Neil Young

Neil Young asked about the rough split of the Astra pipeline by end market (consumer vs. industrial) and sought details on the typical architecture and Synaptics' participation in humanoid robot platforms.

Answer

Rahul Patel, President and CEO, stated that the Astra pipeline is growing rapidly, with consumer applications leading due to faster design cycles, followed by industrial. He highlighted Synaptics' engagement in humanoids, sampling silicon for pilot builds with a major customer using touch sensor controllers and bridge solutions, and explained how their portfolio scales across the broad robotics market.

Neil Young inquired about the rough split of the Astra pipeline by end market (consumer vs. industrial) and Synaptics' participation and typical architecture requirements in humanoid robots.

Answer

Rahul Patel, President and CEO, stated that the Astra pipeline is growing rapidly, with consumer applications building faster than industrial due to design cycles. He detailed Synaptics' engagement in humanoids, sampling silicon for pilot builds with a major customer using touch sensor controllers and bridge solutions, and explained the broader robotics market opportunity for Synaptics' processing, connectivity, and sensing technologies.

Neil Young of Needham & Company inquired about the segmental reporting for the $40 million in annualized sales from the Broadcom transaction and asked for specifics on areas of strength or weakness driving the improvement in Enterprise bookings.

Answer

Interim CEO and CFO Ken Rizvi clarified that all revenue from the Broadcom deal will be categorized under the Core IoT segment. Regarding the Enterprise business, Rizvi noted that the improvement is broad-based, with particular traction in peripherals. He expressed strong confidence in the overall business, citing lean inventories and a clear path to sequential growth of approximately $10 million per quarter through the calendar year, with automotive being the only remaining sluggish area.

Neil Young asked for clarification on how Silicon Motion segments revenue from the boot drive opportunity and MonTitan, specifically whether both are included in SSD solutions or if MonTitan is separate. He also inquired about the anticipated revenue ramp for next-generation boot drive and other switch opportunities with the leading GPU maker.

Answer

CFO Jason Tsai clarified that boot drive revenue is part of SSD solutions, while MonTitan (enterprise controllers) is part of the controller business. President and CEO Wallace Kou added that the 5%-10% revenue target for MonTitan does not include the boot drive solution. Mr. Tsai stated that revenue from the next-generation DPU is expected to begin ramping in the second half of the year. Mr. Young also asked for more details on the smartphone strength observed in Q1, including drivers like market share gains or changes in customer behavior. Mr. Kou attributed this strength to two NAND makers exiting the mobile storage market, leading module makers to increasingly use Silicon Motion controllers with local NAND supply. This has resulted in market share gains in mainstream and value segments, with high-end ramps expected by the end of 2026.

Neil Young from Needham & Company asked for clarification on how Silicon Motion segments revenue from the boot drive opportunity and MonTitan, specifically if both are categorized under SSD solutions. He also inquired about the anticipated revenue ramp for next-gen boot drives and other switch opportunities with the leading GPU maker. Additionally, he sought more details on the drivers behind the smartphone strength in Q1, beyond market share gains.

Answer

Jason Tsai (CFO, Silicon Motion Technology) confirmed that boot drive revenue is part of SSD solutions, while MonTitan (enterprise controllers) is part of the controller business. He stated that next-gen DPU revenue is expected to begin in the back half of the year. Wallace Kou (President and CEO, Silicon Motion Technology) clarified that the 5-10% MonTitan revenue target does not include boot drive solutions. He attributed smartphone strength to two NAND makers exiting the mobile storage market, benefiting module makers using Silicon Motion controllers, including those with local Chinese NAND. He noted market share gains in mainstream and value lines, with high-end ramping by end of 2026.

Neil Young with Needham & Company inquired about the sustainability of Everspin's non-GAAP gross margin, which has been over 52% for three consecutive quarters. He also asked for more details on the sequential decline in licensing, royalty, patent, and other revenue, and its expected trend for Q4. Finally, he questioned if non-GAAP OpEx would remain flat around the $7.5 million range going forward.

Answer

Bill Cooper, Chief Financial Officer of Everspin Technologies, confirmed that the strong gross margin is sustainable due to yield improvements and factory utilization, expecting it to remain in that range. Regarding non-product revenue, Cooper explained its lumpy nature due to project completions and anticipated it to continue around the 10% range of total revenue. For OpEx, Cooper stated that the $7.5 million range is a safe assumption for Q4, reflecting consistent management and a focus on product development costs.

Neil Young with Needham & Company inquired about the sustainability of Everspin Technologies' non-GAAP gross margin, the sequential decline in licensing, royalty, patent, and other revenue, and the expected stability of non-GAAP operating expenses in the coming quarters.

Answer

Bill Cooper, Chief Financial Officer, stated that strong non-GAAP gross margins, driven by yield improvements and factory utilization, are expected to remain in the current range. He explained that licensing and other revenue, which can be lumpy due to project completions, is anticipated to stabilize around 10% of total revenue. Cooper also confirmed that non-GAAP operating expenses are expected to remain consistent in the $7.5 million range, reflecting continued financial discipline and focus on product development.

Neil Young from Needham & Company inquired about the potential for future margin expansion at Fab 25, asking about specific milestones and their timing.

Answer

CEO Thomas Sonderman explained that margin expansion levers include introducing higher-margin ATS engineering revenue, charging market prices for new products, and driving cost optimization synergies between the Minnesota and Texas fabs. CFO Steve Manko added that while near-term gross margins will be compressed, the acquisition was economically sound, doubling revenue and increasing gross profit dollars, with a long-term path to exceed peer foundry margins.

Neil Young of Needham & Company inquired about the distribution of tariff-related revenue pressure between the CIB and automotive segments and asked for the gross margin outlook by segment for Q3.

Answer

CEO Gideon Ben-Zvi explained that the tariff impact is indirect, affecting customers in both the automotive and audio-video industries who manufacture in tariff-exposed regions. CFO Guy Nathanzon stated that while overall Q3 gross margin guidance is provided, the company does not break down margin guidance by segment.

Neil Young, on behalf of Quinn Bolton, inquired about the strongest near-term demand drivers in the cross-industry business, its growth outlook for 2025, and the factors behind the Q1 gross margin guidance.

Answer

CEO Gideon Ben-Zvi explained that demand is mixed, with recovery in traditional ProAV, new growth from huddle rooms and USB connectivity, and longer-term potential in industrial machine vision. CFO Guy Nathanzon added that Q1 gross margin is influenced by a product mix shift in the cross-industry business and a more sustainable cost optimization in automotive, with the overall margin dependent on the revenue split between the two segments.

Neil Young, on behalf of Quinn Bolton, asked for the gross margin outlook for the remainder of the year and inquired about any observed or potential impacts from tariffs on MACOM's business.

Answer

CFO John Kober stated that gross margin is expected to remain in the mid-57% range for Q3, consistent with recent quarters, noting that lower utilization at the Lowell fab is a headwind. President and CEO Stephen Daly addressed tariffs, stating no noticeable impact has been seen on customer behavior, and emphasized that MACOM's business is largely direct, non-commodity, and U.S.-centric, making the situation manageable.