Hello, and welcome to Soitec Half Year Results 2023/2024. Please note this call is being recorded. For the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star one on your telephone keypad. I will now hand you over to Pierre Barnabé, Chief Executive Officer, to begin today's conference. Please go ahead. Good morning, everyone, and welcome to Soitec H1 2024 Results Conference. I'm Pierre Barnabé, Soitec's CEO, and I'm very pleased to be with you today, along with, Léa Alzingre, our CFO, and Steve Babureck, our SVP Strategy. This presentation contains a disclaimer. Please read it carefully. We have a lot to cover today. I will share the main highlights and drivers behind our H1 2024 performance, and Léa will address the financials. Let's start with the highlights of our first semester. In H1 2024, we delivered a financial performance in line with our expectations. Revenue reached EUR 401 million, down 15% year-on-year, as we had announced at the beginning of the fiscal year. This temporary pause in our strong growth trajectory reflects the inventory digestion across the smartphone value chain. Our 33% EBITDA margin demonstrates the resilience of our operating model in the context of a lower revenue. While we strictly control our cost base, we continue to significantly invest in R&D for new product development and in our capacity expansion. The profile of our operating cash flow translates the lower EBITDA performance and the increase in working capital to secure our significant rebound in H2 and beyond. We delivered on the significant sequential rebound we anticipated, as our Q2 revenue was 56% higher than Q1. It translates different dynamics across our three strategic end markets. Let's start with our Mobile Communications division, which delivered a very strong 91% sequential revenue growth in Q2 2024. The H1 2024 revenue performance of our Mobile Communications, down 24% year-on-year, reflects the ongoing inventory digestion across the smartphone value chain, which impacted RF-SOI as anticipated. The temporary weakness in RF-SOI was partially offset by the significant progress we are making on the adoption of new products in 5G smartphones, Wi-Fi 6, 6E, 7 and infrastructure. FD-SOI adoption for both sub-6 GHz and millimeter wave continue to progress as all major players have endorsed our products. POI is ramping up very fast. As we are now delivering to more than five customers. With design wins and accelerating activities in qualification from several other customers, POI value proposition is recognized by the ecosystem. Finally, we continue to make progress on the development of new products for applications beyond handsets, such as 5G infrastructure or satellite communications. On the end market side, we now anticipate the smartphone market to be down around 5% in 2023, compared to flattish market anticipated at the beginning of the year. 5G penetration should be slightly higher than the 60% forecast. While the smartphone market is showing signs of rebounds and the inventory digestion across the value chain is easing overall, inventories at some of our customers remain high. Let's move to Automotive & Industrial, which delivered a strong 31% revenue growth year-on-year. We continue to see strong demand of our products, driven by the increase of infotainment, autonomous driving, functional safety and electrification. This strong performance was essentially driven by a sharp increase in POI wafer sales, continued strengths in automotive FD-SOI, and the revenue generated by our SmartSiC technology. During the first semester, we achieved some significant milestones on our SmartSiC roadmap. In September, we inaugurated our Bernin 4 fab, dedicated to SmartSiC wafers on time with our roadmap. We are deploying our SmartSiC program in line with our roadmap. We are on track on all aspects: technology, manufacturing, supply, and commercial. Our activity continues to be driven by the increase in semiconductor content in automotive. Going forward, the steady increase in electric vehicle penetration will be a significant growth driver. Our Smart Devices division saw a very strong growth in FD-SOI sales in the semester, driven by strong appetite for low-power computing devices and Edge AI applications. This strong performance was offset by lower sales on Imager- SOI and Photonics- SOI, temporarily impacted by weaker data center environment. We confirm the solid long-term drivers and outlook for Photonics- SOI, a product fundamental to enable ongoing development in cloud computing, artificial intelligence, and machine learning. The division was down 6% year-on-year. We are seeing important developments across our product line. On FD-SOI, our product portfolio continues to expand, supporting new generations and extending beyond general purpose into AI computing. On Imager- SOI, we are sampling second-generation wafers dedicated to higher performance sensing applications. On photonics, we are accelerating our R&D investment by leading-edge fabless to support AI/ML developments and leveraging increasing developments in optical transceivers. Let's talk about our capacity expansion. We continue to invest across all our product lines to address customer demand in SOI and compounds. In H1 2024, we invested EUR 138 million, as we are preparing for a strong rebound in H2 2024 and beyond. In Bernin 1, we are managing a slight decline on 200 millimeter by transferring operators to Bernin 3, where the POI activities are strongly picked up, with wafers shipped to more than five customers. Bernin 2 continues to run at full capacity, and we are leveraging technology and automation tools to further improve our industry-leading yields. In September, the inauguration of Bernin 4, our fab dedicated to SmartSiC wafers and 300mm refresh, was fundamental milestones on our roadmap. We have already produced our first wafers in Bernin 4, and we will ramp up production in fiscal year 2025. Our 300mm SOI fab in Singapore continues to ramp up to address strong demand. The extension project is progressing on time. In-house, we are working on samples to prepare the development of gallium nitride for RF and power, and SmartGaN, as we are exploring key specifications with key partners. Finally, our partner, Simgui, is adapting to production's needs. On a full year basis, we will invest around EUR 290 million, slightly below our EUR 300 million guidance. Let's now have a look at how sustainably we continue to deploy our expansion. Sustainability is at the heart of our innovation process. We continue to deploy Renovation, our company-wide initiative, to implement eco-design at Soitec, in order to embed sustainability from the very beginning of our design and production processes. Furthermore, the progress on our SmartSiC roadmap is a strong testimony of our commitments to enabling a more sustainable semiconductor industry, as the production of SmartSiC wafers divide CO2 emission by four compared to conventional mono-SiC wafers. We are also progressing well on our climate objectives, and our greenhouse gas emission reductions targets by 2030 has been validated by the SBTi. We also have strong commitments on reducing our waste water consumptions and increasing the use of recycled water. Between 2015 and 2022, we have reduced our water intake per wafer by a factor of 2.5, and we plan to divide it by 2 by 2030. And finally, on diversity and inclusion, a critical value creation driver, we keep raising our standards with ever more ambitious objectives to create a more diverse, inclusive, and safer work culture to attract and retain talent. Let me now hand the microphone to Léa to comment on our financials. Thank you, Pierre, and good morning, everyone. As expected, FY 2024 is a transition year, and our H1 revenue is down year-on-year as we navigate this current complex environment. As we prepare for the ongoing recovery of the smartphone market, we continue to implement strong cost control measures to maintain profitability. Our strategic priorities remain unchanged, and we preserve investments to extend our technology leadership, accelerate our diversification beyond the FD-SOI products, and optimize value creation for all our stakeholders. The main highlights from our H1 FY 2024 are: we delivered EUR 401 million in revenue, down 15% year-on-year at constant FX rate. We maintained strong profitability with a 33% EBITDA margin. We invested EUR 138 million of CapEx, mainly for SmartSiC and 300 mm SOI capacity. All this while maintaining a healthy balance sheet with a net debt at EUR 21 million. I will now discuss the H1 revenue, as it was already commented by Pierre just before. So let's talk now about profitability. We achieved a solid growth margin of 36%, slightly up year-on-year, thanks to strong initial performance with a highly effective cost control, a favorable product mix, and a positive currency impact. This has strong results considering the headwind we faced during our H1 FY 2024. As expected, inflation, including raw materials price increase embedded in our long-term supply agreements, the higher level of depreciation expenses, and a lower revenue, as explained earlier. In H1 FY 2024, we also maintain a healthy level of capacity utilization with some anticipated inventory build to fulfill H2 FY 2024 demand that is 60% higher than the H1 demand, while at the same time optimizing capital expenditure. Gross margin management is and will remain a key area of focus for us. Operating income then. Operating income reached EUR 86 million, a 21% margin, 2 points lower than last year first semester. While strictly controlling SG&A costs, we continue to invest to support our strategic priorities and position ourselves to a much stronger from this transition period. To that extent, we continue to significantly invest in innovation, and our net R&D expenses increased by EUR 29 million, a 17% increase versus H1 FY 2023. R&D expenses represented 8.4% of our H1 FY 2024 revenue. We remain laser focused on strengthening our technological leadership in each of three end markets and across multiple product lines, SOI, POI, SiC, and taking a longer term view. We are also increasing our efforts in upstream R&D, hiring top talents and strengthening collaboration with innovation platforms worldwide. SG&A expenses represented 6.3% of our H1 revenue, down EUR 3 million, an 11% decrease year-on-year. This is a result of strong cost containment actions started at the beginning of last fiscal year and reinforced during the period. They are mainly related to a decrease of the external expenses and very tight control of labor costs. We, however, continued to invest in digitalization and IT project in order to prepare for the future. Let's now take a look at our EBITDA performance. We reached a 33% EBITDA margin, down 2.5 points year-on-year, resulting from higher gross margin, higher depreciation on sales, offset by higher R&D on sales. Net income reached EUR 80 million at the end of H1 2024, representing around 20% of revenue, a flat net margin year-on-year. Our financial result is a profit of EUR 2 million compared to a loss of EUR 2 million last year. We benefited from a EUR 9 million increase in financial income from cash investments that have more than offset a EUR 4 million increase in financial expenses related to loans and leases. We also recorded a net FX gain of EUR 3 million compared to a EUR 4 million last year. Finally, our income tax continues to benefit from tax loss carryforward. Our effective tax rate moved from 12% to 9%, reflecting a higher contribution of our Singapore subsidiary to the group results. Moving on, let's now take a look at cash flows. We generated EUR 45 million net operating cash compared to EUR 106.26 million last year. This decrease is explained by a lower EBITDA, a higher working capital. The cash outflow from working capital amounted to EUR 69 million, compared to EUR 26 million in the first half of FY 2023. This mainly reflects a EUR 65 million increase of inventory in anticipation of the H2 deliveries based on customer visibility. A EUR 105 million decrease in trade payables, including non-recurring down payments to suppliers to secure our supply chain, partially offset by a EUR 106 million decrease in trade receivables, which were much higher at the end of March 2023. This high level of working capital is mainly explained by the higher seasonality between H1 and H2 this year, as well as non-recurring payment to suppliers. Working capital management is and will remain a key focus moving forward. Regarding cash out from investing activities, we invested EUR 138 million. We continued our capacity expansion based on business visibility. We invested mainly in SOI 300 mm, including refresh capacity, both in France and in Singapore. SiC tools for our new fab, mainly dedicated to SmartSiC, and also R&D, IT, and sustainability programs. Net cash out from investing activities consist of EUR 137 million CapEx cash outs, partly offset by EUR 8 million cash in from cash investment. Financing flows were negative at EUR 45 million, essentially reflecting borrowing repayments during the period. Cash flows using financing activities decreased by EUR 28 million compared to H1 last year, due to higher debt repayments and the absence of new loans over the period, compared to EUR 10 million last year. Including a EUR 2 million positive impact of exchange rate fluctuations, compared to EUR 26 million in the first half of FY 2023, the net cash outflow reached EUR 127 million in the first half of FY 2024, leading to a strong cash position of EUR 661 million at the end of September 2023. Finally, let's focus on our balance sheet, which remains very healthy. Equity is just above EUR 1.4 billion, up EUR 98 million compared to March 2023, thanks to the results from the period. We ended this H1 with a net debt of EUR 21 million due to a EUR 127 million cash consumption over H1 FY 2024, mainly due to CapEx cash out. EUR 59 million related to the leaseback contract of our new fab, dedicated to SmartSiC, starting July 2023, leading to an increase of financial debt. To conclude, you can see that we achieved to maintain a strong level of profitability during this H1, while continuing to invest for the future. We are taking actions on things we can control, such as operating expenses and CapEx, and we are well prepared for the market rebound. I will now hand over to Pierre to conclude on the guidance. Thank you for your attention. Thank you. Thank you, Léa. To conclude, we confirm our strong recovery in the second half of fiscal year 2024. Against the backdrop of a weaker than expected smartphone market, the extent of the inventory correction at our customers is greater than anticipated. We confirm the strong traction for automotive and industrial, as well as smart devices divisions. We now anticipate our fiscal year 2024 revenue to slightly decline by around a mid-single-digit percentage compared to fiscal year 2023, at constant exchange rate and perimeter. As a result, fiscal year 2024 EBITDA margin is now expected to be around 35% of revenue. We'll continue to implement cost control measures while continuing to invest significantly in R&D. Capital expenditures will be around EUR 290 million, slightly lower than our initial EUR 300 million guidance.... They are mainly related to capacity investment, as well as innovation, sustainability, and IT. Our growth outlook remains very strong. While the SOI content within end devices continue to increase, the ongoing penetration of our products across all three end markets and the successful deployment of our expansion into compound semiconductors with POI and SmartSiC are becoming new significant growth drivers. This concludes our remarks. Thank you for your attention. Now, let's please open the Q&A session. Thank you. As a reminder, if you'd like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. We'll take now our first question from Aleksander Peterc from Société Générale. Your line is open now. Thank you. Yes, thank you. Good morning to everyone. I just have a couple of questions. So to start with, given the lower base in fiscal 2024, with today's downgrade to roughly -5%, the hill to climb to your $2.1 billion revenue guidance by fiscal 2026, which was already quite steep going into this, this warning, just got a little bit steeper. So you now need to deliver 36% growth in both fiscal 2025 and fiscal 2026 to get to that number. You haven't actually delivered this kind of growth for two consecutive years in your recent past, since 2017. So I'd just like to understand, does this guidance still stand or is it up for review at a later date? That was my first question. Thank you. Hello, hello, Alex. Then, as you know, we have a robust process each year. We are entering into this process right now by taking the assumptions from analyst observation from our teams, and also discussions with partners, customers, and so on, to assess our business plan for the years. And this process will bring us to give you an update on the years to come guidances by springtime, as we are doing usually. There is just a milestone point that is the Mobile World Congress, where we give our view on the smartphone market for the calendar years, and it will be, we're gonna follow the same process. Then on spring, we're gonna tell you the update of our guidances for the years to come. Okay. So I understand it's up for review then, in the spring. Then my second question would be, just to understand what's changed and brought this cut along to your fiscal 2024 outlook. It seems to me that actually the smartphone market is a bit better. I think Qualcomm slightly upgraded their outlook, or but basically saying that the decline is not quite as steep as it was before. So is your downgrade really reflecting just a misjudgment of what happened in terms of inventory at your customers? Is it just the inventory digestion, which is worse, or is it also the market doesn't help? Thank you. Well, indeed, you remember the assumptions we made to build the first fiscal year view. It was on the smartphone market that was supposed to be flattish for the calendar year 2023. And as you know, everyone is converging on a -5% decline. Then this -5% decline has an impact on the rhythms of digestion of inventories within the full supply chain, starting with our immediate customer. This is the reason why we revise to a single mid-digit decline the fiscal year 2024 revenue. This is a simple reason, and it is impacted, as you know, as you understood, mainly the RF-SOI activity. Thank you very much. I'll jump back into the queue, maybe come back later. Thank you. Thank you, Alex. We'll take now our next question from Sébastien Sztabowicz from Kepler Cheuvreux. Your line is open now. Yeah. Hello, everyone, and thanks for taking my question. On RF-SOI, could you please help us understand, where the inventories are standing right now, the level of inventory that your main customers... Do you have any kind of visibility? And given your discussion with your main customers, when do you expect the inventory correction on RF-SOI to be completed? Is it by the end of the fiscal year or even, beyond that? Thank you, and I've got a follow-up. Hello, hello, Sébastien. Then we have visibility thanks to discussions of course with many of our customers. It's really. It depends on dynamics for each of these customers. And we do believe that we have to wait for another couple of quarters before seeing these inventories on RF-SOI to become to a healthy positions. But again, it really depends on the customers and on what is behind the supply chain for each of them. But overall, we believe that another couple of quarters is expected for seeing these inventories in a healthy position as an overall view. Okay. T he second question is not a short-term one, but how do you see your business trending in fiscal year 2025, given that we have a plus and minus, the macro conditions are getting weaker and deteriorating. O n the other hand, as Alex mentioned, smartphone market is bottoming, inventory correction is being mostly behind us, and you have new product ramping up, POI, SmartSiC, and so on. Can you help us understand how do you see the business accelerating into 2025? Thank you. Fiscal year 2025. Then, as I said to Alexander, the update will be given to you by spring, looking at the process we used to have on a regular basis with all the stakeholders. But clearly, what we see is that we have reached the bottom for this market. We can imagine a growth for next year in smartphone business that will help in the inventory digesters, as I said, for RFSO. But keep in mind that all the other growth drivers are intact, and I would like to say are very healthy for this year and for the coming years. You mentioned POI, that is doing very well. FD-SOI also across all the divisions. We see also a very, very interesting tractions on the SmartSiC, even if it is the beginning, of course, this year, but next year, next years, will be very promising. And we have to keep in mind that Photonics, POI, SOI also are giving a lot of very good ideas for growth as growth drivers for the company. Then it is very important to keep in mind that the diversity and the diversification of our product is going on, and it has been accelerated during this transition year. And it give us, as I said, a very strong view on the growth drivers for the future. Okay, thank you. We'll take now our next question from François Bouvignies from UBS. Your line is open now. Thank you. Thank you very much. I wanted to ask you about first your 5G penetration estimates for calendar 2023 and 2024 after all the moving parts, and what is your view today of the 5G penetration, specifically, as we are, you know, closing in on 2023 and your expectation in 2024 now would be very helpful. The second question is on the silicon carbide. So I understand that you are expecting some new customers by the end of the year. I'm just wondering, you know, from a timing perspective, with your guidance of silicon carbide reaching 10% of your revenue by fiscal year 2026. Obviously, it takes time, you know, to qualify the customer, new customers, and then you have to have some execution risk, you know, ramp up, as silicon carbide industry showed with Wolfspeed, for example. Sometimes it takes much longer than expected. I'm wondering if there is any timing, you know, that basically you need at least to have one monthly time or. My point being is there a risk that it takes some time for customer to sign this contract, that maybe the revenue that you're expecting might take a bit longer? I'm not questioning the fact that you're going to sign new customers. I'm just questioning the timing, if you see what I mean. And thirdly, really quick one on POI. You talk about a strong contribution. If you can share, maybe quantify the contribution of POI or the growth rate, anything around the quantification here would be very helpful. Sorry for the third question. Thank you. No, you have not to apologize for the third question. Also, thank you very much. Then on the first aspect, the 5G, as I said, on the penetration for this year, we should be slightly above 60% penetration. That is a bit better than what we were believing, i n a market that is declining by 5% while we are betting on a flattish market. Then, of course, we see this penetration to continue growing in the coming years, b ut again, now we give you an update during the Mobile World Congress by compiling different data and information from stakeholders, analysts, and so on. W e see, of course, 5G continue to penetrate the smartphone market overall. And at the end of the day, it's of course a good driver and growth driver for us because the content of what we are selling in the different smartphones and the new smartphones to come continue to increase. Then, of course, it's a very important topic for us. Regarding the SmartSiC, we are on track with our plan. Yes, it takes time for customers, you know, because we are entering into prospections, then afterwards, samples, then prototyping and qualification, then it's a process. I do confirm that before end of fiscal year 2024, we're gonna announce another customer into qualification process, a design win. W e have other customer in the pipeline, then we don't see any headwinds and drawbacks on this plan, b ecause first of all, we are built and sustained by a good operation reasons from a innovation point of view, manufacturing point of view, supply chain point of view. T he customers, let's say, activities we have is quite good. Then, we don't see particular slowdown in the plan we have in mind. For the moment, it's a very dynamic market and SmartSiC, step by step, it should become and will become a standard. Regarding the POI, yes, I do confirm it's a very fast growth driver. We don't give any specific details. Today, we have five customers. We are working with additional customers for the coming years. And we see more and more adoption of this technology, again, as a standard in some parts of the POI, I would like to say market. But it's clear that it is becoming step by step a key drivers for the mobile communication divisions, without giving you for the moment more details. Thank you very much. We'll take now our next question from Didier Scemama from Bank of America. Your line is open now. Thank you. Yes, thanks very much, and good morning, everyone. I just want to come back, make sure I understand exactly what you're saying. To Alex's point earlier on, are you saying you're no longer committed to your fiscal year 2026 revenue guidance? I've got a follow-up. No, I didn't say that. I said that we are updating every year our guidance for the years to come, including fiscal year 2026. Then if we have to update, we're gonna give you this update on by spring, after having processed, you know, the different data from the market as we did last year. That means that by springtime, we're gonna be in a position to update, can be, a confirmation, whatever, an update, looking at the market, looking at the customers, looking at inventory digestion, looking at the growth drivers I was mentioning, and also the analyst of the market, and particularly the smartphone market. And we're gonna give you an update on this, on this guidance. This is what I said. Okay. Second question is, if you could give us an update on your Wi-Fi 6, 7 sort of penetration by end of fiscal year 2024. I t was 50% last year. Would you think you are gonna be close to 100% by the end of this fiscal year, or is it you got still more room to to gain share? T hen related to that, also, if you could X the mobile device business, do you feel like you are on track to reach fiscal year 2026 guides on the, you know, non-smartphone part of the business ahead or below? Thank you. Then on the trends, we clearly confirm, and this is what I said as an overall comment, on the fact that the content versions after versions of the smartphone is increasing, for Soitec. If you look at the iPhone 15, as an example, at the iPhone 16 content, we see, depending of course, on the version, that we see between 75-78 square millimeters of Soitec content in these phones. This is a big increase compared to the iPhone 14 and compared to other smartphones. Then we see clearly this trend going on. It does include, as you said, of course, the Wi-Fi and the Wi-Fi evolution to 6, 6E, and 7. It does include the millimeter wave, it does include satellite connectivities, a nd we see that RF, FD, and of course, POI more and more gonna be the key drivers for we're gonna look more and more Soitec content in the smartphone. Then I can clearly confirm this trend because we are observing it right now. Giving you more details will be part of the spring dates, and because of course, we're gonna give you a guidance based and sustained by data, figures, and of course, the translations into or the divisions of what does it mean regarding top lines and profitability. All right. Thank you. You're welcome. We'll take now our next question from Olivia Sherwood from Jefferies. Your line is open now. Thank you. Morning. Thanks for taking the question. Firstly, I just wanted to ask about the H2 outlook. Your new full year guidance would imply above 50% sequential growth in revenues in the second half. How can we think about that being split between Q3 and Q4? T hen my second question was around silicon carbide SmartSiC. There have been some concerns in the market that there's a challenge to source 8-inch wafers at automotive grade. How can we get confidence that you'll have enough wafers at the 8-inch sizing to ramp up when you're aiming to both on the poly-SiC and the mono-SiC side? Thank you. Thank you, Olivia. Then I propose, Léa to take the first question, and I can take the second one. Okay? Yes, of course. Good morning, Olivia. So our growth will not be linear in our H2. We are expecting Q3 quite flattish as compared to Q2. So we can do the math to have the Q4 then. For the second question, it's of course a very important question, but it is validating the SmartSiC technology. That's the reason why I'm very confident in the fact that this technology gonna become a standard. It will take the time necessary, but it will become a standard. W e are able, you remember, to cut 10 times at minimum mono-SiC wafers. You're right to mention that scarcity on 8 inches is coming because there are more and more demands. Our ability to cut 10 times gonna reduce significantly the scarcity. I believe this is one of the key drivers that makes our prospect prototyping samplings customers we have today in appetite. We don't see this issue as a problem for us because of this particularity of the SmartSiC, let's say, technology. This is clearly a big, big driver for us. That's very helpful. Thank you. We'll take now our next question from Robert Sanders from Deutsche Bank. Your line is open now. Thank you. Yeah. Thanks for taking my question. I just had a question regarding Huawei in China. I just wanted to understand a bit better the reason why Huawei ramping up against, for example, Oppo, Vivo, Xiaomi, is a positive. Is that purely because of your POI position in China, or is there another reason? Because I'm just trying to understand, you know, how that Huawei's content compares with what you just mentioned, with the iPhone 15. Thanks. Thank you, Rob. As you know, we don't give details on, let's say, the final end smartphone makers. Just as a reflection of your question, China is an important, of course, dimension and element of the recovery of the smartphone market. The fact that apparently some phone makers are experiencing a good ramp up, not only the one you are mentioning, could be a signal we need to investigate. That's gonna be part of our process analyzing for the data for years to come. But it's clear that China is a very important engine for the recovery of the smartphone market, and we are observing what is happening in these domains. Regarding the POI, we are not giving details on where POI is getting a success, b ut China is part clearly of the countries that are where we are delivering our products, our finished goods as a whole. It's also where we have a partnership, as you know, with Simgui, that is helping us to deliver 200-millimeter SOI solutions to the world. Just a quick follow-up on SmartSiC, then. Just thinking about the Chinese opportunity, are you... is there any reason why you would not license Chinese substrate players your technology over time? Or is there. Would you prefer to just produce wafers? And I'm just wondering whether you would prefer to play China through Western vendors, or whether you would like to play it through Chinese substrate or Chinese IDMs. Thanks. I think it's very simple. We are selling to everyone in the world, okay? As long as, of course, we respect the rules, the laws for selling finished goods. But we are not selling technologies. We are not transferring any technologies to anyone. We are keeping for us the mastering of our patents IPs. As you know, as you mentioned, we continue to invest a lot in R&D, and despite slightly lowering revenue, we continue to invest massively in research and development innovation, because it is the essence of our activities, and it's a way we can really update our products, version our products, and also put on the market new products. It is very important to keep, for us, these technologies, and there is absolutely no project of transfers of technology nowhere. Thanks a lot. We'll take now our next question from Ben Harwood from New Street Research. Your line is open now. Thank you. Hi, thanks for the question. I just have one on the Photonics business. So you mentioned that's facing some weakness. What are the drivers behind the weakness that you're seeing? And then on the other side of that, are you seeing any momentum in, say, optical data center interconnects, given the accelerating demand for AI that we're seeing? And if you could just let us know roughly the size of the Photonics business for us, that'd be great. Thank you. Yeah. Thank you for the question. Then Photonics, there are, there are two, let's say two, times in the, in the Photonics evolution. There were the first wave of Photonics, that is still, of course, very active, where we're gonna... Photonics is used for data centers, servers, interconnections and so on. Then this wave, is, is active, but of course, it depends, depends on, data centers activities and servers activities that suffered a bit over the last quarter. And there is a second wave that is very important, that is key, and I believe, AI will be a big catalyst, for the growth of, Photonics- SOI, in the future. For which, you have seen a big giants, gathering all together to prepare the ground, for Photonics. Photonics- SOI, for me, is a very good solutions. To first of all, accelerate interconnections between, processing units and mainly graphical processing units, that are essential for artificial intelligence and machine learning, calculation and computing. And also, that is of very important topics, electricity and power consumptions. That could become, a bottleneck for, AI and, ML expansions. With Photonics- SOI, we are solving, the two issues, the two problems at the same times. Then, speed of, executions of processing unit at the substrate level and lower power consumptions. And I believe that we're gonna remove, clearly the roadblocks for Photonics, adoptions within the AI machine learning world, by, by providing our Photonics- SOI, wafers. A lot to come and more to come on this, on these products. That's great. Thank you. We'll take now our next question from Florian Sager, from Stifel. Your line is open now. Thank you. Hey, good morning, and thanks for taking my question. I just have a question on inventories, because at your mobile customers, they're still at 150 days of inventories. Do you expect this high level to be the new normal, maybe? Because it used to be more like 100 before the pandemic. Then I have a follow-up on SmartSiC. Then indeed, you have inventories in all the value chain, but it's clear that it seems to be less and less the case at the end of the value chain. But we see, as I said, by our customers, still a high level of inventories that gonna be digested in the next couple of quarters. But again, it's an overall view, and it depends on the customer. Some customers get quite high inventories, others less. Overall, the fact that at the end of the value chain we see a clear improvement is giving us, of course, a view that the couple of quarter will be needed. That said, and again, we're gonna, we are looking at the data that are evolving very fast. What is very important, that the bottom has been reached, and now we see a step by step improvement and this digestion going on. But it's something where we are not giving precise figures, but we are, of course, monitoring the evolution step by step and weeks by weeks, I would like to say. Okay. And the next one would be on SmartSiC. Are you worried here about the Chinese competition and maybe potential price wars? Because, I mean, Infineon is going very much in the direction of Chinese suppliers, right? Isn't that a danger in terms of pricing for you? W e are, we have consolidated our supply chain, because we are using two type of materials for making SmartSiC. We are using mono-SiC and poly-SiC. The fact there are competitions, in this world, whatever it is, from China, from U.S. or whatever, is a, is a good news for us because we could benefit from this competition. But, you know, it take times, to, to build capacities, to, to make mono-SiC or poly-SiC wafers. Particularly, when you, when you shift from 6 inches to 8 inches, having, you know, making in quality, 200 millimeters, mono-SiC wafers, it takes a long time. Then competition is fostering, the improvement of, capacity to deploy and capacity to get technologies. Then this competition from our side and for the SmartSiC deployment could be understood as a good news. Okay. Thank you. We'll take now our next question from Sandeep Deshpande from JP Morgan. You can go ahead now. Thank you. Yeah. Hi, good morning. Thanks for letting me on. I want to go back to the point Alex made at the beginning of the call, on the future, because when you look at the consensus estimates for FY 25 ahead of last night's report, I mean, market is looking for almost 40%+ growth in FY 25. Clearly, I mean, FY 25 is only four months away from here, so you have some view of what market of your-- what your customers want to buy into FY 25. I know you don't want to give guidance into FY 25 here, but in directional terms, do you think that you can grow around 40% in FY 25? Or given the kind of inventory correction we are seeing in the market at this point, that that might not be possible. Secondly, on SmartSiC, the question is that you've got this new customer that you're going to announce by the end of the year. Are you not giving them too much leverage by saying that you've got a new customer to sign up? Because on pricing, et cetera, because the later you announce that customer, the more leverage that customer has with you in terms of making an announcement. Thank you. Then, for the first question, Sandeep, as I said to Alex and Sébastien, sir, we are really, we need to enter, and it's very important for us to, you know, to work in a process point of view, to give you the best update we can on spring. Then you're gonna get, you're gonna get the views for the coming years, looking at the different data we are collecting. You say four months or four months and a half, but in four months a lot of things happened, then a lot of things could happen. Then it's not the fact of the four months; it's more the fact of having very solid data collection and process to give you the best in class update we can by spring. That's very important. It matters to us, and this is really an answer I will continue to confirm. Regarding the SmartSiC, we are. Again, we are selling value in SmartSiC. It's a product. It has nothing to do with mono-SiC, a simple mono-SiC product. It's a solution. It's a product we are selling with really enhancement and improvements in terms of dye concentrations, in terms of electricity, let's say diffusions, in terms of poor consumptions, then it's really value. The price is not a question today, looking at this value. Taking into account that there is a real appetite for SiC, generally speaking, and clearly for SmartSiC, then we are not at all at this stage. Generally speaking, even on, let's say, products we are selling for years, like RF-SOI or FD-SOI, we are really sustaining and defending the value. Again, we are not selling wafers. We are selling engineered substrates that are products in which we are inserting many, many things and more and more things. I f you remember the roadmaps we presented on the different products and the investment we are making in R&D, in innovation, we are bringing more and more features within these products. That means that we are really selling values, and these values is more and more recognized by the industry and more and more recognized by our customers. This is the way we operate from business point of view. Thank you. You're welcome. Thank you for your questions. We are not taking further questions, so I will hand you back to Pierre to conclude today's conference. Well, thank you. Thank you all for your interest and for your questions. The next date in our agenda will be the release of our Q3 2024 revenue on the seventh of February, after market close. This ends our call for today, and thank you, thank you very much for your attention. Thank you. See you soon.