Welcome to the MediaTek 2023 fourth quarter investors conference call. Financial results and presentations for today's call are available on Investor section of the company website at www.mediatek.com. And now, I would like to turn the call over to Ms. Jessie Wang, the Deputy Director of Investor Relations. Ms. Wang, please proceed. Good afternoon, everyone. Joining us today are Dr. Rick Tsai, MediaTek CEO, and Mr. David Ku, MediaTek CFO. Mr. Ku will report our fourth quarter results, and then Dr. Tsai will provide operational remarks. After that, we will open for Q&A. As a reminder, today's presentation will provide forward-looking statements based on our current expectations. The statements are subject to various risks and factors, which may cause the actual results materially different from the statements. The presentation material supplements our non-GAAP financial measures. Earnings distribution will be made in accordance with financial statements based on IFRS. For details, please refer to the safe harbor statement in our presentation slides. In addition, all content provided in this teleconference is for your reference only, not intended for investment advice. Neither MediaTek nor any of the independent providers is responsible for any actions taken in reliance on content provided in today's call. Now, I'd like to turn the call to our CFO, Mr. David Ku, for the fourth quarter financial results. Thank you, Jessie. Good afternoon. Now let's start with the 2023 fourth quarter financial results. The currency used here is NT dollar. Revenue for the quarter was TWD 129.6 billion, up 17.7% sequentially and up 19.7% year-over-year. Full year 2023 revenue total TWD 433.4 billion, down 21% from 2022. Gross margin for the quarter was 48.3%, up 0.9 percentage points from the previous quarter and the same as the year ago quarter. Gross margin for 2023 was 47.8%, down 1.6 percentage point year-over-year. Operating expense for the quarter was TWD 37.9 billion, compared with TWD 34.2 billion in the previous quarter and TWD 34.2 billion in the year ago quarter. Full year 2023 operating expense was NT$ 135.6 billion, compared with NT$ 144.1 billion in 2022. Operating income for the quarter was NT$ 24.7 billion, up 37.8% sequentially and up 36.8% year-over-year. Non-GAAP operating income for the quarter was NT$ 25.1 billion. Full year 2023 operating income was NT$ 71.8 billion, down 43.4% year-over-year. Non-GAAP operating income for the year was NT$ 74.1 billion. Operating margin for the quarter was 19.1%, up 2.8 percentage point in the previous quarter and up 2.4 percentage point year-over-year. Non-GAAP operating margin for the quarter was 19.4%. Operating margin for the full year 2023 was 16.6%, down 6.5 percentage point year-over-year. Non-GAAP operating margin for the year was 17.1%. Net income for the quarter was TWD 25.7 billion, up 38.5% sequentially and up 38.9% year-over-year. Non-GAAP net income for the quarter was TWD 26 billion. Full year 2023 net income was TWD 77.2 billion, down 34.9% year-over-year. Non-GAAP net income for the year was TWD 79.2 billion. Net profit for the quarter was 19.8%, increased 2.9 percentage points from the previous quarter and increased 2.7 percentage point year-over-year. Non-GAAP net profit margin for the quarter was 20.1%. 2023 full year was 17.8%, down 3.8 percentage point year-over-year. Non-GAAP net profit margin for the year was 18.3%. EPS for the quarter was NT$16.15, up from NT$11.64 in the previous quarter and up from NT$11.66 in the year-ago quarter. Non-GAAP EPS for the quarter was NT$16.34. Full year 2023 EPS was NT$48.51, compared with NT$74.59 in 2022. Non-GAAP EPS for the year was NT$49.74. In addition, a reconciliation table for our GAAP and non-GAAP financial measure is attached in our press release for your information. And that concludes my comment. Thank you. Thank you, David. Now, I would like to turn the call to our CEO, Dr. Rick Tsai, for his remarks. Good afternoon, everyone. MediaTek concluded 2023. ... What? Yeah, operators, are we still on? Hello, are we good? Yeah. Hello, sir. Yes, we are still online. All right. Let me start over. Apologize for the incident. MediaTek concluded 2023 with a strong fourth quarter. Our revenue exceeded the high end of our guidance, mainly driven by better than expected smartphone demand. Gross margin for the fourth quarter reached the high end of our guidance. 2023 was a challenging year for the global semiconductor industry. At MediaTek, we managed our business with several proactive measures, including executing price disciplines, reducing our own inventory level, and moderating general operating expenses. All the while, we strategically reallocate more internal resources to pursue new growth opportunities. Thanks to these efforts, we have bolstered our resilience in navigating through this cycle and strengthened our global position by introducing leading products. Now, we're a leading player to launch 5G AI flagship SoC and Wi-Fi 7 solutions. We are also one of very few fabless companies that can support a roadmap for multiple applications on the most advanced process nodes, such as 3 nanometer and beyond. We leverage the leading roadmap and engage with global customers aggressively for new growth opportunities across flagship smartphone SoC, wireless connectivity, enterprise ASICs, automotive, and Arm computing. As we continue to execute these new projects in 2024, we expect several of those new businesses to begin volume production starting from late 2025. With that, we see 2024 as the beginning of MediaTek's next growth trajectory. In particular, we are seeing increasing demand, driven by need for better computing and faster data transmission to support ubiquitous AI in the mid to long term, both at the edge and in the cloud. At the edge, MediaTek is one of the very few companies in the world that has a scalable edge AI SoC product portfolio for a wide range of devices, including smartphones, computing devices, robots, automotive, et cetera. We foresee fast growing demand for more computing capabilities at the edge for users to enjoy the benefit of better privacy, lower latency, and lower cost. In addition, recent rapidly advancing large language models offer extensive understanding of language and context, which enable more accurate, natural, and human-like interactions. This has accelerated the development of generative AI features, especially in the field of personal assistant, creativity, and productivity enhancement tools to provide intuitive and effective user experiences. We are working very closely with the generative AI ecosystem partners and provide high performance and power efficient edge AI SoC solutions for the industry. In the cloud, our strategic 112G and 224G SerDes IP are essential for high-speed data transmission in data centers. We also have strong capability in advanced process capabilities, chiplet architecture design, and advanced packaging. In addition, our power management IC solutions are able to accommodate higher computing and storage requirements in data centers. Furthermore, our leading wireless and wired connectivity solutions play a crucial role in transmitting data between the edge and the cloud. Thus, we firmly believe that we are in a great position to capture the growth opportunities in the era of ubiquitous AI. For automotive, besides the generative AI opportunities in cars, our Dimensity Auto platform continues to gain traction in the global market. We expect our e-cockpit, 5G telematics, and Power ICs, paired with NVIDIA's ADAS and software, will enable us to be a strong strategic partner for global car makers... With that, now let me talk about the recent business performance and 2024 outlook of our three revenue groups. Mobile phone accounted for 64% of total revenue in the fourth quarter, and grew 53% quarter-over-quarter. The strong sequential growth was attributed by 5G and 4G demand and the successful ramp of our flagship SoC, Dimensity 9300. In 2023, our flagship revenue grew strongly 70%, exceeding $1 billion. Our latest flagship SoC, Dimensity 9300, is well received by the market and will continue to gain market share. With the innovative industry-leading AI, the all big core architecture, Dimensity 9300 offers the best computing performance in the market. In addition, Dimensity 9300's AI capability is ranked number 1 globally by the independent ETH Zurich AI Benchmark. vivo, OPPO, and iQOO's smartphone, powered by Dimensity 9300, are able to offer on-device generative AI features, such as text to pictures, article summary, and user-friendly voice assistant. We also extended generative AI to premium segment with Dimensity 8300 SoCs, providing more hardware platforms for the industry to develop more generative AI features. Today, we're still in the early days of generative AI development, and we believe there will be more exciting features to be added in the future. For 2024, we expect global smartphone shipments to increase by a low single-digit percentage to 1.2 billion units, and the 5G penetration rate to increase to low 60% from high 50% in 2023. We also observe that generative AI is driving smartphone upgrade demand and creates a bigger market for flagship and high-end smartphones. We see continuous 5G migration and our flagship share expansion will be key drivers for our Mobile Phone business this year. For the first quarter of 2024, we expect mobile revenue to decline slightly sequentially, following a strong restocking demand in the fourth quarter. Now, move on to Smart Edge Platforms. This group declined 19% sequentially in the fourth quarter and accounted for 30% of revenue. The decline was primarily because TV customers reduced orders after the inventory pre-build in the first half of 2023. For 2023, despite the weak consumer electronics demand, our 5G modem, automotive, and ASIC business continued to grow. For 2024, we expect the overall demand to improve moderately, and upgrade demand for connectivity and computing will be important growth drivers. For computing, we start to see generative AI being added to computing devices, such as tablets. Several of our tablet consumers, customers have adopted Dimensity 9300 with generative AI capabilities for their flagship tablet models in the first quarter, and we expect more to come. For connectivity, right after Wi-Fi Alliance began Wi-Fi 7 certification, we announced a complete first wave of Wi-Fi 7 certified solutions with various customers' products ready at the CES. Our industry-leading Wi-Fi 7 position has enabled our share gains in high-end retail routers, premium notebooks, broadband devices, and more. For the first quarter of 2024, we expect smart edge platform to be flattish sequentially, as growth in TV, tablet, and broadband connectivity offset seasonal weaker demand in other consumer electronics. Excuse me. Now, moving to our IC, which accounted for 60% of total revenue in the fourth quarter and grew 1% quarter-over-quarter. In the fourth quarter, data center Power IC grew robustly, and the broadband consumer electronic revenue was flattish. For 2024 and beyond, we will continue to expand in new areas, such as automotive and data center, to grow our business. In the first quarter, we expect Power IC to decline due to seasonality and product transitions. Now, for the first quarter of 2024, we expect revenue to grow strongly year-over-year, to reflect a more normalized inventory situation and to decline slightly sequentially. Gross margin is expected to be stable in the current range. With that, we expect our first quarter revenue to be in the range of TWD 121.8 billion-TWD 129.6 billion, flat to down 6% sequentially, and up 27%-35% year-over-year, at a forecasted exchange rate of 31.2 NT dollars to 1 US dollar. Gross margin is forecasted at 47% ±1.5 percentage points. Operating expense ratio to be at 28% ±2 percentage points. For 2024, we believe it will be a year of growth. For gross margin, with our continued efforts to manage our product and customer mix, we expect our 2024 gross margin to remain at a similar level to our first quarter guidance range. Finally, I'd like to conclude my remarks by reiterating that with all the exciting opportunities ahead of us, we believe 2023 growth stage. Thank you, and Happy Chinese New Year to you all. Thank you, Rick. We are now ready for Q&A session. Operator, may we please have the first question, please? Yes, Jessie. Ladies and gentlemen, we are now in Q&A session. If you would like to ask questions, please press star one on your telephone keypad, and please ask your questions after your name is announced. Please limit your questions to two at a time to allow more participants to join the discussion. After two questions, we will move on to the next caller. Should you have more questions, please press star one again to come back to the queue. To cancel your question, please press star two. As a reminder, it is greatly appreciated that you turn off the speakerphone mode of your device to prevent possible echo effect. We thank you for your cooperation. Now, please press star one on your telephone keypad if you would like to ask questions. Thank you. Now, please press star one if you would like to ask questions. Thank you. The first one to ask question is Randy Abrams from UBS. Go ahead, please. Yes, thank you for taking my question. I wanted to ask the first one about, just to add on your comments on the Gen AI application opportunity. How are you seeing or viewing the content uplift, factoring the compute engine, the CPU, the GPU, and the AI processor, would see some upgrade? I think Qualcomm's talked about a pretty good uplift, but I'm curious your view on content. And second is, how you're viewing the market, given your market share is higher in the mainstream of the market, how you see the features roll out, or if you see opportunity to move it down categories from the flagship category? For the first question, Randy, we, you know, we see, number one, I think our Dimensity 9300 SoC, flagship SoC, is in its computing power, CPU, GPU, and AI processing power, as good as anybody's. There's no question about that in our mind, and I believe in our customer's mind. So, with all those computing capabilities, the generative AI features I just mentioned in my remarks, I think only will improve as the time goes on. It's just at the beginning of our introduction, and our customers are working very hard with their ecosystem partners to develop more features. I have no question in my mind that all those computing power will be utilized to upgrade the user experiences, and we will... I also believe you know the cadence of our flagship SoC. We really believe, going forward in the next, you know, starting this year and next couple of three years, the upgrade cycle, because of those Generative AI features, will certainly materialize, for the flagship SoC and the premium SoCs. The second question about?... I think it's probably the answer with the summit. Oh, okay. Yeah, or if you could put, I'm not sure if you have a feel for if each category of the market you could see, or at least in the flagship and premium, do you see, we've moved up quite a bit the last several years, where we're about $100, but do you see that upward category can still push higher? Or is the opportunity you grow the category and grow market share in the category? Let me put it this way. We see upside in both. I'm not saying we can get the immediate upside in our, for instance, ASP, very quickly, but there's also no doubt in my mind that the upgrade cycle is beginning, and the consumers will want to come to buy AI, to buy, I should say, to buy phones and, for that matter, computing devices, which will enable AI features. And the features itself, are themselves, some of them I think will be very interesting, some of them maybe not so interesting. But what we are, I think what we believe will happen, hopefully are happening, consumer will flock into the crowd and they say, "Hey, we want the AI devices." And as such, I'm not, you know, the total shipment of the, for instance, smartphones may be somewhat, well, say, muted. We now talk about, say, about low single digit growth in the units. But we believe a upgrade toward the high end, well, which means flagship and premium segments market share is increasing, not will be, is increasing, especially in China domestic market. So we are very confident that we will... We are doing well, and we will be doing well going forward in this AI-generated upgrade cycle. Thank you. Okay. Yeah, no, thank you, Rick. The second question I wanted to ask, it's inventory, I think from two perspectives. You saw a very strong recovery, granted from a decline quite a bit the last few quarters, but the 50% rebound, I'm curious where you think you're shipping relative to market demand and how you feel the channel inventory is. And then if, if you could talk about your own inventory, you've done a great job actually to bring it to very low levels. Are you at the point you're constrained, or, or will you'll run at a bit leaner level now? I think our inventory level right now is very healthy. Maybe at the end of fourth quarter, a bit too healthy. And you're right that, yeah, we are—actually, in some cases, we are rushing our manufacturer partners for shipments to us. Saying all that, our goal, of course, is to maintain a stable inventory. I think we have learned our lessons, I hope. And we are seeing our channel, or which means our customer and their channel, inventory level at a—I would say—normal level. So since right now, I think, in a stable state, the macroeconomic picture for the two largest market, China and U.S., are, I think, as you all know, are somewhat right now not... We don't see huge demand increase, but they're not, they're not bad either. So I guess a stable state is a reasonable description of where we are. Okay. Thank you. Yeah, great. Great, Rick. And, yeah, appreciate the update. Okay. Thank you. Thank you. Next one, we have Brad Lin from Bank of America. Please ask your questions. Thank you for taking my question. Firstly, congrats on the good result and also the guidance. I have two questions. One is on the smartphone pricing, and secondly is on the Edge AI opportunity. We learned that the inventory level actually improved at ASUS and also the channel and possibly our competitor as well. With that regard, do we see the market ASP also stabilize? And it would be great if we can elaborate a bit by low-end, mid-end, and high-end segments. My second question would be on the AI, and we have seen the increase in computing power of the, well, smartphone and other end devices. Has our MediaTek clients continuously proactively requesting to increase even more AI computing power by the end of the year? Do we see a potential bottleneck there in the near future? Thank you. That's my two questions. ... Good question about pricing. Well, first of all, probably I comment a little bit about pricing. I think overall, we see a relatively, first of all, the competition is always out there, but we see basically just a normal competition situation out there. So pricing is having some pressure, but in general, I think it's still manageable. And that's why, as you can see, for Q1, what we guide, the Q1 gross margin guidance, is actually from a guidance range perspective, it's been flattening out, which is based on 47 ± 1.5%. So pricing-wise, we see actually that it's manageable. To the Edge AI question, we are very excited. I think Dimensity 9300 is just the first you are seeing with I would say really tremendous Edge AI for the smartphone platform. But we are not stopping here. In addition to continuous improvement in our Edge AI capability, computing especially, capability with the smartphone platform, we are investing aggressively in building computing capability into SoC or chiplet-like platforms to be used in other higher power computing devices, such as the computing devices, automotive, et cetera. So we are seeing this Edge AI things as kind of a pervasive. You will... It is, I believe. If you look at now the one of the most the hottest subject is AI PC. These are all at the beginning of the cycle, and MediaTek is very excited, and we are well prepared. We are determined that to be one of the top providers for the Edge AI capability for multiple verticals. Thank you. Thank you very much. And right now we have Gokul Hariharan from JP Morgan. Please go ahead. Yeah, hi. Thanks for taking my question. My first question is about 2024 growth. I think, Rick, you mentioned it will be a growth year. Could we get a little bit more clarity in terms of how much growth you're expecting, given that we are coming off an inventory correction year? Usually, the first year after inventory correction is pretty strong growth. So are we thinking about 15%-20% kind of growth is possible this year? Just wanted to understand, given your end market assumptions are still a little bit cautious, but you have some specific drivers in here. I think the growth picture remains still a little uncertain. First quarter, obviously, we know well, and we are having, I would say, a strong year-over-year growth. We all know one of the major driver was the restocking. However, also, I would say our SoC, the flagship SoC for the mobile applications, is also contributing a great deal to our growth. My expectation is for our flagship SoCs growth to continue into the year. The restocking momentum remains to be seen somewhat. We understand everybody's talking about restocking. Maybe it's kind of a shall we say, moderating. Well, sure, we tend to agree with that, but I think our market what we're doing both in the flagship and for the entry level and the medium level associates, we're holding up quite well. Quite well. And for the flagship, no, I'm sorry, for the smart edge platforms, I think we are seeing, we're starting to see certain also inventory really not only stabilize, but also I think we're seeing some for instance, the broadband bidding starting to come back. For instance, in China, which they basically have stopped for almost at least more than half a year. We believe the Small Edge Platforms inventory situation is gradually improving, but it's gradually improving because we're not seeing a strong momentum as we did with smartphone. But we remain certainly or at least hopeful. But I must say also, the continuing geopolitical things across the world, it is a major uncertainty, and with that, you always. Actually, if you ask me, probably unfortunately, every year people will have this concern. And as such, that's why we kind of refrain from making a full year forecast. We will, as time goes on, I'm sure the picture will get more clear, and we will give you not only our forecast, but hopefully try to give you more our takeaway and indications. Thank you. Thank you. Thanks, Rick. That's helpful. Second question, you did talk about replacement cycle in smartphones, especially in the mid to high end and flagship segment. Could you talk a little bit about what are you seeing in this replacement cycle, given your overall unit forecast is still not that great, but. And it's been a long time since we've seen a smartphone replacement cycle, especially in China. So could you talk a little bit about what you are observing in terms of this replacement cycle, how it is panning out? And I think there has been some concern about Huawei's resurgence, especially in the flagship segment, having some impact on other brands, and now we are probably six months into that. What are you seeing on that front as well? Okay. Maybe the better way to talk about that is actually separate smartphone on the flagship segment and other segment. I think for the flagship segment, overall, we are doing very strongly, especially from the gaining market share. So on that front, we are enjoying, I would say, not just the restocking cycle, but also market share gain. And plus, due to the AI and all those new feature coming in, a short replacement cycle. I think that's actually all positive on the flagship. And I think that's why I think the CEO claimed, even for this year, full year, we feel fairly comfortable to see the flagship continue to grow strongly. Very strongly. That's on the flagship. On the segment for non-flagships, I think, obviously for starting from fourth quarter and first quarter this year, restocking probably is the major driver. For the premium sector, especially due to the AI and also other new features, we do feel maybe there's opportunity to see short-term replacement cycle, even though it's not a strong signal yet. With actually the market feedback, we see some positive momentums, or at least early signals out there. For the entry level, probably it's by and large, restocking and also... Another good news actually, I think we, because we monitor both for China and so more importantly, globally. I understand everyone looking to the China for the BCI numbers, it's not so exciting, but when we look at the global numbers, it's actually getting stabilizing and improving. I think that's actually contributing why we feel comfortable for this year will be a year of growth on the smartphone space. Okay. Okay, any more clarity, David, in terms of flagship? I think you grew 70% last year. Should we expect something similar to that this year? Yeah. Well, I, I think I would say something similar to that. It is very strong. Very strong double-digit growth in terms of revenue, yeah. Got it. Thank you. Next on line to ask question, Laura Chen from Citi. Go ahead, please. Hello. Hi, good afternoon and Happy New Year. Thank you for taking my question. I have two questions regarding MediaTek's progress on the AI. So, we know that actually the Dimensity high-end series are getting quite good momentum, but for many of the large language model, like Gemini or Llama 2, for current smartphone AI functions, we know that actually provided by the cloud service provider. So from that angle, I'm just curious what MediaTek can help your customer to differentiate their AI function on device? Do you need to do more, like, customized design to help your customers do, like, AI or machine learning on device, and thus, can help them to provide some different features, such as, the instant translation or enhanced personal assistance, something on that? Yeah, that's my first questions. Okay, Laura. First of all, of course, we work very closely with the key generative AI ecosystem partners such as Meta, Llama 2, Google on their Gemini Nano in China, Baidu, Hitron, et cetera. All those, I'm sure you know well, Stable Diffusion. As to how... Well, what we have been doing actually over the years, it's not so well known. Is we have a very, very powerful and also friendly AI software toolkit for our AI processing computing unit. We call that NeuroPilot SDK, which affords our customers the OEMs to design their features very effectively and efficiently.... Saying all that, we also work for a lot of the AI application goes through, for instance, camera, multimedia, kind of applications. We also gaming, for that matter, especially in China. The other thing we have been doing over the several years, we have a very strong relationship with, for instance, gaming developers in China. They have been, they also use this NeuroPilot SDK to develop their games, which can run well with much better power efficiency and quality user experiences on the phones made with our chips. I fully expect this model, this collaboration model, to continue and prosper going forward for the more applications with respect to generative AI. I, again, the ones we are seeing and the ones we are talking, we just said, it's just the tip of the iceberg. Yeah, thank you, Rick, for the very clear picture here. I'm just wondering that with this kind of NeuroPilot, the SDK provided by MediaTek, would that also implied probably better like a profitability or since the client thickness probably will also be higher? Well, that's what we can expect? Well, of course, we do not charge for our customers to use NeuroPilot SDK. Maybe we should, but... But certainly, I, I think for us, we, and for our customers, it's very importantly, MediaTek provides, these, capabilities so that they can prosper, and we, we will prosper. And hopefully, not much hopefully, and you will, again, ignite the upgrade and the, and the replacement, cycle. And that- Okay. I think that's the main approach we are employing for our growth, which in this vertical mobile phone, but also other verticals also. Thank you. Okay. Yeah, thank you. And also my second question is also about the AI at the cloud side. I think, Rick, you just mentioned that, your service, IP and also, the progress at the, enterprise customers. I think you also mentioned about, like, a late 2025, we can see some contribution. I'm not sure if I heard this correctly. Can you elaborate more on the current progress and what's, the project you are engaged right now? Yeah. First, you heard me right. We did say that the software, well, I guess quite a few of our new opportunities will start volume production in late 2025, which means that we will start seeing the fruits of our investment. Two, we do have. We have those in our pipeline, in, for instance, in the enterprise ASIC. We continue to pursue this with multiple opportunities, but internally, we are laser focused in executing our current project, which is very significant. We will deliver that project. And we, I, and I, I'm very confident that the MediaTek will execute, and we will have more good opportunities ahead of us. Thank you. Yeah, if I may ask, what kind of the revenue or the profitability you can share with us at this moment, the potential? Yeah, Laura, unfortunately, we probably won't be able to share the impact due to the confidentiality. Okay. I think we will update the market when it's possible. Okay, sure. Fair enough. Thank you. Next, we have Charlie Chan from Morgan Stanley. Go ahead, please. Thank you. Hi, Rick, David, Jessie. Happy New Year. So my first question is about, you mentioned the HPC opportunity. So, Rick mentioned that you can use a Chiplet technology and to get the HPC device with some AI computing power. So I'm curious if that refers to some notebook PC or AI PC opportunity. And I think you also mentioned that some ARM-based SoC opportunity. I'm not sure if you refer to the same thing... And I think a year ago, you talked about Windows on ARM, and you mentioned that there are some serious partners in those projects. So, can you give us some updates when you will see these kind of opportunity to turn to a real revenue to MediaTek? This is my, my first question. Thank you. Charlie, first of all, I think it's what we mentioned along the lines, which is also we called enterprise asset, okay? Which is actually leverage of our circuit technology, our high-end processing technology, and also more importantly, the packaging technology. And if there's any, I think, due to the AI trend, obviously for the on enterprise side, there's a new demand as well, and which feed into our expertise. I think that's actually what we talked about on the enterprise side. On the PC side, to be precise, I think the area we're getting in is something called Arm computing. And because we already have been one of the leaders on the tablet side and also on the Chromebook, and with the AI trend, we do believe actually the AI will get into this area as well. I think that will be the area we will continue to push and grow. Okay. Okay, thank you. Charlie, I think I might add one word. Okay. Well, we... One important thing is we are working on—and I think I know we are also marketing our automotive chip based on chiplet architecture, with very powerful GAI capability. That is, I would say that that will be in a way a forerunner for us also in the more generic computing world. That's, I think, that's a comment I'd like to add. Thank you. Sure. Thanks, Rick. Yeah. So I believe you secure a very strong partner, and I think that partner will also depend on you, so very, very well done. And my second part of question also goes back to AGI. So couple technical, kind of, small questions, so bear with me, just as some clarification. Number one is the Gemini Nano. I remember it's a kind of Google's service, right? So with that, the Gemini Nano can really deploy to the China smartphone? This is the first small question. And I, I'm very impressed by your compression technology. Does that mean that you don't have to increase the DRAM contents, and then you can run the LLM? Last part of this topic, you said, when will you deploy your APU to the mainstream smartphone chips? Just some technical small questions to clarify. Thanks. Okay, Charlie, I think that's a very good question, and, yeah, we certainly are doing 7 billion parameter model, Llama 2 model, and we, we can certainly also do 13 billion parameter model with our flagship SoC. And the one thing is that we are doing, certainly we're kind of pushing down the capability first to 8300 at the premium segment SoC. Our APU capability actually is prevalent across the portfolio of our SoC offering. Mm-hmm. I think for the more kind of a mainstream end of the devices, right now, probably also not the focus of our customers. Well, everybody has limited R&D resources. So- Mm. Certainly our customers are focusing their resources on the, on the high-end, Mm ... focus, as they should. We fully agree. So but I think as time goes on, when we go to the next year or two, the computing power will continue to improve. So the 7 billion parameter capability that we have now on flagship will migrate down to more mainstream chips. DRAM, you're right, Charlie, certainly the DRAM, especially the bandwidth of the DDR DRAMs, it is something the industry... It's an industry-wide issue, industry need to address from the- Mm. System architecture point of view. You're, you're right on that. Okay. Gemini Nano, can you deploy that to the China smartphone? The last part of the question. I think, Charlie, the real question, okay, Gemini Nano is actually an open source, and everyone can use it, but whether or not for certain regions, you can use that service, because it's a platform version service, nothing different. I mean, you can still use the open source to develop your own service, but if you want to use Google service, maybe you need to follow Google's rules and restrictions for the area you can use. But for the platform or the, or let's just say, LLM model itself, it's actually available. ... Got you. Okay, thanks for the clarification, gentlemen. Much appreciated. Thank you. Next one, we have Brett Simpson from Arete. Go ahead, please. Yeah, thanks very much. Rick, I had a question about the flagship market. You know, I think congrats on reaching the $1 billion revenue in 2023. Can you maybe just share with us, what do you think the TAM is for MediaTek in flagship? Or how many flagship units do you think ship within the Android ecosystem that you could address? And in terms of the competitive dynamic in flagship, we're obviously seeing Exynos coming back in. We've seen, we're seeing Huawei ramping as well, and Qualcomm has a new platform following their Nuvia acquisition coming at the end of the year. How do you think that these ingredients sort of play into your expectations for share gains over the medium term? Thank you. Okay, Brett. I think our current TAM, the outlook for our current TAM is probably $4 billion of 14, 14. Well, my CFO wanted to correct me. No, no, no. Well, I guess what I'm saying is, in my mind, I understand David's number, but in my mind right now, the number I just quote, just said, is something that we have high confidence in continuing grabbing shares. There are more obviously a TAM, that is, to be honest, it's, you know, has higher barrier for us. Oh, you mentioned, for instance, the Exynos. Although that is, in my mind, that's not really our concern too much. The Huawei's case in... Actually, it's Huawei is always very, very powerful player. Well, certainly we all know they have the other limitations. But again, what I believe is the capability we have built for our flagship SoC will enable us to continue to grow. I mean, David just mentioned the growth potential. Well, he gave some strong indication for this year, and this momentum will... I cannot say, well, every year, it's the same percentage for the... We have no doubt, number one, our capability, our competence will enable us to grow, while the Generative AI features will also enlarge the TAM. So I'm trying to give you as much transparency as I can, Brett. Mm. That's where we are, and yeah, I'm really very confident and comfortable, very appreciative of our team in making these things happen. Great. Thanks for the- thanks for sharing that perspective, Rick. And maybe just to follow on there, we have seen over the years, certain Chinese smartphone vendors try to build their own silicon. I think we saw Xiaomi and OPPO try to build silicon. And I guess if I look at what Arm is trying to do, they're talking about a turnkey application processor that's relatively low barriers to entry for potentially a handset vendor to build AP going forward. Do you think that the risk that customers build their own silicon, do you think that's largely behind us? Or do you think these types of initiatives that Arm is trying to build out could be a threat long term for your TAM? Thanks. Well, Brett, the best way is to make your competitor into your partner or your customer. Hmm. Well, of course, easier said than done, but I think we're in the process of doing that. I'm not saying we are attacking our customers. Don't get me wrong at all. Don't get me wrong. Well, when our customers, like Xiaomi, it's known they're building their own AP, and we work with them on, for instance, with our modem. But we build our partnership with them, and yeah, I cannot say whether they will succeed or not for Xiaomi, but we do know OPPO met difficulties for sure. But in many ways, I think that makes OPPO now even a stronger partner with us, and vice versa. You know, for Arm, we understand Arm's business objectives and the business model and the... But if you look around the industry, MediaTek is one of the very, very few true AP, so really advanced APs supplier with track record. I think it's important, and maybe even imperative that, you know, that we work together as an ecosystem partner in the in market share together. Mm. Thank you. Thank you. If I can maybe ask one final question, Rick, just on Wi-Fi 7. I mean, I think this is the start of the transition towards this next standard, and I just wanted to understand what this means for MediaTek. Is there a meaningful content story as Wi-Fi 7 ramps up for MediaTek? If there's any perspective you can share about your market share and the adoption rates for Wi-Fi 7, and what it might mean for your business, that'd be very helpful. Thanks. Well, Robert, first, Wi-Fi is a very important business unit for MediaTek. We have actually experienced very strong growth during the last couple or three years. Our last year was not good, as many of our other products, but, yeah, we're seeing the momentum turning back to a growth mode. And Wi-Fi, the technology operates every around every four, five years, continuous, continuous. And Wi-Fi 7, as far as we can see, for instance, starting from the mobile phone customers, the broadband operators. Broadband, all the major broadband operators now only accept Wi-Fi 7 for their bidding, for the, for their device bidding, already. So we see a Wi-Fi 7 continuing just like the previous generations. That is good, because we have caught up with our competitors in our technology capability. Our goal is to not only get to the market share that we have at Wi-Fi 6 or 5 for that matter, but also we like to go in as early as we can so that we don't miss the front part of the cycle. Thank you. Thanks. Ladies and gentlemen, as we are running out of time, we are going to take the last one for questions, and the last one will be Bruce Lu from Goldman Sachs. Go ahead, please. Ladies and gentlemen, Bruce just got disconnected, so shall we take the last one? Yeah. Yes, yes. Okay, the last one will be Nicolas Baratte from Macquarie. Yes, hello. If I can go back to a, a question about production starting late 2025 for the ongoing development project, would you classify this, consider this as an entirely new product category, an entirely new revenue stream, meaning both product and customers, or a continuation of existing established businesses? Nicolas, sorry, I think that your voice actually breaking out a little bit. Can you just repeat your question again slowly? Because I actually having a hard time hear your question clearly. Is it better now, David? No. Hi, David, I'm sorry. Is it better now? Yeah, it's better now. It's better now, yeah. All right. Okay. Sorry, sorry. When, as Rick mentioned, late 2025 volume production for ongoing projects, would you classify this, categorize this as entirely new revenue stream, new product, new customers, or the continuation of the established businesses that we know today? Well, I think first of all, I think what actually you're talking about is hard to, you know, having the first time revenue in late 2025. So by definition, the overall revenue contribution in 2025, probably will be mild, will be small, given actually it will start to run toward the end of the year. So most likely going to see some more revenue coming in, after the start ramp. Understood, David, but for products that you've done before or never done before? That's a new product. That's a new product. Entirely. Yeah. Understood. Did I hear correctly that you would roll out those, you know, increased AI capabilities into Dimensity 8300 later this year? And if that's the case, do you see the need to roll out into, you know, lower categories of Dimensity later on? Well, I think for this year, so one of the major points still gonna be flagship, given the potential revenue opportunity and also the market's assessment of this high flagship product. For the premium, we do see actually the opportunity to basically trickle down the AI capability, because that will be one of the logical next extension, trickle down from the flagship to the premium. So, we will see how is the premium go for the second half this year, but we do have the plan to roll out the premium product later this year. Thank you. Okay. Thank you, ladies and gentlemen, for all your questions. I'm going to hand it over to Miss Jessie Wang for closing comment. Miss Wang, please go ahead. Ladies and gentlemen, this concludes the MediaTek 2023 fourth quarter conference call. An audio replay will be available in one hour after the call at the investor section of MediaTek's website. We would like to thank you for your participation, and you may now disconnect. Yes, thank you, and again, for your participation in today's conference. You may disconnect now. Thank you again, and goodbye.