Welcome to the Soitec half-year results 2025-2026 presentation. Today's conference will be hosted by Pierre Barnabé, Chief Executive Officer; Albin Jacquemont, Chief Financial Officer; Steve Babureck, EVP, Chief Strategy Officer; and Alexandre Petovari, Head of Investor Relations. For the first part of the conference, the participants will be on listen-only mode. During the Q&A session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to Pierre Barnabé to begin today's conference. Please go ahead. Hi everyone, and Welcome to Soitec H1 2026 results conference. I'm Pierre Barnabé, Soitec's CEO, and I'm very pleased to be with you today, as well as with Albin Jacquemont, our Chief Financial Officer, Steve Babureck, Chief Strategy Officer, and Alexandre Petovari, Head of Investor Relations. Before we begin, please take a moment to read the disclaimer included in this presentation. We have a lot to cover today, but before we start the formal presentation, let me share a few words about the current fiscal year. Fiscal year 2026 is a special year for Soitec. As you know, I have decided to leave the company at the end of March after four years, and I personally recruited Albin as our new CFO, giving him a clear mandate to strengthen our financial discipline and clean up our balance sheet. This job has already been done and done very well. H1 2026 reflects that discipline and the priorities we set back in May, meaning focus on what we can control, give absolute priority to cash, and take deliberate, sometimes tough, actions to correct inventories and improve cash conversion. These actions have been fully launched, but their impact has just started to materialize. We are being methodical and sequential, managing our own inventories, optimizing working capital, and adjusting our cost structure accordingly while maintaining selective investments in strategic areas. At the same time, we are progressing on multiple fronts: expanding our product portfolio, preparing for new end markets, and rolling out our new client and product-centric organization, which positions us to capture the next phase of growth. Our incubators, introduced last May, are also delivering promising results. We are identifying significant opportunities as key players explore SOI for advanced computing applications and memory. This is a large and fast-growing market, and we are at the forefront of materials innovation, combining cutting-edge R&D capabilities with the ability to industrialize rapidly and produce at scale, a unique differentiator for Soitec. These initiatives come with a high risk-reward profile, so we will remain prudent in our commitments until we see clear customer engagement. That said, recent developments confirm that our efforts are well-targeted and aligned with where the market is heading. As you will see, I have asked the teams to continue executing this disciplined plan, combining financial rigor and strategic focus, so that Soitec emerges stronger and ready for its rebound. Let's begin with the main highlights of our first half-year. Our H1 2026 performance reflects the actions we have taken to strengthen cash generation, with lower production volumes to support the reductions of inventories. Revenue reached EUR 231 million, down 29% organic compared with last year. Our 34.1% EBITDA margin mainly reflects the smaller revenue base and a temporary increase in inventories supported by continued volume production. Initial cost measures have had limited impact so far, as expected, given their recent implementation. Their benefits will start to materialize in the coming quarters. Finally, our EUR 26 million operating cash flow reflects our effort to reduce production volumes to correct inventories and a temporary increase in working capital as inventories rose in H1 to support our H2 deliveries, partly offset by lower CapEx. Looking at revenue by quarter, Q2 confirms the expected rebound from our low Q1 2026 with a 47% sequential organic increase. Our first half revenue reflects different dynamics across divisions: strong growth from AI-related products, with the Edge and Cloud AI division up 34% organic year-on-year, excluding the impact of the anticipated major SOI phase-out, offset by continued weakness in Mobile and Automotive. Let's start with Mobile Communications. H1 revenue reflects the continued inventory correction at certain foundry customers, as anticipated. RF-SOI inventories remain high, but they are going in the right direction. We expect further correction in H2 2026 and fiscal year 2027. We also continue to expand beyond RF-SOI. POI remains a major growth driver, with 11 customers in production and 12 in qualification. While we saw a temporary slowdown in Asia after a very strong initial ramp last year, adoptions continue to expand among leading fabless companies, supported by new design wins for flagship smartphones. Beyond RF-SOI, we continue to make solid progress in next-generation communication products, with adoption advancing in Wi-Fi 7 SoCs for premium smartphones, confirming our position in future communication architectures. We are also progressing in our 18-nanometer roadmap, as shown by the announcement on Tuesday of a design win from a key customer. FD-SOI technology brings advanced low-power computing with a high level of reliability, which is critical for satellite communications applications. Our Edge and Cloud AI divisions continue to show strong momentum. In the first half, revenue reached EUR 96 million, flattish organic year-on-year, but up 34% when excluding the anticipated major SOI phase-out, reflecting robust demand for AI-related products. The increase was mainly driven by higher Photonics- SOI sales, benefiting from AI-driven investment in data center infrastructures and by strong demand for FD-SOI across both Edge and Cloud applications. On Photonics-SOI, we are leveraging the AI acceleration across the industry, supported by large-scale CapEx investment. The technology stands out as the most efficient solution for high-speed optical interconnects, including co-package optics, which enable faster, more energy-efficient, and cost-effective data center architectures. Photonics-SOI continues on its fast-growth trajectory, from a very low point in fiscal year 2022 to approaching $100 million in revenue for fiscal year 2026. On FD-SOI, our product portfolio continues to expand, supporting new generations of AI computing devices and Edge applications with strong customer engagement and committed capacity investments. On Imager-SOI, we completed the phase-out of first-generation products in H1 2026, which represented an impact of around $32 million. Residual purchase orders in Q2 2026 generated a few million euros in revenue. Let's move to Automotive and Industrial, where market weakness continues to weigh on activity. In a challenging Automotive context, we continue to see increasing adoption of our products and rising content per vehicle, driven by infotainment, autonomous driving, functional safety, and electrification trends. Power- SOI sales were impacted by inventory adjustments at customers, following a strong restocking at the end of last year. We are preparing the transition to 300 mm to meet growing demand for battery management systems and vehicle electrification applications. FD-SOI adoption continues to progress, supported by leading foundries and IDMs developing Automotive solutions for ADAS and edge computing in radars, microcontrollers, and wireless connectivity. On SmartSiC, we have revised downwards the market perspective set when Soitec launched the program in 2021, reflecting intensified competition from Chinese mono SiC players. We are continuing to qualify five customers. While we are seeing growing interest in SmartSiC's efficiency benefits for next-generation power supply and data center applications, these opportunities are unlikely to materialize in the near term. Let me now say a few words about our new organization, which the entire Executive Committee has been working on for several months. This new client and product-centric structure strengthens Soitec's readiness to expand into new SOI and beyond SOI end markets and applications. It is built around four key pillars. One, the acceleration of our product portfolio expansion and diversification, structured around five established product lines, ready industry standard or on their way to becoming so: FD-SOI, Photonics-SOI, RF-SOI, POI, and Power- SOI. Recent progress on the product development front supports our strategy to enter new markets and new applications with SOI and beyond SOI. Two, a more balanced customer, supplier, and geographic base, expanding our ecosystem's influence. Three, an innovation powerhouse driven by more targeted R&D investment focused on future growth opportunities. Four, agile industrial capacity management, ensuring optimized utilization of our state-of-the-art production tools and greater asset fungibility across sites. Let me now leave the floor to Albin for the financial review. Thank you, Albin. Thank you, Pierre, and good morning, everyone. Let me begin with the key financial highlights for the first half, some of which Pierre has already touched upon before taking you through the details of our financial performance. As Pierre mentioned, we have mandated teams across the organization to reinforce financial discipline and accelerate the cleanup of our balance sheet. I will update you on the progress we have made on this front. Our first half results reflect the deliberate actions we have taken to initiate a reduction in inventories in the second half of the year and to strengthen cash generation, all while maintaining close oversight of customer demand and inventory levels. We delivered revenue in line with our first half guidance, although organic revenue declined 29% year-on-year, reflecting continued complexity of the market environment. Our EBITDA margin improvement is largely attributable to a lower revenue base and should be viewed in conjunction with a temporary increase in inventories supported by ongoing production volumes. Our net result was -EUR 67 million, primarily reflecting non-recurring items, including the SmartSiC impairment and the one-off non-cash foreign exchange conversion loss recorded in the first quarter. Excluding these non-recurring effects, current net income was broadly stable at -EUR 2 Free Cash Flow was -EUR 31 million, reflecting seasonality, lower revenue, and a temporary increase in inventories ahead of second half deliveries, partly offset by lower capital expenditures. Turning to the balance sheet, our position remained solid. We closed the half year with EUR 483 million in cash and investment, pro forma the repayment of the OCEANE, which took place on October 1st to October 2025, and with EUR 145 million in net debt. This maintains a robust financial profile with 0.5x EBITDA leverage, including leases recorded under IFRS 16, and provides us with ample flexibility to support our strategic and financial priorities. Pierre already addressed the revenue performance, so let me move directly to the P&L. As you heard from Pierre, reducing working capital and reinforcing cash generation are top priorities, and we have advanced on these fronts. First, we actively managed FAD utilization to better align production with planned deliveries, thereby paving the way for a reduction of our own inventories in the coming months. Second, we launched a comprehensive cost reduction program addressing our major cost drivers. Third, we scaled back capital expenditures. These actions are all aligned with our objective to enhance cash generation, improve operational efficiency, and secure lasting savings across the company while preserving our technological capabilities. The key message I would like to leave you with is that while these actions will take a few months to translate into meaningful results, we will remain relentless, systematic, and disciplined in their execution. Gross margin declined 490 bps year-on-year, driven by three factors: the disposal of Dolphin Design, representing 120 basis points; lower fab loading as an initial step towards reducing inventories; and an unfavorable mixed price effect. Going into H2 2026, do expect a significantly lower loading of our fabs, and that will weigh, obviously, on our gross profits. Net R&D expenses decreased by EUR 23 million year-on-year, reflecting the disposal of Dolphin Design, a favorable phasing of public funding, and lower material purchases linked to reduced use of pilot lines. Excluding the effects of the Dolphin Design disposal and the timing of public funding, gross R&D spend was broadly stable year-on-year, underscoring our continued commitment to technology leadership. SG&A expenses declined by EUR 6 million compared with the prior year, driven by lower compensation-related expenses, tighter control of discretionary spending, and the disposal of Dolphin Design. Other operating expenses totaled EUR 46 million and include a EUR 41 million impairment loss on SmartSiC non-current assets, following a downwards revision of business prospects as a result of increasing competition from Chinese players, and a EUR 3 million downwards adjustment to the earnings related to the disposal of Dolphin Design. As a reminder, the SmartSiC program was launched well before 2022, at a time when prices for alternative competing products were significantly higher than they are today. For context, Dolphin Design, acquired in 2018, generated EUR 40 million of operating losses over the period since its acquisition. We also incurred a EUR 17 million one-off non-cash foreign exchange conversion loss in Q1 of our financial year. This loss results from the reevaluation of balance sheet foreign exchange exposures following the depreciation of the U.S. dollar against the euro, with the EUR/USD moving from 1.08 at the end of March 2025 to 1.18 at the end of June 2025. As background, in 2021, the company began contracting euro-denominated loans at the level of our affiliate in Singapore, whose accounts are kept in U.S. dollars. Converting euro-denominated debt into U.S. dollars had been beneficial to our financial results as long as the U.S. dollar was appreciating against the euro, and we repeatedly recorded foreign exchange gains. However, in Q1 of our 2026 fiscal year, the situation reversed, leading to the foreign exchange loss recorded this quarter. Because experiencing significant foreign exchange volatility on our result is clearly not in line with our standards, we took action. As a first step, we implemented appropriate hedging instruments to prevent foreign exchange movements from impacting our financial results. This is now in place. In addition to that, we engaged external advisors to conduct a comprehensive review of our foreign exchange risk management framework, and this review is now well advanced. Now moving to the Free Cash Flow. First, let me note that we have aligned our definition of Free Cash Flow with prevailing market practices. Updated definition incorporates three key changes. First, all tangible and intangible capital expenditures are included in the Free Cash Flow calculation, regardless of how they are financed. Capital expenditures that were previously funded through finance leases and therefore excluded from the CapEx base are now fully taken into account. Second, Free Cash Flow now includes both interest received and interest paid, as well as other financial expenses. Previously, only interest received was taken into account in the Free Cash Flow calculation. Lastly, the Free Cash Flow definition now excludes inorganic CapEx, which incidentally was nil over the period. Operating cash flow was EUR 26 million for the period, down EUR 103 million year-on-year, mainly reflecting lower EBITDA and an increase in working capital driven by higher inventories built ahead of deliveries scheduled in the second half of the year. Working capital resulted in a cash outflow of EUR 57 million compared with an inflow in the prior year. This primarily reflects the seasonal buildup of inventories to support second half deliveries and the reduction in trade payables, partly offset by a decrease in trade receivables following the strong fourth quarter 2025 activity. Capital expenditures were largely directed towards industrial investments, including manufacturing tools for SOI and POI products in Berlin and Singapore, upgrades to our industrial facilities, and targeted IT investments to enhance operational efficiency. This results in EUR 31 million of Free Cash Flow under the new definition. We maintained a moderate leverage ratio with net debt to EBITDA at 0.5x EBITDA at the end of H1 2026. Let me conclude my remarks with a few comments on the balance sheet. As part of the financial discipline mandate issued by Pierre to the teams, we have carried out a restatement of a prior year account. In accordance with IAS 8, we have retrospectively restated consigned raw materials as inventories, with a corresponding amount recorded as trade payables to reflect the transfer of control upon receipt at our sites. This restatement has no impact on the group consolidated income, EBITDA, working capital, Free Cash Flow, or equity. As a result, EUR 37 million of additional inventories and trade payables were recognized as of March 2025. For context, this compares with EUR 31 million of consigned inventories as of September 30, 2025. As of September 30, 2025, cash stood at EUR 808 million, reflecting a temporarily high level of liquidity ahead of a repayment of the EUR 325 million OCEANE 2025 bonds, which took place on October 1st, 2025. Post-OCEANE repayment, net cash was EUR 483 million at closing. As of September 30th, 2025, we are undrawn on the maximum EUR 150 million use of proceeds loan secured from EIB. Our available liquidity post-OCEANE repayment, including our undrawn confirmed revolvers, was EUR 603 million. Financial debt totaled EUR 953 million, up from EUR 782 million at the end of March 2025, reflecting the new EUR 200 million Schuldschein loans and prior to the OCEANE repayment. This brings my prepared remarks to a close. As you can see, we did not shy away from making tough decisions. As I mentioned, our first half performance reflects the mandate to take decisive actions on inventories, strengthen balance sheet discipline, reduce costs, and improve cash conversion. While the initial measures were implemented in the first half, we will accelerate and amplify these actions in the second half and expect to see inventory improvement by year-end. Our focus remains laser-sharp on generating positive Free Cash Flow under the new definition by the end of the fiscal year. At this point, let me pass you on to Pierre to take you to our strategic priorities and guidance. Thank you, Albin. That's very clear. Let's now have a word on our guidance. On revenue, we expect Q3 2026 organic growth in the mid to high single-digit range sequentially. For the end of this year, fiscal year, we expect continued under-shipment in our FD-SOI as we pursue the inventory correction, persistent weakness in Automotive, and a strong momentum in Edge and Cloud AI, supported by sustained demand for Photonics-SOI and FD-SOI. On capital allocation, we remain fully committed to a disciplined and agile investment strategy. We now expect fiscal year 2026 CapEx of around EUR 140 million, down from the EUR 150 million previously indicated and well below the EUR 230 million spent in fiscal year 2025, reflecting our selective approach and focus on cash generation. We continue to leverage the fungibility of our industrial footprint to optimize asset utilization. On financing, we redeemed the EUR 325 million OCEANE 2025 convertible bonds on October 1st and successfully secured new funding. Finally, on profitability, our H2 gross margin will reflect fab unloading with headwinds from mixed price, FX, and lower volumes. Some important data points for profitability: a 10% decline in fab loading resulted in a 300 bps - impact on gross margin. A 5% remove in the euro/dollar rates represents roughly 150 basis points impact on EBITDA and EBIT margin, and our net exposure is about 95% hedged at around 1.10. As well, deliberately reducing production to bring inventories down year- on- year by the end of fiscal year 2026 while moderating our CapEx profile. All actions remain focused on securing a positive Free Cash Flow for the full year. To conclude, H1 2026 was in line with our expectations. We are focusing on what we can control, taking deliberate actions to reduce inventories and applying strict financial discipline to improve our cash generation. Our new client and product-centric organization ensures tighter alignment between innovation, product roadmaps, and customer needs, reinforcing Soitec's readiness to expand into new SOI and beyond SOI markets and applications. We are also progressing on our incubators with strong traction in advanced computing and memory, a large and fast-growing market where Soitec's materials innovation and ability to industrialize rapidly give us a unique position. I have decided to leave the company at the end of March, but I remain fully committed until then to deploying our new organization, accelerating the company's shift towards AI-driven markets and applications, and preparing Soitec for its rebound. We are strengthening the foundation of the company. Our growth potential remains intact in an addressable market set to expand at a double-digit pace. I have full confidence in Soitec's ability to deliver meaningful value. This concludes our remarks. Thank you for your attention. Now, let's please move to the Q&A. Ladies and gentlemen, if you wish to ask a question, please dial pound key five on your telephone keypad. If you wish to withdraw your question, please dial pound key six. The next question comes from Alexander Peterc from Bernstein. Please go ahead. Yes, good morning, and thank you for taking my questions. I'd have three to start with. The first one is, if you could explain what drove the relative resilience of your gross margin and your EBIT margin in the first half, and how we should think about margin sequentially. You do cite headwinds into the second half on unloading charges. Could you quantify them? When you say you have headwinds, is that implying a sequential decline in EBITDA margins in the second half? Second question is on your investment in SmartSiC. Is that now a total write-off, or do you still keep assets on your balance sheet that are attached to SmartSiC? Can you also tell us what you are going to do now with Bernin 4 Is it going to be repurposed? What are you going to do about it? Final question on your situation with your former licensee, Global Wafers. Your press release suggests that the cross-licensing agreement between you and them has been terminated, but it seems to me that they continue to manufacture SOI wafers. They have a big fab being built in Missouri, in the U.S., a 12-inch fab that they describe in their third quarter results as an SOI facility. Does this mean that they have a workaround? Your patents, and if they do it, will others follow? Thank you. Okay, thank you, Alex. What I propose is the question one regarding GM, EBITDA, H1, and H2 to be treated by Albin as well as the first part of your second question of SmartSiC. I will take over the before fulfillment as well as your third question on Global Wafers. Albin, please. Yeah, sure. Alex, of course, what we are doing will have a meaningful impact sequentially and on the full year, on the profitability, very clearly. Like Pierre said, the priority for us is to reduce our inventories. In a market context where revenue is under pressure, it is probably not very easy. What we are doing to achieve our objective is to significantly reduce the loading of our fabs. It is quite mechanical. When revenue is stable or under pressure, if you don't reduce the loading of our fabs, then inventories do not decline, and that wouldn't be consistent with our objectives. Now, when you look at our profitability and our gross profit, I think the two main key drivers of our gross profit are, first, fab loading, which is very important, and second, mix and price. What we will see in H2 is significantly lower fab loading, whereas typically, the loading of a fab would be higher in the second half of the year for the company, but will not be the case this year. We will see lower process costs, and we will see a much lower absorption of these process costs in the inventories. To put things to take answer the question with a different angle, idle costs or under-utilization costs will be significant in H2, and that will weigh on the profitability. Yes, you should expect sequential decline of gross profit, EBIT, and EBITDA in H2. As for your second question, Pierre said that we reviewed downwards prospects on SmartSiC, but still, the product has great technical capabilities, and we are in the process of qualifying with some customers. We do expect some business, and the impairment that we took against our assets reflects our expectations. Overall, what we are doing is maximize the fungibility of our assets to minimize the financial consequences of these prospects being revised downwards. I will take over, if you do not mind, Albin, on the Bernin 4 capacity. First of all, we need to keep in mind that we're going to continue, and we'll have to continue to produce SmartSiC. First of all, because we have five customers today under qualification and pre-advanced qualification, and that is progressing on Automotive applications. Second, we are working on new prospects for new applications in the data centers areas and the lower efficiency, let's say, management. Third, SmartSiC as a roadmap is going to evolve and going to improve because this product is recognized as an excellent product. That's the reason why we believe that despite the postponement in the business plans, this product is going to find several market applications in the future. We need to keep a Bernin 4 product line for SmartSiC. That said, as you know already, B4 is busy with other applications in our process because close to one-third of the footprint of B4 is dedicated for refresh, SOI refresh. That is, as you know, a very important piece in our process, a very important milestone in our process. B4 is already partially used for refresh SOI. Talking about rebounds, B4 is going to be used for the rest of the footprint for any other application, particularly around SOI, if necessary, to produce more of the product we will have to deliver to our customer in the coming years. We are not concerned by the ability to use, as it is already the case, B4 for SmartSiC, refresh SOI, and other SOI production in the near future. Regarding your third question on Global Wafers, it has been said that we terminated our license agreement with Global Wafers. We are today in a transition period of this application. Of course, you can make SOI without using Smart Cut and our dedicated and patented processes. We are going to observe in the future, in the near future, the way Global Wafers is going to produce SOI product in their brand new U.S. factories. We are today in transition and in observation. That's clear. Thank you very much. Welcome, Alex. The next question comes from Sébastien Sztabowicz from Kepler Cheuvreux. Please go ahead. Yeah, hi everyone. Thanks for taking my question. One on the inventory situation, both on RF-SOI at your large F100 customers and also on the Auto and Industrial market. Where are you standing right now in terms of level of inventory? In Mobile, are you still in RF-SOI? Are you still expecting to go back to 11 months of inventory in December, or you are a little bit trending behind this target? The second question is on a follow-up on the first one on fab loading. What was the fab loading in H1 exactly, and where do you see the loading trending in H2 based on the Q3 guide and what you can expect for Q4? The last one is on the OpEx trend for H2 because in H1, you had a big civil impact or tax credit. I do not really know, but the OpEx were quite low. How do you see OpEx moving into the back half of the year? Thank you. Hello, Seb. I propose to take the first question, and I will ask Albin to relay me on the fab loading and the OpEx evolution. Regarding inventories, what we said in July is that the equivalent 8 inches, 200 millimeters wafers in our customers' inventories, so it takes inventories by our customers, were around 2.5 million wafers units. What we are measuring today, what we are observing, is around 2.3 million. We are clearly in a trend of depletion. That is a fact. We want to focus on what we can measure, and this one is measurable. What we see is a continuous depletion of these inventories, meaning that some of the customers are going to go for a minimum level of inventories. We can translate it in the fact, and this is what we already said in July, and we repeat it right now, is that H2 is going to be another semester of depletion to reduce the level of 8 inches wafers inventories equivalent by our customers. We think also that the year 2026 is going to see even further depletion to reach a level that is going to be pre-COVID. What we believe is really to give you a maximum of information on what we can measure, and what we can measure is the evolution of the overall inventories by our customers. 2.5 million equivalent 8 inches July, 2.3 million equivalent 8 inches September, and we are going to give you another points for the next call on February. Albin for fab loading. Sebastian, yes. In Automotive, Pierre, where do you see the need? No, sorry, you are right. You are right. Sorry, I missed the Automotive. I missed the Automotive. For the Automotive, of course, we are not a major player with Power-SOI, but we see what is observed everywhere in the Automotive world, meaning that there are quite big inventories still. Power-SOI is experiencing a big drop this year. We do not see, let's say, a clear rebound for the year after, for calendar 2026. It seems that what we have today engaged with some customers is going to be sufficient for this year and next year, provided the execution of the existing LTAs. We do not see, let's say, a clear rebound in Automotive before 2027 so far on Power-SOI, linked to, of course, a low level of electrification, volumes in units of cars that is not very high. The good news is that we see a shift with more and more qualification by new customers on 300 mm platforms that are going to give another bubble of oxygen to develop Power-SOI beyond 200 mm. Albin? On the fab loading, Sebastian, look, traditionally, our loading is much higher in H2 than what it is in H1. For instance, last year, in H1, our loading was slightly below 60% in H1, and it was in excess of 80% in H2. That was for fiscal year 2025. In the current year, in H1, our loading was a little bit lower than what it was in H1 2025. That was because the decision actions Pierre referred to have been taken in July. There is a time lag to adjust the production planning. The decision we have taken will take full effect in H2. For H2, I'm not going to give you, I'm not going to share our forecast fab loading, but think of it as being slightly lower than what it was in H1 of the current fiscal year. You see that compared to the fab loading in H2 2026 compared to the fab loading in H2 2025 is much, much lower. That is a very significant shift, which, like I said, will have significant impact, temporary impact on our gross profit in H2 2026 fiscal year. Very atypical for Power-SOI tech. As for the OpEx, the first thing to say is that while we are telling you that our profitability will be lower, we do not stay idle, and we have engaged a comprehensive program to reduce our cost drivers. Our OpEx line is not very easy to comprehend in our net income because it is OpEx, what you see is a net of our gross OpEx, net of what has been charged to the process cost. Of course, what we are doing on the production has an impact on the OpEx level that you are seeing. On H1, as you could see, OpEx are down EUR 5 million. For the full year, OpEx will be down as well. In fact, the financial impact of what we are doing on our SG&A is higher than the EUR 5 million that you are seeing, but not fully visible on the P&L because of this charge-out framework that you see that we have in place. The next question comes from François Bouvignies from UBS. Please go ahead. Thank you very much. I have a couple of quick questions. Maybe on this cost-saving program that you are also delivering on top, can you quantify a bit the cost-saving program, what benefit you could bring maybe for 2027 once it's fully implemented, or a bit more timeline and details around this cost-saving at the group level? The gross margin, I mean, what kind of gross margin do you target in terms of range post all these adjustments and inventory correction? How should we think about Soitec's gross margin in the medium term? My last question, if I may, is on POI. I mean, it seems that you have good prospects and the penetration is increasing, but we feel like now your revenues are under pressure because of Asian customers. How should we think about POI trajectory from here? Is it going to recover in the second half of the year, or should that take longer? Thank you. Yeah, on cost savings, we did tell you that we did not shy away from transactions. To give a little bit of color, we have agreed with the unions that a furlough is being put in place across the company, but it includes absolutely everyone, not only the production, but also the innovation, and also the G&A and functional departments. It shows, it testimonizes how resolved we are at driving costs out of a system. That was the first thing. Second thing is that incentive-related and profit-sharing-related expenses will be lower and will reflect our results. The impact of this is significant and is above EUR 5 million savings that you see in H1. The third thing that comes on top of that is that there is frugality which is being put in place under the direction of Pierre across the company. All in all, we expect the savings to be significant on the year. As for fiscal year 2027, we will see lasting impact of these savings, but we do not want to hamper the potential of the company for a recovery by doing unappropriate cuts into our resources. It is too early for us to guide on 2027, obviously. Sure. François, on POI, to take your question, POI experienced a very, very intense growth last year to equip our Asian, particularly Chinese customers, and that really made our POI as a standard in this area. We see clearly a relay coming from Western world customers for flagship smartphones. This year being, as we already said, a transition between these two, let us say, these two moves and two shifts of, I would like to say, continents. We clearly see, and we continue to see, a 20% growth CAGR on POI because we see more and more adoptions in more and more customers + 50 may be flattish for this fiscal year, but we see over the years, clearly, a strong growth around 20% CAGR and more and more adoption. On the gross margin? Thank you very much. On the gross margin potential for the company, I mean, what kind of target you? Anything you can give here? I'm trying to—I will try to answer this question ahead with modeling. The first thing is that we don't want anymore to guide on the gross margin. The reason for that is not because we do not have visibility on what the gross margin will be, but we do not want our action on the inventory reduction to be hampered or constrained by the guidance we gave to the market on the gross margin. We do not guide. Nevertheless, you need to model what our gross margin will be and will help you insofar as we can. A few things for you to know. When you look at our cost, of course, raw material cost is 100% variable, so needless to elaborate on this. When you look at our direct manufacturing cost and indirect manufacturing cost, I would say that around 30% are variable, 70% are fixed. If you combine these manufacturing costs with the raw material, it is one-third fixed, two-thirds variable. To go a bit further helping you with the modeling, when you look at our cost split in terms of cash and non-cash, that may be useful because we fully realize how difficult it is to model. I would say that our manufacturing costs are approximately 70% - cash and 30% + non-cash. I hope that helps. Very much. Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. Please limit yourself to two questions. The next question comes from Jakob Bluestone from BNP Paribas Exane. Please go ahead. Great. Thanks for taking my question, guys. Firstly, you made a comment, I think it was part of the SmartSiC write-down around increasing competition from Chinese players. I just wanted to clarify, is that just purely for SmartSiC, or are you seeing broader competition emerge from Chinese players? If you can maybe just clarify that comment. Secondly, I think you mentioned further inventory destocking in FY 2027. If you can maybe put that in the context of where you see the 2.3 million kind of going next year, and is that your expectation that that's the bottom? What are your thoughts around FY2027 in the context of the comments you made on inventories? Okay, Jakob, then on the first question, yeah, the very fierce competition coming from Mono SiC has impacted our SmartSiC, let's say, initial plan that was built in 2021, and we revised it to really bring SmartSiC as a premium product that fits with the five customers' expectations we have today under qualification. Of course, competition is everywhere. So far, so quite good because we are maintaining our market shares everywhere, including in China. As you know, if we look at just RF-SOI, that used to be our Mono product a few years ago, and we're still, of course, observing cautiously this market. We are proceeding with many teardowns of smartphones coming from any integrators, any OEM, and we clearly see that SOI is a standard first for particularly radio front-end and more and more for filters with our POI solutions. In many cases, it is a Soitec solution. Our market shares today are, let's say, protected because we continue to innovate, because we are able to deliver in terms of quality to our customers wherever they are, including in China. That said, we are not naive, and we are very picky in the observations on any players trying to promote SOI-like solutions. Today's impact we have clearly disclosed concerns Mono SiC, particular competition that is changing the trajectory of SmartSiC. If we look at the evolution of the 2.3 million 8-inch equivalent inventory Soitec by customers, we are clearly going to continue to undership. It means that the trend of depletion is going to continue semester after semester for sure. In H2, we are going to undership. We do believe that even further, we are going to undership in the year 2026. We don't know at the end of the day what's going to be the objective of each of our customers. It's going to depend on their strategy of inventories, but we are taking cautious assumptions, meaning that we do believe that many of them, large part of our customers, are going to reach the pre-COVID level of inventories. We prefer to have this cautiousness. Undershipment, depletion of the inventories, it is highly probable the 2.3 million to decline semester after semester till at minimum end of year 2026. Thank you. The next question comes from Emmanuel Matot from ODDO BHF. Please go ahead. Hello, good morning, gentlemen. I have two remaining questions, maybe for Albin. First, what do you target in terms of inventories in the balance sheet? What normative level would be great given the current visibility you have for the business? I mean, maybe an indication as a percentage of your sales would make sense. Second, has there been any progress in the tax adjustment procedure with the French authorities? Thank you very much. Very good questions, Emmanuel. The company said in the previous year, I wasn't there, that the normal working capital requirement as a percentage of revenue should be within a range of 30%-40%. I fully subscribe to what has been said. We will not guide for now in terms of components of our working capital requirement, but I do confirm that 30%-40% is something which is a level which is adequate, which should lead you to the conclusion that there is much cash generation opportunities ahead of us. Because obviously, as things stand today, we are at a much higher level. That is for the working capital requirement level. As for the tax reassessment, we are done, as you know, on responding to the request of the tax authorities. We did not receive an answer to our response yet. We will. I will not forget. In the meantime, we have strengthened our defense, worked a lot with independent experts. I could not say more than that, but it should bring you some level of confidence on this. Okay. Thank you very much, Albert. The next question comes from Craig McDowell from JP Morgan. Please go ahead. Hi, good morning. Thanks very much for taking my question. Just the first one on pricing. You've talked about pricing in the context of gross margin. I'm wondering whether you can translate that back to what that's doing to your top line. Is this pricing pressure, more negative pricing pressure on particular products, or is it particular customers? Any commentary or color on pricing impacting your sales would be helpful. The second question, just appreciate your thoughts at this early stage on the merger between Qorvo and Skyworks. Understand both to be your customers. Just if you give any thoughts on what that might mean for both pricing, but also how that might impact your sort of channel inventory worked on. Presumably, they'll look at some kind of synergy on inventory if they do merge. Thank you. Okay. On the pricing fragment, then what we can see is that, of course, there are continuous pressures depending on the product. Overall, we are in a low single-digit decrease and quite limited because we are also promoting more and more high and added value products. We are having a roadmap, a product that is increasing the overall value, and we are protecting, thanks to a good mix and a better mix, the level of prices to compensate the pressures we are getting. Of course, as a kind of parallel of this pressure that we are limiting at the end of the day, we are benefiting from lower prices from bulk providers thanks to the fierce competitions we have today. Of course, we continue to have this discipline and to invest in our existing roadmaps, to invest in our innovation and R&D to keep higher the value and the prices of our product and putting on the market new products and new features. I will not comment that much on the Qorvo Skyworks, let's say, ongoing project of merger. What we can tell you is that these two companies are customers, but complementary customers. We do not see any synergies and potentially rather synergies. It is going to be a long process, and we will have to, I am sure, comment later when it is completed. Thank you very much. This concludes the question and answer session. I would like to hand the program back to Pierre Barnabé for any closing comments. Thank you all for following our H126 analyst call and for the quality of your questions this morning. The next date in our agenda will be the release of our Q326 revenue on February 4 after market close. In the meantime, we will be very happy to host you in Shanghai on November 25, where we will be hosting our first Soitec China Day with key industry leaders and customers from the China SOI ecosystems. This ends our call for today.