.

Answer

Executive Jeffrey Clarke emphasized Dell's open-based architecture, exemplified by the new IR 7000 rack. He explained this design's thermal and power headroom allows it to quickly accommodate any combination of new technologies based on customer needs, rather than being locked into a specific architecture, providing flexibility and speed.

Mehdi Hosseini of Susquehanna International Group asked if the availability of 128TB QLC-based NAND was affecting NetApp's ability to offer competitive AI solutions. He also inquired about revenue seasonality expectations for the upcoming January quarter (Q3).

Answer

CEO George Kurian responded that NetApp is not gated by NAND technology, as it offers a broad portfolio of drives, including 60TB QLC, and is working on larger form factors. Regarding seasonality, he expressed confidence in the full-year outlook but stated the company would take it one quarter at a time due to external macro uncertainty, deferring specific Q3 guidance.

Mehdi Hosseini of Susquehanna International Group asked if the availability of 128TB QLC-based NAND was impacting NetApp's ability to provide AI solutions and questioned the expected seasonality for the upcoming January quarter.

Answer

CEO George Kurian responded that NetApp is not gated by NAND technology, as it offers a broad range of drive capacities and is developing larger ones. Regarding seasonality, he expressed confidence in the full-year outlook but stated the company is taking it one quarter at a time due to macro uncertainty and will provide more detail after Q2.

Mehdi Hosseini of SIG requested an updated view on the all-flash array cycle, asking if the recent 12% CAGR would continue in FY26 or if a deceleration was expected. He also asked for a breakdown of secular versus GDP-sensitive growth drivers.

Answer

CEO George Kurian responded that there is still significant runway for the all-flash transition from HDDs, driven by new workloads like AI and by tech refreshes that are paced by the GDP outlook. While not providing a specific breakout, he noted that the FY26 outlook assumes NetApp will at least match the market growth rate for all-flash arrays, which has slowed from about 12% to 9% according to IDC.

Mehdi Hosseini of Susquehanna International Group, LLP asked for an updated view on the all-flash array cycle, questioning if the 12% CAGR from FY23-FY25 would continue in FY26 or if a deceleration was expected before a re-acceleration.

Answer

CEO George Kurian stated that the transition from 10k HDDs to all-flash is still in its early-to-mid stages, providing plenty of runway for growth. He noted the pace is driven by new priority workloads like AI, which are predominantly all-flash, and by the tech refresh cycle, which is more sensitive to the GDP outlook. He added that while public benchmarks for the all-flash market show a slight slowdown from 12% to 9%, NetApp expects to grow at or above the market rate.

Mehdi Hosseini of SIG requested an updated perspective on the all-flash array (AFA) technology cycle, asking whether fiscal 2026 will continue the recent momentum or experience a deceleration before a potential re-acceleration.

Answer

CEO George Kurian described the transition from HDD to all-flash as being in the 'third or fourth inning,' with plenty of runway left. He noted the pace is driven by new priority workloads like AI and the GDP-sensitive tech refresh cycle. He pointed to IDC forecasts showing the AFA market growth slowing from ~12% to ~9%, and stated NetApp expects to grow at or above that market rate, implying continued share gains.

Mehdi Hosseini asked for an update on the competitive landscape, the progress of increasing the QLC flash mix to improve costs, and the competitive outlook for the remainder of the year.

Answer

CEO George Kurian stated that there were no fundamental changes to the competitive landscape, which remains consistently competitive. He emphasized the strength of NetApp's fully refreshed product portfolio, including the C-Series and ASA families, which are gaining traction and winning new footprints without any significant shift in competitive dynamics.

Mehdi Hosseini expressed concern about the sustainability of the 20%+ all-flash growth, asking about the risk of deceleration in FY26, and also inquired about the current and future mix of QLC NAND.

Answer

CEO George Kurian expressed confidence in sustained growth, citing a much broader product portfolio than in the past and noting that pure-play storage vendors are outperforming integrated system vendors. He also stated that QLC NAND currently represents roughly half of the flash business and is expected to grow as a percentage of the total mix.

Mehdi Hosseini questioned the potential for seasonality to return in the March quarter, asked about ASP pressure and margin drivers in the OSP segment, and inquired about the impact of new phone form factors on 3D sensing.

Answer

President and CEO Oleg Khaykin responded that while some seasonality will remain, it will be less pronounced as counter-cyclical data center demand offsets service provider trends. For OSP, he clarified that volume is a bigger factor than ASP, with product mix in anti-counterfeiting being the largest driver of margin swings. He added that new phone form factors are addressed in the product roadmap and could lead to future ASP appreciation.

An analyst on behalf of Mehdi Hosseini asked about the dynamics in the 3D sensing business, which was weaker in the quarter. The question covered ASP trends and the expected contribution of 3D sensing to the OSP segment's Q3 guidance of $75 million.

Answer

President and CEO Oleg Khaykin explained that the 3D sensing business is seasonally weaker in the March and June quarters and that some annual ASP reduction also impacted revenue despite healthy volumes. He stated that the OSP guide is supported by a healthy anti-counterfeiting and industrial business, which is offsetting the seasonal 3D sensing decline. He also noted a conscious decision to ship from inventory to lower internal levels, which frees up cash but slightly dampens margins.

Mehdi Hosseini from Susquehanna International Group asked about Tower's long-term strategy for data center infrastructure, particularly the transition to co-packaged optics and its impact on capacity planning. He also asked about the cost-effectiveness of Tower's SiPho platform, the outlook for operating expenses, and the company's plans for its cash balance.

Answer

CEO Russell Ellwanger clarified the key market shift is from EML to SiPho, highlighting SiPho's cost and performance benefits at 1.6T. He positioned co-packaged optics as a distant technology (post-2029) that won't disrupt current SiPho demand. CFO Oren Shirazi stated that operating expenses are expected to remain flat at around $40M per quarter and that the primary use of cash is for strategic CapEx investments totaling $1.15 billion to drive long-term growth and shareholder returns.

Mehdi Hosseini from Susquehanna Financial Group inquired about the revenue mix versus wafer mix for high-speed applications, specifically asking if the revenue mix for products over 400G is significantly higher due to ASP premiums. He also requested an update on the company's silicon photonics revenue forecast, noting it appeared to be tracking ahead of previous targets.

Answer

CEO Russell Ellwanger confirmed that for active copper cables, higher speeds command higher ASPs. He clarified that the company's silicon photonics revenue is indeed tracking ahead of schedule, with the 2024 forecast now at approximately $100 million, up from a previous $80 million target. He added that the company expects to exit 2024 with an annualized silicon photonics revenue run rate of over $150 million, indicating strong momentum.

Mehdi Hosseini inquired about the revenue growth trajectory from late 2024 to late 2025, asking about the contribution from new PCIe projects and how the BlueField ramp would sustain growth into 2026. He also asked if OpEx intensity would decline in 2026.

Answer

CFO Jason Tsai clarified that the incremental revenue growth is broad-based across eMMC, UFS, PCIe 5, and initial MonTitan/BlueField ramps. He affirmed expectations for operating margin leverage in the future but noted that the company will continue to invest in R&D for new projects, which are currently resource-constrained.

Mehdi Hosseini of Susquehanna International Group inquired about the key drivers for the projected incremental revenue growth from Q4 2024 to Q4 2025, the role of the BlueField program in 2026, and whether OpEx intensity is expected to decline in the future.

Answer

CFO Jason Tsai clarified that the revenue increase is driven by broad strength across eMMC, UFS, and PCIe 5 SSDs, plus the initial ramps of MonTitan and BlueField. While deferring 2026 guidance, he noted the strong long-term pipeline. Tsai also stated that while R&D investments will continue, the company expects to see operating margin leverage as revenue scales and new products mature, driving profitability.

Mehdi Hosseini inquired about the outlook for operating expenses and CapEx in 2025, and asked for clarification on the company's strategy to address the maturing NAND market, given that new enterprise revenue streams are only expected to be 10% of revenue by 2026-27.

Answer

CFO Jason Tsai stated that 2025 OpEx would grow in line with low-to-mid-single-digit revenue growth, driven by R&D, and projected $65 million in CapEx. CEO Wallace Kou explained that NAND makers scaling back on consumer products creates a significant opportunity for Silicon Motion to gain share. He also highlighted investments in a new SerDes and mixed-signal team and noted the company is evaluating internal development, partnerships, and acquisitions to expand its enterprise capabilities.

Mehdi Hosseini questioned the company's confidence in a recovery in early 2025, given the projected weakness in Q4 2024. He also asked why the company isn't increasing its cash dividend to signal confidence in its new products, considering its cash position and stock valuation.

Answer

CEO Chia-Chang Kou expressed confidence in 2025 growth due to a strong design pipeline but acknowledged that a Q1 recovery is not guaranteed due to current retail weakness. Regarding capital returns, Kou stated that the Board continuously evaluates its options, but the current dividend is set at a comfortably affordable level, especially considering potential future legal expenses. The primary focus remains on growing the business.

Mehdi Hosseini questioned if TSMC's capital intensity would need to rise back above 40% to support the N2 ramp, similar to past node transitions. He also asked if the A16 node represents the point where AI and HPC applications move to the leading edge, rather than lagging by a node.

Answer

SVP & CFO Mr. Wendell Huang responded that capital intensity is not a target and expects revenue growth to outpace CapEx growth, thus keeping the ratio in check. Chairman & CEO Dr. C.C. Wei explained that A16's significant power efficiency improvements are a critical value for AI data centers, driving customers to adopt the leading-edge node more quickly than in the past.

Mehdi Hosseini of Susquehanna Financial Group asked about the future drivers of ARR growth, including product diversification and AI, and sought clarification on the change to a 20% long-term non-GAAP tax rate.

Answer

President and CEO Rajiv Ramaswami outlined multiple growth levers, including an expanding product portfolio (cloud management, modern apps, AI) and three expansion vectors with customers. CFO Rukmini Sivaraman clarified that the change to a 20% non-GAAP tax rate is for reporting consistency and does not impact cash taxes, which are expected to remain in the mid-to-high single-digit percentage range of pre-tax profit.

Mehdi Hosseini asked about the key assumptions behind the low and high ends of the widened revenue guidance range for the third quarter.

Answer

CFO Brice Hill stated that the guidance range was widened from ±$400 million to ±$500 million for two main reasons: the company's revenue base is larger, and there is increased volatility in the macroeconomic, geopolitical, and trade environments. CEO Gary Dickerson concurred, citing the combination of revenue size and regulatory uncertainty.

Mehdi Hosseini asked about the key assumptions behind the widened revenue guidance range for the third quarter, which was increased to plus or minus $500 million.

Answer

CFO Brice Hill explained the decision to widen the guidance range was based on two factors: the company's larger revenue base and increased volatility in the macroeconomic, geopolitical, and trade environments. CEO Gary Dickerson concurred, citing the combination of revenue size and regulatory uncertainty.

Mehdi Hosseini asked when the Semiconductor Systems (SSE) backlog might show an inflection and begin growing, and whether the small China-related impact to the AGS backlog was due to its multi-year nature.

Answer

CFO Brice Hill confirmed that the large AGS backlog is due to multi-year contracts, which average around 2.9 years in length. Regarding the SSE backlog, he stated the company no longer reports it quarterly as it has normalized post-COVID and is not a good indicator of underlying business trends, offering no new information beyond the 10-K.

Mehdi Hosseini questioned the company's capacity figures, asking for a reconciliation between aggressive CapEx spending and the seemingly unchanged capacity of 5,000 racks per month. He also asked for an update on the company's search for a new CFO.

Answer

CEO Charles Liang clarified that the 5,000 racks/month capacity is for the USA facility, and the company is now also growing capacity in Taiwan, Malaysia, and the Netherlands. CFO David Weigand added that the Malaysia facility will be fully enabled for large-scale rack production by the end of the calendar year. Regarding the CFO search, Charles Liang stated the company is always aggressively looking for more talent, including for the CFO position, as it continues to grow.

Mehdi Hosseini questioned the drivers of the strong operating cash flow, given that inventory and DSO increased. He also asked for an update on total production capacity and the current utilization rate, particularly with the new Malaysia facility.

Answer

CFO David Weigand attributed the positive cash flow to a combination of slower revenue growth (which consumes less working capital), higher gross profit, and an increase in accounts payable. CEO Charles Liang added that the company has built significant capacity for future growth in the US, Taiwan, and Malaysia, but estimated the current utilization rate is relatively low, around 50%, while awaiting new chip supply.

Mehdi Hosseini asked about the drivers of growth in the Home and IoT segment, specifically the mix of volume versus pricing, and its effect on inventory visibility. He also questioned the drivers behind the lower-than-expected smart mobile revenue, asking if it was due to inventory build or consumer demand.

Answer

President and COO Niels Anderskouv noted that IoT inventory levels have normalized and highlighted strong Q1 design wins in WiFi 7, connected MCUs, and medical devices. CFO John Hollister explained that the smart mobile revenue was impacted by two factors: the roll-off of prior-year underutilization payments and typical seasonality, adding that the segment is expected to ramp throughout the year.

Mehdi Hosseini of Susquehanna International Group requested details on recent design wins, asking which market segments they are in and when they might materially contribute to revenue. He also asked for guidance on the OpEx baseline, particularly SG&A, considering the impact of tax credits.

Answer

CEO Thomas Caulfield highlighted the focus on converting the sales funnel to outgrow the industry. CBO Niels Anderskouv provided a detailed overview of GF's four-pillar growth strategy, covering essential chip technologies (like 22FDX, RF SOI, SiPh), high-growth markets (auto, IoT), global manufacturing, and a balanced customer model. He noted 90% of recent wins are sole-source. CFO John Hollister stated OpEx is being managed carefully and that the advanced manufacturing tax credit should be estimated at roughly $10 million per quarter going forward.

Mehdi Hosseini from SIG questioned if LG Display's tandem solution should be viewed as a 'bridge' for high-end devices before a wider mass adoption of a stand-alone phosphorescent blue. He also asked for the outlook on material gross margin.

Answer

CFO Brian Millard described LG's announcement of a tandem structure using UDC's phosphorescent material as a positive step toward commercial application, but deferred to customers on specific product strategies. Regarding margins, he reiterated the full-year total gross margin guidance of 76% to 77% and advised focusing on total gross margin rather than material-specific margin due to mix variability.

Mehdi Hosseini inquired about the phosphorescent blue material, asking about the diversity of customers evaluating it and whether the commercialization timeline is uniform across all partners. He also asked for a quantification of the R&D revenue generated from blue materials in 2024.

Answer

CFO Brian Millard confirmed that Universal Display is working with multiple customers across various regions on its blue material. He clarified that the "months, not years" timeline refers to UDC achieving a commercial design win with a customer, without specifying individual customer progress. Millard disclosed that blue material sales, primarily emitters, totaled $4.6 million in 2024.

Mehdi Hosseini from SIG inquired about the company's strategy for procuring key HAMR components, particularly after a competitor's acquisition of Intevac. He also asked for an update on the search for a permanent CFO.

Answer

CEO Irving Tan stated that the competitor's acquisition has no impact, as Western Digital has diversified its supply chain with alternate sources and believes healthy suppliers benefit from serving multiple customers. He added that the search for a permanent CFO is progressing well and thanked Don Bennett for his excellent performance in the interim role.

Mehdi Hosseini asked if Micron's stated 'best competitive position' implies a potential for record earnings, referencing the 2018 peak. He followed up by asking for more clarity on the longevity and magnitude of the earnings opportunity, given the gradual product mix shift and ongoing market cyclicality.

Answer

Chief Business Officer Sumit Sadana explained that the 'best competitive position' refers to product and technology leadership, highlighting share gains in high-margin segments like HBM, high-capacity DIMMs, and data center SSDs. CFO Mark Murphy added that while financial potential is shaped by market conditions, the AI-driven demand and disciplined supply create a favorable setup. He noted that overall industry profitability is still impacted by elevated inventory levels from the recent downturn, but these are improving.

On behalf of Mehdi Hosseini, a representative from Susquehanna asked for color on the 2025 OpEx growth outlook relative to revenue growth. The question also probed whether the semiconductor business pickup was due to inventory refresh or underlying demand, and asked for an update on trends in the networking business.

Answer

CFO Paul Oldham projected that full-year operating expenses would grow at less than half the rate of revenue growth. CEO Stephen Kelley stated that while some semi customers may be refreshing inventory, he believes demand has reached an equilibrium point. Regarding the Telecom and Networking business, Kelley described it as a flat business that is no longer a growth engine for the company, as the focus has shifted to semiconductor, data center, and industrial & medical markets.