Quinn Bolton

Quinn Bolton inquired about the e-commerce warehouse robotics win, seeking details on its production status, expected ramp-up, potential scale, and overall significance. He also asked for clarification on the automotive pipeline, specifically the $13 billion figure versus a previously mentioned $19 billion, and requested an apples-to-apples comparison of the unweighted auto pipeline growth year-over-year.

Answer

President and CEO Fermi Wang confirmed the e-commerce warehouse robotics win is in low-volume production with expectations for continued growth, highlighting its significance as a first design win and validation of their perception system. He clarified the automotive opportunity pipeline is $13 billion, noting growth in total opportunities compared to last year, and that the 'won business' remained similar despite a weak automotive market, indicating healthy design win momentum. CFO John Young also confirmed the $13 billion figure.

Quinn Bolton inquired about the e-commerce warehouse robotics design win, seeking details on its production status, expected ramp-up, and overall market opportunity. He also asked for clarification on the updated $13 billion automotive pipeline, comparing it to previous probability-weighted forecasts to understand its growth trajectory.

Answer

President and CEO Fermi Wang confirmed the robotics win is in low-volume production with expectations for growth, highlighting its significance as a first design win for their perception system. Regarding the automotive pipeline, Mr. Wang clarified the $13 billion represents total opportunities (won or invited to bid) for fiscal years 2027-2032, indicating growth compared to last year's unweighted pipeline. He noted the 'won business' portion remains similar to last year, which is positive given the weak automotive market in 2025, demonstrating healthy design win momentum. CFO John Young confirmed the $13 billion figure.

Quinn Bolton asked about Ambarella's approach to the automotive market, specifically inquiring if the company still sees opportunities in Level 2+ autonomous driving or if it is de-emphasizing automotive applications, noting the absence of a previously provided automotive funnel. He also asked CFO John Young if the current mix towards high-volume customers, which is impacting gross margin, is expected to continue beyond the January quarter or if it's a temporary shift that will normalize.

Answer

CEO Fermi Wang clarified that Ambarella has not de-committed from the automotive market, continuing to focus on Level 2, Level 2+, and Level 3 autonomous driving engagements with multiple OEM Tier 1s, and an updated, non-probability-weighted automotive funnel discussion would be provided next quarter. CFO John Young stated that while no guidance is provided beyond Q4, the dynamic of high-volume customers impacting gross margin will remain a factor, and reiterated the long-term expectation of creating operating leverage by having revenue and gross profit outpace non-GAAP OPEX growth.

Quinn Bolton asked about Ambarella's approach to the automotive market, specifically if there are still opportunities in Level 2+ autonomous driving or if the company is de-emphasizing certain automotive applications. He also questioned whether the current mix towards high-volume customers, which is impacting gross margin, is a temporary shift for the January quarter or if it's expected to continue beyond that period.

Answer

CEO Fermi Wang clarified that Ambarella is not de-committed from the automotive market and continues to focus on it, engaging with multiple OEM Tier 1s for Level 2, Level 2+, and Level 3 autonomous driving. He mentioned that a revised automotive funnel discussion, moving from a probability-weighted matrix to direct opportunities, would be provided next quarter. CFO John Young stated that while they are not guiding beyond Q4, the dynamic of the ratio of high-volume customers to total revenue will continue to be a factor influencing gross margin going forward.

Quinn Bolton asked about the primary drivers for fiscal '26 revenue growth beyond the CV5 and CV7 families and sought clarification on the sequential decline in automotive revenue for Q4 and Q1.

Answer

CEO Fermi Wang confirmed that while CV5 and CV7 will contribute over half of the growth, the older CV2 family is also expected to see healthy growth. He clarified that the legacy video processor business will continue a slow decline. Wang also stated the minor sequential auto revenue decline is not related to inventory correction but reflects conservatism due to potential indirect tariff impacts on customers.

Quinn Bolton asked for a breakdown of the automotive pipeline, specifically the percentage driven by Level 2+ opportunities and the pipeline's geographic distribution.

Answer

President and CEO Dr. Fermi Wang clarified that in the 'won' portion of the funnel, CV3 (for Level 2+) is below 50%, but in the 'pipeline' portion, it is well above 50%. He noted that about 15% of the pipeline is from China, with a higher percentage from Europe. CFO John Young added that the 6-year funnel methodology may understate the China opportunity due to its faster design cycles.

An analyst on behalf of Quinn Bolton asked if Ambarella's recent passenger OEM win created a 'halo effect' for other automotive engagements. They also questioned if the company was seeing negative impacts from the aggressive pricing environment in the China auto market.

Answer

CEO Fermi Wang acknowledged that any design win helps, particularly in validating Ambarella's scale and experience for automotive OEMs. However, he emphasized that each new engagement is a competitive battle on technology, price, and support. While confirming intense pricing pressure in China, Wang stated that in balance, the company does not expect its overall gross margin profile to change significantly in the near term.

Quinn Bolton inquired about the expected OpEx for 2026, specifically how the integration of Quantum Circuits (QCI) impacts the business and if the previously mentioned 15% sequential OpEx increase fully accounts for QCI's costs.

Answer

CFO John Markovich confirmed that the 15% sequential OpEx growth includes all incremental costs associated with QCI, such as the expansion of their R&D team, fabrication expenses, and some CapEx.

Quinn Bolton of Needham and Co. asked for clarification on D-Wave's projected operating expenses for 2026, specifically whether the 15% sequential quarter-on-quarter OpEx increase includes the full integration costs and expansion plans related to the Quantum Circuits acquisition.

Answer

CFO John Markovich confirmed that the 15% sequential growth in OpEx fully encompasses all incremental costs associated with Quantum Circuits (QCI), including the expansion of their R&D team, fabrication expenses, and capital expenditures.

Quinn Bolton from Needham & Company followed up on the Q Alliance transaction, asking about the mechanics of the option to purchase the full system, specifically if the EUR 10 million contract for half capacity would be credited towards a full purchase.

Answer

CEO Dr. Alan Baratz stated that details of the purchase option were not disclosed but clarified that the EUR 10 million for half capacity does not directly imply a double price for the full system. He noted a premium for outright system purchases due to additional benefits like title transfer and exclusive use.

Quinn Bolton from Needham & Company asked for clarification on the Q-Alliance transaction, specifically how the option to purchase the full system would work, and if the EUR 10 million spent for half capacity would be credited towards a full purchase.

Answer

CEO Alan Baratz stated that the specific details of the purchase option have not been disclosed. He cautioned against assuming a direct doubling of the EUR 10 million for a full system purchase, as there is a premium for outright system ownership due to additional benefits and capabilities not available with shared capacity. The current agreement grants 50% capacity over five years, with an option to purchase the full system later.

Quinn Bolton sought clarification on the Julich system sale, asking if the recognized revenue included the Advantage2 upgrade. He also asked about the pipeline of customers moving applications into production, following the lead of Ford Otosan and others.

Answer

CEO Alan Baratz clarified that the Julich system is an Advantage system with an option to upgrade to Advantage2, which has not yet been exercised, distinguishing it from the new Davidson Advantage2 installation. Regarding the production pipeline, Baratz suggested that the companies presenting at the recent Qubits user conference are a strong indicator of the organizations on the path to production.

Quinn Bolton of Needham & Company asked if the gap between Q4 bookings and Q1 revenue guidance indicated a significant rise in QCaaS bookings. He also questioned if the Jülich deal includes an ongoing recurring revenue component for maintenance and support. Lastly, he inquired about the go-to-market plan for Advantage2, specifically regarding its qubit count.

Answer

CFO John Markovich stated that QCaaS bookings in Q4 were 'incrementally greater' than in Q3 and confirmed the Jülich booking includes an Advantage2 upgrade option, ongoing support/maintenance, and Leap/QCaaS access, with components recognized beyond Q1. CEO Alan Baratz explained the go-to-market for Advantage2 will start with the 4,400-qubit system and that future scaling will focus on a multi-chip processor approach.

Quinn Bolton inquired about the production rollout timeline for the NTT DOCOMO application and its potential annual QCaaS revenue. He also asked for an update on momentum in the government sector and the prospects for the reauthorization of the National Quantum Initiative (NQI).

Answer

CEO Alan Baratz confirmed that production applications are expected to generate revenue in the high hundreds of thousands of dollars annually but stated that NTT DOCOMO has not yet publicized its rollout schedule. Regarding the government sector, Baratz noted that the reauthorization of the NQI could unlock significant funding. He also highlighted that being deemed 'awardable' on the Department of Defense's Tradewinds platform is a major step that simplifies the procurement process for government agencies.

Quinn Bolton sought clarification on Valens Semiconductor's strategic focus, specifically whether the company is de-emphasizing machine vision and medical opportunities or becoming more selective. He also inquired about potential declines in legacy audio/video businesses as the VS3000 and VS6320 chipsets ramp up, and the factors contributing to the Q1 2026 revenue guidance being down year-over-year after a strong Q4 2025.

Answer

CEO Yoram Salinger clarified that Valens is concentrating resources on its core audio/video and automotive markets due to significant growth opportunities, while still pursuing "anchor deals" in medical and industrial sectors to establish a stronger presence. He noted that the company does not segment revenues by chipset families, and while VS3000 and VS6320 are growing, it takes time for new products to significantly impact overall results. Regarding Q1 2026 guidance, Salinger attributed the slower start to macroeconomic conditions and customers utilizing Q4 inventory, but reiterated confidence in overall 2026 growth.

Quinn Bolton sought clarification on Valens Semiconductor's strategic focus, asking if the company is de-emphasizing machine vision and medical opportunities in favor of core AV and automotive markets, or if it will be more selective. He also inquired about potential declines in legacy AV businesses given the expected growth of VS3000 and VS6320, and the factors contributing to the Q1 2026 revenue guidance being down year-over-year after strong prior quarters.

Answer

CEO Yoram Salinger clarified that Valens Semiconductor is focusing on its core AV and automotive markets due to significant growth opportunities, leveraging its strengths in high-performance connectivity. He stated that the company is still pursuing large, anchor deals in medical and industrial markets to establish a stronger presence. Regarding AV, Salinger noted that VS3000 and VS6320 are newer products gaining momentum, without commenting on specific legacy product declines. For Q1 2026 guidance, he attributed the slower start to customers utilizing Q4 inventory, with confidence in overall annual growth despite macroeconomic influences.

Quinn Bolton of Needham & Company followed up to ask if tariff uncertainty was impacting customers' long-term product development roadmaps and requested more detail on Valens' collaboration with the Qualcomm Snapdragon Ride platform.

Answer

CEO Gideon Ben-Zvi responded that customers' long-term product roadmaps remain intact, though development speed may be affected by macro factors. Regarding Qualcomm, he clarified that the collaboration was a demonstration to showcase the VA7000's ease of integration and fast interoperability with leading processors, a key value proposition for customers.

Quinn Bolton of Needham & Company, LLC sought more detail on the Mobileye partnership, asking at what specific camera resolution MIPI A-PHY demonstrates superior performance over incumbent technologies. He also inquired about progress with Chinese auto OEMs, the potential timeline for adoption in China, the margin impact of the local partnership, and requested a reiteration of the full-year 2025 guidance.

Answer

CEO Gideon Ben-Zvi clarified that A-PHY's advantage is not just about resolution but total bandwidth, where its resilience to noise becomes critical for safety systems. Regarding China, he emphasized the market's rapid A-PHY adoption and Valens' strategy of using local partnerships to penetrate the market, confirming active discussions with Chinese OEMs. CFO Guy Nathanzon addressed the guidance, stating that the full-year 2025 outlook remains unchanged at this time, though the company is monitoring potential tariff impacts.

Quinn Bolton followed up on the grid re-architecture opportunity, specifically for high-voltage Silicon Carbide in solid-state transformers (SSTs), asking about design process status and the dollar content opportunity per megawatt.

Answer

CEO Chris Allexandre highlighted the accelerated design momentum for 2.3kV and 3.3kV SiC modules in grid-tied applications like SSTs, battery energy systems, and megawatt chargers, expecting significant revenue growth from 2027. He referred to a total SAM of $25,000-$35,000 per megawatt, with $10,000-$12,000 of that from non-data center grid applications, emphasizing the multi-decade transformation towards higher voltages.

Quinn Bolton followed up on the grid re-architecture opportunity, specifically asking about the design process for high-voltage SiC in solid-state transformers (SSTs) and the potential dollar content opportunity per megawatt.

Answer

CEO Chris Allexandre emphasized the critical importance of grid re-architecture for AI data centers, driven by the need for efficient, high-voltage power delivery via SSTs. He noted accelerated sampling of 2.3kV and 3.3kV SiC modules for grid-tied applications (SSTs, BESS, megawatt chargers, solar farms) and expects significant revenue growth from grid infrastructure starting 2027. He cited a SAM content of $25,000-$35,000 per megawatt, with $10,000-$12,000 of that specifically for non-data center applications like SSTs and BESS. He highlighted grid transformation as a multi-decade trend driving continuously higher voltages.

Speaking for Quinn Bolton, Nick Doyle asked about the 2025 smartphone market outlook, potential tariff impacts on mobile, and whether the channel slowdown in EV and industrial was due to demand or inventory.

Answer

CEO Eugene Sheridan stated that Navitas's mobile growth depends more on increasing GaN adoption than on modest smartphone unit growth. He sees strong trends for adoption at 65W and higher. He clarified the broader channel slowdown was a combination of both slowing demand and an inventory overhang, which he believes is now near its end and should resolve in a quarter or two.

Quinn Bolton inquired about the sustainability of the new, lower operating expense target of $15.5 million per quarter and whether the cuts could limit future growth. He also asked for an update on the 2025 revenue expectations for the data center business.

Answer

CFO Todd Glickman confirmed the go-forward non-GAAP OpEx target of $15.5 million per quarter, stating it should remain fairly flat and that the business is now 'rightsized' to grow without further cuts. CEO Gene Sheridan declined to provide a specific 2025 revenue breakout for the data center segment but affirmed the trajectory is good and growing sequentially, supported by a strong Q4 for design wins.

Quinn Bolton inquired about the primary drivers filling Vicor's Andover facility capacity, specifically asking if it's largely due to the lead customer or other significant Gen 4/Gen 5 customers. He then sought clarification on the base for the projected record IP licensing revenue for 2026, asking if it includes or excludes the $45 million patent litigation settlement from 2025.

Answer

CEO Patrizio Vinciarelli stated that the increasing demand filling the Andover facility is a combination of factors, including hand computing (with multiple factors at play), test equipment, and other end markets. CFO Jim Schmidt clarified that the $57.4 million royalty revenue for 2025 does not include the $45 million litigation settlement. Patrizio Vinciarelli added that the licensing business is expected to expand considerably, potentially reaching 'hundreds of millions worth of revenues,' and that the $45 million settlement is not overall significant in the long-term upside.

Quinn Bolton asked for confirmation on the interpretation of Vicor's revenue ramp guideposts, specifically if the company anticipates product revenue approaching an $800 million run rate over the next year, based on the Andover fab's $1 billion capacity at 80% utilization.

Answer

CEO Patrizio Vinciarelli confirmed that the analysis was 'on point,' indicating that demand is expected to reach a run rate utilizing about 80% of the capacity in a quarter. He added that 2026 is projected to see a major increase in product revenue, double the rate of last year, and at a level not seen for some time, based on current and expected bookings.

Quinn Bolton inquired about the composition and timeframe of the ~$200 million return from patent litigation, the drivers behind the sub-1 book-to-bill ratio, and the outlook for bookings, 2025 revenue, and future royalty streams.

Answer

CEO Patrizio Vinciarelli confirmed the ~$200 million figure is locked in through 2026. Corporate VP Philip Davies stated the tariff hesitancy impacting bookings is now resolved. Vinciarelli reiterated his expectation for 2025 to be a record revenue year but noted significant uncertainty remains in forecasting, particularly around lumpy litigation outcomes, and that headwinds with an existing OEM licensee are not yet resolved.

Quinn Bolton asked for details on a licensee transitioning to an unlicensed product, the scope of the ITC injunction against infringing imports, and the future growth drivers for both NBM products and royalty income.

Answer

CEO Patrizio Vinciarelli declined to elaborate on the specific licensee situation but confirmed that the ITC's exclusion order applies broadly to infringing products. He expressed confidence in the long-term growth of the licensing business and noted that the ITC win has led to a revival in demand for Vicor's NBM products. He stated that future growth will come from a combination of existing licensees ramping, potential new licensees, and overall product revenue growth.

Quinn Bolton from Needham & Company asked about the financial impact of the new hyperscaler license, whether it included NBM product orders to help fill the ChiP fab, the scope of the license, and the drivers for the 18% sequential growth in Advanced Products revenue.

Answer

CEO Patrizio Vinciarelli described the new license as "significant" but could not disclose financial terms due to confidentiality. He confirmed the agreement incentivizes product orders that will help load the new fab over time, though the ramp would not be immediate. He also clarified the license covers any NBM module from any source. Philip Davies, VP of Global Sales and Marketing, attributed the strong Advanced Products growth primarily to a recovery in the HPC market.

Quinn Bolton of Needham & Company inquired about the market impact of the recent ITC ruling against Delta, asking if customers are now more inclined to license Vicor's IP. He also sought an updated timeline for Gen 5 product adoption following a recent delay, questioned the margin impact from a legacy HPC program, and asked about the future trajectory of royalty revenue from licensees.

Answer

CEO Patrizio Vinciarelli stated that while some customers are skeptical of competitors' workarounds, Vicor anticipates ongoing legal challenges for those using infringing products. He clarified the Gen 5 delay was due to a PCB respin, not ASICs, and expects initial shipments to a key customer in the next couple of months. Vinciarelli also confirmed the legacy product mix impacted Q3 margins but expects the effect to diminish in Q4, and he anticipates royalty revenue will continue to trend up with licensee volumes.

Quinn Bolton inquired about the 2026 segment growth, noting that the strong Q1 guidance suggests growth at or above the high end of previous ranges for both communications and computing and industrial and automotive. He also asked about current lead times, whether they are stretching out, and if there's any indication of double ordering given bookings extending into 2027.

Answer

CFO Lorenzo Flores confirmed that confidence in demand has strengthened across all end markets. CEO Ford Tamer clarified that current revenue projections exceed the high end of previous guidance for both markets. He stated that there is no belief in double ordering as orders are scheduled throughout 2026 and into 2027, acknowledging increased lead times and proactive communication with customers and suppliers.

Quinn Bolton asked if the company is tracking to the high end or above previous segment growth guidance for 2026, and about lead times, booking into 2027, and potential double ordering.

Answer

Ford Tamer (CEO, Lattice Semiconductor) and Lorenzo Flores (CFO, Lattice Semiconductor) confirmed that confidence in demand has strengthened considerably, implying growth at or above the high end of previous ranges for both segments, with comms and compute remaining the fastest-growing. Ford Tamer stated that the company does not believe there is double ordering, as orders are scheduled throughout 2026 and into 2027, acknowledging increased lead times and proactive communication with customers.

Quinn Bolton of Needham & Company asked if point-of-sale (POS) demand in the industrial and auto market was increasing or stable. He also inquired about the company's preparations and potential impact from Section 232 tariffs.

Answer

CFO Lorenzo Flores confirmed that POS in the industrial and auto segment is increasing. CEO Ford Tamer addressed tariffs by explaining that country-specific tariffs are expected to supersede broader ones and that a significant portion of their channel supply chain utilizes a free trade zone in Mexico, mitigating direct impact.

Quinn Bolton asked about the potential tariff impact on the substantial revenue shipped to China and requested an estimate of how much of that is consumed locally ('China for China'). He also inquired about the competitive pressure from local Chinese FPGA vendors.

Answer

CEO Fouad Tamer explained that the percentage of revenue consumed in China is far lower than what is shipped there, and the business mix has shifted from Communications to Automotive and Industrial. He noted Lattice has slightly grown its China business while competitors have declined. CFO Lorenzo A. Flores added that based on their supply chain, they do not expect current inbound tariffs to China to be applicable, and they are working to mitigate any future impacts.

Quinn Bolton asked about the potential tariff impact on shipments to China, how much of that revenue is consumed locally ('China for China'), and the level of competition from local Chinese FPGA vendors.

Answer

CEO Fouad Tamer clarified that revenue consumed in China is far lower than the ship-to figure, which includes Hong Kong. He noted that while local vendors have gained share in Communications from larger US peers, Lattice has grown its China business by shifting to Industrial and Automotive. CFO Lorenzo A. Flores added that due to their supply chain sourcing, they do not expect significant direct impact from inbound tariffs to China.

Quinn Bolton followed up with a request for clarification on the revenue contribution from new products, asking if the mid-teens percentage for Avant and Nexus was a cumulative figure and what that implies for the revenue share of pre-Nexus products.

Answer

CEO Ford Tamer confirmed that the revenue contribution from new products was higher than the 13% reported in the previous quarter but stated the company would not break out the specific number going forward. He reiterated that the figure grew from single digits in the prior year, showing strong improvement for Nexus and Avant.

Quinn Bolton of Needham & Company questioned why Lattice's revenue trend differs from its larger competitors, who saw a trough earlier in the year. He also sought to clarify if the 2025 revenue guidance of ~$130 million per quarter reflects true end consumption or if point-of-sale (POS) is higher.

Answer

CEO Ford Tamer responded that when viewed from the market peak in Q1 2023, Lattice has outperformed its peers and gained share in its target non-SoC FPGA market. Interim CFO Tonya Stevens confirmed that 2025 revenue will be lower than end consumption as the company works to reduce channel inventory to the midpoint of its target range through mid-2025.

Quinn Bolton sought clarification on the Q1 2026 gross margin, specifically whether the benefit from the Q3 2025 utilization uptick or other factors were more impactful, and the typical lag for utilization effects. He also asked for more details on the 30+ GaN-based solutions being introduced, including their target applications and voltage ranges.

Answer

CFO Thad Trent explained that the Q1 2026 gross margin improvement is a combination of mix, utilization impact, and cost benefits from FabRight activities. He noted that while Q4 2025 utilization was down, cost actions and FabRight initiatives would offset any potential Q2 2026 headwind. President and CEO Hassane El-Khoury stated that the new GaN devices span 40-1200 volts, targeting a broad range of applications including data centers, automotive, and industrial, with a focus on high-voltage, high-power density solutions.

Quinn Bolton requested more details on the over 30 GaN-based solutions being introduced this year, specifically their target applications and voltage ranges.

Answer

CEO Hassane El-Khoury confirmed that the new GaN solutions span a broad voltage range from 40V to 1200V. These devices target various end markets, including data centers (closer to the XPU) and high-voltage applications in automotive and industrial sectors, such as next-generation traction systems with partners like GM.

Quinn Bolton requested more details on the VCORE acquisition, its contribution to the business, and its relevance for X86/ARM processors and XPU voltage regulators. He also asked about the reliability of vertical GaN (vGaN) compared to lateral GaN and its production timeline.

Answer

Hassane El-Khoury, President and CEO, explained that VCORE complements the Trail platform, offering short-term revenue generation in 2026 while providing a long-term architectural advantage through integration. For vGaN, Hassane stated it offers better reliability than lateral GaN, overcomes die size limitations for high-voltage applications, is currently sampling with lead customers in AI and automotive, and is expected to generate revenue around 2027.

Quinn Bolton requested more details on the VCORE power acquisition, specifically its role in supporting X86 and ARM processors and its contribution to XPU voltage regulators. He also asked about the reliability of ON Semiconductor's new vertical GaN (VGAN) technology compared to lateral GaN and when it is expected to go into production.

Answer

Hassane El-Khoury, President, CEO, and Director, ON Semiconductor, explained that the VCORE acquisition complements their Trail platform, providing short-term products for revenue generation in 2026 while integrating architectural functions for long-term performance advantages. He stated that vertical GaN offers better reliability than lateral GaN and solves the die size challenge for high-voltage applications. ON Semiconductor is currently sampling VGAN with lead customers in AI and automotive, with production revenue expected in the 2027 timeframe.

Quinn Bolton asked for clarification on the gross margin and utilization math, questioning how the company gets back 900 basis points of underutilization charges. He also inquired about the qualification and ramp timeline for new Smart Power Stages and the 800-volt rack opportunity.

Answer

CFO Thad Trent explained that post-impairment, full utilization is now in the low 90% range, which accounts for about 700 basis points of margin recovery, with another 200 basis points coming from FabRite initiatives. President and CEO Hassane El-Khoury stated that Smart Power Stages have a standard 12-18 month qualification cycle and will ramp with XPU supplier roadmaps, but declined to comment on specific customer timelines for the 800-volt opportunity.

Quinn Bolton sought clarification on whether the AI data center wins at major hyperscalers were for CPU or GPU power. He also asked for confirmation on the expected gross margin impact from the East Fishkill fab.

Answer

CEO Hassane El-Khoury explained the data center strategy is to provide a cohesive power tree solution for both NVIDIA and ARM-based systems, without specifying the exact application. CFO Thad Trent confirmed the East Fishkill fab remains a ~100 basis point headwind to gross margin in Q4, with the impact expected to taper off linearly through 2025.

Quinn Bolton asked if MPS is gaining market share in the AI power segment, given competitors' projections of doubling their businesses. He also inquired about market preferences for GaN versus silicon carbide solutions for 800-volt racks, specifically for the 800V to 12V/6V stage.

Answer

Michael Hsing, CEO and Founder, declined to compare MPS's performance directly with competitors but emphasized MPS's strong products, broad customer engagement, and design wins. Tony Balow, VP of Finance, added that MPS is well-positioned with its product portfolio. Michael Hsing also mentioned MPS's development of both silicon carbide and GaN devices, noting that MPS was the first to sample 800-volt solutions, though significant revenue from this is not expected until late 2026.

Quinn Bolton asked if MPS is gaining market share in the AI power segment given competitors' growth projections and about the market preference for GaN versus silicon carbide in 800-volt solutions for data center racks.

Answer

Michael Hsing, CEO and Founder, declined to engage in a 'pissing contest' regarding market share, emphasizing MPS's strong products, broad customer engagement, and design wins. Tony Balow, VP of Finance, reiterated confidence in MPS's product portfolio. Regarding 800-volt solutions, Michael Hsing mentioned MPS is developing both Silicon Carbide and GaN devices, and while 800-volt revenue is not expected until late 2026, MPS is the first to sample these solutions. Tony Balow added that MPS is well-positioned to adapt to market demands for either technology.

Quinn Bolton of Needham asked a big-picture question about the enterprise data segment, referencing Intel's server CPU shortages, increased hyperscaler CapEx, and NVIDIA's demand forecasts. He inquired if customer lead times, forecasts, or pricing for voltage regulators and vertical power had changed over the last quarter. He also questioned the trajectory of gross margins, which have been ticking down, asking if they are expected to remain in the mid-55% range or if there's a point next year when they might move higher due to mix or new products.

Answer

Bernie Blegen, EVP and CFO, described the enterprise data market as very dynamic, noting improved predictability due to layering in more customers, and stated that MPS is positioned to be responsive. Michael Hsing, CEO and Founder, acknowledged that rapid market ramps cause supply imbalances but expects things to smooth out. Bernie Blegen added that there have been no recent or sustainable trends in pricing. Regarding gross margins, Bernie Blegen explained that strong demand and short-term orders limit the ability to manage mix for expansion, expecting margins to remain in the mid-55% ±20-30 basis points range until the demand profile changes. Michael Hsing added that while the transition to a solution provider will improve margins long-term, it will not be quick due to the large scale of products and customers.

Quinn Bolton asked about changes in customer lead times, forecasts, and pricing pressure within the enterprise data segment, given increased hyperscaler CapEx and AI demand. He also sought clarification on the gross margin trend, specifically if it would remain in the mid-55% range or if an increase is expected next year due to mix or new products.

Answer

Bernie Blegen (EVP and CFO) described the enterprise data market as dynamic, with improved predictability from layering customers, but noted no recent sustainable trends in pricing. Michael Hsing (CEO and Founder) added that rapid market ramps often cause supply imbalances. Bernie Blegen attributed the stable gross margins to short-term orders limiting mix management, expecting them to remain in the mid-55% range for the foreseeable future. Michael Hsing believes long-term improvement will come from automation and the transition to solution-provided companies.

Quinn Bolton asked whether the new AI ASIC platforms tend to be single-sourced or multi-sourced for power management ICs. He also requested an outlook for the automotive segment in the second half of the year and its primary growth drivers.

Answer

Founder, Chairman, President & CEO Michael Hsing explained that sourcing strategies vary widely among customers, including single, dual, and multi-source arrangements, and MPS is equipped to meet diverse demands. For automotive, EVP & CFO Bernie Blegen projected a growth pickup in late Q3 and Q4 as new content ramps come online. Vice President of Finance Tony Balow highlighted long-term opportunities in 48-volt and zonal architectures.

Quinn Bolton followed up on enterprise data, asking for a more precise forecast and addressing concerns about potential market share impact from a customer's next-generation GPU platform change. He also questioned the reason for the slight gross margin decline in the Q2 guidance.

Answer

CEO Michael R. Hsing stated that MPS offers a broad product portfolio to meet customer needs and feels more confident due to recent product qualifications, but declined to tighten the forecast range. CFO Bernie Blegen added that while confidence is higher, the timing of customer ramps remains uncertain. Regarding gross margin, Blegen attributed the slight dip in guidance to a mix of factors and general conservatism rather than a specific event or pricing pressure.

Quinn Bolton asked about the expected revenue pattern through 2025, particularly the weighting between the first and second halves, and inquired about pricing pressure versus blended ASP trends in the Enterprise Data segment as new module solutions ramp.

Answer

EVP and CFO Bernie Blegen reiterated the expectation for a flattish year in enterprise data, weighted to the back half, but noted that the business can be volatile with short lead times. CEO Michael Hsing emphasized that MPS will stick to its gross margin model by providing high-performance products, whether silicon or modules. He stated that if a business doesn't fit their model, they won't take it, which is why they have successfully engaged with all hyperscalers.

Quinn Bolton asked for a disclosure of any 10%+ customers for the September quarter, following a similar disclosure in the prior quarter's 10-Q. He also sought commentary on the reasonableness of Wall Street's 2025 revenue expectations for the Enterprise Data segment, considering the competing factors of new competition and new product ramps.

Answer

After a brief check, the executive team confirmed there would be one direct customer and multiple distributors called out as being over 10% of revenue in the upcoming 10-Q filing. Regarding 2025 Enterprise Data expectations, CEO and Founder Michael Hsing stated that MPS will be a significant player when the AI market reaches equilibrium. He noted that the ramp is still lumpy but confirmed that MPS has many more customers and designs that will turn into revenue next year.

Quinn Bolton asked about the increased annual outlook for MACOM's data center business (from 20% to 35%-40% year-over-year growth), inquiring about the factors driving this improved confidence, such as better visibility, increased orders, or market share gains. He also asked how MACOM could benefit from a potential shift towards Near-Packaged Optics (NPO) or Co-Packaged Optics (CPO).

Answer

Stephen G. Daly, President and CEO of MACOM Technology Solutions Holdings Inc, attributed the increased confidence primarily to the 1.6T market, noting significant activity, design wins, and production ramps, with a healthy backlog and expectations for a stronger second half. Regarding NPO/CPO, Mr. Daly explained that MACOM's existing product set (drivers, TIAs, photodetectors, lasers) is similar to pluggable modules, with a focus on silicon photonics-based solutions, particularly CW lasers and photodetectors. He highlighted MACOM's design capability for more complex, multi-channel chips and potential benefits from coherent modulation in these architectures.

Quinn Bolton asked about the drivers behind MACOM's increased annual outlook for the data center business (from 20% to 35%-40% growth), inquiring if it's due to market trends, improved visibility, order fulfillment, or share gains. He also asked how MACOM could benefit from a shift towards Near-Packaged Optics (NPO) or Co-Packaged Optics (CPO).

Answer

Stephen G. Daly, President and CEO, attributed the improved data center outlook primarily to strong activity, design wins, and production ramps for 1.6T products, noting a healthy backlog and expected stronger second-half revenue. Regarding NPO/CPO, Mr. Daly explained that MACOM's existing product set (drivers, TIAs, photodetectors, lasers) is highly relevant. He highlighted strong demand for CW lasers and photodetectors for silicon photonics, MACOM's competitive 200G photodetector, and progress on 75-milliwatt CW lasers. He also noted that the increased channel density and complexity in NPO/CPO architectures, along with the potential for coherent modulation, play to MACOM's design strengths.

Quinn Bolton asked about MACOM's market share position for TIAs, drivers, and PMDs in 800 gig and 1.6T optical modules, inquiring if there have been any shifts or if MACOM is holding or gaining share.

Answer

Steve Daly, President and CEO, MACOM, stated that MACOM is performing well with differentiated products in a competitive market, earning sockets based on performance, timing, and price. However, he declined to comment on specific market share gains or losses for particular product lines.

Quinn Bolton asked about MACOM's relative market share position across TIAs and drivers for 800G and 1.6T modules, inquiring if there have been any shifts, and how MACOM is performing with PMDs for optical modules in these applications.

Answer

President and CEO Steve Daly responded that MACOM is performing well with differentiated products in a very competitive landscape, emphasizing the need to earn every socket based on performance, timing, and price. He declined to comment on specific market share gains or losses for particular product lines.

Quinn Bolton of Needham & Company inquired about the timeline for the RTP fab to become a gross margin tailwind following its early transfer and the adoption pipeline for MACOM's Linear Pluggable Optics (LPO) solutions.

Answer

President and CEO Stephen Daly explained that MACOM is excited to have full control of the RTP fab, allowing for intensified efforts on yield and efficiency. He projected 25-50 basis points of improvement per quarter after Q4, suggesting it could become a tailwind in two to three quarters. CFO John Kober added that the team has identified opportunities for improvement over the next 90 days. Regarding LPO, Daly highlighted a growing ecosystem and customer pull driven by lower power, latency, and cost, confirming one production customer and expecting more in 2026.

Quinn Bolton questioned why record defense revenue was not offsetting under-loading at the Lowell fab and asked for clarification on the growth drivers for the linear equalizer opportunity, specifically cables versus backplanes.

Answer

President and CEO Stephen Daly explained the Lowell fab situation is affected by a temporary volume reduction in a large radar program and weak demand for certain industrial products. CFO John Kober added that some recent defense growth came from acquisitions, which does not utilize the Lowell fab. Regarding linear equalizers, Daly stated that the primary growth opportunity is in active cables rather than backplanes.

Quinn Bolton inquired about the potential for SiTime's core business to exceed its long-term 25%-30% growth rate in 2026, given strong demand and a 1.5x book-to-bill. He also asked about cross-selling opportunities with the Renesas acquisition, specifically if Renesas' clock products are typically paired with quartz oscillators, creating an opening for SiTime's MEMS oscillators. Finally, he asked if China SAMR approval would be required for the transaction.

Answer

Rajesh Vashist, CEO of SiTime, qualitatively affirmed expectations for strong growth in 2026, driven by AI data centers and inference. Beth Howe, CFO, added that CED would lead, with opportunities in automotive, industrial, aerospace, and consumer. Mr. Vashist confirmed minimal product overlap with Renesas, presenting significant cross-selling opportunities for SiTime's MEMS-based solutions where Renesas clocks are currently paired with quartz, and also for Renesas clocks in SiTime's existing AI design wins. Ms. Howe stated that SiTime does not expect to need China SAMR approval for the transaction.

Quinn Bolton congratulated SiTime on its strong results and acquisition, then asked about the core business's growth prospects for 2026, given the 1.5 book-to-bill and seven consecutive quarters of over 100% CED growth, seeking a framework for the overall growth rate. He also questioned the cross-selling opportunities with the Renesas acquisition, specifically whether Renesas' clock products are typically paired with quartz oscillators, creating an opening for SiTime's MEMS oscillators, and if China SAMR approval would be required for the transaction.

Answer

Rajesh Vashist, CEO, qualitatively affirmed strong growth expectations for 2026, driven by the AI data center world and inference applications. Beth Howe, CFO, added that CED would continue to lead, with opportunities in automotive, industrial, aerospace, and consumer design wins. Rajesh Vashist also confirmed minimal product overlap with Renesas, presenting a significant cross-selling opportunity to introduce SiTime's MEMS solutions where Renesas clocks are currently paired with quartz. Beth Howe stated that SiTime does not expect to need China SAMR approval for the acquisition.

Quinn Bolton of Needham & Company asked about the expected margin profile of the new Titan resonator family, considering its lower price points, and its alignment with the 60% gross margin target. He also inquired about SiTime's updated M&A strategy, specifically regarding atomic clocks or other assets for scale. Additionally, he questioned the visibility and lead times within the CED business, potential component shortages or inventory hoarding, and how the increasing CED mix might mitigate typical Q4 to Q1 seasonality.

Answer

Rajesh Vashist, Chief Executive Officer, confirmed lower ASPs for Titan resonators but expected gross margins in the 60%+ regime due to high unit volumes. He expressed interest in M&A for scale but preferred opportunities with near-term revenue impact over atomic clocks. He stated no hoarding or shortages for SiTime due to its robust supply chain, while acknowledging rumors of optical component and substrate shortages. Beth Howe, Chief Financial Officer, anticipated continued Q4 to Q1 seasonality but noted strong demand in CED and AI could mitigate it, with potential for revenue shifting due to large customer orders.

Quinn Bolton from Needham & Company inquired if SiTime has similar content opportunities on hyperscaler ASIC-based platforms as it does on merchant GPU platforms, and asked for details on the new Symphonic product's target applications and ASP.

Answer

CEO Rajesh Vashist confirmed that similar opportunities exist on hyperscaler ASIC platforms, but noted SiTime's penetration varies and often lags merchant silicon vendors, who tend to move faster. Regarding the Symphonic product, he stated it targets 5G, GPS, and millimeter-wave applications and commands a higher ASP because it offers a system-level solution. He anticipates future traction in private 5G networks for IoT, though this may be a year or more away.

Quinn Bolton of Needham & Company, LLC inquired about the full-year growth expectations for SiTime's largest customer and the potential impact on gross margins from this lower-margin consumer business.

Answer

Executive Rajesh Vashist confirmed continued growth is expected from the largest customer, driven by new design wins, but noted uncertainty around the exact growth rate due to consumer product cycles and potential tariffs. CFO Beth Howe addressed gross margins, stating that while the new consumer business pressures the rate, the company is working to offset it through cost and yield improvements on other new products and remains committed to its 60% gross margin target by year-end.

Quinn Bolton of Needham & Company inquired about management's confidence in the long-term growth target of 25-30% for 2025-2026 and asked for details on the drivers behind the Q1 gross margin guidance dip to 57% and the timeline to return to 60%.

Answer

CEO Rajesh Vashist affirmed that the 25-30% long-term growth target remains appropriate given the breadth of the market and product activity. CFO Beth Howe explained the Q1 gross margin decline was primarily due to revenue seasonality, manufacturing absorption, and increased depreciation from new product ramps. Mr. Vashist added that returning to a 60% gross margin is still a target the company is working towards.

Quinn Bolton asked for more detail on content in GPU-to-GPU scale-up networks, the expected 2025 growth rate for the CED segment, and the trajectory for gross margins to return to the 60% target.

Answer

Executive Rajesh Vashist confirmed content in fully populated AI racks can be in the 'high hundreds of dollars' and that CED growth would exceed the company's overall ~30% target in 2025. CFO Beth Howe added that gross margins are expected to return to the 60% level by the second half of 2025, acknowledging a potential seasonal headwind in Q1.

Quinn Bolton asked about the expected diversification of revenue away from the 63% customer in the second half of fiscal 2026 and whether Super Micro has started receiving orders for the upcoming NVIDIA Vera Rubin and AMD Helios platforms.

Answer

Charles Liang (CEO) indicated increasing customer diversification with many more large-scale customers, leading to overall rapid revenue growth. He confirmed high customer interest and some commitments for Vera Rubin and AMD Helios, with delivery contingent on partner availability.

Quinn Bolton asked if Super Micro expects significant revenue diversification away from the 63% customer in the second half of fiscal 2026, or if concentration with that large customer will continue. He also inquired about current orders for upcoming platforms like NVIDIA Vera Rubin and AMD Helios for second-half delivery.

Answer

CEO Charles Liang acknowledged the difficulty in predicting customer schedules but stated that customer diversification is increasing, and overall revenue will grow quickly, with DCBBS and software adding value. He confirmed high customer interest and some commitments for Vera Rubin and AMD Helios, with delivery contingent on partner readiness.

Quinn Bolton's associate asked about Super Micro's positioning regarding recent export licenses for certain NVIDIA and AMD products to the Middle East and whether the guidance includes these shipments. He also requested clarification on the DCBBS revenue ramp timeline.

Answer

CFO David Weigand and CEO Charles Liang stated they are not anticipating selling the specified products (like H20) in any significant quantities. Charles Liang clarified an earlier comment, explaining that DCBBS revenue will ramp gradually and could reach 20-30% of total revenue 'maybe next year, summer,' not in the immediate quarter.

Quinn Bolton followed up on the GB200 NVL72, asking if the primary gating factor is GPU supply from NVIDIA and whether Super Micro has a forecast for when that supply will become available. He also posed a longer-term question about whether a potential industry shift from AI training to inference would be positive, neutral, or negative for Super Micro's business.

Answer

CEO Charles Liang confirmed that for the GB200, they have proven the solution and received some allocation, but demand is much larger, so they are waiting for more allocation from their partner to ship in higher volume. Regarding the shift to inference, Liang viewed it as 'very positive.' He explained that as inference becomes more popular worldwide, the customer base will expand from a few hundred buyers to thousands of companies, growing the total market size. He believes Super Micro's application-optimized solutions are well-suited to serve this diversifying customer base.

Quinn Bolton asked if the company is seeing its backlog for Blackwell systems build, which would provide confidence for a stronger second half of the year. He also inquired about the consequences under its credit agreements if audited financials are not delivered by the specified deadline.

Answer

CEO Charles Liang indicated that customer engagement for new solutions is underway, including remote proofs-of-concept, and expressed confidence in future demand. Regarding the credit agreements, CFO David Weigand referred to the company's 8-K filings, noted the strong, long-term relationships with their banks, and stated they would seek waivers or extensions as needed, expressing no concern about access to capital.

Quinn Bolton asked whether MaxLinear's DSP wins, particularly with 800G products, are starting to move into scale-out networks, or if this shift would require the Rushmore 1.6T product.

Answer

CEO Kishore Seendripu clarified that it's difficult to precisely parse scale-up vs. scale-out, but 800G is shipping in scale-up networks (a smaller portion of revenue) and predominantly in traditional scale-out networks. For the follow-up, Quinn questioned the implied ASP of sub-$25 for optical DSPs based on the 4-6 million unit forecast and $100-$130 million revenue, asking about the pricing environment and if aggressive pricing is aiding market share gains. CEO Kishore Seendripu refuted the ASP conclusion, stating that MaxLinear is competitive and wins based on product performance, not pricing, in this sophisticated technology market.

Quinn Bolton sought clarification on MaxLinear's 'moderation' comments regarding the broadband business, asking if it refers to a moderation in the growth rate or a potential decline, and if a decline would be due to cable normalization, delayed DOCSIS 4.0 ramp, or PON growth offsetting cable. He also asked a longer-term question about the advantage of MaxLinear's Keystone product being manufactured at Samsung (5nm CMOS) compared to competitors at TSMC, especially if the 3nm-5nm market remains tight.

Answer

CEO Kishore Seendripu clarified that for broadband, they anticipate 'ho-hum growth' next year, not an overall decline, with good growth beyond this year dependent on fiber PON design wins and the DOCSIS 4.0 ramp. CFO Steve Litchfield added that the moderation comment was specific to Q4 guidance, and for the longer term, PON is picking up with new business and market share gains, while DOCSIS 4.0 offers a 50% content increase, ramping into 2027. Dr. Seendripu explained that Keystone (100Gb lane) and Rushmore (1.6Tb) being at Samsung provides natural diversification, which should help in the long run given the tightness in 5nm nodes due to high demand from GPU vendors, though short-term capacity still requires effort.

Quinn Bolton asked a longer-term question about optical modules being supply-limited by EML lasers and silicon, and how MaxLinear's Keystone product being manufactured at Samsung (5nm) instead of TSMC could be an advantage if 3-5nm capacity remains tight.

Answer

CEO Kishore Seendripu confirmed Keystone is a 5nm CMOS solution in production at Samsung, and Rushmore (1.6-terabit) is also at Samsung, providing natural diversification. He noted that 5nm and 3nm nodes are highly occupied by GPU vendors, making capacity tight. This diversification, he stated, should help in the long run, but short-term capacity planning remains challenging.

Quinn Bolton inquired about potential tariff-related order pull-ins, sought clarification on the 'accelerating growth in 2026' commentary, and asked about the source of a significant foreign exchange charge.

Answer

CEO Kishore Seendripu stated that long lead times prevent any meaningful impact from tariff pull-ins and clarified that 'accelerating growth' refers to specific major design wins ramping. CFO Steve Litchfield attributed the $4M FX charge to currency fluctuations, primarily the Euro and Shekel.

Quinn Bolton sought clarification on the potential impact of tariffs in Southeast Asia, how this uncertainty was factored into Q2 guidance, and the current outlook on the timing of 800-gigabit optical ramps at hyperscalers.

Answer

CFO Steve Litchfield confirmed they have factored the current tariff environment into their guidance and noted there are no reciprocal tariffs on their chips flowing through China. He acknowledged uncertainty around Southeast Asian tariffs but stated they are working with customers. On the 800-gigabit ramp, Mr. Litchfield reiterated comfort with their $60-$70 million optical revenue forecast for the year, with the key ramps still expected in the second half of 2025.

Quinn Bolton from Needham & Company asked about the outlook for the cash balance in Q1 2025, considering working capital and restructuring charges, and requested clarification on recent Tier 1 design wins in wireless infrastructure and North American PON.

Answer

CFO Steven Litchfield projected cash flow breakeven around mid-year, likely in Q3 2025, while managing inventory and working capital. CEO Kishore Seendripu clarified that the H2 2025 wireless ramp includes both backhaul and Sierra O-RAN products, and the new PON engagement is a significant full-gateway win at a North American Tier 1 operator.

Quinn Bolton asked if the book-to-bill ratio had returned to above one, given the positive commentary on bookings. He also questioned the performance of the infrastructure business excluding optical, noting it appeared very depressed, and asked when a recovery in areas like Panther and microwave backhaul is expected.

Answer

CFO Steve Litchfield confirmed a "really significant uptick" in bookings and that sell-through has been strong, though he did not provide a specific book-to-bill figure. He acknowledged that wireless infrastructure has been a drag on the infrastructure segment due to lower telecom spending but stated that Panther storage accelerators are gaining traction. He projected a recovery in 2025, with the overall infrastructure business expected to grow over 30%.

Quinn Bolton asked why Allegro MicroSystems is slower to return to peak automotive revenue levels compared to some peers, and if this indicates any share loss. He also inquired about the potential for a step down in OpEx in the June quarter after variable compensation resets.

Answer

Mike Doogue, President and CEO, firmly denied any share loss, asserting that Allegro is gaining share. He attributed the slower return to peak levels to past customer inventory builds and highlighted strong e-mobility SAM growth. Derek D'Antilio, CFO, confirmed an expected marginal step down in OpEx in the June quarter due to variable compensation resets, offset by merit increases, followed by inflationary growth.

Quinn Bolton asked why Allegro is slower to return to peak automotive revenue levels (20% below peak) compared to some peers, and if there is any evidence of share loss. He also inquired if there would be an opportunity for a step down in OpEx in the June quarter, or if the current $81 million is the right base for inflationary growth.

Answer

President and CEO Mike Doogue firmly denied any share loss, stating Allegro is driving share gains. He attributed the slower return to peak auto levels to customers previously building larger-than-expected inventories, and expressed confidence in the 16% CAGR for the e-mobility SAM driven by dollar content gains. CFO Derek D'Antilio confirmed a mathematical $2 million step down in OpEx for the June quarter due to variable compensation reset, partially offset by merit increases. He expects OpEx to be marginally down in June, then grow at an inflationary rate thereafter.

Quinn Bolton questioned the outlook for the December quarter, asking if the recovery cycle could overpower typical seasonality, and inquired about the timing for restocking the distribution channel.

Answer

CFO Derek D'Antilio acknowledged the historical 5% seasonal dip in December but suggested that strong secular trends in the current cycle could trump seasonality, putting the outlook in a -5% to +5% range. Regarding inventory, he stated that while they take it one quarter at a time, they are beginning to restock select parts for distributors, expecting a net flat sell-in for Q2.

Quinn Bolton of Needham & Company questioned why gross margin remains under pressure despite several quarters of revenue recovery and asked if automotive customers are requesting price cuts more frequently due to tariff uncertainty.

Answer

CEO Michael Doogue stated that pricing dynamics are following a normal annual cadence with low single-digit reductions in automotive. CFO Derek D'Antilio added that margin pressure was partly due to fulfilling orders from finished goods inventory while keeping production levels steady, causing some under-absorption. Doogue confirmed there have been no abnormal requests for price reductions related to tariffs.

Quinn Bolton from Needham & Company, LLC inquired about the potential for a better-than-normal gross margin recovery following the March quarter's dip and whether Allegro is observing customers re-emphasizing ICE vehicles due to slower EV growth.

Answer

CFO Derek D'Antilio stated that since the 200 bps margin headwind is Q4-specific, the margin drop-through from March to June should be better than the typical 65%. CEO Vineet Nargolwala responded that customers are not introducing new ICE platforms but are focusing on hybrid solutions, where Allegro's content opportunity is comparable to that in full battery electric vehicles.

Quinn Bolton of Needham & Company sought to reconcile the December guidance with prior expectations, asking for an estimate of the company's true end-consumption run-rate versus ongoing inventory digestion.

Answer

CEO Vineet Nargolwala attributed the near-term weakness to a longer-than-expected inventory correction in North American and European auto markets, which has been compounded by OEM production cuts. CFO Derek D'Antilio estimated the underlying end-demand run rate is closer to $225 million per quarter, referencing the Q4 FY24 revenue of $250 million which included about $25 million of excess inventory shipment. Both executives affirmed their belief in the company's long-term growth model of auto production plus 8-10% content growth.

Quinn Bolton asked about Credo's AEC supply, specifically concerning BizLink as a sole provider, potential constraints, and any supply front call-outs. He also sought confirmation on whether the top two customers are still primarily at 25 or 50 gig per lane, and the potential for ASP uplift with their transition to 100 gig per lane.

Answer

President and CEO Bill Brennan acknowledged increasing discussions about supply constraints but expressed no concern for AEC volumes, citing proven ramp capability. He highlighted Credo's N-1 process strategy (12nm workhorse) and strong foundry partnerships as advantages against broader wafer capacity constraints. Bill Brennan confirmed production across 25, 50, and 100 gig per lane, noting 100 gig per lane as a fast-growing segment, and affirmed that top customers would migrate to faster speeds, leading to expected ASP uplift.

Quinn Bolton questioned whether tariff risks were impacting the Q1 gross margin guidance and asked about the potential for Credo's two new hyperscale customers to reach 10% revenue contribution during fiscal 2026.

Answer

CFO Dan Fleming stated that tariff risks are not expected to have a significant impact on Q1 gross margin. CEO Bill Brennan added that the company is actively diversifying its manufacturing geography. Regarding new customers, Brennan noted that while both have the long-term potential to become 10% customers, it's difficult to predict for fiscal 2026, though one customer's ramp is now expected to begin mid-year.

Quinn Bolton questioned the revenue trend outside of Credo's largest customer, which appeared to decline sequentially, and asked about the timeline for revenue rediversification. He also probed for confidence in the sustainability of the large customer's revenue surge, asking about the risk of an inventory build or a future "air pocket."

Answer

CFO Dan Fleming projected the largest customer's revenue would be in the same "ZIP code" in Q4 as in Q3, implying that the guided 19% sequential growth would come from other customers, reducing concentration to around two-thirds of total revenue. CEO William Brennan addressed sustainability by highlighting the standard practice of receiving 12-month forecasts and noted that multiple customers are at different deployment stages, which should lead to diversification and mitigate air pockets. He expects a new large customer to ramp significantly in fiscal '26.

Quinn Bolton asked about the attach rate of AECs per GPU and the source of confidence for continued growth into fiscal '26. He also sought to clarify if the second-half growth is driven by higher GPU volumes, increased attach rates, or a mix shift to higher-ASP products.

Answer

CEO William Brennan noted a trend towards a higher ratio of AECs per GPU but attributed confidence for fiscal '26 growth to broad design and qualification activity across multiple customers. He specified that the current revenue inflection is primarily driven by an increase in the sheer number of GPUs being deployed within existing architectures, rather than a change in attach rates or product mix.

Quinn Bolton questioned why the Q2 gross margin guidance wasn't higher, given the expectation for flat product margins and a slightly higher IP mix. He also asked for an update on the royalty component within the IP business.

Answer

CFO Dan Fleming responded that business performance is not always linear and the company prefers to maintain a conservative guidance posture. CEO William Brennan added that while a royalty stream from a USB customer exists, it is not expected to be a material part of the IP business, which will continue to be dominated by licensing revenues.

Quinn Bolton asked for a more specific outlook on the IoT Systems and Connectivity (ISC) gross margin for Q4, given the semiconductor gross margin guidance. He also questioned whether a divestiture of non-core assets would now be dilutive to EPS, considering the company's significantly reduced interest expense.

Answer

CFO Mark Lin stated that ISC gross margin would be lower in Q4 primarily due to the growth in cellular modules, reiterating that semiconductor gross margins remain healthy at 60.5% plus or minus 50 basis points. Regarding the EPS impact of divestitures, Mark Lin indicated that for the lower gross margin portions of the business being considered, the impact would be 'nominal impact to immaterial impact' without naming specific assets.

Quinn Bolton requested a specific range for the IoT Systems and Connectivity (ISC) gross margin in Q4, noting that it appeared to be materially below the Q3 figure. He also asked about the potential dilutive impact on EPS from a non-core asset divestiture, given that the high-interest term loan debt had already been repaid.

Answer

Executive Vice President and CFO Mark Lin stated that the ISC gross margin would be lower in Q4 primarily due to the growth in cellular modules, while semiconductor gross margins remain healthy at 60.5% ±50 basis points, with core assets expected to be accretive. Regarding divestiture, Mark Lin indicated that focusing on lower gross margin portions of the business would result in a nominal to immaterial impact on EPS.

Quinn Bolton from Needham & Company followed up on the Active Copper Cable (ACC) opportunity, seeking to clarify the timing and initial applications. He also requested an outlook for the Persei sensing business, particularly regarding growth in smart glasses and adoption in smartphones.

Answer

CEO Hong Ho clarified that the 100G per lane (800G) ACC ramp for interconnects will begin in Q4, as will the 1.6T ACC for scale-up applications. Regarding Persei, he confirmed its status as an industry standard in smartphones and noted active design engagements for next-generation smart glass platforms, viewing it as a potentially sizable future market.

Quinn Bolton of Needham & Company inquired about the performance of Semtech's cellular module business, questioning the revenue decline despite seven consecutive quarters of booking growth and the significant drop in its gross margin.

Answer

President & CEO Hong Hou explained the Q1 revenue dip was due to expected seasonality, but noted strong tailwinds from competitors' challenges should drive future acceleration. EVP & CFO Mark Lin attributed the lower gross margin to a product mix shift towards modules from higher-margin routers and a one-time inventory event, which were within the company's expectations.

Quinn Bolton sought clarification on whether the quarter-on-quarter data center growth comment was specific to the Q1 guide or for all of fiscal 2026. He also asked for a general breakdown of the $50 million data center business, particularly the mix between FiberEdge, CopperEdge, and other products targeting 400G/800G modules.

Answer

President and CEO Hong Hou clarified the quarter-on-quarter data center growth outlook was specific to the Q1 fiscal 2026 guidance. He added that if cloud service provider CapEx remains strong, he would expect strong year-over-year growth for the full fiscal year. Executive Mark Lin noted that FiberEdge net sales were at record levels but declined to provide a detailed breakdown of the data center portfolio. Both executives confirmed that 400-gig and 800-gig applications are a 'sweet spot' for growth.

Quinn Bolton inquired about the confidence in the Active Copper Cable (ACC) Total Addressable Market (TAM), seeking details on opportunities beyond the Catalina rack and the ramp timing for linear drivers. He also asked about the drivers for the increasingly positive outlook on Linear Pluggable Optics (LPO).

Answer

CEO Hong Hou reaffirmed the floor case for the ACC TAM, citing broader ecosystem awareness and design-in activity for linear equalizers on boards and in connectors, with revenue from these new applications expected by mid-calendar 2025. For LPO, he noted initial orders for 800G and 1.6T TIAs are in qualification for both scale-up and scale-out data center applications.

Quinn Bolton of Needham & Company sought clarification on the Active Copper Cable (ACC) opportunity and inquired about the specific use cases and market potential for Linear Pluggable Optics (LPO).

Answer

President and CEO Hong Hou confirmed the revised ACC opportunity forecast relates to a single platform, with other customer engagements representing additional upside. Regarding LPOs, Hou described them as versatile solutions for both 'scale up' and 'scale out' data center architectures, positioning them as a low-power, low-latency alternative to the large market of DSP-based optical transceivers. He highlighted Semtech's best-in-class TIA technology as key and anticipates initial LPO shipments in late fiscal 2026.

Quinn Bolton of Needham & Company asked about the business impact of the Energy Department's $625 million investment in National Quantum Research Centers and sought an update on the reauthorization of the National Quantum Initiative (NQI) Act.

Answer

President and CEO Subodh Kulkarni clarified that the NQI Act was reinstated at its original funding level of $625 million over five years, which he considers a positive first step, though significantly less than previously discussed amounts. He anticipates larger funding for the DOE in the coming months.

Quinn Bolton asked for details on Rigetti's roadmap, specifically if the 150-qubit and 1,000-plus qubit systems would continue with a chiplet-based approach, and if the qubit count per tile would increase for the 1,000-qubit system. He also questioned the feasibility of long-range coupling on tile-based systems and inquired about the revenue recognition schedule for the AFRL contract and Novera system sales.

Answer

President and CEO Subodh Kulkarni confirmed the 150-qubit system would use 9-qubit chiplets, while the 1,000-qubit system would likely use 36-qubit chiplets. He stated that chiplets do not inherently worsen the industry-wide challenge of long-range coupling. CFO Jeff Bertelsen clarified that revenue for the two Novera systems would be recognized upon shipment, likely in Q1 and Q2 2026, and the AFRL contract revenue would be recognized ratably over three years, starting in Q3 2025.

Quinn Bolton from Needham & Company inquired about the long-term strategy for chiplet size versus chiplet count, potential CapEx requirements for larger tiles, the timeline for implementing quantum error correction, and the status of the National Quantum Initiative (NQI) reauthorization.

Answer

CEO Subodh Kulkarni stated that Rigetti will use its 9-qubit chiplet for the year-end 100+ qubit system but will explore larger chiplets for future systems to manage packaging complexity. He does not anticipate needing drastic new fab equipment. He projected that implementing sophisticated error correction codes is still a year or two away. On the NQI, he confirmed there is bipartisan support and ongoing hearings, but a final bill has not yet been consolidated.

Quinn Bolton sought clarification on the NQI reauthorization timeline, asked about the U.K. Innovate award project to upgrade the NQCC system to 36 qubits, including its timeline and expected gross margins, and posed a technical question on the roadmap to improve gate speeds from the current tens of nanoseconds to under 10 nanoseconds.

Answer

CEO Subodh Kulkarni reiterated that the NQI Act's timing is uncertain. For the NQCC upgrade, he outlined two paths: a simple upgrade using the existing chip or, preferably, installing the new 36-qubit chiplet system in the second half of 2025 after it's validated. He noted NQCC margins are low due to a strategic cost-sharing model. On gate speeds, Kulkarni explained that improvements come from tunable couplers, gate types, and chip geometry, while highlighting superconducting's 1,000-10,000x speed advantage over other modalities.

Speaking on behalf of Quinn Bolton, an analyst from Needham & Company asked if the Novera QPU sale to Montana State University was a competitive process and what feedback led to the university choosing Rigetti. The analyst also sought clarification on whether the DOE Quantum Leadership Act was a new bill or a reintroduction of the National Quantum Initiative Act, and asked for the expected share count in Q1.

Answer

CEO Subodh Kulkarni clarified that the sale to Montana State University was for fundamental research purposes, providing a user-friendly way for academics to gain hands-on experience with quantum computing, rather than for demonstrating a quantum advantage in a competitive bake-off. He also confirmed that the DOE Quantum Leadership Act is the same bill as the National Quantum Initiative renewal. CFO Jeffrey Bertelsen estimated the Q1 share count would be approximately 290 million shares.

Quinn Bolton inquired about the strategic shift towards chip tiling, the long-term balance between tile size and count, the roadmap for fidelity improvements beyond 99.5%, and when quantum error correction (QEC) will become a primary focus. He also asked if the low-margin NQCC contract was complete.

Answer

CEO Subodh Kulkarni explained that tiling smaller, high-yield 9-qubit chips is a highly scalable approach learned from the CMOS industry and is now central to Rigetti's roadmap. He stated that QEC is already becoming critical at the current ~99.5% fidelity level and is being actively developed with partners like Riverlane. Kulkarni also clarified that the lower-margin NQCC contract will continue to impact gross margins through Q1 2025.

Quinn Bolton asked about Astera Labs' strategy to complete a full scale-up CPO solution following the Xscape Photonics acquisition, particularly regarding silicon photonics capabilities.

Answer

Jitendra Mohan, CEO and Co-founder, explained that a full optical solution requires an electrical IC, a photonics chip, and packaging technology. He stated that Xscape Photonics addresses packaging and brings photonics expertise, with Astera Labs confident in developing the electrical components. Mr. Mohan indicated a willingness to work with third-party photonics solutions to meet customer requirements. Sanjay Gajendra, President, Co-Founder, and COO, confirmed that initial Scorpio X shipments in Q4 represent the initial build of production systems, following qualification, with a significant ramp anticipated in 2026.

Quinn Bolton sought clarification on the initial Scorpio X shipments in Q4, asking if they are pre-production, sample units, or the initial build of a production system.

Answer

Sanjay Gajendra, President, Co-Founder, and COO, confirmed that these are initial builds for production systems, following qualification stages, with the significant ramp expected in 2026.

Quinn Bolton asked for a latency comparison between new scale-up Ethernet switches and Astera's PCIe/UALink solutions, and requested more color on the growth drivers for the Taurus product line, such as 800G adoption.

Answer

CEO Jitendra Mohan asserted that Astera's solutions offer lower end-to-end latency and better bandwidth utilization, but emphasized the primary advantage is UALink's open ecosystem. President & COO Sanjay Gajendra stated that Taurus growth will be driven by the market's transition to 800G Ethernet, with broader adoption and volume ramps expected in 2026, aligning with Astera's scale-focused business model.

Quinn Bolton sought clarification on whether the guided growth for the Aries product line includes the Aries SCM for scale-up applications. He also asked about the long-term revenue trajectory of the Scorpio X-Series versus the P-Series.

Answer

CFO Mike Tate confirmed that the Aries SCM is performing well and contributing to growth. CEO Jitendra Mohan projected that the Scorpio X-Series, which serves a rapidly growing market, is expected to become the company's single largest product line and a larger revenue contributor than the P-Series in the 2026-2027 timeframe.

Quinn Bolton questioned the impact of a potential shift toward smaller inference clusters on the connectivity TAM and asked if the Scorpio P-Series has design engagements on ASIC platforms.

Answer

CEO Jitendra Mohan responded that the business benefits from both training and inference growth, and that the 'unit of compute' is evolving to a rack-level AI server, which creates more complex connectivity challenges and a net positive opportunity for Astera. President and COO Sanjay Gajendra confirmed that Astera has engagements for its Scorpio P-Series for head-node connectivity on internal ASIC platforms, in addition to merchant GPU systems.

Quinn Bolton of Needham & Company sought to clarify the product mix within the Scorpio family's expected 2025 revenue contribution and asked for a framework to understand the typical attach rate of P-Series and X-Series switches per accelerator.

Answer

CFO Michael Tate confirmed that both Scorpio P-Series and X-Series will contribute to 2025 revenue, with P-Series ramping first and X-Series starting in the second half of the year. President and COO Sanjay Gajendra explained that the P-Series typically has a 1-to-1 attach rate per accelerator, while the X-Series attach rate is variable and depends on the specific back-end fabric architecture.

Quinn Bolton sought clarification on whether Micron provided cost down targets for fiscal 2026. He also asked about the potential impact of NVIDIA's CPX GPU using GDDR7 instead of HBM for inferencing on Micron's broader HBM market outlook, and if this architecture represents a small portion of the inference market.

Answer

Mark Murphy, CFO, clarified that cost down targets were only provided for fiscal 2025. Sumit Sadana, Chief Business Officer, acknowledged that the AI market's evolution will lead to diverse architectures for optimized workloads, with inference being memory-bound. He stated that Micron is well-positioned with industry-leading HBM, GDDR7, and LPDRAM solutions to address various latency and bandwidth requirements across the evolving AI landscape.

Quinn Bolton sought clarification on whether the fiscal 2025 cost down targets provided also apply to fiscal 2026. He then asked about the potential impact of NVIDIA's CPX GPU, which uses GDDR7 for inferencing, on Micron's broader HBM market outlook, and if this architecture represents a small portion of the inference market.

Answer

Mark Murphy, EVP & CFO, clarified that the cost down targets were only for fiscal 2025. Sumit Sadana, EVP and Chief Business Officer, acknowledged that the AI market's evolution will bring diverse use cases and optimized architectures, with inference workloads often being memory-bound. He stated that different solutions (HBM, GDDR7, LPDRAM) will be appropriate for various workloads based on latency and other KPIs. He emphasized Micron's strong position in HBM, industry-leading GDDR7, and pioneering LPDRAM in the data center, all of which will serve the company well in the evolving architectural landscape.

Quinn Bolton sought clarification on whether Micron provided cost down targets for fiscal 2026. He also asked about the potential impact of NVIDIA's CPX GPU using GDDR7 instead of HBM for inferencing on the broader HBM market outlook, and if this architecture represents only a small portion of the inference market.

Answer

Mark Murphy, CFO, clarified that cost down targets were only provided for fiscal 2025. Sumit Sadana, EVP and Chief Business Officer, viewed the use of GDDR7 as part of the AI market's evolution, which will feature diverse use cases and optimized architectures. He noted that inference workloads are often memory-bound, requiring increased memory capacity and bandwidth. He emphasized Micron's strong position in HBM, industry-leading GDDR7, and pioneering LPDRAM in data centers, aiming to provide high-value solutions across evolving customer architectures.

Quinn Bolton from Needham & Company LLC asked about Ambiq's Q2 order trends, specifically if strong end-customer performance (like Garmin's growth) translated into higher order rates, and the typical lead time for shipping Apollo processors. He also sought an update on the second-half outlook, considering previous tariff uncertainties, and inquired about the gross margin expectations for Q3.

Answer

CEO Fumihide Asaka confirmed a typical 16-week lead time for customer orders and expressed optimism about healthy end-customer growth. CFO Jeff Winzeler added that Q3 revenue guidance reflects some upside, with cautious optimism for the second half due to potentially less impactful tariffs. Mr. Winzeler also indicated that the Q2 gross margin of 42.7% is largely indicative of current levels, with minor fluctuations expected based on product and manufacturing mix.

Quinn Bolton from Needham & Company asked about Ambiq Micro's Q2 order trends, given strong fitness tracker customer performance, and the typical lead time for Apollo processor shipments. He also sought updates on tariff impacts for the second half and Q3 gross margin expectations.

Answer

Fumihide Esaka (CEO & Director, Ambiq Micro) confirmed a typical 16-week lead time for customer orders, noting healthy end-customer growth. Jeff Winzeler (CFO, Ambiq Micro) expressed cautious optimism for a better second half due to potentially less severe tariff impacts and indicated Q3 gross margins would likely remain around the Q2 level of 43%, subject to product mix.

Quinn Bolton of Needham & Company asked for the revenue timing of Marvell's first scale-up switch fabric products and for the company's view on the market penetration of Linear Pluggable Optics (LPO) versus traditional DSP-based modules.

Answer

Sandeep Bharathi, President of the Data Center Group, stated that product introductions for scale-up switches will occur 'in the next two years.' Regarding LPO, Chairman & CEO Matt Murphy confirmed it is a 'niche use case' happening at a smaller scale, in which Marvell participates, but he asserted that the 'vast majority' of the market for the foreseeable future will remain DSP-based pluggable optics.

Quinn Bolton from Needham & Company followed up on the potential for dual-sourcing, asking for clarification on whether customers pursuing 'multiple paths' could lead to dual-sourcing and about the NVLink Fusion partnership model.

Answer

Chairman and CEO Matt Murphy reiterated that given the large volumes, it's possible for customers to pursue multiple paths, but he expressed confidence in Marvell's revenue continuity and program ramps based on direct customer engagement. On NVLink, he clarified the initial model is a chiplet solution, where Marvell's custom XPU interfaces with an NVLink chiplet via a die-to-die connection.

Quinn Bolton pressed for quantification on the AI revenue upside, asking if the full-year number is closer to $2 billion than the original $1.5 billion target. He also asked about DCI traction and its approximate percentage of the electro-optics business.

Answer

CEO Matt Murphy did not provide a new specific number for the AI target but pointed to the strong Q3 and Q4 growth outlook as evidence that they will 'clearly, clearly' exceed the $1.5 billion target. On DCI, he noted the business has grown dramatically from its origins and is a strategic area of investment for 800-gig and 1.6T, but did not provide a specific percentage of the electro-optics portfolio.

Quinn Bolton requested the assumed value of underutilization and write-off charges within the gross margin guidance and asked whether lead time extensions were driven by front-end (wafer) or back-end (packaging) constraints.

Answer

CFO Eric Bjornholt declined to provide a specific number but confirmed both charges would be lower sequentially. COO Richard Simoncic and CEO Steve Sanghi clarified that the lead time pressures are almost entirely from back-end constraints like substrates and packaging, not internal or external wafer supply, as they have sufficient die inventory.

Quinn Bolton asked for the value of total charges for underutilization and inventory write-offs assumed in the September gross margin guidance. He also questioned why wafer starts are not increasing until December if lead time extensions are being caused by back-end substrate or packaging constraints rather than front-end wafer supply.

Answer

CFO Eric Bjornholt declined to provide a specific number for the charges but stated they expect underutilization to be modestly lower and inventory write-offs to be lower. COO Richard Simoncic confirmed the majority of current constraints are in back-end packaging and substrates, not wafers, as the company has significant die inventory. CEO Steve Sanghi added that wafer supply is only constrained in a few very spotty external foundry nodes.

Quinn Bolton asked if the guided 85% incremental operating margin could increase further as production ramps and inventory reserves decline, or if it might happen even sooner.

Answer

CEO Steve Sanghi responded that while there are many positive moving parts, including declining write-offs and improving utilization, investors should expect the company to 'roughly keep that sort of incremental margin falling to the bottom for a few quarters.'

Quinn Bolton inquired about the revenue mix between quantum computing and networking, the drivers for the Q2 revenue beat, progress on the DARPA QBI program, and the expected closing timeline for the Oxford Ionics acquisition.

Answer

CFO Thomas Kramer stated the revenue beat was due to accelerated project implementation for existing customers, noting that major projects like the one with AFRL include both computing and networking components. CEO & Chairman Niccolo de Masi expressed high confidence in progressing in the DARPA QBI program, highlighting that both IonQ and Oxford Ionics were selected, creating a stronger combined entity. He confirmed the acquisition is expected to close later in 2025, pending UK regulatory approval.

Quinn Bolton asked about the slower sequential growth in the Home and Life business, the outlook for H2 2025, and sought reconfirmation of the target for continuous glucose monitors (CGM) to reach 10% of sales. He also inquired if gross margins could exceed the 57-58% target range in the future.

Answer

CEO Matt Johnson confirmed the CGM target of 10% of revenue remains on track, explaining that while individual customer ramps can be lumpy, 10 of their 12 largest ramps are on schedule, keeping overall growth expectations intact. CFO Dean Butler added that he expects gross margins to remain at the high end of the 56-58% target range for the next few quarters, driven by a strong industrial and distribution mix, but is not yet reassessing the long-term model to go higher.

Quinn Bolton followed up on channel inventory, asking for a timeline to reach the 70-75 day target. He also asked about the competitive pricing environment and whether fab competitors were becoming more aggressive.

Answer

CFO Dean Butler indicated that normalizing channel inventory back to the target level could potentially happen by the end of the calendar year but might take a quarter or two longer, depending on the pace of point-of-sale (POS) growth. CEO Matt Johnson affirmed that the pricing environment has not meaningfully changed, stating that while competitors may use price, Silicon Labs continues to compete on product differentiation, which supports its premium gross margin.

Quinn Bolton inquired about the expected shape of sequential revenue growth throughout 2025, given the company's confidence in new program ramps despite low visibility. He also asked about the pipeline and revenue contribution timeline for the new 917 WiFi device.

Answer

Chief Financial Officer Dean Butler confirmed confidence in sequential growth each quarter of 2025, driven by design win ramps, but noted that the exact rate is hard to predict due to short lead times. Chief Executive Officer Matt Johnson added that the new 917 WiFi device generated the largest opportunity pipeline in company history and will begin contributing to revenue in 2025, positioning it as a key future growth driver similar to their successful Bluetooth business.

Quinn Bolton questioned management's confidence in the second-half ATS revenue recovery, given the previous quarter's delayed forecast and ongoing budget uncertainty in Washington. He also asked for the approximate size of the advanced computing business and the specific nature of the work being done with Si-Quantum.

Answer

CEO Thomas Sonderman expressed confidence in the ATS recovery, citing the U.S. government's prior $300 million investment in these critical national security programs and ongoing customer dialogues. He expects funding clarity by the end of Q2. Sonderman stated that advanced compute represents about 10% of the business, with 90% of that tied to quantum computing. He described SkyWater's work for Si-Quantum as providing expertise in superconducting and other films technology, including photonics, as part of their value chain.

Quinn Bolton asked about the reasons for the relatively low incremental gross margin fall-through implied in the second-quarter guidance. He also inquired about the expected timing for the volume ramp of the recently announced co-packaged optics (CPO) design wins.

Answer

CFO John Hollister attributed the Q2 gross margin dynamic primarily to product mix. Regarding co-packaged optics, CEO Timothy Breen stated the industry has moved from an 'if' to a 'when' on CPO adoption. President and COO Niels Anderskouv added that the performance and power benefits of CPO have created urgency among major players, and GlobalFoundries expects to be among the earliest to ramp these solutions with customers.

Quinn Bolton of Needham & Company, LLC asked for the 2025 outlook for the Home and Industrial IoT end market and questioned whether an ASP lift was assumed in the forecast to reach a 30% gross margin by year-end.

Answer

CBO Niels Anderskouv stated that the IoT market bottomed in 2024 and is expected to return to growth in 2025 as customer inventories normalize. CFO John Hollister explained that the margin improvement relies on a "generally stable pricing environment" for its differentiated technologies, not a significant ASP lift. The primary drivers are utilization, cost structure, and mix.

Quinn Bolton from Needham & Company followed up on potential 'green shoots' in the Enterprise segment, asking for more detail on demand stabilization in enterprise IT. He also inquired about the general pricing environment for processors and wireless products.

Answer

President and CEO Michael Hurlston confirmed a better outlook for the Enterprise segment, attributing recent strength more to new product cycles and share gains than a broad IT spending recovery. He noted the pricing environment is relatively stable. CFO Ken Rizvi added that the company's strong design-win positions on certain products limit pricing pressure.