Hello, and welcome to the Soitec Full Year 2022 Q4 Sales. Please note this conference is being recorded and for the duration of the call, your lines will be on listen-o nly. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your question. I will hand over to your host, Paul Boudre, CEO, to begin today's conference. Thank you. Thank you, operator, and welcome to Soitec's conference call dedicated to the publication of the fourth quarter revenue of our fiscal year 2022. This is the quarter covering the period from the first of January to the end of March 2022. I am Paul Boudre, Soitec's CEO. Together with me on this call are Léa Alzingre, our CFO, and Steve Babureck, our SVP Strategy. As usual, we will briefly comment on our sales performance, and after that, we will open the floor to questions. Thanks to a very strong Q4, we finished our fiscal year 2022 above our guidance. I'm very pleased to say that, thanks to our strong industry performance, we generated a full year revenue of more than $1 billion for the very first time, slightly above our guidance of around $975 million. Thanks notably to a record Q4, we are reporting today full year 2022 revenue of EUR 863 million at 50% growth at constant exchange rates. Our full year revenue is obviously an all-time high and another key milestone in Soitec's growth trajectory. Since we repositioned the group on electronics in fiscal year 2016, we have increased our revenue by almost four times. Looking now more specifically into Q4 performance, we achieved EUR 282 million in revenue. That is to say the highest quarter in Soitec's history. Q4 revenue was up 56% on a reported basis versus Q4 last year. We had a slight positive currency impact of +3%. At constant exchange rates, Q4 growth stood at +53%. This is also representing a strong 35% sequential growth, excluding currency impact over Q3 2022. Sequential growth was mostly driven by 300-millimeter sales, which went up by 50% over Q3 2022. This is our seventh consecutive quarter of sequential organic growth since the low point achieved in Q1 2021 at the beginning of the COVID-19 crisis. Let's now take a look at the drivers behind this strong performance. We continue to enjoy a strong traction across our three end markets. Mobile communications remains our largest end market and a key driver of our performance. Our revenue growth continues to be boosted by the deployment of 5G, and as you know, the transition towards 5G is translating into increase in Soitec products content in every smartphone. This is supporting our RF-SOI, POI, and FD-SOI products. We also continue to benefit from a sustained level of activity in the automotive industry, which is positive for both our Power-SOI and FD-SOI products. Finally, our revenue in smart devices also increased, driven by higher sales in FD-SOI and Photonics-SOI wafers. To match this strong customer demand, we have been able to further increase our production output. While our facilities in Bernin 1 and Simgui dedicated to 200-millimeter SOI wafers, and Bernin 2 dedicated to 300-millimeter SOI wafers, continue to operate at full capacity. These facilities achieved a very strong industrial performance in Q4, allowing to produce more wafers than expected. In the meantime, we enjoyed a good ramp-up in production in Bernin 3, dedicated to 150-millimeter POI wafers. In Singapore, for 300-millimeter SOI wafers, where we have been progressively adding new capacity over the past few years. Looking now in more details at our Q4 revenue by type of products. Sales of 150- and 200-millimeter wafers reached EUR 94 million. Compared to Q4 last year, this is an increase of 25%, excluding currency impact. Revenue growth was mostly driven by higher volumes, but also by a positive price mix effect. Sales of RF SOI, 200-millimeter, and photonics were much higher than in Q4 last year. In addition, we increased 150-millimeter POI wafer sales, driven by a demand for RF filters required for 4G and 5G smartphones. If we now look at our 300-millimeter business, we recorded sales of EUR 175 million in Q4 2022. This represents a very sharp 81% increase, excluding currency effect compared to Q4 2021. This comes as a result of the strong volume increase in Singapore and obviously thanks to the increase in capacity, a higher output in Bernin 2, thanks to a good industrial performance and a positive price mix effect. The level of RF SOI 300-millimeter sales continued to grow very fast. Thanks to our strong leadership in RF applications for front-end modules, we continue to benefit from the market opportunity driven by 5G. We also achieved another strong quarter with FD-SOI. The FD-SOI technology is expanding across our three end markets, i.e., smart devices, automotive, and industrials, as well as mobile communication. Sales of Imager-SOI for 3D sensing applications were also at a higher level than in Q4 2021. Finally, sales of Photonics-SOI for data centers were much higher than in Q4 2021, confirming the solid trend that we have achieved over the past few quarters. To complete the review of our sales, revenue from royalties and other revenues went up also from EUR 12 million in Q4 2021 to EUR 13 million in Q4 2022. As already mentioned in my introduction, this record high in Q4 brings our full year 2022 revenue to EUR 863 million above the $1 million mark, which is also an all-time record in Soitec's history. Full year 2022 revenue was up 48% on a reported basis, or up 50% at constant exchange rates compared to fiscal year 2021. 150/200 millimeter wafer sales were up 26% at constant exchange rates. 300 millimeter wafer sales were up by 79% also at constant exchange rates. On the back of this strong performance, we are now aiming for the top end of our EBITDA guidance for fiscal year 2022. Our previous guidance was to reach around 34% with a potential upside to reach 35%. Thanks in particular to the higher revenue level in Q4 2022, fiscal year 2022 EBITDA margin is now expected around 35.5%. We also anticipate fiscal year 2023 revenue up around 20% at constant exchange rates and perimeter, and our EBITDA margin, at least at the level of fiscal year 2022 EBITDA margin. Regarding our financial model for fiscal year 2026, we are now anticipating significant growth on each of our three end markets, and we are managing our business to reach a revenue target around $2.3 billion and an EBITDA margin target around 40% at 1.20 EUR/USD exchange rate. Just to remind everyone, this is compared to a revenue of $2 billion, with the ICAs around $2.4 billion, and to a 35% EBITDA margin communicated during the capital market day in June 2021. We will obviously share more details after the disclosure of our fiscal year 2022 results on June 8th. Let me now highlight a few key events which took place since our last call in January. On March 11, we announced the launch of a new fabrication facility in Bernin. Bernin 4 will allow us to expand our manufacturing footprint with higher 300-millimeter SOI capacity and the ability to produce SmartSiC engineered wafers. As you know, we have developed these SmartSiC wafers at the Substrate Innovation Center located at CEA-Leti in Grenoble, and we have already been supplying customers with samples produced by our pilot line. As the electronic chips built on SmartSiC wafers offer compelling performance and energy efficiency gains to power supply system, our SmartSiC wafers are addressing the key challenges of the electric vehicle and industrial markets. The new facility could lead to the creation of up to 400 direct new jobs. We target to generate first revenue in the second half of calendar year 2023. By fiscal year 2026, we expect a capacity of up to 500,000 wafer per year, with SmartSiC contributing to around 10% of our fiscal year 2026 revenue. The groundbreaking ceremony took place on March 31st, and the construction of the fab is running as planned. On April 5th, a fire broke out, an electricity supplying facility outside of our site in Bernin, leading to a power outage of our production plants. Safety protocols were immediately activated to protect people, equipment, while waiting for the restoration of the power supply. Our plants were progressively back in operation as of April 5th in the evening, and the production went fully back to normal on April 9th. We expect this power outage to have only a very limited impact on our fiscal year 2023 and financial performance, and it is included in our fiscal year 2023 guidance. Finally, on April 8th, we joined forces with other leading semiconductor players to announce the new collaboration design to define the industry's next generation's roadmap for FD-SOI technology. These other players include CEA, GlobalFoundries, and STMicroelectronics. Semiconductors and FD-SOI innovations are of strategic value to France and the EU as well as to customers globally. FD-SOI offers substantial benefits for designers and customer systems, including lower power consumption, as well as easier integration of additional features such as connectivity and security. This is obviously key for automotive, IoT, and mobile applications. This now ends our opening remarks. We are now ready to take your questions. The first question comes from the line of Aleksander Peterc from Société Générale. Please go ahead. Yes, good morning, thank you. Thank you for my question. Congratulations on your strong report here. I would just like to have a little bit more color on your side. I know we'll get a full detail at the June event, but if you could just give us the key drivers for your fiscal 2026 guidance upgrade. It's quite substantial, both at the revenue and margin level. What has changed that made you think that these high numbers are now achievable? Which are the key end markets, and what's going on in margin terms for you to be so much more confident at this stage? I have a quick follow-up. Thank you. Clearly, obviously, we will get the full details to you guys in June, but from the top, I mean, I will say that our sales are boosted on the three markets with basically higher ASPs, better product mix, and I will say also new generations of products. That's really the drivers on the end markets. On the EBITDA margin, clearly, we are very focused on our cost control. We have learned a lot over the past two years, and you see our improvement quarter after quarter and year after year. This will continue. Cost control is continuing to drive our operational performance and financials as well. The operating leverage are the two contributors for EBITDA margin. Okay. Just as a quick follow-up, really, you're guiding for next year's constant currency growth of around 20%, if I'm not mistaken. If I look at the implied compound annual growth rate between your reported 2022 number to the 2026, $2.2 billion, I derive 22% growth a year. If you get 20 next year, that means there's gonna be an acceleration thereafter. Is that how I should think about you getting to this $2.2 billion? Yeah, it is roughly. I mean, I will say that, it is roughly around 20% as we see it in a linear basis, yes. Okay, that's great. Thank you very much. The next question comes from the line of Varun Rajwade of JP Morgan. Please go ahead. Hey, good morning, Paul. First question on near-term demand. You know, we are picking up some early signs of demand weakness, particularly from regions such as China. And also, you know, 5G smartphone shipment expectations have recently been sort of, you know, downgraded, so to speak, from 750 million units closer to 700 million units today. Paul, based on your discussions with your end customers, are you picking up any signs of demand weakness? I mean, given your upstream position in the supply chain, you may be, you know, slightly, you know, you may pick up, you know, signs of demand weakness probably later than some of the other companies. But just based on your, you know, discussions with end customers, some color on that would be helpful. On fiscal year 2023 itself, can you outline your growth expectations by different product lines? Some qualitative color here will be useful. Thanks. Yeah. Maybe on the last questions, I would like to invite you to come to the June meeting, because I think this is where we would like to share with you a lot more than what we can really do today. Looking back at your first questions, clearly, I told you over the last quarters that specifically on smartphones and for us, what is driving our business, which is clearly communications and RF. Basically we continue to see very healthy inventories and no sign of clear slowdown today. That's for sure. I mean, one of the reasons is that, as you probably know, we are extremely close to our end users and but also we have a global view on the supply chain. What we started with is clearly for calendar year 2022, we started with low single-digit growth. From the very beginning, our you know, 5G phones that we were planning to build for the year is very close to the 750 million 5G smartphones, which could be you know, between 730-750. Now, what we have seen and what we are seeing today is there is clearly a shift on premium smartphones, and we see it because it's driving us to higher footprint into the phone. We understand the dynamic of reported in Q1. We were cautious on the overall market from the beginning in our models and in our what we were planning to build for this year. I think that now the industry comes to our numbers, or pretty close to our numbers. The benefit that we see there is two. One is clearly, as I said, the shift on the premium smartphone driving us. You know that our growth is based on content as well. That's driving us to higher content. The other signal I will say is that we could have a trend to a healthier inventory level because we across the supply chain were very tight. Clearly, I think that now the industry is driving from more crisis situations to just-in-time situations. We do not see any major, you know, slowdown or whatever situations. Oh, thanks for the color, Paul. If I can just squeeze one follow-up. You know, you mentioned a sharp increase in revenue from smart devices and also from photonics SOI. Can you just remind us of the level of sales for your photonics SOI product line? Is there any commercial update on FD-SOI for smart devices? Thank you. Yeah. Clearly on smart devices and FDSOI, I mean, it has been a very strong trend over the last quarters confirmed by our last Q4. You know that for FDSOI, it's a platform to integrate different functions on the same die. Clearly, edge computing is one of the key applications that we see. We integrate on this a lot of the applications, and it's a great value for our customers when used as an ecosystem. I mean, you see it. I mean, I can give you a couple of examples. I mean, you see it in i.MX for NXP. I mean, Microsoft with the cloud secure options that uses also NXP solutions. You have Lenovo, I mean, the X1 laptops will be using Lattice FPGA. This is clearly, I mean, now confirming the position of FDSOI on smart devices, including obviously what we started with, IoT. The good news for FDSOI also, I mean, as reported last quarter, was also the penetrations of this platform into 5G millimeter wave. You have seen that now clearly the Samsung platform, Google Pixel 6, sorry, is now clearly built on our FD-SOI platform. As new applications, I mean, we are seeing also coming everything around SATCOM, all these satellite communications that will be growing in the next years. Thanks, Paul. Sorry, I didn't really complete with you mentioned. Photonics SOI. Yeah. Photonics, yes. Clearly, I mean, photonics is stable and in line with our visions. We are obviously pursuing the promotion of silicon photonics towards the ecosystem. That's the very good news. We are engaging now qualifications with new foundries around the world. Clearly, what you can read on silicon photonics tractions. I mean, clearly it's going to be among main digital companies' design demonstrators are being built around the world. We continue to believe that biosensors will be one of the key drivers for photonics applications in the coming quarters, months and years. Perfect. Thanks. The next question comes from the line of Didier Scemama of Bank of America. Please go ahead. Good morning, and thanks for taking my question. Two quick ones. I think you tried to answer the question, but it's not clear in my mind. I just wanted to know, in your guidance for fiscal year 2023, what's your assumption for 5G unit growth for smartphones? And second, on the wafer supply and demand environment, I mean, do you see any improvement or any signs of improving supply, either this quarter or in the second half of this year? Thank you. Let me be clear. I mean, what we said a couple of quarters ago regarding the number of 5G smartphones, our model has been, and still is, 750 million units for 5G smartphones. What I just added in my comment today is that we see and continue to see and foresee for the next quarters and for the year a shift on the high-end phones. By high-end phones, I mean, I'm talking about, you know, phones that are more than $400 on the market. So that's what we classified here at Soitec high-end phones. Sorry, the second question was? Just on the silicon wafer market, supply, and demand environment. Just give us a sense of your level of comfort on the supply in the second half. Yeah. As you know, I mean, we are really triggering a long-term contract and multiyear agreements with all our suppliers. Bulk wafer prices are up, I will say, single-digit versus fiscal year 2021 on average. Calendar year 2023, 300-millimeter bulk prices expected to be up more than 10%, and obviously this is part of our guidance as well. Thank you very much. The next question comes from the line of Sébastien Sztabowicz of Kepler. Please go ahead. Yeah. Hello, everyone, and thanks for taking the question. One on the guidance for fiscal year 2023, because we are seeing a little bit of a tougher macro environment. What kind of visibility you have for the coming quarters for the fiscal year of 2023? And do you have any kind of visibility even beyond fiscal year 2023? This would be the first question. The second one is on the ramp of POI, and how many customers are you supplying right now with your POI product? And have you been able to qualify or made any progress in the qualification of any additional RF customers for RF filters with POI? Thank you. Back to our visibility in fiscal year 2023. I mean, we have a very strong visibility because our fiscal year is booked by all contracts. We understand exactly what we have to do. This is a year that is fully committed. Clearly, if we can build more during this fiscal year 2023, we could sell more. This is clearly one of the key element. Visibility, I mean, goes beyond fiscal year 2023 for us because for many customers now, we are getting into multi-year contracts. You know that we have to build extra capacity to deliver the demand. Forced to build capacity, we have also commitment, engagement with our customers that gives us now confidence of the long-term contract that we have with them. Visibility is very strong and commitment are clearly on the table and we are on the execution phase for fiscal year 2023. There is not much that we can say on top of that. On POI, I mean, I will say that major RF customers qualifications continue in Europe, Asia and in the US. We are, I mean, clearly progressing step by step because getting from, you know, evaluations to qualifications takes. There is a lead time into this process because our end customers they have to tune their product to get into the phones. We developed several products, basically today to address all bands, I mean, the low, the mid, high band, for filters. Thank you. One question on the CapEx front, if I can follow on this one. You have slightly updated your sales target for the coming years and for fiscal year 2026. Do you expect to change a little bit your CapEx ambition for the coming years, or are you still maintaining the plan that has been unveiled a year ago? If you could be a little bit patient, I think that we could give you a great lot of details on this in June. Okay? Clearly this is a very good question. Keep it for Léa in June. She will be happy to answer. Okay. Thank you. Next question comes from the line of Jerome Ramel of BNP Paribas. Yeah. Good morning, and congratulations. Finally back above the long-term target from 2017, despite everything you went through. First question, concerning the smartphone business. Could you update us on your thoughts on the penetration of millimeter wave going forward? And also on the FD-SOI traction specifically for smartphone. Beyond the envelope tracking, what kind of opportunity do you see for FD-SOI in smartphone? For FD-SOI in smartphone, clearly the target is the millimeter wave applications. You have seen the applications that we are targeting on the Google Pixel 6. This is the first smartphone integrating FD-SOI millimeter wave and being commercialized. What we are looking at is the full integrated 5G millimeter wave module, which means LNA, PA, switches, and transceiver. The driver is really energy efficiency. There is many design activities underway. You know, I think that FD-SOI for millimeter wave could be sold as an ecosystem platform for these applications. We continue, as I told you, I mean, in the past to see the two roadmap depending on customers. Some will be on RF-SOI and the other one will be on FD-SOI for this block, these millimeter wave blocks. What we see in terms of penetrations for millimeter wave, we see 10%-15% millimeter wave penetrations. That's what we are planning for this year. Still, you know, low level in terms of percentage. Clearly, I mean, maybe to add to it, the inflection point will be driven by China and China take off for millimeter waves. You know, you remember I told you that we could see it later in 2023, but I think takeoff in China could be more 2023 to 2024 today. Okay. Thank you. Maybe just a follow-up. You gave a guidance, assuming a euro dollar at 1.20. The spot is currently at almost 1.06. Any chance you could take the opportunity of a weaker euro in the coming quarter for your hedging? I will give the floor to Léa for that answer. Yeah. Good morning. Yes, for FY 2023, as we said before, we are almost hedged now, and our hedging is around 1.18. We don't anticipate any positive effect of the FX rate next year. Okay. Thank you. As a reminder, if you would like to ask a question, please press star one. Next question comes from the line of Robert Sanders of Deutsche Bank. Yeah, good morning. Hi. I just wanted to check in on your market share assumptions. I think historically it was around 70%-ish. I just want to understand what you are anticipating, going forward, as you look out to fiscal 2026. I have a couple of follow-ups. Yeah. I mean, we have basically a model that continue to give us this type of level in terms of market share. For obviously, I mean, you know that an average market share means a lot, but for us, we continue to see it slightly going up in the future. Why? Because you know that our technology leadership gives us access to first markets and within the couple of years of first applications, we are the drivers, I mean, for this. We are benefiting from a lot of our innovations in our market share positioning, and this will continue with new product coming on the market. Great. Sorry, I wasn't able to make it to the Bernin visit, but this would have been my question, which would have been on SmartSiC. How many tier ones do you expect will be ramping SmartSiC in volume by the 2026 timeline? I have one last follow-up after that. Yeah. It's interesting because we are bringing these innovations to SmartSiC, and I told you we are clearly now evaluating and developing and qualifying our technology with key partners around the world. Today I'm very pleased to report that basically there is a lot of work being done in Europe, in U.S., and in Asia. Basically we are touching the key major potential partners, and hopefully they will become customers soon. It's big ambitions that we have with this platform, with this technology. We continue to see the value that we bring to the industry. We are extremely pleased to where we stand and happy to see the traction that we bring to the market right now. Got it. The last question would just be, if you could just update us around the European Chips Act. I mean, there was some more press in February, an additional EUR 15 billion on top of the EUR 30 billion. I mean, I guess, you know, if I was Thierry Breton, I would look at, you know, what European differentiates on an FD-SOI would be a big part of that. I was just wondering, you know, how you think about potential subsidies to offset your potentially higher CapEx now that you've got a higher growth outlook and how that could come into the P&L as we look forward. Yeah. It's probably a bit early to say too much on this, but you have seen our announcement with CEA, GlobalFoundries and STMicro driving the FD-SOI platform down to basically next generations of products over the next couple of years. There is a really major focus on the European Chips Act to give access to the players around this platform and this technology and to support it to a greater extent. As you know, I mean, if you think just about FD-SOI, talking about millimeter wave, talking about Edge AI, talking about IoT, I mean, we know that this is going to be a major driver for the change in the coming years. We are expecting Europe and French funds. It's already obviously included in our plans. Got it. Thanks. We have no more questions on the line. If you would like to ask a question, please press star one. If there is no more questions, I would like to obviously thank you all for your interest and all your questions today. I mean, this is great. The next date in our agenda would be the release of our full year results on the eighth of June after market close. We will be hosting an in-person presentation in Paris on the next day. That is to say, on the 9th of June. For now, this ends our call for today, and thank you for your attention. Obviously, I mean, myself and the team are looking forward to seeing all of you very soon. Thank you for joining today's call. You may now disconnect.