Financial Impact of ITC and CHIPS Act
Q: Update on CHIPS Act funding and ITC benefits?
A: We've accrued about $1.5 billion in ITC credits. " Starting next quarter, we'll receive $300 million, totaling $1 billion for all of 2024. " No update on CHIPS Act grant; still in process. "

Capital Allocation and Share Buybacks
Q: When will share buybacks resume?
A: As our free cash flow increases post-investment phase, we'll consider resuming buybacks. " In the last 12 months, free cash flow was $940 million, and we returned $4.8 billion to owners. "

Demand Trends and Market Outlook
Q: Is demand normalizing, and is inventory correction over?
A: Some markets show recovery; personal electronics is behaving seasonally. " Industrial sectors are mixed; some slowing declines, a few grew sequentially. " Overall, Q2 is seasonally strong for us. "

China Competition and Market Share
Q: How is China competition affecting you?
A: Competition in China has increased over the years, but we continue to compete effectively. " We're leveraging our advantages in manufacturing, portfolio breadth, and market reach. "

Pricing Trends and Margins
Q: Any changes in pricing environment?
A: Pricing returned to pre-pandemic trends with low single-digit declines. " We continue to see this environment. "

Inventory Levels and Factory Utilization
Q: Outlook for inventory levels and factory loadings?
A: Adjusted factory loadings as we neared desired inventory levels, growing inventory by about $80 million in Q1. " For Q2, we'll adjust loadings based on future demand. "

Supply Chain and Dependence on China
Q: Impact of customers reducing China dependence?
A: Customers seek "geopolitically dependable capacity"; we're positioned to support them. " We're unique in building capacity at scale outside China and Taiwan. "

Year-over-Year End Market Performance
Q: How did end markets perform year-over-year?
A: Industrial down 25%; automotive down low single digits; personal electronics up single digits; communications equipment down 50%; enterprise systems down mid-teens. "

R&D Investment Allocation
Q: Where are R&D investments focused?
A: Increasing investments in industrial and automotive due to secular growth trends. " Maintaining steady investments in personal electronics and communications equipment. "

Embedded Business Strategy
Q: Update on embedded business progress?
A: We continue to invest, aiming for growth and free cash flow contribution. " Investing in capacity to gain control over supply and gain share. "

Bookings and Demand Signals
Q: Are bookings recovering broadly?
A: Bookings increased each month in Q1, behaving as expected. " Demand signals are reflected in our guidance. "

Depreciation Expectations
Q: Update on depreciation impact?
A: Expecting $1.5 to $1.8 billion in depreciation this year, likely at bottom half. " For 2025, expect $2 to $2.5 billion. "

Capital Management and Cash Usage
Q: Any changes in cash usage and capital management?
A: Increasing cash to protect $5 billion per year CapEx investments in manufacturing. " Conscious of liquidity and repurchases. "

Pricing Strategy with Increased Capacity
Q: Will increased capacity affect pricing strategy?
A: No change in pricing strategy; we price to be competitive. " Our competitive products and 300mm capacity support this. "

Automotive Market Inventory and Demand
Q: Are automotive inventories normalizing?
A: Customers are re-evaluating supply chains; seeking dependable capacity. " We're positioned to support growth in this market. "

Industrial Sector Recovery
Q: Which industrial sectors are recovering?
A: Shorter-cycle sectors began recovery earlier; longer-term sectors are turning recently. "

Impact of China Insourcing
Q: Is China insourcing affecting growth?
A: Local suppliers account for about 12% of content; we aim to maintain and gain share in China. "