Good afternoon, everyone, and welcome to the conference call for analysts and investors for Infineon's intended acquisition of GaN Systems. Today's call is hosted by Alexander Foltin, Executive Vice President, Finance, Treasury, and Investor Relations of Infineon Technologies. As a reminder, this call is being recorded. This conference call contains forward-looking statements and/or assessments about the business, financial condition, performance, and strategy of the Infineon group. These statements and/or assessments are based on assumptions and management expectations and resting upon current available information and present estimates. They are subject to multiple uncertainties and risks, many of which are both partially or entirely beyond Infineon's control. Infineon's actual business development, financial condition, performance, and strategy may therefore differ materially from what is discussed in this conference call. Beyond disclosure requirements typically by law, Infineon does not undertake any obligation to update forward-looking statements. At this time, I turn the call over to Infineon. Please go ahead. Thank you, operator. Good morning, and good afternoon, respectively. Ladies and gentlemen, welcome to our special analyst and investor call related to the acquisition of GaN Systems. Yesterday evening, we have announced the signing of an agreement to purchase GaN Systems in all-cash transaction. This deal will significantly strengthen Infineon's gallium nitride activities, the business ownership of which is with our PSS division. I am joined today by Adam White, PSS President, who is dialed in from the Canadian capital of Ottawa, and Ulrich Pelzer, Division CFO, whom many of you will recall from his days as Head of Investor Relations. Adam and Ulrich will give you an overview of the acquisition, providing color on the strategic rationale, financial merits, and the integration concept. The statements will be accompanied by a presentation which is synchronized with a telephone audio signal and is available at infineon.com/slides. Following their prepared remarks, Adam and Ulrich will be ready to take questions from you. A recording of this conference call, including the aforementioned slide set, will be available on our website at infineon.com/investor. Over the Atlantic to you, Adam. Thank you, Alexander. Welcome everyone. It is a great pleasure to talk about this exciting news to you. We're acquiring GaN Systems to strengthen our gallium nitride, or GaN portfolio, and thus reinforcing our global leadership in power systems. Infineon and GaN Systems are joining forces, bringing together highly complementary strengths in terms of IP, application understanding, customer access, enabling us to address fast growth applications to create superior customer value. With unmatched R&D resources and application expertise, we significantly accelerate our roadmap and meaningfully shorten time to market for our customers. Crucially, the acquisition of GaN Systems fully pays into Infineon's corporate strategy, fostering our leadership in power systems through the mastery of relevant power technologies, be that of silicon carbide or gallium nitride. Let me further stress this point, the perfect fit with our overall strategy. By putting the acquisition into context, we will be very familiar with the chart on the left-hand side, showing how wide bandgap materials are expanding and the capabilities of power semiconductors compared to traditional silicon. Silicon carbide and gallium nitride have superior electrical properties, pushing the boundaries in the terms of power density and switching frequencies, creating significant system-level benefits. Whilst all three base materials will coexist for quite a while, the transition of wide bandgap means the future market growth in power semiconductors will be predominantly from SiC and GaN. Today, the GaN market is still nascent. It is poised to see the highest growth rates. That's where GaN Systems comes into play. The key selling point of gallium nitride is its superior switching performance, resulting in high power efficiency, compact form factors, and lower system costs. The market is clearly accelerating and taking off as a couple of key power applications have reached or are getting close to their tipping points. Good examples are chargers and adapters for laptops, tablets and handheld devices or high-voltage power supplies for servers. In supporting the mega trend of renewable energies, GaN is powering residential solar installations. In automotive, gallium nitride enables high power efficient and compact onboard chargers. As is happening often with disruptive technologies, their speed of adoption and market growth beyond an inflection point is underestimated. We see that market researchers continuously increase their projections, calling for mid or double-digit growth rates over the coming years. According to Yole Développement, GaN for power management applications offers a cumulative market potential of over $6 billion over the next five years. It would not come to as no surprise to us if these estimates, in hindsight, prove to be conservative. The transition paths of individual applications are going to differ. Some will move directly from silicon to gallium nitride. Others might well see a period in which silicon carbide is the technology of choice before the full advantages of GaN could be reaped. Other applications not on this chart will remain best addressed with silicon or silicon carbide. To state the obvious, these are predictions based on current technological assessments, not by the laws of physics. What this underscores again is the importance of mastery of all power technologies in order to broadly address applications and create the highest customer benefit. As far as GaN is concerned, it is expected to be the preferred technology in some of Infineon's core portfolio applications by the year 2030. It is hence clearly important to get ourselves positioned. With that now, I'd like to hand over to Ulrich. Thank you, Adam. Welcome everyone to this call. It is clearly important to get positioned in GaN, and that's where then GaN Systems comes into play. GaN Systems is a global leader in GaN power semiconductors with a strong product IP base with top-notch application understanding, as well as a broad product portfolio and superb customer access. The company was founded in 2008 in Ottawa in Canada. It's thus far privately held by both strategic and financial investors. With more than 200 employees across locations in North America and Asia, most of the employees having an engineering background, the company has created an impressive library of patents and has an industry-leading lineup of devices and packages, all purely around gallium nitride. GaN Systems is fabless. Its foundry partnership helping it to scale and ramp revenues quickly. Focusing on server, telecom, automotive, industrial, and consumer markets, the company's revenue is currently in the low to double-digit million U.S. dollar range, making GaN Systems one of the leading players in this very young market. As you would imagine, the financial value created by the transaction lies in a significantly accelerated path to strongly growing future revenues and profitability, supported by revenue and cost synergies. The acquisition will bring together highly complementary strengths and thus creates a winning formula for shaping the gallium nitride market. In this market, competitive differentiation does not hinge on base material supply, as GaN transistors are grown through epitaxial processes on commoditized and readily available silicon wafers. Infineon commands critical IP relating to epitaxy and front-end device processing. GaN Systems adds product and packaging patents. On the manufacturing side, GaN Systems is contributing foundry capacity corridors, whereas Infineon is expanding in-house capacity at sites in Villach, Austria, and in particular in our new wide bandgap fab that's under construction in Kulim in Malaysia. Both sites will be ready for 8-inch wafer production in the not too distant future. In order to reap the benefits of gallium nitride at system level, specific topologies and packages are necessary. Adding Infineon's and GaN Systems' expertise in these areas will fast-forward the creation of highly innovative solutions, among them also the monolithic integration of logic functions. Further key success factors are deep application understanding and excellent access to lead customers. In these areas, the strengths of GaN Systems and Infineon complement and in fact reinforce each other. Therefore, the combination is ticking all the right boxes. We see strong cultural fit, and we plan to establish a dedicated GaN business unit to facilitate integration. Adam, again, over to you. Thank you, Ulrich. In fast-paced technological evolutions, the power to innovate is crucial. The combined platform will feature leading GaN IP with patent families, outnumbering those of peers by a factor of six to seven. With GaN Systems, we will have the industry's strongest R&D force, both in terms of manpower and budget. This is critical to significantly speed up time to market and leverage learning across different use cases. In order to optimize its potential in power systems, gallium nitride comes with specific requirements, whereas silicon carbide can be seen as a drop-in replacement to silicon. GaN is calling for bespoke topologies, a customized system architect. This explains, in part, why the adoption of gallium nitride is somewhat lagging the one of silicon carbide. It also explains the all-important role of application understanding. Take a single-stage solar inverter as an example, offering clear benefits in terms of power density, efficiency, and reduced complexity and cost, but needing a system redesign. Deep analysis and comprehension of what is needed at a system level is key to creating customer value. This is part of Infineon's DNA, as we have been following our strategic P2S or product to system approach for more than a decade. From our interactions with GaN Systems team, we know that we are thinking along exactly the same lines as they have developed and nurtured strong engagements with market-shaping customers. The acquisition of GaN Systems will enable us to create superior solutions for our customers and unlock significant financial value. The number of gallium nitride products in our portfolio is set to double instantly. We will serve over 2,000 active customers in our consumer, industrial, and automotive-focused applications. In these applications, we see the design opportunity pipeline more than doubling through the combination to exceed EUR 3 billion. We significantly accelerate the time to market growth with market shaping OEMs and distributors, thus creating highly attractive revenue synergies. Achieving scale and learning faster will in turn lead to manufacturing cost efficiencies, in particular from gradually ramping our in-house capabilities. We will be one of the leading GaN semiconductor companies. Ulrich? Yeah. Everyone, let's quickly go through the key facts of the transaction. We plan to acquire GaN Systems for $830 million in an all-cash transaction, and we're gonna use available liquidity on our balance sheet to do so. The transaction is subject to customary regulatory approvals and closing conditions, and we expect that closing should take place still within the current calendar year. Adam, back over to you. Thanks, Ulrich. Let me just take this window of opportunity to summarize the merits of course, acquiring GaN Systems. The combination will create a leading GaN patent portfolio, the strongest R&D force in the industry with best-in-class application understanding. Combining foundry and in-house manufacturing capacities will be a key process. IP will be positioning Infineon as a leader in GaN, a GaN player. Let me finish once again, putting the GaN Systems acquisition into a bigger picture of the Infineon group strategy, for which we always adopt a long-term entrepreneurial perspective. GaN Systems contributes significantly to our competitive positioning in gallium nitride, which in turn adds to Infineon's strong position as a leader in power systems. Thank you very much, Adam. Thank you very much, Ulrich. Ladies and gentlemen, this concludes our prepared remarks, and we are now opening the call for your questions. Operator, please start. Thank you much, sir. The Q&A session. Thank you. Thank you, much sir. Ladies and gentlemen, our question answer session will be conducted electronically. If you'd like to ask a question, simply press the star key, followed by one on your telephone keypad. If you're joining us today using a speakerphone, please make sure that your mute function is turned off for your equipment. First question today is coming from Monsieur François-Xavier Bouvignies from UBS. Please go ahead, sir. Hi, everyone. Thank you very much for the presentation. I have two quick questions, if I may. Maybe the first one is for Adam. I mean, when in your slide five, you talk about GaN tipping points, reach or insight for three applications, including chargers, server, and onboard charger. I think we can see already the charger, you know, happening today, and it's clearly, you know, very good product for that. My question is more on the server and onboard charger. When I look at your slide, it looks like the server and onboard charger are more at the end of the decade, you know, in terms of adoption, and you have the silicon carbide, you know, in that will be adopted in before that. My question is, what makes you think, you know, you are at a tipping point for these two end market? Put it a different way, out of your EUR 3 billion pipeline opportunity that you will have combined, do you have any server or onboard charger already in this kind of pipeline? That would be very helpful to understand the timing of this of these adoptions. Yeah. First of all, François, lovely to hear your voice and thank you for the question. Look, let's just take server as an example. There's a lot of the talks about the green server. We recognize today the ability to, quite frankly, compute a lot of information within the existing space of a data center, meaning a rack, and then ultimately going down to a blade. If we can obviously provide the server customers a value proposition by improving efficiency, improving density, meaning size, then ultimately they can compute more power in more of a greener way than currently is happening. Here we've already engaged a number of companies that are very much interested in our value proposition along the dimensions that I just articulated. The other area is onboard charger. Clearly here that there are a number of designs out there in the industry that goes from silicon as well as silicon carbide because of their certain topologies and the preference for our customers R&D. We've also seen an acceleration of our customers now very much interested in new topologies in the areas of multi-level, for example, where we can of course offer a gallium nitride-based solution coupled with silicon. Here what we find is again, it gives performance in the areas of efficiencies as well as density and overarching over cost performance of the solution. We believe at the moment there will be an adoption rate, as we've highlighted, Ulrich and myself, that, we take a, as a company, a longer term entrepreneurial perspective for these markets to adopt. But it's vital that we position ourselves today. Great. Thank you, Adam. I think that was very clear. The second one in is the maybe, can you develop or give your assessments on the antitrust and you know, what's? Because it seems to GaN Systems that there are a significant market share for a small market obviously today still. If you combine with Infineon, it makes a clear leader, and I think you showed the patents, you know, compared to number two. What's your assessment on the antitrust front? You know, how much market share do you think you would have combined to the market? Also on the regulatory side, is there any exposure to the defense application for GaN? I'm not really aware of bigger application there, but just wanted to have your view on that front. Thank you. Yeah. Ulrich, would you like to take this? Sure. I can have a stab at that. Yeah, Francois. I mean, it's tough to comment on how regulators are going to look at this. The combination of the two companies pro forma, in the calendar year 2022, in our mind, would not command a market share that would give rise to very serious regulatory concerns at an antitrust level. In terms of defense, there is a very small defense exposure. We are confident that this will be manageable. Great. Thank you very much. It's worth echoing, you know, Francois, the GaN market is obviously at its infancy and market shares will of course fluctuate and again, as the markets grow to a bigger dimension. Yeah. Yeah, makes sense. Thank you, Adam. Thank you much, sir. Please, next question is coming from Mr. Alexandre Fleury, calling from Société Générale. Please go ahead, sir. Any comps or anything that would tell us that this is a fair price. That'll be my first question. I have a follow-up please. Alexandre, I'm afraid. It's Ulrich. I'm afraid best case, half of your question was audible to us. Not sure why that is. Okay. Can you repeat please? Sorry. Yes, let me try again. Apologies for this. Can you hear me all right now? Yes. Now it's good. Okay, cool. I was just wondering if you could provide any insights on how you arrived at the transaction price, the $830 million? What exactly, what kind of comps or metrics you looked at or anything that you could give us to justify the price tag, first of all? Thank you. Okay, Ulrich? Yeah. That's been a two-pronged approach where on the one hand, we've looked at multiples of comparable transactions. In the venture capital private equity and also IPO areas, in recent history. On the other hand, we've applied the discounted cash flow methodology to value the company. I think outside of the technically how have you done it, when you think about what would you put into a financial model or into a discounted cash flow model. In my mind, you've got an overall power discretes market that today is worth greater than $10 billion worldwide, where the silicon part of that is showing some growth. As we said also during the introductory remarks of this call, the vast majority of the growth is driven by wide bandgap and in particular by gallium nitride. This addressable market has a potential nicely into the billions, when you think five years out. When you think five to 10 years out, obviously that's much bigger. The combination of the two companies has great prospects in a market that is growing very dynamically. I, I think you, if you wanna try and use current financial year multiples, they will inevitably look high. I, I think they will come down very fast as that market will see very dynamic growth going forward. In fact, growth over the last two years has surprised on the upside. Yeah. If I may complement on this, again, exactly what Ulrich said, like we in Infineon continue to take a long-term perspective to ensure we are positioned. We have a great respect for GaN Systems for establishing a very credible brand due to their solutions. Now, the other topic to answer this is you could also cross-reference Navitas. Today, Navitas' market cap is give or take $930 million. again, there is a multiple, but we wish to make sure that we go having the technologies in-house from a perspective of silicon carbide as well as gallium nitride to reinforce our leadership in power systems. That's very clear. Thank you very much. Can I just ask, also, you know, when you show the over 350 patent families, what's currently sitting in Infineon and what will be brought in by GaN Systems? That would be first follow-up. The second very small one is, if you could be more precise on what you mean by the $3 billion design opportunity pipeline. Is Is that what you think you will garner in a, in a, in a couple of years? Or is this what you think you can target but will not necessarily get? Thank you. Yeah. We've publicly announced as a standalone Infineon that we've had over 300. Again now, with this new statement, I think you can do the basic math to work out how many we would inherit with the successful closing conditions. That's the first part of the question. The second part, we state here that actually we have a greater than 2x design opportunity pipeline. This is purely in GaN power in the focus applications of greater than $3 billion. The way to read that does not all translate to revenue, I must stress. What we classify as a design opportunity pipeline, there's different levels of conversion to success. What that tells us is what Ulrich and I have been projecting here, that we really have significant confidence that the customers are now really putting their R&D resources in designing in gallium nitride. As I mentioned in my script, this is not a drop-in replacement like silicon carbide would be. We have to have bespoke topologies. This is where we see when those customers are willing to try the new topologies with gallium nitride, they reap and unleash the potential of the gallium nitride performance. EUR 3 billion, greater than EUR 3 billion, but we must stress that is the opportunity pipeline. Does not translate one-to-one with revenue. That's very clear. Thank you very much. Thanks so much, sir. Today's next question is going to come from Mr. Andrew Gardner, calling in from Citigroup. Please go ahead, sir. Thank you for taking my question. Good morning, Adam. Nice to hear from you again, Ulrich. I had a question around the sort of complementary nature of the deal that you're calling out. One on the product side and one perhaps on the manufacturing side. On the product front, you're saying you have 2x the available gallium nitride product. Is there not, you know, sort of, you know, what was the overlap like between the Infineon portfolio as it stands and the GaN Systems portfolio? Are you saying there's not really much overlap, therefore it is, you know, truly complementary between the two? On the manufacturing side, yeah, as you point out, they're fabless. You're an IDM. I think you hinted at this in your comments to Adam, but are you now seeing the opportunity to perhaps bring some of that fabless volume back into your internal fabs, and therefore say, you know, Kulim would ramp quicker than you'd previously anticipated? Thank you. Okay. Thank you. Thank you, Andrew. Let me start, and Ulrich feel free to add your comments. First of all, it's very important to understand we do have what we consider as a complementary portfolio. Here, you know, we are both servicing the GaN markets. There are two different technologies with characteristics that may benefit some applications for more advantages from a value proposition perspective. We are very much looking forward to, quite frankly, doubling the amount of products that we can now service to our customers. Of course, we will also be having some complementary ICs in the areas of drivers and control IC capabilities from both parts of the organization. This isn't, again, just all about the GaN switch, it's about really complementing our power systems play, where we wanna put in together the best drivers, the best control ICs, the best switch technology. Of course that gives us benefits as well with they've got a very good embedded package technology. We've also got a lot of package families that we can of course do derivatives on as well. That's really, really exciting to us, Andrew. Then on the foundry side, as we stated, look, we've got our in-house capabilities in dual sourcing within Villach as well as Kulim with the new facility that Ulrich highlighted in his address. On top of that, we're very much motivated in working with the foundry industry because ultimately we see benefits of having capacity corridors to ultimately service our customer needs. Thank you very much. Just if I could have one follow-up on the prior question from Alex on the, on the pipeline. I'd also seen GaN Systems talk about an $8 billion pipeline, that was sort of around the time of their prior funding round. So what is the distinction between how they have defined what was, you know, a particularly large number relative to what you're now calling out as EUR 3 billion? Yeah. Look, I won't comment now on historical information there with how, GaN Systems have obviously gone to market. From our perspective, you know, the pipeline of how we count a pipeline and what we classify as, for example, design in, for example, design win, for example, and business win, that's where we come up to these numbers and greater than EUR 3 billion. Okay? That's your question. Thank you much, sir. Yes. Thank you. The next question is coming from Mr. Lee Simpson, calling in from Morgan Stanley. Please go ahead, sir. Great. Thanks for letting me in. Congratulations everyone on the deal. could just sort of take a step back here. I'm just trying to understand some of the value. Given that there's a great breadth of IP and patent family and clearly some know-how, there seems to be two aspects here. There's a need for a bespoke systems capability, which I think you've been quite clear about. It also looks as though there's a need for an architecture redesign, and I suspect using e-mode. Having acquired GaN Systems, can you maybe just give us a sense, Adam, for how much does a deal like this really inhibit the ambitions for others trying to come in and replicate what looks like a class-leading proposition in GaN? First of all, thank you for complimenting the deal. This is full credit to one, GaN Systems for establishing themselves in the market and vice versa, for the Infineon team for getting us to the signing stage. We're excited honestly, because we see this value proposition, but I believe, as I was mentioning earlier on, a lot of engineers, where you go from silicon, if they got a drop-in replacement, for example, it's more similar with silicon carbide, you know, the time for market for the engineers are there, they can see great benefits. That's great, but there are certain applications that really benefit from higher switching frequency. That area in higher switching frequency, when you change what we call the topologies, the application design circuitry, then what we see is the eyes light up with our R&D contacts within the customers. The who's who of the industry, when they play with this and when they test this, we know and we see the smile in their eyes as it were, where they go, "Wow, this really is an incredible performance." Of course, you know, as we go down our path, you know, there's no doubt about it that there will be competitors today and competitors tomorrow. You know, these markets are very large, as you know-Will continue to significantly grow as we talked about in our script. I'm sure that there will continue to be a very healthy competition landscape. What we wanna do here is just position ourselves, make sure that we are truly ready for the tipping point. You know, if you look at charger and adapter, look at you know, some of those now designs happening in the industry over, say, 100 watts, most of the high-end charger and adapter market, the engineers now are only really focused on the gallium nitride-based solutions 'cause they see the performance that can bring at a system level. I hope that answers your question. No, that's very clear. I think maybe just one quick follow-up. I mean, given the considerable R&D that you'll have as a sort of standalone GaN business when two are combined, when can we expect the genuinely first new devices from the combination? Is that a couple years out, or could we see that sooner? Thanks. Yeah. We can't now talk about the road mapping, because obviously we are separate organizations until closing. Of course here, we are effectively competitors until that stage. It's pretty intuitive to us, that there, you know, as I echoed earlier on, there's a lot of complementary portfolios. We're really looking forward to getting getting to the closing conditions because we genuinely feel that there's a lot of derivatives. What do we mean by derivatives? This is the ability for us to potentially put the technology from GaN Systems in some of our packaging as a point number one. Point number two, that there's even great ways that we can now really couple our IC capabilities, as I mentioned earlier, the drivers and the control ICs, into a system approach with their GaN, gallium nitride technology as well. This is what we're sort of... We're gonna have to hold our engineers back, honestly, 'cause I'm sensing already when we've announced this just over the last 24 hours, a lot of people are already beginning to brainstorm and coming up with ideas. I can't give you the exact date, but, of course, at the right time after closing, we will come out to the market and show our roadmap and where we're leading to. It's really, really exciting times, and I really appreciate you recognizing that, and understanding that this is, you know, part of the future for the industry. Here, Infineon's looking forward to supporting and shaping that area. Great. Thanks so much. Thank you, sir. We'll now go to Johannes Schaller calling from Deutsche Bank. Please go ahead. Thanks for letting me on. Adam, Ulrich, congrats on the great deal. Let me maybe play devil's advocate a little bit if I, if I can. I mean, Adam, you obviously have an International Rectifier background. That deal closed about eight years ago, and you spent a lot of money on R&D, as we all know. I guess maybe can you contrast this acquisition a little bit against International Rectifier? I think where I'm going with this is, what does this deal bring to Infineon really that you cannot, you know, develop yourself? Let's say, if you spend the $800 million on R&D instead of that deal, kind of where are really the points where you say, "Look, we cannot get there?" A second question, just on automotive. I know Peter Schiefer isn't on. Maybe that's a question for him. GaN Systems also has a traction inverter product based on gallium nitride. Can you maybe talk about this a little bit and the prospects you're seeing here? Because that could potentially be quite a game changer in the EV space. Thank you. Yeah. Thank you, Johannes, and appreciate the recognition on what we're doing here. Yes, as you know, some of you know as well, I actually came from International Rectifier in 2015 to join the Infineon family. Of course, Infineon purchased International Rectifier for multiple reasons. In there was a crown jewel, no doubt, on the gallium nitride side, plus the IP portfolio that came across with that acquisition. Full credit to the team of Infineon to really embrace the technology and to, of course, work with the technology to get it to a point of really a robust and performing technology, and that takes time. The industry, again, there's two real reasons why the industry hasn't adopted gallium nitride quicker. One, the technology it is a, you know, very complex technology, but it has incredible performance, and that's why it's taken us time as a standalone company to get to the quality levels that we need to stand behind the brand of the Infineon brand. That's one element. The other element, again, you know, we're comfortable and we're confident here that we can of course further be successful in GaN, in GaN standalone. We do believe that, and we fundamentally believe that. I'm very confident here from what we've seen in due diligence that GaN Systems will have the capabilities of going alone, and they would be successful. Now, this is the magic. The magic is, if we come together, that really helps accelerate our portfolio. It accelerates the amount of people focused on gallium nitride, greater than 450 people just in the areas of R&D and application. That doesn't include the other areas, for example, in operations or sales and those areas. It's this whole concept of how do we ensure that we accelerate ourselves? How do we make sure we've got the right portfolios? How do we ensure we've got the right customer access? How do we ensure that we get a rich pipeline conversion? That's the magic. That's why we're doing this deal. That's the answer to the first question. The second question, yes, what I'm going to do here, respectfully, is defer to Peter Schiefer, related to traction, for what he sees as the value proposition there moving forward, especially to do with wide bandgap, because, of course, we've got multiple solutions in silicon as well as in silicon carbide. I will say in automotive, though, you know, we're getting a lot of interest, especially in the area of the onboard charger. I, you know, the who's who of the industry, are definitely seeing the significant benefit of gallium nitride in the onboard charger application. Why? It's basically along the lines of efficiency and density, ultimately bringing system cost benefits as well. Thank you, Adam. Thank you much, sir. We'll now go to Sandeep Deshpande calling from JP Morgan. Please go ahead. Yeah. Hi. Thanks for letting me on, and congratulations on the deal. I'm trying to understand a couple of things on the deal. Firstly, my question is what is holding back much greater gallium nitride adoption? I mean, you've talked about all the wonderful things about the technology. I mean, as we've heard or seen for a long time in silicon carbide, it has been the cost. What is it in gallium nitride that is what is going to cause that big hockey stick as such? The second question, I think, is for Ulrich. I mean, in terms of the deal itself, when do you expect it to be accretive to Infineon? How should we be looking at the costs associated with this? I mean, I'm sure the business is not profitable at this point, so how should we be modeling it within Infineon once it is integrated in terms of dilution, whether there is gonna be any significant dilution of the earnings? Ulrich, why don't you take the second question first, if you don't mind, and then I'll answer the first question. Yeah, with pleasure. Hi there, Sandeep. Look, it is dilutive, obviously, to earnings today. That said, you know, if it closes within the current calendar year, you're going to see a very small... I think what we're gonna report publicly as a PSS division, you will not even see an impact. When will a discernible impact for you in the outside world, if I can call it that. When will it begin to be accretive to earnings? Wow, you know, it's gonna be very fast growth in the market. It will take some time. If we close in the current calendar year, it's going to be a matter of, let's say two to three years before we reach that point. Okay. Thank you, Ulrich. Okay. Sandip on your first question. Look, I really wanna emphasize the point that it really takes a relationship between us as a supplier as well as the engineering community of the customers. When customers are willing to look at a system approach, meaning that they're also willing to look at new topologies, that's where we see these huge value propositions coming in from their perspective. Again, this is not a drop-in replacement, and that's very important to note because the adoption of silicon carbide clearly was also a function of cost, as you emphasized, but also a function here that they have a number of applications that you just drop it in, and it's very robust on the drive schemes. Here, what we're showing now and demonstrating, by the way, between two wonderful organizations, Infineon as well as GaN Systems, when those customers are willing to open their minds open and look at the true value that it can come from new design circuitry, then we are very confident that in faster switching applications, for example, there is a massive value proposition along the dimensions that I previously mentioned. That's one of the reasons why the adoption has taken time. We're very confident on the robustness of the technology. Millions of devices have found their way into the field with very good overarching PPM levels. We feel very, very confident of putting the Infineon brand behind our quality commitments, and that's why we don't have any concerns on that. Moving forward, you know, gallium nitride is also very close from the manufacturing. After you do the epi processes that you can reuse a lot of the existing silicon CapEx to also support the buildout of gallium nitride. This for us will ultimately be a technology that a number of customers will also adopt too. Thank you, Adam. Thank you much, sir. Today's next question is going to come from Mr. Matthew Ramsay calling from Cowen. Please go ahead, sir. Thank you. Congrats on the deal. This is Joshua Buchalter on behalf of Matt Ramsay, by the way. Yeah, congrats on the deal. I wanted to ask about slide four in particular. If you can just suggest that the, you know, the silicon power market is flattening, it would be surprising given that the industry has been growing, I think, that it's still low double digits, you know, for the last decade or so. I guess what I want to confirm is that the right message to take away, and if so, it sort of indicates that there's at least some cannibalistic element of silicon carbide GaN. I'd be curious, you know, your view of IDT growth within Silicon, given your leadership there. Thank you. Yeah. Okay. Thanks very much again for John for the feedback and, again, I really apologize for being somewhat of a stuck record, but we want to leave you understanding that we as Infineon believe hugely in the benefits of silicon, in the benefits of silicon carbide, as well as gallium nitride. We're in the fortunate and luxury position to be able to develop leading-edge technologies in all three. Here, you know, just to really emphasize why we also see growth of silicon. Not so long ago, we announced our new facility, 300 millimeter, power and mid signal facility in Dresden. Those markets will absolutely continue to grow. We're very confident that we needed that facility, and that facility over time will also, you know, grow with the wafer start, knowing the demand that we're working today. Also though, it's just logical, the other markets of these disruptive technologies in silicon carbide and gallium nitride, they're disruptive. They come from a lower base of revenue. Logically we are modeling that they will grow quicker than the current silicon if you use that as a reference point today. Please, it's a great question, but from our side, we just announced a EUR 5 billion facility because silicon will also continue to grow, and that's what we are preparing for. Okay. No, thank you for the clarification. You know, bigger picture now that you've got, you know, a scaled portfolio of MOSFET, IGBT, silicon carbide and growing in GaN, how important is the diversity of power semi solutions more holistically to your customers? Like, you know, do you get many customers who wanna be able to get several of those technologies for one provider or even their innovation, putting them on the same module? Or is this? You know, is the acquisition motivated more by the opportunity in GaN specifically because of the growth rates there? Thank you. Yeah. Great, great question. Look, again, one of the luxury positions, we got the three technologies, and we're working now with customers with multiple designs. You know, we absolutely are gonna couple, whether it's silicon carbide or whether it's in the gallium nitride, the right IC technologies, the right packaging technologies, whether that is going to be multiple die with monolithic solutions in packages or whether we do embedded packages. And of course, in the gallium nitride, the roadmap will no doubt take, you know, work to the inherent benefits of gallium nitride, where it's a lateral device that you can actually monolithically put a number of devices into one solution. Here, really, you know, customers are really working themselves, and we are offering them really system perspectives. We can then offer them in some of their particular applications or use cases, you know, different solutions where including silicon and SiC or including silicon or gallium nitride or pure silicon play. It all depends on what they're looking for. This is what is exactly what is so fascinating about our industry at the moment. We see a tipping point in these disruptive technologies, now really customers are now working with us at a system level, and I must stress that from an architect level, to really look at things a little bit differently. Those customers are willing to do that, they are, I think they're going to come up with a lot more winning value propositions than the traditional way that the industry's been doing it for the years past. Thank you. Thank you very much, sir. We'll now go to Aditya Mathew calling from Credit Suisse. Please go ahead. Your line is open. Yeah. Thank you guys for taking my questions. I had a few. Firstly, Adam, you talked about monolithic integration just now. I just wondered, can you talk a bit about where exactly GaN Systems capabilities are from a monolithic integration viewpoint and how that compares to what Navitas and POWI are already doing? These two, Navitas and POWI, have made a big deal out of their monolithically integrated products. Any color you can provide there on how your products will compare will be helpful. Secondly, just a clarification on slide 10, you talked about more than 2,000 active GaN customers. Are these, are all of these customers actively using your solutions or GaN Systems solutions today? Would that be the right way to understand it? If you could clarify that. Thirdly, I just wondered if you could talk a bit about, you know, the rationale behind using Foundry for GaN, and whether you see any real differentiation from having internal manufacturing in this space or will it not be a key differentiation factor? Finally, just a clarification. Does this add anything on the RF GaN side at all? Thank you. Okay, great. All right, let me take them one by one. First of all, on the monolithic from GaN Systems. Look, I'm, you know, I let GaN Systems under their own accord talk about their roadmap and where they're gonna position themselves. What I will say is that we understand from an Infineon standalone perspective that if you play to the benefits of the unique lateral structure of GaN, then you can do all sorts of different levels of monolithic solutions. Whether that is bringing multiple switches together. Whether that's bringing elements of the driver into the switch together. That really is a huge benefit in certain applications. Really, you know, I will be very clear in stating that in order again, to play to the benefits, it would be foolish for Infineon not to have that firmly in our sights or roadmaps. Of course, how you partition the GaN is very, very important, and that's why we're working with a number of customers to understand as we develop a roadmap, what level of partitioning they need for monolithic. Question two was about the customers. This is the combined effect that, you know, we are just really giving an indication that, you know, the amount of customer interest and has already, you know, these 2,000 we say greater, please notice for greater than 2,000 is today actually purchasing gallium nitride. Why do we put that out? I think great that you picked it up there. Because we see the interest growing exponentially. We truly see more and more customers now understanding how to use GaN and why they wanna use GaN to get the better overall system performance. I believe in the foreseeable future, that number of customers will again grow moving forward. Point number three on the foundry. Look, and again, we've got the in-house capabilities for the Infineon standalone technology. GaN Systems, you know, being a fabless that they use, utilizing the benefits of foundry. All I can say is we are really looking forward to working with foundry partners on this gallium nitride technology, where we see a true benefit of teaming up. We've got some ideas that we're looking forward to working with the foundry partners on. We hope that there's a mutual benefit ultimately for both of us to coexist. I must stress this is not different to how we today work with our e-ecosystem, meaning our internal plus our external partners from a foundry perspective as well as a back-end perspective. We have a lot of technologies in Infineon portfolio where we of course use both internal as well as external. The fourth topic is just to be very clear, the GaN Systems has nothing to do with RF GaN. Zero. Got it. Thank you. All right, this has been our last caller. Time to wrap up. Thank you very much to all for dialing in on a Friday afternoon here in Europe, and for your questions. Thank you, Adam and Ulrich, for your presentation. We are concluding now our special analyst and investor conference call related to the GaN Systems acquisition. For any further questions, please feel free to contact the IR team here in Munich. Again, thank you very much. Take care and have a good rest of the afternoon.