Tore Svanberg

Tore Svanberg inquired about the significant revenue beat for the quarter and the better-than-seasonal guidance for the March quarter, seeking additional details on the underlying drivers.

Answer

CFO Jeff Woolard explained that the strong performance was primarily due to being further away from the peak of unit volumes and a favorable mix of end devices than initially anticipated when previous guidance was issued. CEO John Forsyth also addressed a follow-up on voice as an interface for AI, confirming a new product for PC OEMs enhancing conversational AI interaction, with revenue expected in calendar 2027-2028, and noted its relevance for other AI devices.

Tore Svanberg inquired about the drivers behind Cirrus Logic's higher-than-expected revenue for the current quarter and the better-than-seasonal guidance for the upcoming March quarter, seeking additional color on these strong results. He also asked about the timeline for revenue contribution from the company's voice as an interface for AI technology, particularly in the notebook market and other applications.

Answer

CFO Jeff Woolard clarified that while the seasonal shape remains consistent, the company was further from the peak than initially anticipated, driven by higher smartphone unit volumes and a favorable mix. CEO John Forsyth elaborated on the voice as AI interface, confirming its primary focus on PC OEMs to enhance conversational AI interactions. He mentioned sampling a new codec with smart voice features, which could double the ASP of previous generations, with expected revenues in calendar 2027 and 2028. He also noted its relevance for other AI devices.

Tore Svanberg asked about the expected seasonality of Cirrus Logic's business for fiscal year 2026, inquiring if it would return to a more typical pattern, and also sought updates on potential opportunities in the power/battery management sector for smartphones.

Answer

CFO Jeff Woolard explained that the seasonality has shifted, with camera content and some pull-ins pushing revenue earlier into the first half of the fiscal year, a trend observed in Q2 results and Q3 guidance. He indicated no expected changes to this historical seasonality for the remainder of the fiscal year. CEO John Forsyth expressed continued excitement about the power/battery area, highlighting compelling IP focused on power efficiency, system performance, and long-term battery health, despite no concrete design wins to announce yet.

Tore Svanberg asked about the seasonality of Cirrus Logic's business, specifically if fiscal year 2026 could return to a more normal pattern, and for an update on potential opportunities in the power/battery side of the smartphone market.

Answer

CFO Jeff Woolard explained that seasonality has shifted, primarily due to camera content becoming a larger portion of total revenue and some pull-ins, pushing the revenue shape more into the first half of the fiscal year. He noted that this trend has played out as expected and they don't foresee changes to historical seasonality for the remainder of the fiscal year. CEO John Forsyth added that the power/battery area remains exciting, with compelling IP validated by customer feedback, focusing on power efficiency, system performance, and long-term battery health, though no concrete design wins were announced yet.

Tore Svanberg of Stifel sought to quantify the seasonality shift, asking if the revenue profile would look more like a 45/55 split between the first and second halves. He also asked if the expected sequential inventory decrease in Q2 was related to this seasonality or the winding down of GlobalFoundries commitments.

Answer

CFO Jeff Woolard clarified that the seasonality shift is primarily driven by the increasing mix of camera content, which ships earlier in the manufacturing cycle, and some level of demand pull-in. He did not confirm a specific percentage split. Woolard also stated that the anticipated inventory reduction is mostly due to working through the long-term capacity agreement with GlobalFoundries as the company moves back towards its target inventory levels, rather than being a direct result of the seasonality shift.

Tore Svanberg asked about any abnormal booking behavior observed in the June quarter related to tariffs and what variables the company is monitoring. He also inquired about the company's ambitions for its general market products and whether new timing products were related to previous MEMS IP.

Answer

CFO Jeff Woolard responded that the June quarter outlook appears normal based on customer forecasts and that Cirrus Logic is actively supporting customers' supply chain diversification. CEO John Forsyth added that the general market business could eventually become 10% of revenue by leveraging IP for high-margin, long-lifecycle products. He clarified that the new timing product IP is completely different from and unrelated to MEMS technology.

In a follow-up question, Tore Svanberg asked if SG&A expenses would need to increase as Cirrus Logic expands into new markets like automotive, or if it would follow a more capital-light, reference-design-based model similar to its laptop strategy.

Answer

CEO John Forsyth stated that he is comfortable with the current SG&A level as a percentage of revenue and does not foresee it changing significantly to support new market entry. He indicated that the company has opportunities to reallocate existing investments and does not expect to grow the SG&A organization to support this expansion.

Tore Svanberg of Stifel asked if unusual product cycle timing from Cirrus Logic's largest customer was creating atypical business linearity or inventory staging. He also inquired about the new power conversion ICs in laptops and their potential to expand into the smartphone market.

Answer

CEO John Forsyth stated that the primary factor shaping the September-to-December transition is the fiscal calendar shift, not unusual customer behavior. Regarding power ICs, he explained the new laptop chip, derived from the Lion Semiconductor acquisition, offers high efficiency but is distinct from their smartphone power strategy. For smartphones, Cirrus Logic is focused on high-precision components around the battery and sees the laptop market as a larger opportunity for its current power R&D investments.

Tore Svanberg followed up by asking about the split of the $3.4 billion capacity expansion investment between VSMC and ESMC, specifically for the 2026 completion.

Answer

Bill Betz, CFO, stated that the majority of investments for VSMC, which is ahead of schedule and expected to ramp in 2027 and be fully loaded in 2028, will be completed in 2026 (potentially a small portion into Q1 2027). ESMC payments will continue from 2027 to 2029 but are much smaller in aggregate, with most payments hoped to be done by the end of 2026.

Tore Svanberg asked for the main reasons behind NXP's decision to change its geographic revenue reporting to a headquarters-based region. He also inquired about the split of the $3.4 billion capacity expansion investment between VSMC and ESMC by the end of 2026.

Answer

Rafael Sotomayor, President and CEO, explained that the new reporting method better reflects how NXP manages the company internally, directs resources, and organizes its sales force, as customer engagements and design win decisions are often centralized. Bill Betz, CFO, stated that the majority of the VSMC investments are expected to be completed in 2026, as VSMC is ahead of schedule and expected to ramp in 2027 and be fully loaded in 2028. ESMC payments will continue from 2027 to 2029, but are smaller in aggregate, with most payments hoped to be done by the end of 2026.

Tore Svanberg asked for clarification on whether the $500 million and $1 billion revenue targets for Celestial AI included only PFLink products or also potential memory-related businesses.

Answer

Matt Murphy (Chairman and CEO) clarified that the revenue targets and earnout for Celestial AI are for the business in totality. He noted that the PF chiplet is expected to drive the initial revenue build towards the end of fiscal 2028 and 2029, but all potential applications, including memory, are on the table.

Tore Svanberg questioned whether Celestial AI's projected revenue targets of $500 million and $1 billion were solely for PF chiplet products or also included potential memory-related businesses.

Answer

Chairman and CEO Matt Murphy clarified that the revenue targets and earnout for Celestial AI encompass the entire business. While the PF chiplet is expected to be the primary driver initially, all opportunities are considered due to extensive industry engagements.

Tore Svanberg of Stifel Financial sought clarification on Marvell's competitive position in 200-gig SerDes technology and asked for details on how the new partnership with NVIDIA on NVLink Fusion will function.

Answer

Chairman and CEO Matt Murphy asserted that Marvell's SerDes technology remains "best in class," highlighting its leadership in 200-gig and its recent demonstration of 400-gig per lane technology. Regarding the NVIDIA partnership, he explained it validates the complementary role of custom silicon, allowing customers to integrate their own XPUs with NVIDIA's rack-scale solutions, with Marvell providing a key enabling technology.

Tore Svanberg noted the quick succession of Marvell's 3-nanometer 1.6T DSP announcement after its 5-nanometer version and asked if this accelerated cadence was driven by a market push for lower power.

Answer

CEO Matt Murphy confirmed that while lower power is a key driver, the primary reason for the accelerated cadence is the need to "move at hyperscale speed." He explained that in a high-growth inflection point like AI, the company with the best and most readily available technology wins. Therefore, Marvell is intentionally quickening its product cycles to maintain and extend its market leadership in high-speed optics.

Tore Svanberg inquired about Marvell's operating leverage and gross margin dynamics, particularly how the lower-margin custom ASIC business remains accretive to the operating margin due to NRE offsets.

Answer

CFO Willem Meintjes explained that non-GAAP gross margin is expected to stay in a similar range for the next few quarters. He noted that the impact of lower-margin custom programs is largely offset by the recovery in core merchant products and improved manufacturing absorption. CEO Matt Murphy added that the path to their target operating margin is clear due to disciplined OpEx management, regardless of the exact gross margin outcome.

Tore Svanberg inquired about the drivers of Ambarella's 36% to 38% fiscal year 2026 revenue growth, specifically asking about the split between unit volume increases and average selling price (ASP) expansion. He also asked for more details on the portable video market, including new design wins, the role of AI-based drones, and how this market is expected to drive Ambarella's future growth, noting its past volatility. Finally, he asked CFO John Young if OPEX growth for fiscal year 2027 is expected to be slower than revenue growth, given the good operating leverage demonstrated this year.

Answer

CEO Fermi Wang stated that both unit growth and ASP increases contributed to the revenue growth, estimating the contribution to be roughly half and half, with significant ASP growth noted. He clarified that the portable video market includes action sports cameras, panorama cameras (like those from Arash), drones, wearable cameras, web cameras, and video conferencing products, identifying it as a significant growth driver with surprising market size momentum. Louis Gerhardy, VP of Corporate Development, added that it's technically categorized as 'portable video and other.' CFO John Young confirmed that while no specific guidance is given for FY2027, the long-term expectation is to achieve operating leverage by having revenue and gross profit outpace non-GAAP OPEX increases.

Tore Svanberg asked about the drivers behind Ambarella's projected 36-38% revenue growth for fiscal year 2026, specifically inquiring about the split between unit volume increases and average selling price (ASP) expansion. He also sought more details on the portable video market, including new design wins and the role of AI-based drones in driving future growth.

Answer

CEO Fermi Wang indicated that both unit growth and ASP increases contributed significantly to the revenue growth, estimating the split to be roughly half and half. For the portable video market, Fermi Wang clarified it encompasses action sports cameras, panorama cameras, drones, wearable cameras, web cameras, and video conferencing products, noting its substantial contribution to current growth and expected continued expansion. Louis Gerhardy, VP Corporate Development, added that it's technically categorized as 'portable video and other'.

Tore Svanberg of Stifel Financial sought more detail on Ambarella's new focus on "edge infrastructure," asking what the term entails, and questioned if non-camera IoT revenue is becoming a significant portion of the business that might be broken out separately in the future.

Answer

CEO Fermi Wang explained that edge infrastructure refers to on-premise servers or AI boxes that aggregate data from multiple existing endpoint devices to run advanced AI models, providing an upgrade path for the installed base. VP of Corporate Development Louis Gerhardy clarified that while security is now less than half of revenue, most current revenue still involves data ingestion through a camera lens, though this may change.

Tore Svanberg asked for a broader perspective on the importance of open-source reasoning models like DeepSeek for Ambarella and requested an update on the company's 2-nanometer development timeline.

Answer

CEO Fermi Wang highlighted the significance of running a 1.5 billion parameter DeepSeek model on a 1.5-watt chip, noting it opens new applications and simplifies customer model adoption. Regarding 2-nanometer, he stated they are developing two projects, expect to tape out late this year, and anticipate customer production by the end of 2026.

Tore Svanberg requested more detail on the product mix between CV2 and CV5 SoCs and asked whether the Q3 rebound in legacy video processor revenue was a temporary event.

Answer

President and CEO Dr. Fermi Wang stated that AI revenue constituted roughly 70% of sales in the quarter and that CV5 shipments would be significantly north of one million units for the year. He confirmed that the growth in legacy video processors was a temporary phenomenon driven by the end of inventory correction and that this category is expected to resume its gradual decline.

Tore Svanberg requested clarification on the product ramp timeline, specifically asking if the CV72 and CV75 SoCs would see meaningful production ramps in the next fiscal year or later. He also asked how the ASP of the CV72 compares to the higher-end CV5.

Answer

CEO Fermi Wang clarified that CV5 will remain strong next year, while CV72 is expected to begin ramping at the end of the current fiscal year for IoT enterprise applications. He noted CV72 is a replacement for the older CV22 and represents a significant ASP increase over it, while CV5 remains a higher-end product. CFO John Young added that the current blended SoC ASP is around $12-13, and all new product families (CV5, CV7, CV3) will drive this average higher as they ramp.

Tore Svanberg asked about Analog Devices' R&D allocation strategy, specifically which areas the company plans to double down on and which it might de-emphasize, given structural changes in the economy.

Answer

CEO Vincent Roche outlined R&D priorities: continued focus on core analog (signal processing, data conversion, precision, high-speed), doubling down on power management as a significant growth opportunity, and investing in digital portfolio niches (low power, low latency, heterogeneous compute, algorithmic technologies). He emphasized enhancing core analog with machine learning and solving customer complexity, noting an 'opportunity-rich' investment portfolio.

Tore Svanberg questioned if the growth outlook for ADI's automation business is accelerating beyond the previously discussed 15% target, given new opportunities in humanoid robotics and key partnerships.

Answer

CEO & Chair Vincent Roche expressed high optimism, stating that ADI aims to double its multi-hundred-million-dollar automation business by 2030. This growth is driven by a strong R&D pipeline, macro trends, and increasing content opportunities from new sensing modalities in robotics.

Tore Svanberg asked for more details on the robotics market opportunity, noting a potential inflection point driven by AI and inquiring about current design activity.

Answer

CEO Vincent Roche described robotics as a long-term, persistent trend driven by demographics and the need for productivity. He highlighted a shift towards more tactile, precise robotic systems that use significant edge intelligence. Roche stated that ADI's content per unit could increase by an order of magnitude, from hundreds of dollars today to potentially thousands in more advanced autonomous and humanoid robots over the next 5-10 years.

Tore Svanberg of Stifel asked about ADI's strategic approach to its hybrid manufacturing model amid geopolitical risks and followed up on whether design win conversion is accelerating as the inventory cycle turns.

Answer

CEO Vincent Roche explained that ADI's strategy focuses on diversity for resilience, aiming for about 95% of products to have dual sourcing by early 2027 through investments in US/EU fabs and partner diversification. He also confirmed that new product adoption is strong, particularly in ATE, auto, and data centers, driving growth and higher average selling prices, indicating a healthy design win conversion rate.

Tore Svanberg asked a strategic question about ADI's differentiation in software as AI moves to the edge, particularly in relation to its analog and mixed-signal peers.

Answer

CEO Vince Roche explained that ADI is increasingly using software to support its core analog, mixed-signal, and power franchises. He highlighted two recent launches: CodeFusion Studio, an open-source development environment, and ADI Assure, a new security architecture. He emphasized that software makes ADI's complex solutions easier for customers to adopt and integrate.

Tore Svanberg asked for confirmation on the three ACC programs with the lead customer, specifically if they are all cable or PCB board-based, and if they operate at the same speeds, requesting the specific speeds. He also inquired about the ongoing pressure on Sierra Wireless gross margins, considering component costs and the outlook for the next few quarters.

Answer

President and CEO Hong Hou confirmed that all three ACC programs are for 200 Gbps trace and are all in cable forms, with none being chip-on-board. Executive Vice President and CFO Mark Lin clarified that Sierra Wireless (ISC) gross margin pressure is primarily due to product mix, with strong growth in lower-margin cellular modules (both 4G and 5G) outweighing higher-margin services and router business, rather than inflationary component costs.

Tore Svanberg asked for confirmation on the three ACC programs with the lead customer, specifically if they are all cable or PCB board and their speeds. He also inquired about the pressure on Sierra Wireless (IoT Systems and Connectivity) gross margins, considering mix shifts and component costs, and the impact of 5G modules ramping.

Answer

CEO Hong Hou confirmed that all three ACC programs with the lead customer are for 200 gigabit per second trace and are all in cable forms, not chip-on-board. CFO Mark Lin addressed ISC gross margins, stating that inflationary costs on BOM (like memory) are not being experienced. He clarified that the primary driver of lower ISC gross margins is the mix shift towards cellular modules (both 4G and 5G), which have significantly lower margins than services or router businesses, especially with strong orders and delivery ramps expected in Q4.

Tore Svanberg from Stifel asked about the general business environment in terms of sales and bookings linearity. He also requested clarification on the geographic mix of the three leading hyperscalers expected to ramp 800G LPO in Q4.

Answer

CEO Hong Ho described the business environment as having very positive momentum, with strong booking activity across data center, Persei, consumer, and industrial segments. He clarified that the three hyperscalers ramping 800G LPO in Q4 consist of two in the U.S. and one in China. He also noted that Semtech benefits from both DSP-based and LPO solutions, with LPO doubling the company's serviceable available market (SAM).

Tore Svanberg from Stifel inquired about the ramp timeline for the PerSe proximity sensor business in smart glasses. He also asked if LoRa's medical applications were expanding beyond the currently discussed hearing aids.

Answer

President & CEO Hong Hou expressed excitement for PerSe in smart glasses, noting active engagement with several customers and expecting new product launches beyond Meta in the second half of the year. Regarding LoRa, he confirmed that hearing aids are the primary medical application for now but sees potential for expansion, also highlighting robotics as a new growth area.

Tore Svanberg asked for the revenue mix between 200-gig and 100-gig CopperEdge products, the proportion of the company's $1B revenue run rate considered strategic, and the key drivers for gross margin expansion into fiscal 2026.

Answer

CEO Hong Hou and Executive Mark Lin clarified that Q3 CopperEdge revenue was substantially all 200-gig. Regarding strategy, Hong Hou pointed to the industrial segment breakdown as a guideline. For margins, Mark Lin explained that while product mix is the primary driver, scale also contributes, though growth in lower-margin IoT systems can temper the overall percentage improvement.

Tore Svanberg from Stifel asked about the drivers behind the strong recovery in LoRa revenue, questioning whether it was due to inventory replenishment or new program adoption.

Answer

President and CEO Hong Hou attributed the LoRa revenue strength to both factors. He confirmed that channel inventory depletion has led to a demand rebound, while also emphasizing that new, high-value use cases, such as a successful deployment at Mercedes-Benz, are driving fresh adoption. Hou expressed commitment to expanding the LoRa ecosystem to foster further growth.

Tore Svanberg of Stifel inquired about the primary drivers of SiTime's strong Q4 outlook, including the relative growth across its three segments. He also asked how new product lines like clocks and the Titan resonator would influence oscillator opportunities, about the factors behind the strong Q4 gross margin guidance, and for an update on SiTime's go-to-market strategy with hyperscalers and chip players.

Answer

Beth Howe, Chief Financial Officer, explained that Q4 would see sequential growth in all segments, led by Communications, Enterprise, and Data Center (CED), with contributions from new mobile Symphonic products and aerospace/defense. She attributed strong gross margins to product mix, scale, and cost management. Rajesh Vashist, Chief Executive Officer, clarified that clocks might influence oscillators in 1-1.5 years, while Titan resonators are not expected to generate meaningful revenue until late 2026/2027, emphasizing SiTime's unique position as a broad-based timing supplier. He also reported significant progress in the semiconductor area, engaging new market entrants, and focusing on high-end, differentiated timing, benefiting from accelerating technologies like 1.6 Tbps.

Tore Svanberg from Stifel Financial questioned the flat sequential performance in the Mobile/IoT/Consumer segment, asked for an outlook on non-data center markets like industrial and auto, and later inquired about timing architecture trends at the data center rack level and the recovery of the 5G communications business.

Answer

CFO Beth Howe attributed the consumer segment's performance to typical seasonality, noting that the second half of the year is usually stronger. CEO Rajesh Vashist advised against over-analyzing consumer volatility and noted that while automotive has some softness, industrial and aerospace/defense remain strong. Regarding data centers, he explained that the astonishing pace of innovation is driving demand for more complex, higher-ASP, system-level timing solutions. He also confirmed that the communications business is recovering, with deployments expected in the coming year.

Tore Svanberg from Stifel Financial Corp. asked for more detail on the growth drivers within the AI data center segment, the expected drivers of sequential growth for Q2, and whether the telecom/5G market is recovering. He also inquired about the duration of elevated capital expenditures.

Answer

Executive Rajesh Vashist highlighted that data center growth is broad, extending beyond optical modules to switches, servers, and accelerator cards, with momentum expected for years. He stated Q2 growth would come from all segments and saw minimal tariff-related pull-in. He also noted the telecom/5G market is starting to move, aided by software solutions. CFO Beth Howe explained that elevated CapEx for new product capacity would continue in Q2, with the full-year total expected to be in the mid-to-high $30 million range.

Tore Svanberg of Stifel asked about the source of strong 2025 bookings momentum, the relative growth strength of SiTime's three segments, the key application drivers within the CED segment, the outlook for the largest customer, and the revenue and margin profile of the acquired Aura clocking products.

Answer

CEO Rajesh Vashist identified the Communications, Enterprise, and Data Center (CED) segment as the primary growth driver for 2025, noting that while all segments are expected to grow, CED will lead. He also deferred comment on the largest customer, citing a lack of non-public information. CFO Beth Howe confirmed that products from the Aura acquisition are now generating revenue, which is expected to build through 2025 with gross margins that are accretive to the corporate average.

Tore Svanberg followed up on Taurus' strong growth in Q4, specifically asking if the 400G growth is diversified and when the inflection for 800G Taurus is expected in 2026.

Answer

Sanjay Gajendra, President, Co-Founder, and COO, stated that 800G deployments are just beginning, and Astera Labs is engaged with several customers. He expects the revenue impact from 800G solutions to start in the early part of 2026, following qualification completions and ramping to production.

Tore Svanberg asked about the strategic timing and material revenue timelines for Astera Labs' entry into the optical scale-up market via the Xscape Photonics acquisition.

Answer

Jitendra Mohan, CEO and Co-founder, explained that the acquisition aligns with Astera Labs' vision for complete rack-scale connectivity, anticipating optical interconnects will be necessary as data rates increase and scale-up domains extend beyond copper's reach. He noted Xscape adds critical fiber chip coupling and photonics expertise, complementing Astera Labs' signal conditioning and switching. Mike Tate, CFO, projected material revenue from scale-up optical connections earliest in the 2028-2029 timeframe. Sanjay Gajendra, President, Co-Founder, and COO, added that Taurus's strong Q4 growth is driven by 400 Gb solutions across several customers, with 800 Gb revenue impact expected to begin in early 2026 after qualifications.

Tore Svanberg asked if the ramp of the Scorpio X Series could lead to another doubling of the company's revenue run rate, similar to previous growth phases, and questioned the reasons behind the recent surge in traction for UALink.

Answer

President & COO Sanjay Gajendra outlined a multi-step growth plan, confirming the Scorpio X series ramp in 2026 represents the next step-up in the revenue baseline due to its higher dollar content. CEO Jitendra Mohan clarified that UALink is gaining, not regaining, traction since its recent introduction in Q1 2025, driven by strong interest from hyperscalers and partners like AMD, with most engagements at 200 Gbps speeds.

Tore Svanberg asked for more details on the Aries 6 upgrade cycle, particularly the use cases for the new gearbox product. He also questioned the reason for the increase in Days Sales Outstanding (DSO).

Answer

COO Sanjay Gajendra explained that the Aries 6 gearbox is essential for connecting different protocol generations, like a PCIe 5 CPU to a PCIe 6 GPU, and carries a higher ASP than a standard retimer. CFO Mike Tate attributed the rise in DSO to 40 days to more balanced linearity within the quarter, stating this level is expected to be typical going forward.

Tore Svanberg asked if the projected 2025 revenue from Scorpio would be driven primarily by the P-Series and also inquired about the customer and use-case diversification for the Taurus product line.

Answer

CFO Michael Tate confirmed that both Scorpio P-Series and X-Series are expected to contribute to revenue in 2025, with P-Series launching first and X-Series ramping in the latter half of the year. Regarding Taurus, Tate explained that the recent growth was driven by 400-gig solutions for a lead customer, with strong growth expected to continue in 2025 across both AI and general-purpose compute before the market transitions toward 800-gig.

Tore Svanberg of Stifel asked for the expected timing of volume production for PCIe Gen 6 products and inquired whether the Scorpio switch and Aries retimer products would have a strong pull-through effect or if they would be sold in mix-and-match scenarios.

Answer

President and COO Sanjay Gajendra indicated that the PCIe Gen 6 production timeline is dependent on customer schedules but reiterated that Scorpio is expected to exceed 10% of 2025 revenue. He explained that while current Gen 5 deployments are often mix-and-match, the integrated COSMOS software suite provides a significant advantage for selling Scorpio and Aries together.

Tore Svanberg asked if ON Semiconductor, with its recent acquisitions, possesses all the necessary IP and building blocks to achieve the projected $50,000 content per rack in AI data centers by 2027, or if further build-out is required. He also requested historical context on the vertical GaN (VGAN) technology, including its development timeline and expected revenue contribution milestones.

Answer

Hassane El-Khoury, President, CEO, and Director, ON Semiconductor, affirmed that for the next couple of years, they have the necessary IP and building blocks, both organically and inorganically, to capture market share, viewing their portfolio as a 'toolbox' for rapid product deployment. For VGAN, he explained that development began with IP and asset acquisition in 2024, leading to successful first-product yields and aggressive sampling with lead customers in automotive and AI. Revenue contribution from VGAN is anticipated in the 2027 timeframe, drawing parallels to the successful commercialization of GTET silicon carbide technology.

Tore Svanberg asked if ON possesses all necessary IP and building blocks to achieve $50,000 content per rack in power delivery from grid to processors by 2027, and sought historical context on vGaN development, including its origins and expected revenue contribution milestones.

Answer

Hassane El-Khoury, President and CEO, affirmed that ON has or is developing the necessary IP and building blocks for the next couple of years, with a full portfolio and rapid product deployment. He explained that vGaN development began with IP and asset acquisition in 2024, with the Syracuse fab included, and ON's manufacturing expertise is crucial for commercialization, similar to the GTET acquisition. Revenue from vGaN is expected around 2027.

Tore Svanberg asked about the Treo platform's progress, specifically where design wins are occurring and when material revenue might be expected. He also inquired about the CapEx outlook for the second half of the year.

Answer

CEO Hassane El-Khoury reported broad design win traction for Treo across automotive, AI data centers, and industrial markets, with revenue ramping now at accretive 60-70% margins. He noted that while revenue will grow, it won't be material at a company level in 2026. CFO Thad Trent stated that full-year CapEx will be in the mid-single-digit percentage of revenue, primarily for maintenance, reinforcing confidence in free cash flow generation.

Tore Svanberg of Stifel asked for clarification on the gross margin improvement formula during a recovery, specifically the basis points gained per point of utilization. He also asked how investors should track the financial success of the new Treo platform.

Answer

CFO Thad Trent explained that from current levels up to the low-60% range, utilization improvements would yield 20-25 basis points of gross margin, after which it would revert to the previous 15-20 basis point rule of thumb. CEO Hassane El-Khoury said that for Treo, the company will provide updates on leading indicators like product introductions and margin profiles, and noted first revenues will occur in 2025, but will not break out revenue at a granular level.

Tore Svanberg sought to clarify the change in commentary on China EV 800-volt market share from 'approaching 60%' to '50%'. He also asked how high distribution inventory would go as part of the mass market strategy.

Answer

CEO Hassane El-Khoury confirmed that nothing had changed regarding the China EV design wins. CFO Thad Trent stated that the new target range for distribution inventory is 9 to 11 weeks in a normalized market, and he does not expect it to go above 11 weeks.

Tore Svanberg inquired about MPS's journey in the enterprise data segment, specifically its progression from selling predominantly chips to module subsystems and eventually full systems, and the potential future scale of this business.

Answer

Michael Hsing (CEO and Founder) discussed anticipating building multiple millions of highly integrated module units per month, emphasizing the development of automated test systems to achieve low single-digit PPM failures. He noted that module power solutions currently represent less than a third of enterprise data revenues but are expected to grow significantly. Tony Balow (VP of Finance) added that solutions for 800V are projected for 2027-2028 revenue ramps, indicating MPS is still at the early stage of this opportunity.

Tore Svanberg of Stifel inquired about the $800 million enterprise data segment, specifically MPS's journey from predominantly selling chips to module subsystems and eventually full systems. He asked about the current stage of this transition and the potential for future growth with more system-level solutions. He also asked for clarification on the timing of 800V solutions for data centers.

Answer

Michael Hsing, CEO and Founder, anticipates building multiple millions of highly integrated modules per month, aiming for low single-digit PPM failures through automated systems, with a near-term goal of $10 million a month. He stated that the journey towards system-level solutions is at the very beginning, with module power currently less than a third of revenues but expected to grow significantly. Tony Balow, VP of Finance, clarified that 800V solutions for data centers are projected for 2027-2028 revenue ramps, reinforcing that MPS is at the front end of this opportunity. Michael Hsing emphasized that revenue ramps for new technologies typically take several years.

Tore Svanberg asked for details on the September quarter guidance, seeking a breakdown of the puts and takes across MPS's six end markets. He also requested more color on the ramping AI ASIC programs, including customer numbers, architecture, and whether the $4 billion enterprise data SAM has increased.

Answer

EVP & CFO Bernie Blegen outlined the Q3 guidance, projecting 20-30% sequential growth in Enterprise Data, a seasonal uplift in Consumer, and high single-digit growth in other segments, with caution on Storage and Compute after two strong quarters. Founder, Chairman, President & CEO Michael Hsing confirmed engagement with multiple large and emerging AI customers, positioning MPS as a 'winner' and reaffirming confidence in achieving the $4 billion enterprise data SAM.

Tore Svanberg asked if the first quarter represented a low point for the enterprise data segment in 2025 and inquired about how MPS's global diversification efforts are impacting its position amid the current tariff environment.

Answer

CEO Michael R. Hsing and CFO Bernie Blegen confirmed that visibility for enterprise data is improving for the second half of the year, driven by broad-based design wins that are waiting to ramp. Regarding diversification, Hsing detailed the decade-long strategy to establish local manufacturing for local customers, which now positions MPS favorably to supply the U.S. from outside China and China from within. Vice President of Finance Tony Balow added that this diversification strategy also extends to R&D.

Tore Svanberg inquired about the business dynamics for the upcoming March quarter, specifically by segment, and asked for color on the growth trajectory for the enterprise data business throughout calendar year 2025.

Answer

EVP and CFO Bernie Blegen stated that for Q1, growth will be driven by automotive and a rebound in communications, with strong demand also seen in memory and notebooks. Industrial and consumer ramps are expected later in 2025, while enterprise data will be down. For the full year, CEO Michael Hsing and CFO Bernie Blegen indicated that the enterprise data market is a multi-billion dollar opportunity, but near-term customer buying patterns are hard to control. They expect the business to be flattish or slightly up for the year, with a slower start in the first half and a broadening customer base in the second half as new hyperscaler products launch.

Tore Svanberg inquired about the near-term Q4 outlook for the Enterprise Data segment, the key drivers behind the surprisingly strong growth in the Communications segment, and the future growth potential from vertical power solutions.

Answer

CEO and Founder Michael Hsing stated MPS is not losing share in Enterprise Data in Q4 and is fulfilling existing forecasts. EVP and CFO Bernie Blegen added that the outlook for Enterprise Data is for low single-digit growth. Regarding Communications, Hsing explained the growth comes from data converters for data centers and new Wi-Fi formats. Blegen noted that while a post-stocking dip is normal, they see sustainable growth in Communications through H1 2025. Hsing also confirmed that vertical power solutions will be a significant growth driver in the coming quarters, not just years, and that products are already shipping in volume.

Tore Svanberg asked about the context for MaxLinear's 'exceptional growth' projection for 2026, especially in relation to the approximately 30% year-over-year growth expected in 2025. He also inquired about the strength in wireless infrastructure, including company-specific product cycles and service provider CapEx, and the outlook for the wireless segment within infrastructure for calendar year 2026.

Answer

CEO Kishore Seendripu noted that 2025 showed solid growth and a return to profitability. For 2026, he mentioned street numbers around 20% growth, which is about two times the industry expectation, driven by optimism from design wins in optical, wireless, and storage accelerators, and strong booking strength. He emphasized caution due to large, complex systems and customer concentration. Regarding wireless infrastructure, Dr. Seendripu confirmed telecom operators are increasing CapEx, leading to strong traction for MaxLinear's Sierra product line, a single-chip solution for RAN. He highlighted Q3 qualifications with two major North American telecom operators and expected strong growth for wireless access and backhaul, potentially similar in magnitude to optical, reiterating a long-term infrastructure revenue target of $300 million-$500 million within two to three years.

Tore Svanberg inquired about the OpEx trend, noting it's higher than previously, and asked if it would come down in the first half of 2026 or if the current level is the new baseline, especially considering early-year restructuring.

Answer

CFO Steve Litchfield acknowledged higher OpEx due to revenue ramps and customer demands for software/platform support. He indicated this is an adjustment and expects to see 'nice operating margins developing throughout the year' in 2026, demonstrating leverage in the model.

Tore Svanberg inquired about the expected performance of MaxLinear's business segments in Q3, given their volatility, and asked about the drivers for the strong growth in the broadband market.

Answer

CFO and Chief Corporate Strategy Officer Steve Litchfield highlighted that the Infrastructure segment is expected to lead growth, followed by a continued recovery in broadband and connectivity. He attributed this to increased carrier CapEx and market share gains, rather than just inventory replenishment.

Tore Svanberg followed up on tariffs, asking about customer contingency planning. He also questioned the reasons for volatility in the industrial business and asked for the company's inventory targets.

Answer

CEO Kishore Seendripu described the tariff situation as 'too chaotic' for concrete contingency planning at this stage. CFO Steve Litchfield attributed the industrial segment's volatility to general market softness compounded by China-specific dynamics. Regarding inventory, Mr. Litchfield expects levels to decline for another two quarters before needing to build again to support future growth, while Dr. Seendripu added they are actively building inventory for new product ramps.

Tore Svanberg of Stifel asked about the impact of recent AI-related industry news on the optical interconnect market, the reasons for the Q4 increase in Days Sales Outstanding (DSO), and the revenue potential from adjacent products like Active Electrical Cables (AEC) and discrete TIAs.

Answer

CEO Kishore Seendripu stated that recent industry events democratize the market and create opportunities for new entrants, as faster interconnects are always needed. He noted that AEC revenue is still small and TIAs are primarily attached to MaxLinear's own DSP platforms. CFO Steven Litchfield explained that Q3 DSO was understated and the current 80-85 day range is a more realistic run-rate for 2025.

Tore Svanberg asked for details on the 1 million unit optical transceiver run rate, the mix between 400G and 800G, and the outlook for the broadband business, including inventory levels and the DOCSIS 4.0 transition. He also inquired about the revenue timing for the Rushmore 200-gigabit-per-lane product.

Answer

CEO Kishore Seendripu confirmed the 1 million unit per year run rate for optical transceivers, with 800G being a larger fraction than 400G, and expects to exceed this rate in 2025. For broadband, he anticipates growth in 2025 as order rates pick up, noting the current market is still dominated by DOCSIS 3.1. Regarding Rushmore, he stated that initial demand is driven by AI applications, with a full product showcase planned for the next OFC.

Tore Svanberg from Stifel Financial inquired about Ambiq Micro's progress in broadening applications beyond wearables, specifically which new markets are expected to generate revenue soon. He also requested an update on the Atomiq product line's development and sampling timeline.

Answer

Fumihide Esaka (CEO & Director, Ambiq Micro) mentioned AR/VR glasses as a near-term market, alongside growing segments like walker safety and machine health monitors. He noted significant progress on Atomiq, with active engagement with early adopters on specifications, attributing accelerated development to the company's public status.

Tore Svanberg asked when to expect a more significant decline in underutilization charges and what the target debt level is before share buybacks could resume.

Answer

CEO Steve Sanghi indicated a substantial improvement in utilization charges should begin in the December quarter and continue from there. On capital allocation, he stated the priority is to first repay the ~$350 million borrowed to fund the dividend and then to reduce leverage from 4.2x toward their target of 1.5x or lower, adding that buybacks should not be expected in the near term.

Tore Svanberg asked about the timing for a more significant, 'step function' decline in underutilization charges. He also inquired about the new target debt level, seeking to understand when share buybacks might resume now that cash flow is expected to cover the dividend.

Answer

CEO Steve Sanghi indicated that a substantial improvement in utilization charges should be seen in the December quarter and continue from there, as the ramp must begin well before inventory normalizes. Regarding capital return, Sanghi stated the near-term priority is to use excess cash flow to pay down the approximately $350 million borrowed to cover the dividend. He added that with leverage at 4.22x, well above the target of 1.5x, share buybacks are not expected in the near term.

Tore Svanberg asked for clarification on the recent organizational change that combined the 8-bit and 32-bit business units and how this might impact the company's microcontroller market share.

Answer

CEO Steve Sanghi clarified that the 8-bit and 32-bit product groups were combined to better manage the customer transition from 8-bit to low-end 32-bit MCUs, a segment where Microchip had a product gap. He explained that the newly combined unit has changed development priorities to address this, with the first new products expected in early January, aiming to capture more of this transition market.

Speaking for Tore Svanberg, Jeremy asked for quantification of the 'turns' business needed to meet guidance and how that compares historically. He also asked about the revenue opportunity for the new RISC-V processor.

Answer

CFO Eric Bjornholt stated that the turns required to meet guidance are not outside of normal levels for a short lead-time environment. COO Rich Simoncic added that they are also seeing expedites and pull-ins. Regarding RISC-V, Simoncic noted high customer engagement in development but said the company has not yet forecasted its revenue impact or announced specific design wins.

Tore Svanberg asked about the current high-turns business environment, wondering how long it might persist given that peers also have short lead times. He also questioned if the company could double its quarterly revenue with its existing capacity and only maintenance CapEx.

Answer

CEO Ganesh Moorthy stated it's hard to predict when the high-turns environment will end but believes it will reverse when customers either feel supply risk or gain confidence. Executive J. Bjornholt confirmed that, in theory, they could double revenue with current capacity if the product mix stayed the same, noting they have 'a lot of capacity to grow back into,' though mix changes would require some investment.

Tore Svanberg of Stifel inquired about the value proposition of MACOM's new photodetector (PD) products, particularly the chip-scale package with a TIA, and its target use cases. He also asked for clarification on the PCIe Gen 7 opportunity.

Answer

President and CEO Stephen Daly described the photodetector products as 'world-class,' highlighting their industry-leading dark currents, self-hermetic design, and precision lens fabrication, making them ideal for high-volume 800G and 1.6T data center applications. Regarding PCIe Gen 7, he confirmed it is an optical-based opportunity driven by the compute industry's need for equalization in high-speed, disaggregated architectures, and noted MACOM is also developing electrical-based equalizer solutions.

Tore Svanberg inquired about the sustainability of MACOM's strong Data Center growth into fiscal 2026 and the potential gross margin impact from the ahead-of-schedule Wolfspeed RF fab transition.

Answer

President and CEO Stephen Daly acknowledged the Data Center's strong growth, driven by 100G per lane adoption and emerging LPO standards, but cautioned against expecting such high growth rates to continue due to market volatility. Regarding the Wolfspeed fab, Daly stated that while the transition is ahead of schedule and the business is cash-generative, there is still a gap to close to make the fab's gross margin neutral or accretive to the company's overall margin. CFO John Kober added that taking direct control of the fab will enable further margin improvements.

Tore Svanberg requested a summary of the data center growth drivers for the year and asked for specifics on the gross margin pressure related to underutilization at the Lowell fab.

Answer

President and CEO Stephen Daly confirmed the data center growth outlook, driven by the transition from 800G to 1.6T optical products, with LPO and ACC contributing later. Regarding gross margins, Daly explained that weakness in the core telecom business has led to underutilization at the Lowell fab, preventing margins from returning to the low 60s. CFO John Kober added that a mix shift towards certain high-growth products with slightly lower corporate-average margins also contributed to the pressure.

Tore Svanberg inquired about the expected turns business percentage for the upcoming quarter. He also asked for CEO Steve Daly's perspective on how the 200 gigabit-per-lane market will evolve between competing technologies like optical versus copper and linear versus DSP-based solutions.

Answer

CFO John Kober stated that the turns business has been hovering around 20% and is expected to remain consistent. CEO Stephen Daly explained that as a merchant supplier, MACOM remains technology-agnostic, supporting customers across all architectures (DSP, LPO, silicon photonics). He emphasized that MACOM's strength is in high-speed interconnect design and vertical integration, allowing them to co-design solutions and ensure they are positioned to win regardless of which technology ultimately gains more traction.

Tore Svanberg inquired if the inventory adjustment was primarily concentrated in the consumer segment and whether it would be a short-lived correction. He also asked about any observed changes in the competitive landscape following TSMC's decision to exit the GaN foundry business.

Answer

CFO Sandeep Nayyar confirmed the adjustment is most visible in appliances and expects it to last at least two quarters, citing a 15% year-over-year growth in major appliances in the first half as evidence of front-running. Director of Investor Relations Joe Shiffler added that commentary from appliance maker Whirlpool supported this view. Regarding GaN, Sandeep Nayyar stated that TSMC's exit validates their strategy and that Power Integrations is differentiated by its proprietary 1250V and 1700V technology and system-level product approach, which puts them ahead of competitors.

Tore Svanberg asked for more detail on the suspected pre-tariff inventory build in the consumer segment and inquired about a new 900-volt GaN automotive design win, specifically its exclusivity and if it's driving interest from other customers. He also asked for the Q2 channel inventory forecast.

Answer

CEO Balu Balakrishnan explained the tariff pull-in theory was based on public commentary from an appliance customer, estimating the impact at a few million dollars in Q1, which was accounted for in the Q2 guidance. He confirmed the 900-volt GaN automotive design is a sole-sourced win and is generating broad interest for 400-volt battery systems. CFO Sandeep Nayyar added that channel inventory is expected to hold steady at around 7.9 weeks in Q2.

Tore Svanberg inquired about the near-term outlook by segment for the March quarter, the channel inventory target for Q1, and whether the initial data center power supply revenues would come from GaN or silicon products.

Answer

CEO Balu Balakrishnan stated that for Q1, consumer and industrial segments are expected to grow, while communication and computer would be down. CFO Sandeep Nayyar projected that channel inventory should remain stable as sell-in and sell-through are expected to be similar. Balu Balakrishnan clarified that the first product for AI server main power supplies will be GaN-based and available next year, with significant revenue not expected until 2027-2028.

Tore Svanberg inquired about the status and growth of the design win pipeline. He also asked for more detail on the continuous glucose meter business, specifically the number of customers currently ramping. In a follow-up, he questioned the future of the 20% non-GAAP tax rate given recent legislative changes.

Answer

CEO Matt Johnson stated that while the focus is on ramping existing wins, the opportunity funnel is the largest it has ever been, with momentum from Series 2, Wi-Fi, and the new Series 3 platform. He confirmed they are engaged with over 60 CGM customers and are ramping more than 12. CFO Dean Butler addressed the tax rate, explaining that while GAAP adjustments have been made, the long-term non-GAAP impact is still under assessment but could be 'marginally lower'.

Tore Svanberg asked if key growth segments like shelf labels, glucose meters, and smart meters were still on track to each represent 10% of revenue. He also inquired about the revenue contribution from Series 2 and the expected ASP uplift from the new Series 3 platform.

Answer

CEO Matt Johnson confirmed strong progress in all three growth areas and highlighted additional drivers like Matter, Wi-Fi, and BLE. CFO Dean Butler clarified that only the blood glucose monitor segment was previously quantified as a potential 10% application. Johnson added that Series 2 is driving current growth with a large backlog, while Series 3, which is already ramping, is expected to carry higher ASPs due to increased performance and features.

Tore Svanberg asked if the company could provide revenue contribution targets for other key growth drivers like electronic shelf labels (ESL) and smart meters, similar to the 10% target given for continuous glucose monitoring (CGM). He also asked about the impact of the Matter standard on market penetration.

Answer

Chief Executive Officer Matt Johnson declined to provide specific revenue targets for ESL or smart meters, explaining the CGM target was an exception due to its rapid and visible ramp. Regarding Matter, he described it as a net positive for the industry and Silicon Labs, highlighting that the company has secured more 15.4 design wins since the standard's release than in the previous five years combined, signaling strong future growth.

Tore Svanberg asked for details on the use cases for Credo's Active Electrical Cable (AEC) products with large customers, the status of the 400G to 800G transition, and the company's plans for system-level optical solutions.

Answer

CEO Bill Brennan explained that AECs are primarily used for connecting servers and switches in front-end, back-end scale-out, and disaggregated chassis applications, with scale-out networks being the majority of current shipments. He noted the transition to 100G per lane (800G) will accelerate in late fiscal 2026. Brennan also confirmed Credo is exploring system-level optical solutions for both 100G and 200G per lane markets.

Tore Svanberg asked if Credo plans to adopt a system-level business model for its new PCIe products, similar to its successful AEC strategy. He also requested an update on the market traction for Credo's Linear Receive Optics (LRO) solutions.

Answer

CEO William Brennan confirmed that Credo is pursuing the same system-level path for PCIe AECs as it did for Ethernet, planning to demonstrate a full rack of active PCIe AECs at the upcoming GTC conference. Regarding LRO, Brennan stated that Credo offers both full DSP and LRO solutions and remains agnostic to customer choice. He noted that LRO is the de facto solution when power is the deciding factor and that the market discussion around LPO has decreased substantially.

Tore Svanberg asked for visibility into potential inventory builds given the strong growth and geopolitical climate. He also questioned if a major GPU vendor's unique architecture was a key factor driving customers toward copper-based solutions.

Answer

CEO William Brennan assured that Credo has good visibility into the supply chain and sees high consumption rates with no signs of a significant inventory build at customer partners. Regarding market drivers, Brennan did not link the demand surge to any single GPU vendor's architecture, emphasizing instead that Credo's success stems from direct collaboration with each customer to optimize their specific network designs.

Tore Svanberg sought clarification on the statement that Credo would ship more DSPs in fiscal 2025 than in all previous years combined. He also asked about the timing for entering the PCIe retimer market and the breadth of the expected product ramps in the second half of the fiscal year.

Answer

CEO William Brennan clarified the DSP shipment comment referred specifically to the optical DSP business, driven by U.S. hyperscaler and international demand. He explained Credo is entering the PCIe market at Gen 6 to offer compelling signal integrity, power, and cost, with Gen 7 development underway. Brennan described the second-half ramp as broad-based, involving multiple customers and product lines including AECs, optical DSPs, and Line Card PHYs.

Tore Svanberg of Stifel asked if there was any regional disparity in recent business activity, considering that potential tariffs could have different impacts across various geographies.

Answer

CEO Haviv Ilan responded by emphasizing TI's strategy of providing 'geopolitically dependable capacity.' He explained that for most products, TI already has internal dual-flow manufacturing capabilities, a framework established over a decade ago. The company is now focused on adapting logistics to ship from its various fabs in the U.S., Japan, China, and Germany to optimize supply chains for customers based on their needs. He described it as a complex but manageable execution plan.

Tore Svanberg from Stifel inquired about the state of the industrial end market, asking if sell-through is stabilizing, getting worse, or improving. He also asked if there is a sense that customers are delaying spending pending lower interest rates or the U.S. election.

Answer

CEO Haviv Ilan reiterated that most industrial sectors are hovering at a stable, low level, with the exception of factory automation and motor drives, which are still declining. He stated he does not hear directly from customers that they are waiting on interest rates or elections. Instead, he emphasized that customers value TI's ability to supply parts when needed.

Tore Svanberg sought clarification on the 2025 revenue growth outlook, asking if it was based on the reported 2024 number. He also asked about the expected evolution of the business mix between mobile broadband, FWA, and software, and questioned the future trajectory of operating expenses based on the Q1 guidance.

Answer

The executives confirmed that the 2025 growth guidance is year-over-year on the reported 2024 revenue of $191 million. CEO Juho Sarvikas detailed the growth strategy, highlighting the significant opportunity in the enterprise FWA segment and plans to expand into mass-market MiFi. CFO Steven Gatoff added that operating expenses will increase in the first half of 2025 to fund new product development, with much of that spending being capitalized.