Ladies and gentlemen, welcome to the STMicroelectronics 3rd Quarter 2024 earnings release conference call and live webcast. I am Moira, the Chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference has been recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jean-Marc Chery, President and CEO. Please go ahead. Thank you, Moira, and good morning, everyone. Before starting this call, I am very pleased to announce the appointment of Jerome Ramel as Executive Vice President, Corporate Development and Integrated External Communication. Jerome has been associated with our company for many years as a recognized European semiconductor analyst and has had 24 years of experience in senior roles in various finance institutions. He brings in-depth knowledge of the semiconductor industry and capital markets, which will be extremely beneficial to support the company in the way we interface with investors, analysts, and external stakeholders. I would now like to briefly turn the call over to Jerome. Thank you, Jean-Marc, and good morning. I'm very pleased to join ST and excited by this new challenge. Thank you, everyone, for joining our Third Quarter 2024 financial result conference call. Hosting the call today is Jean-Marc Chery, ST President and Chief Executive Officer. Joining Jean-Marc on the call today are Lorenzo Grandi, President and CFO, and Marco Cassis, President Analog, Power and Discrete, MEMS and Sensor Group, and Head of STMicro Strategy, System Research and Application and Innovation Office. This live webcast and presentation material can be accessed on ST Investor Relations website. A replay will be available shortly after the conclusion of this call. This call will include forward-looking statements that involve risk factors that could cause ST results to differ materially from management expectations and plans. We encourage you to review the Safe Harbor statement contained in the press release that was issued with the result this morning and also in STM's most recent regulatory filing for a full description of these risk factors. Also, to ensure all participants have an opportunity to ask questions during the Q&A session, please limit yourself to one question and a brief follow-up. Now I'd like to turn the call over to Jean-Marc Chery, ST President and CEO. Thank you, Jerome. Let me begin with some opening comments, starting with Q3. Third Quarter net revenues of $3.25 billion were in line with the midpoint of our business outlook range. Compared to our expectations, revenues were higher in personal electronics, declined less in industrial, and were lower in automotive. Q3 gross margin of 37.8% was broadly in line with guidance. Q3 net revenues decreased 26.6% year over year, mainly driven by a decline in industrial and, to a lesser extent, in automotive. Looking at our year-over-year performance, gross margin decreased to 37.8% from 47.6%, operating margin decreased to 11.7% from 28%, and net income came in at $351 million. On a sequential basis, net revenues increased 0.6%. For the nine-month period, net revenues were down 23.5% year over year to $9.95 billion, decreasing across all reportable segments, and particularly in microcontrollers, which is impacted by the continuing weakness in the industrial market. We reported gross margin of 39.9%, operating margin of 13.1%, and net income of $1.22 billion. During the quarter, customer order bookings were slightly up versus Q2, but were below our expectation. This reflected a continuing delayed recovery in industrial and a further deterioration in automotive. As a result, we now anticipate Q4 2024 revenues at the low end of the range previously indicated and well below normal seasonality in Q1 2025. For Q4 2024, our fourth quarter business outlook is for net revenues of about $3.32 billion at the midpoint, declining year over year by 22.4% and increasing sequentially by 2.2%. Gross margin is expected to be about 38%. For the full year 2024, the midpoint of our Q4 guidance translates into full year 2024 revenues of about $13.27 billion, representing a 23.2% decrease year over year at the low end of the range indicated in the previous quarter, with a gross margin slightly below that provided in that indication. For Q1 2025, based on our current customer order backlog and demand visibility, we anticipate a revenue decline between Q4 2024 and Q1 2025 well above normal seasonality. I would like to highlight that today we have also announced the launch of a new company-wide program to reshape our manufacturing footprint, accelerating our wafer fab capacity transition to 300mm silicon and 200mm silicon carbide, and resizing our global cost base. Now, I will move to a detailed review of the third quarter. By segment on a year-over-year basis, analog products, MEMS, and sensors was down 13.3%, mainly due to the decrease in imaging and in analog. Power and discrete products decreased 18.4%, with a decline in both power and discrete products. Microcontrollers revenues declined 43.4%, mainly due to general purpose microcontrollers. Both power and general purpose microcontrollers revenue declines were largely driven by industrial. Digital ICs and radio frequency products declined 29.7%, mainly due to headsets and infotainment. By end market, industrial declined by more than 50%, automotive by about 18%, personal electronics by about 9%, and communication equipment and computer peripherals by about 5%. Year-over-year, sales to OEM decreased 17.5% and by 45.4% to distribution. Overall, Q3 net revenues increased 0.6% sequentially, with an increase of 1.7% in analog products, MEMS and sensors, 7.9% in power and discrete products, and 3.6% in microcontrollers, while digital ICs and radio frequency products decreased 17.4%. By end market, industrial was down about 12% sequentially, automotive flat, personal electronics up about 20%, and communication equipment and computer peripherals down about 8%. Gross profit was $1.23 billion, decreasing 41.8% year over year. Gross margin decreased to 37.8% compared to 47.6% in the same quarter last year. The decrease was mainly due to product mix and, to a lesser extent, to sales price and higher unused capacity charges. Operating margin was 11.7% compared to 28% in the year-over-year period. On a year-over-year basis, Q3 net income decreased around 68% to $351 million compared to $1.09 billion in the year-over-year quarter. Earnings per diluted share decreased to $0.37 compared to $1.16. Net cash from operating activities decreased to $723 million in Q3 versus $1.88 billion in the year-ago quarter. Net CapEx in the 3rd quarter was $565 million compared to $1.15 billion in the year-ago quarter. Free cash flow was $136 million compared to $707 million in the year-ago quarter. Inventory at the end of the 3rd quarter was $2.88 billion compared to the $2.87 billion in the year-ago quarter. Days sales of inventories at quarter end were 130 days, similar to the previous quarter, and up compared to the 114 days in the year-ago quarter. During the 3rd quarter, ST paid $80 million of cash dividends to stockholders and executed a $92 million share buyback under our current share repurchase program. ST's net financial position of $3.18 billion as of September 28, 2024, reflected total liquidity of $6.3 billion and a total financial debt of $3.12 billion. I will now go through a short update on some of our strategic focus areas. In automotive, we saw some further deterioration in customer backlog and order entry during the third quarter. In our view, this reflects a change in the plans of our customers with some shift from full battery electric to hybrid and from premium to economy vehicles, as well as downsizing production at car makers to control inventories. However, we do not anticipate significant change in the long-term electric vehicle adoption by consumers, and we assume their concerns regarding residual value, charging stations, and price will gradually alleviate. During the quarter, we continued to execute our strategy on car electrification. We introduced our fourth generation of silicon carbide MOSFET technology. This brings new benchmarks in power efficiency, power density, and robustness, and is particularly optimized for traction inverters in electric vehicles. We had multiple wins with both silicon carbide and silicon devices and modules for new traction inverter and onboard charger design. We also won additional business with our automotive smart power technologies for electrical vehicle battery and power management systems, as well as our smart fuse solutions. In car digitalization, we gained further traction with our portfolio of automotive microcontrollers. Our Stellar microcontroller was selected by a major European car maker in a new platform for traction inverter and onboard charger management. Another significant Stellar win was with a Japanese Tier 1 as part of an electrification platform design that integrates multiple functions in a single MCU. This approach is generally called X-in-1 and is an important trend for next generation of car architectures. A further win saw Stellar chosen for an active safety application in a new electrical vehicle platform from an emerging player. We also continue to have important design wins in traditional applications like braking, where we are the leader in smart power. In sensors, we had a number of wins with our automotive-grade motion MEMS for smart keys, telematics units, and for a new innovative rotating car display. Our design win activity here continues to position ST well to leverage the structured growth in this key market. In industrial, we are seeing continuing inventory correction at OEMs and along the value chain, preventing any significant recovery in semiconductor demand. In this context, we continue to work with customers to design in today's products while investing in R&D to create the next generation of solutions. We had design wins across a broad range of applications for our power and analog portfolio. This included a design win with silicon and silicon carbide products for a leading provider of power supply units for AI and server infrastructure, a fast-growing application requiring very high power efficiency. In embedded processing, our STM32 microcontrollers continue to be the most familiar MCUs for developers. We have a recognized software ecosystem with over 1.2 million unique users, growing more than 30% year-over-year, and one of the fastest-growing and most active microcontroller technical communities, with over 500,000 unique visitors each month and 40% year-over-year growth. This growth in STM32 adoption will position ST to capitalize effectively on the next industrial market upcycle. Additionally, we have over 50,000 active development projects on ST's artificial intelligence tools. This activity has been also boosted by our ST Edge AI suite that we launched at the end of the last quarter. During Q3, we also announced a new strategic collaboration with Qualcomm Technologies for the next generation of industrial and consumer IoT solutions. Together, we will integrate Qualcomm's leading wireless connectivity technologies with our STM32 microcontroller ecosystem. We will start with a Wi-Fi Bluetooth Thread Combo system on the chip. Thanks to this, developers will enjoy seamless connectivity software integration into STM32 microcontrollers. Moving now to the other two end markets, personal electronics was slightly better than expected, and communication equipment and computer peripherals were in line with expectations for all our engaged customer programs. To conclude on this Q3 update, I would like to mention a new step in our company organization. Since the beginning of 2024, ST has made significant changes in the way it is structured and operates, including the reorganization of its product group. Since October 1, 2024, Lorenzo Grandi, President and CFO, has taken additional responsibilities, with the perimeter now also covering supply chain, corporate development, and integrated external communication, in addition to finance, global procurement, digital transformation, and information technology, enterprise risk management, and resilience. The company's executive committee remains unchanged and continues to report to me as President and CEO. Now, let's move to our Q4 2024 financial outlook and our plans for the full year 2024. For Q4, we expect net revenues of about $3.32 billion at the midpoint, representing a year-over-year decline of 22.4% and a sequential growth of 2.2%. Q4 gross margin is expected to be about 38% at the midpoint, impacted by about 400 basis points of unused capacity charges. For 2024, our Q4 guidance at the midpoint translates into 2024 net revenues of about $13.27 billion. This represents a decrease of about 23.2% year-over-year in the low end of the range indicated in the previous quarter. Within this guidance, we expect a gross margin of about 39.4%, impacted about 290 basis points of unused capacity charges at the midpoint of our 2024 full year indications. This $13.27 billion is in the low end of the revenue range indicated in the previous quarter. The difference compared with the midpoint of the range relates mainly to lower revenues in automotive and, to a lesser extent, lower revenues in industrial, partially offset by the slightly better revenues in personal electronics. We confirmed our 2024 net CapEx plan of about $2.5 billion. For Q1 2025, at this time of the year, we usually do not comment two quarters ahead. But based on our current customer backlog and order entry dynamics, we anticipate a revenue decline between Q4 2024 and Q1 2025 well above normal seasonality. Fair to say this also includes a significant lower number of calendar days in Q1 2025 versus Q4 2024, a 6% sequential decrease, which is the highest sequential decrease in the number of days in the last three years. Finally, today, we have announced the launch of a new company-wide program to reshape our manufacturing footprint. We are accelerating our wafer fab 300 transition in Agrate and Crolles, in particular in Agrate, reaching a scale of about 4,000 wafers per week exiting 2026. In Catania, in silicon carbide, we will accelerate our transition to 200mm. Moreover, we will resize our global cost base. This program should result in strengthening our capability to grow our revenue, but with improved operating efficiencies, resulting in annual cost savings in the high triple-digit million dollar range exiting 2027. To conclude, as I said last quarter, the current market cycle dynamics, coupled with the ongoing transformation in the automotive and industrial end markets, are bringing both opportunities and challenges in the short, medium, and long term. This is true for ST and for our customers equally. In the short to medium term, we are adapting our operating plans to this situation, and we are launching our company-wide reshaping and resizing program while continuing to invest in innovation and our strategic manufacturing initiatives. Medium to long term, we continue to be convinced that this will provide the basis for our sustainable growth ambitions and for delivering value to our stakeholders. We look forward to updating you on our strategy at our Capital Markets Day on November 20, either in person in Paris or via our live webcast. Thank you for your attention, and we are now ready to answer your questions. We will now begin the question and answer session. Anyone who wishes to ask a question or make a comment may press Star and One on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press Star and Two. Participants are requested to use only handsets while asking a question. Anyone who has a question or a comment may press Star and One at this time. The first question is from François-Xavier Bouvignies from UBS. Please go ahead. Thank you very much. Jean-Marc, I wanted to come back to Q1 comments. Obviously, you mentioned less calendar days, but the sharp decline in Q1, could you highlight maybe some drivers? And importantly, it is the first quarter of the calendar year, which is the pricing reset. And you know that we have a lot of fear on the market right now, especially given the oversupply and the demand environment, that pricing could fall significantly into next year. How should we think about that as negotiations started and you guided a weaker Q1? What is the pricing impact here? And how should we think about next year's pricing environment? On the pricing, I will let Lorenzo comment, but here is not a warning about pricing. Absolutely not. It's more a warning about the customer backlog and the order dynamic and the fact that, you know that in Q1, we have released the usual seasonality of personal electronics. And including on personal electronics, potentially this year could be worse. Unfortunately, it will be significantly this year amplified by the fact that the quarter will be shorter, 88 days compared to 94 days in Q4. This impact also significantly is a run rate of the revenue. Usually, we have, let's say, a low hand double-digit sequential growth. This year will be amplified by the 6%. It's more related to the customer order dynamics and backlog, maybe worse specifically on personal electronics, rather than something triggered by a price. Lorenzo, you want to comment? Yes. Good morning, everybody. You know that when we look at the price dynamic today in this quarter, substantially the pricing is similar to what was expected, I would say, low single-digit decline. But next year, as was Jean-Marc remarking, we don't see a dramatic price environment. Yes, it's a little bit, let's say, there is a little bit more pressure than this year, but we still are talking about mid to single-digit decline overall. So, of course, we are in the negotiation phase now, but as I said, overall, for the company, in average, we see something that is more in the mid single-digit that is a little bit higher than this year, but not a dramatically changing. Thank you, François Xavier. Thank you very much. Do you have any follow-up? Follow-up or just one? Yeah? Follow-up, yeah. Yeah. Yeah, the follow-up would be on the microcontroller side. I mean, obviously, it has been a big decline through the year. I mean, Q4 might be also declining a lot. I was wondering, where are you inventory in the channel? I mean, where are you in this inventory correction versus your normal level? Where do you think you should be? Do you see any light in the tunnel here with regard to microcontrollers industrial, particularly? For General Purpose, it is clear that it is a very significant decrease this year, above minus 50% in 2024 versus 2023. We have to say that about more than half of this decrease for microcontrollers is really connected to an inventory correction. The point is that this inventory correction is lasting more than expected because the demand of our customer, moving along the year was also decreasing. We also assess that 30% to 35% of the decrease of microcontrollers is ultimately linked to the handset weakening of the customer, of our customer. It is true that we have lost some market share in China, linked to the fact that during the shortage of semiconductors, we squeezed some Chinese companies to support automotive and other big OEM and industrial. We squeezed distribution in China in 2021 and 2022, and now we have lost this market share. About the inventory correction in the channel, it is not decreasing at the expected speed. And why? Because decreasing our POP, we didn't see, unfortunately, globally, I'm speaking, there is a value dynamic by region. The POS is not behaving sufficiently to decrease inventory faster. We expect that in Q1, the inventory correction will continue, especially in Asia, amplified by the Chinese New Year vacation impact. It should continue to decrease a bit in Q2. Discussing with our distributor, we should expect a normalization in H2 2025. This is where we are today. Thanks a lot. Thank you. Next question, please, Moira. The next question is from Sandeep Deshpande from JPMorgan. Please go ahead. Hi. Thanks for letting me on. I have a question on the automotive market. In the first half of the year, you saw a slowdown from your big EV customer, as well as you saw a slowdown in Digital Mobile. Now you're saying in the fourth quarter, you're seeing further slowdown. Can you quantify where this slowdown is occurring? Is it in legacy parts? Is it in silicon carbide? Where is this slowdown occurring in the automotive market? Associated with this slowdown, are you seeing the tier one suppliers reducing their inventories now, given that they have been holding such high levels of inventory in the automotive supply chain? Are we now seeing that correction in the automotive supply chain in terms of inventory? Is that one of the reasons why, of course, there's the consumer angle as well, but on the personal electronics angle? Is that continuing into the first quarter of the year? I have one quick follow-up. Thank you. If you don't mind, I will share the answer with Marco Cassis. Yes, Sandeep. Good morning. Yes, what you say is correct. Let me give you some color. First of all, the reduction in automotive is related with an overall reduction in terms of light vehicles. 2024 will be lower than 2023. Going specifically on battery-operated cars, we see a reduction in the battery-operated cars, giving space to an increase in the hybrids and plug-in hybrids. We are able to quantify this decrease in terms of battery-operated car in the range of 15%, not equally distributed, much less in China and more in Europe and in the US. Clearly, this has an impact considering that battery-operated cars have a higher content in terms of silicon and has, of course, an impact also on the silicon carbide. We believe, and this is what analysts are saying, is that 2025 will be still not growing the overall number of light vehicles. It's a situation that will proceed during 2025, at least for the first half. Clearly, this has created, of course, probably some excess of inventory at car makers and along the supply chain, which has an impact, as we have seen in our overall numbers. Now, say that if we extend a little bit the time horizon, we do believe that electrification is going to come because it's linked to factors that will be in place. It's going to come at a lower pace than what we were expecting. 2025 first half will be not easy. As you said, yes, it's a combination of the factors that we are highlighting. I hope that this answers your question. Thank you. You mentioned earlier on the pricing environment at the moment. Can you just comment on what you're seeing in terms of the automotive space in particular, what you're hearing in the current negotiations that are happening for pricing into next year, given how difficult the environment is for your customers and given also that they are holding quite high levels of inventory? Lorenzo, you take the point. Negotiations are ongoing. For sure, this year, the price pressure in automotive was there, but quite mild. I would say that at the end, it was in the low single digit. It's true that starting negotiations, we see some more price pressure in automotive than the one that we see in 2024. Of course, as you can imagine, it's different with respect to the various customers. I would say that assuming that at the end, the negotiations that are ongoing will end like the one that we are close already, we may say that in automotive now, the price pressure will be mid to single digit, let's say, something in that range. Then we may have some more and less, but at the end, this is what we see today. Maybe if I can complement, it is clear that also it has been assessed in the perspective of a regional view. It is clear that today is what's happening in China, especially on the fact that Chinese car makers really have excess of capacity. The price pressure in China, specifically around the ecosystem of passenger vehicle or light vehicle, is definitively high. This is a different behavior compared to the Western world or the region. Maybe if I can add just the last comment here, Sandeep. What we see, let's say, yes, this pricing environment, and then you have also to consider in terms of capacity reservation fees, let's say, in 2025, there will be a further reduction because clearly, let's say, it's acknowledged by the market that now capacity is available. This will be an element that will be there definitely in 2025. Thank you so much. Thank you, Sandeep. Moira, next question, please. The next question is from Lee Simpson from MS. Please go ahead. Great. Good morning, everyone. Thanks for squeezing me in. I'm just wanting to ask around the R&D number, I think $492 million. Look to slow that gap down maybe about 10% relative to some of the expectations out there. I'm just trying to get a sense for, is this a sustainable level? Do we think this is the right level going into next year? And whether or not related to this, there was any change perhaps in the spend structure around silicon carbide as a strategy? Thanks. No, I would say that when we look at the expenses in the quarter, in Q3, you have to keep in mind that there are a few elements. First of all, the expenses came lower than expected for a few reasons. One reason is we know is impact of the vacation in Europe. This was expected. We're a little bit higher than what we were modeling entering the quarter, but this is not the main reason. There are one item, one-time item in the cost of labor that was decreasing our expenses, and this was not expected in respect to entering the quarter. But then there is also some more control during the quarter on our discretionary expenses. So that's the combination of these elements combined together that are driving our expenses lower. It's not something structural. We have not, especially when we look at our R&D, changed our effort in terms of R&D. So we continue to invest. We continue to invest in the silicon carbide, and we continue to invest in the development of our products. It's true that the new organization is bringing some efficiency in our ability to follow our programs and somehow be more efficient in the way that we drive our expenses. This is also driven by the fact that we have reorganized our groups in a way that today, we are avoiding overlaps between the activity in the groups. This is a portion also that is impacting our ability to have a better control of our expenses. Great. Thanks, Lorenzo. Very clear. Really, if I could just turn to, I think somewhere in the commentary you mentioned wins in AI servers. Just trying to understand which part of the server power semis architecture are you addressing. There's three major parts with power supply units, voltage handling across the rack, and of course, the delivery to accelerators or GPUs themselves. Is there a specific area where you're winning? Could you tell us anything about the architecture of the power semis that you're using? Thanks. Thank you. Obviously, I will pass the question to Marco Cassis. He's now in charge of this fantastic product line. Yeah. Good morning. Now, we are going to address all the three main blocks. I'm speaking about the power supply units. I'm speaking about the down to the 48 volt or whatever and down to drive the GPUs, which means we will address through silicon carbide, high voltage MOSFET, GaN, and phase change voltage regulators and SPS. The SPS is the low voltage MOS, which is the part in which we are now really focusing. It will take a little bit of time clearly to come with a strong offer, but our offer is going to go through all the chain because we do believe we will have the portfolio, and we have the portfolio, and we have the capabilities to serve all the content inside the AI servers. Considering the maturity of the products, the first big target is going to be on the power supply units and down the voltage and the scale through the AI servers architecture. That's very clear. Thank you very much. Thank you, Lee. Moira, next question, please. The next question is from Didier Scemama from Bank of America. Please go ahead. Good morning and congrats for your appointment. I've got a couple of questions. First, on the Q1 commentary, should we assume that your gross margins are going to take another leg down? Because obviously your volumes are going to be lower and you're going to lower your factory utilization to lower your inventories on the balance sheet that are lingering at a high level. That's my first question. I've got a follow-up. Thank you. You see that in this quarter, our, let's say, the impact of the unloading charges is very material because it's impacting our gross margin by 400 basis points. We start already, let's say, to take some measures in front of a weaker Q1, as we said before. Let's say this will be well below our normal seasonality. There is the impact of the calendar, but there is also the impact on the visibility on the backlog. But for sure, Q1, yes, we do expect early at this stage to give a precise guidance, but definitely will be a difficult quarter in terms of gross margin, also because we will continue to have a significant impact for the unloading. We wanted to keep under control our inventory, and this is something that for sure, let's say, will have an impact in Q1. Thank you. It is clear that our manufacturing activity in Q1 will not follow the usual activity profile. But in Q4, we have to follow a strict process of discussion with representatives of personnel and people to plan this on Q1. But again, we will come back later on it. Makes sense. On the restructuring program, thank you for highlighting the fab sort of resizing and perhaps OPEX cutting. I think one of the questions we got this morning was, is the high triple digit millions of dollars a net number or is it a gross number? This is the expected savings that we will have as a combination of costs and expenses. Of course, this is not including the possible cost related to severance or something cost like that. Because it's a gross number. I mean, okay. Maybe just a quick one. Last time, Jean-Marc asked you if you were still looking at M&A. You said that you're actively looking. So can you just give us an update on that? Thank you. No, but we continue to operate within our organic growth strategy with bolt-on acquisition. We have activity in our radar screen, which are pretty active today. So we'll come back to you as soon as we conclude on it. Thank you. Thank you, Didier. Moira, next question, please. The next question is from John Marco Bonaccina from Banca Akros. Please go ahead. Yes, good morning. Couple of questions for me. The first one is if you can specify what is the one-time charge related to your cost-saving plan. The second one is more strategic mid-term, given that we are seeing, especially in Europe, some change in the platform and factory closures. So what makes you confident that in the mid to long term, we will see still a significant ramp-up in the penetration of EVs? Thank you. Good morning. You refer the one time that I was referring for Q3 or something different? Sorry, I'm not sure. No, assuming you will have, let's say, $800 million of cost-saving in 2027, assuming that this will be partially related to, let's say, lower headcount, how much will be the one-time cost associated with the cost-saving plan? I would say that at this stage is a little bit early to enter in those kind of details. Let's say, of course, these kind of things, I think, will be better clarified moving ahead on our capital market day and entering, let's say, more detail on this plan. If you don't mind, at this stage, I would prefer, let's say. Okay? Okay. For the second question, if I want to simplify, it is clear that for any semiconductor company to continuously improve its competitiveness, and especially facing an ultra-competitive marketplace that we are facing now, due among many reasons, some capacity that has been triggered by government incentives here and there, everywhere. And unfortunately, as well, with some trade constraints, the only way is to increase the buffer size and to shrink the product. But then, you know that when the industry is facing and our customers are facing this kind of down cycle, each time, the exit period is asking for new products and new technology. So that's the reason why for ST, there is no other option to accelerate our 300 millimeter. The reason why I have mentioned AGRATE specifically, and we have to accelerate to reach as fast as we can the right scale in order to have benefits of the cost of goods sold above this 300 millimeter. I would like to recall that basically the benefits we can expect are moving to 300 millimeter, it at least 20% productivity increase. But directionally, this is ST, what ST has engaged. Of course, we will update you timely with this program, because we have defined the critical milestone. Of course, we will give more color at our market day next November 20th. Thank you. Thank you, Jean-Marco. Moira, next question, please. The next question is from Stephane Houri from ODDO BHF. Please go ahead. Yes, hello, good morning, everyone. You have described the change in dynamic of the EV market. Can you please update us on your vision, on your targets for silicon carbide for this year and the following years? Thank you. Okay. Thank you for the question. Clearly, considering the change that we have seen in terms of dynamics, specifically the fact that fully battery-operated electric vehicles has decreased compared to what was the expectation in 2023. This reduction is going through linearly in the next years. This has an impact for us in 2024 that, as you remember, we're expecting to be in the range of $1.3 billion. Now we expect to land the year at $1.15 billion to $1.2 billion. So reflecting this change in terms of mix in terms of electrification. Now, we do believe that the trends going forward, so if we expand the horizon up to 2030, we believe that the trend for electrification of mobility remains. As I was saying before, if we go outside, we'll see also opportunity in AI servers or industrial for what is related to silicon carbide. We still believe that our ambition to go over the $5 billion by 2030 is there because this is linked to market share that we do expect to be in the range between 30% to 33%. Yes, there is a slowdown, but the long-term ambition towards 2030 is remaining at the level that we were expecting. I hope that this answers your question. Well, in fact, you also talked about 2025. I think you were targeting $2 billion, but I think you decreased this target to $1.8 billion. That was also the question. What do you see for next year? We no longer expect to grow the $500 million, but due to the short-term uncertainty, we will provide better visibility at a later stage. Now it's too early to further comment. Okay. Thank you very much. If I may, I have a follow-up. It's a specific question on the evolution of the tax environment, notably in France, where you've got significant operations. Have you thought already about the potential impact on the evolution of your tax rate of the new tax increase in France coming? As you know, in these kind of things, it's always a little bit difficult because there are many ingredients that are combining together. Of course, it depends also how the distribution of the profit of the companies is among the various countries' jurisdiction. Definitely, yes. You see that today, our tax rate will be in the range of 17%. We deem that more or less the impact that we may have if the law is enacted, as has been announced. We need also to look in detail how this will happen, but we may have an impact that will be below 1 percentage point on our tax rate. Okay. That's very clear. Thank you very much. Thank you, Stephan. We have time for a very quick one. The next question is from Joshua Buchalter from TD Cowen. Please go ahead. Hey, guys. Thank you for squeezing me in. I wanted to ask about the accelerated move to 300 millimeter and the cost cutting. How should we think about the implications to CapEx from this change? Are you guys shutting down more quickly 200 millimeter facilities? In the short to medium term, does this bring your CapEx up or should it lower it? Thank you. We will reduce our CapEx next year and on the next three-year planning horizon. But it is, of course, something that we will disclose during our capital market day based on the market evolution and our capability to grow over the market perspective. But yes, of course, we will decrease our CapEx. If I may add, Jean-Marc, but you have to think to consider that the big infrastructure to go to 300 millimeter are already there. The effort has been done. We have already put in place the infrastructure. So it means that, yes, of course, we will have some CapEx, but we'll be lower in respect to what has been in the past. The second, as we are accurate on this story, I would like to highlight that the concept of our buffer fab of silicon carbide 200 millimeter in Catania is copy-paste of the concept of crawl. It means we can increase by gateway. We don't need to build a big infrastructure to grow. We are building by module. This is really a smart way to adapt ourselves to the market condition and investing in due time at the right time, but never in excess. Thank you, Josh. I think this is ending our call for this quarter. Thank you very much, all of you, for being there. We remain here at your disposal should you need any follow-up questions. Sorry for the ones that didn't have time to ask questions here. Thank you very much. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.