Okay, great. Good morning, and welcome to J.P. Morgan's fifteenth Annual U.S. All-Stars Conference, held here in London. My name is Harlan Sur, I'm the semiconductor and semiconductor capital equipment analyst for the firm. Very pleased to have the team from Analog Devices here with us today. Rich Puccio, Executive Vice President and Chief Financial Officer. We also have Mike Lucarelli, Vice President of Investor Relations and FP&A here with us as well. So for those of you that don't know, the Analog Devices team, leader in high-performance mixed-signal RF analog semiconductor solutions, strong position in power management and signal chain processing, both digital and analog, with which, as we know, is a technology that bridges the real world to the physical world. Best-in-class gross operating free cash flow margin, strong capital return program, very diversified business, right? Industrial, automotive, comms, infrastructure, 85% of total revenue. Rich and Mike, thanks for joining us this morning. Good morning, everybody, and thanks for having us, Harlan. Great. So if we rewind back this same time last year, second half of your fiscal 2023, team was already in the midst of the semiconductor industry cyclical downturn. You were driving about 9% year-over-year declines in the second half of last year. From there, the business continued to drive lower. You troughed in the April quarter of this year, with peak to trough in year-over-year revenue decline of about 34%. Since then, right, the team has driven positive inflection and quarter-over-quarter revenue growth. Your year-over-year compares are improving as well. Take us through the dynamics over the past year and, more importantly, your view on the cyclical dynamics in the business going forward. Sure. So, you know, and we've talked a lot about this. Obviously, we've gone through, you know, one of the largest inventory corrections we've seen. I think this is, for ADI, the second-largest correction. Yes. The only time larger being during the dot-com downturn. So, you know, the correction, you know, as we've talked about, we feel like the inventory correction has largely happened across most of our businesses. We've talked about, except for auto, is still seeing a bit of a correction. You know, and if you look, you know, what we're seeing from a positive signs perspective, if you just look at our most recent results, so, you know, Q3, we delivered, you know, an above midpoint quarter. We also guided for 4% incremental sequential growth. You know, so we feel, you know, very positive about where we're starting to see. Look, we've talked about this. I think the broader pace of the recovery is gonna continue to be dictated by the broader macroeconomic and geopolitical issues, you know, as we look forward. You know, but one of the things we've also talked a lot about is, you know, we have clearly been under shipping to demand at our customers for at least a year, so that gives us some confidence that as we, you know, look into 2025, we can see strong 2025 and get back onto our long-term model that we described back in the 2022 Investor Day, so in that 7-10% growth range. Last, you know, back last year, the Analog team has, I think, what, Mike, this is your third or fourth consecutive year, right, that the team has presented. Back last year when we hosted events, he was already talking about stabilization and order rates, right? The team then drove three quarters of sequential improvements. However, in July, you did see a slight decline in bookings, with growth in all segments offset by a decline in automotive, book-to-bill at parity exiting the July quarter. You're midway through this quarter, have the order trends ex auto continued to improve? And you've said recently that you've seen an inflection, a positive inflection in automotive orders. Has that continued so far this quarter as well? So, what we've seen on orders, as we mentioned, you know, a continuing increase across broadly other than auto. You know, on the auto side, what we started to see in, you know, as we went into the summer months, is our order rates started to come down on auto. We did start to see them pick back up as we got through the late part of the quarter, and that has continued quarter to date. And, you know, the trends we were seeing in the non-auto parts continue from a growth perspective. You know, we continue to be a little bit softer in the automation segment of industrial. But, you know, as we talked about, we're, we had seen lower reductions than we saw in the prior period. So we feel like we've, you know, that we're on an upward trend on the booking side. You know, we've got a number of tailwinds, we think, behind us from a secular perspective that will help us continue. So you're continuing to see non-auto order trends sort of continuing to improve sort of quarter to date. Automotive, you saw the negative inflection in June, July, but you've seen the positive inflection since then, that sort of continued quarter to date. Book-to-bill, I know you guys exited book-to-bill in the July quarter, roughly at about one, right? Non-auto bookings being slightly offset by auto. Looks like both of them are moving in the right direction. So would you say book-to-bill kind of still tracking towards one, maybe slightly above one so far, quarter to date? Yes. And, you know, on the... It's interesting, on the auto side, you know, it is also mixed, and I think- Yes ... We've talked about, you know, we've had two consecutive strong growth quarters in China from a growth perspective. Yeah. But we're seeing, you know, offsets, you know, being weaker. Now, particularly as we see in the auto space, you know, the forecast for the back half of the year is for volumes to decline, you know, relative to the prior guidance. You know, and there is a substantial portion, about, you know, about half of our auto business is tied to the legacy auto and volumes, and that's why we think that this inventory correction could go on a little bit longer, on the auto side, and I think we'll see it, certainly into Q4 and probably into Q1, but we do still see an opportunity for growth in 2025. So as you've talked about sort of the quarter-to-date continued improvements in automotive bookings, there's still some inventory correction, looks like, going on with your customers. So what's driving the positive dynamics, if you take your auto business in sort of as a whole? Sure. So, you know, if I, as I said, the most challenged piece is the legacy piece that's- That's right ... driven by auto. The other area which we've talked about now for about a year is we've had some pressure on the BMS space. We are starting to see some... We've seen some design wins in the BMS space. Mm-hmm ... which is positive for us. But if you look across the other parts of our business that are tied to the EV world, so if you think about our GMSL, our A2B, and our functionally safe power, those parts of the auto continue to grow double digits. So, you know, that is offsetting some of the downward pressure on the volumes. Mm-hmm. And also, you know, we get this question a lot, you know, we've seen a much shallower peak to trough- Yes ... in the auto than we saw in the other businesses. I think, part of that is, one, the continuing growth, right? Although we talk about the slowdown, you know, in the EV markets, they're still growing. They're just not growing as fast. So that, you know, that's gonna be an important part of the dynamic as volumes start to recover and stop being a drag against the growth parts of our business. That's where we'll see the upside. And to the credit of the team, and I think you said this in answer to the first question, but in terms of how do we get to where we are today, to the team's credit, I think you guys have been under-shipping your customers' demand profiles for a number of quarters, right? Yes. Yeah. I mean, we've certainly been under shipping for a year, and then you can see that, right? We've been super focused on- Right ... managing the inventory, both on our balance sheet as well as the inventory in the channel. When you look at the overall business, what are you seeing from a geographical perspective? You particularly called out broad-based strength in China. In the July quarter, you had some commentary about positiveness in automotive as well, out of China. But, how are you seeing the business from an overall geographic perspective, and is China still, broadly speaking, sort of strong quarter to date as well? I think China continues to be strong across all the end markets, including in auto, which we've talked about. Certainly, excuse me, Europe continues to be the weakest for us. You know, in the industrial there, and obviously, it's tracking pretty similar to what the PMIs have been doing- Yes ... in Europe, as we've seen PMI soften over the last couple of months, and obviously, the broader macro in Europe is weaker, and then relative stability compared to Europe in the U.S. and the rest of Asia. Ambarella has done a really good job, like I said, of shipping below your customers' consumption levels over the past three to four quarters, both direct as well as your channel customers, right? You exited July with 178 days of inventory on the balance sheet. That was down about 7%-8% sequentially. Do you anticipate further work downs of the inventory this quarter? And you've also been extremely disciplined on channel inventories, driving them towards the low end of your target range of seven to eight weeks. Where do you see that trending this quarter as well? I give a lot of credit to our operating teams for focus on inventory, both on our balance sheet and the channel. I think we've taken out, since the peak, about $300 million of balance sheet inventory. I actually think that that'll remain relatively stable here in the next couple of quarters. Mm-hmm. You know, one, certainly one of the things we learned during the supply fracture and the subsequent rebound is the importance of maybe keeping a bit more inventory on a balance sheet. We're also being very smart about how we keep it. A lot of the inventory is being kept at a die bank level. Yes ... you know, which gives us a lot of flexibility and also helps us manage our cycle times as the demand does start to return. So I expect our balance sheet inventory, you know, to stay relatively where it is from a dollar perspective. And you know, as we continue to see growth, we'll see days come down. On the channel side, you know, we talked about this, very disciplined to get back down to the low end of our model. You know, we talked about it, you know, if we continue to see positive signs, we'd start shipping to end demand. We do expect near term that the channel inventories will remain relatively flat to where they are. You know, obviously, as you know, we see increased growth, we might have to ship more. The current plan is to keep that relatively flat in the near term. Got it. So putting everything together, right, and given your thirteen-week lead times, you know, the team had qualitatively described the forward view that the January quarter was likely to be a seasonal-type quarter, right? Revenues down sort of mid-single digits% sequentially, with the seasonal pickup in the April quarter, and as you mentioned in your prepared remarks, sort of overall strong sort of fiscal 2025. Is that still how you kind of see the profile of the business looking for? Yeah, so you nailed it, right? So with the lead times back, you know, in the thirteen-week period, you know, that means we tend to have visibility out of the way. Right. Right? So we don't have a ton of visibility yet on Q1. Could Q1 be higher than seasonal? I mean, it could, right? We've been higher than seasonal- Right ... two quarters in a row, but we don't yet have an order book that would tell us we'll be above seasonal. And so the historical pattern is sort of mid to low single digits, sequential decline in the seasonal first quarter. So, you know, that's what we've been talking about, only because we don't have a longer-term signal there. But we do still feel that the growth opportunity in 2025 for the full year is strong. ... Perfect. Before I move on to some of the more mid to longer term focused questions, I wanna make sure that we give the audience an opportunity to ask questions. If you have a question, raise your hand, and we'll get a mic over to you. I'm interested to know, congratulations, your new role. Things have changed a lot in the last few years since your Investor Day when you were as a prior CFO in your role, and I'd be interested to know what part of that framework, I know, I think you talked about 15% EPS as a potential target in the future. What part of that framework that was laid out at that Investor Day is relevant still today or not relevant? Great question, and I actually spent a fair amount of my first couple weeks with Mike going through the Investor Day model to make sure that I was comfortable that we could execute against that and continue to do that. So I talked a little bit about, you know, how I feel about the seven to ten- Right ... revenue. 7%-10% revenue is still the right way to think about it. You know, even if you just took the historical CAGR of the industrial business and add in some of the tailwinds we've created, I feel good about the 7%-10%. Again, you know, given our flex capacity and what we demonstrated, you know, from a margin perspective, obviously, we did break the 70% floor, which we've talked about in that model. But I also know at the time we built that model, That's the Royal we. At the time we built that model, we certainly didn't anticipate the severity of the trough that we were gonna see, but, you know, the ability to hold to a high sixty, you know, sixties margin at the trough of our cycle, you know, we feel very good about that. We're disappointed to break the seventy, but we feel very good and gave us even more conviction about the agility of our model in both the up and the down. So I feel good about that. Still feel good about, you know, where we're headed on the op margin. Right? We're gonna, again, at the bottom of the trough, we're gonna, you know, if we stay the outlook for the rest of this year, you know, we're looking at a 40%, you know, op margin, you know, at, in the trough year. So we feel good about getting back into the long-term margin range that we talked about. The one piece that I think is, you know, worthy of note is, you know, obviously, given the severity of the drop in the lower base we're starting from, I think we had said, you know, getting to a $15 EPS in 2027, I think was the original- ... model. That's right. I would say it's more likely that that's 2028, not 2027, just given how deep the drop was from peak to trough coming out of that, you know. But otherwise, I feel very comfortable with our ability to execute against the long-range model. You know, and we're and we continue to be following our, I missed this one, on our return of capital policy, you know, with 100% going, free cash flow going back to investors over the long term. I think post Maxim, we're, you know, including last quarter, where we were under the 100% threshold, we're still at about 110% of our cash flows. Free cash flow has been distributed. We've increased our dividend pretty significantly, and share count by about 8%, so feel pretty good about where we're doing against the long-term model. Any other questions? No, the good news is that the, I think, The Street agrees with you that the severity of this downturn did warrant probably the team getting back to more of a $15 type earnings power target in fiscal 2028. So the good news is consensus is sort of centered around that fiscal 2028 timeframe. But to your credit, right, looking back over the past 20 years, I mean, the analog team has grown their revenues at a 9% CAGR, right? You're targeting 7%-10%. Your earnings and free cash flow per share over the last 20 years have grown at an 11%-13% CAGR over that time, too, right? Some of it inorganic, but most of it organic as well. And then to the team's credit, I mean, in the peak of the last cycle, you guys were already driving $11 of annualized earnings power. So feels like, you know, if we are emerging from this, this downturn, and few years of sort of relatively good growth, combined with some other product cycles that we're talking, you know, the $15 running power certainly seems, within reach over the next few years. Yeah, I agree. And I think one of the things that's important is, you know, and I will just, I'll give you a little bit more detail on my thinking is sort of bending that historical growth curve- Yeah ... that you described and getting up, you know, into that 7-10% range. And if you think about what's happened in our space, you know, go back to, for us, to 2022, coming out of the pandemic, significant tailwind from pricing in 2022, another year of tip pricing tailwind in 2023. 2024 has been relatively stable from a pricing perspective, and we expect 2025 to be stable. So if I just take The Street has us at a 10.4x next year, you know, we think that the ability to maintain that price versus the historical- Yeah ... practices of giving that back is worth about a point to us. I think the significant number of concurrent secular tailwinds, whether it's in, you know, automation- ... aerospace and defense, AI, you know, you know, the Industry 4.0, you know, we think those combined tailwinds are worth about another point of growth to us. And then the final piece is, you know, at the time of the Maxim acquisition, we talked about the synergies we generate, and we expect to have about $1 billion worth of revenue synergies by 2027. So you think about those three factors as about a three-point step up- Yes ... in sort of the historical curve, which is how we get comfortable and how I get comfortable with where we're headed from an EPS and a free cash flow perspective. To that end, I mean, at, we always look at, you know, a strong indicator from our perspective of forward revenue growth profile is the design win pipeline. Right? And you grew your design win pipeline by a double-digit percentage rate in fiscal 2023 across all of your end markets, right? So how is 2024 tracking so far relative to that number, and what areas of your portfolio or, end market exposure are you seeing the strongest expansion and revenue opportunity as you look at that sort of forward pipeline? ... So we are continuing our strong design win. And you're right, that the best look at our sort of depending on market, right? As the design cycles have shortened in a number of places, you know, even the historical, you know, data center design cycles have gotten significantly shorter. So I'd say that the design win is a good lookout for the, you know, one to three-year growth period. You know, we continue to see growth. We are growing again in double digits in 2024, and actually we're seeing some really good strength in the auto design win space. You know, and we talked about that. I think we've talked about it in a couple of prior calls, you know, getting design wins in at two more of the largest companies. We've gotten a number of design wins in China with, you know, one of the larger new entrants in China. So we feel very good about where we are from a design win perspective. Perfect. Maybe a question in the crowd- Oh! Oh. Hi, just to clarify, so in 2022, you said long-term target growth, 7%-10% on, on revenue base. Okay, on revenue base, $11.2 billion. Obviously, peak to trough revenues come down. So how should we think about the 7%-10% on, on what base? Grab... I can grab that. You're right. So I think what Rich was outlining was the targets, the 7%-10% growth, the operating margin profile, the returns are all good metrics. Using 2022 as a base year is gonna be tough, 'cause that was kind of a in the upswing cycle, which is a huge inventory build on top of that. I think if you think over the long term, this business should grow 7-10, they're off mid- to high 40s, up to 50% operating margin and a lot of free cash flow. Now, what base year I think is the, is your base of your question of what's a good year to start from? I think if you want to start... Honestly, if you want to look back and say there's a lot of noise in 2020, 2021, 2022, 2023, you start in 2018 to 2019 as a base year, and you grow off from there, and you look at a trend line. You can even see how far we're shipping below that- Yeah ... trend line today, and that's what gives us optimism that we're going to have a good year in 2025, and we're also not far off from that bogey of $15 of earnings. Note, in 2027, be very hard to do. There's no reason to think we're not too far after that. If you look at that base year of 2019 revenue and you just grow it from there, and you see where we went to, where we are today, and the future growth of this business, is what, what gives us confidence. Any other questions? Let's focus on your industrial business, right? 45%-50% of closer to 50% of total revenues, composed of a set of very diversified segments right across different end markets: factory automation, healthcare, instrumentation and tests, energy infrastructure, aerospace and defense. Help us understand the sizing and growth of the different subsegments as the team moves through the potential upturn and on a go-forward basis, and what of these subsegments are likely to outperform going forward? Sure. So just broad strokes, if you think about in our industrial business, the instrumentation and test part of the business is about 25%, probably a little bit more than 25%. The automation part of our business is about 25%. If you look at the aerospace and defense and healthcare businesses, that's round numbers, about 15%- ish of our business. And then if you look at the energy is probably in the mid to high single digits, so sort of the rest is other. And, you know, as we talked about, we're continuing to see growth in all of the- ... all of the end markets in industrial, with the exception of automation. And so, you know, we, we've talked a little bit about, you know, the activity we're seeing in AI-related high bandwidth memory and tests. Yeah. You know, that's, that's significant, you know, as a green shoot. You know, on the aerospace and defense side, we have a number of design wins there ramping, and obviously with the, you know, the global macros, you know, increases in defense spending, you know, we feel pretty good about where we're gonna be on the aerospace and defense side. You know, and if you, you know... I guess those are the, the big green shoots I like at this stage. Yeah. I think if you, and you look at kind of the business, like you said, automation is weak, but there's a lot of trends in that business that will propel it- Right ... to growth. Maybe not this year. Next year, I think we start seeing it, but over the long term, that's a very good growth market for us. The other one we don't talk much about, I think the energy franchise with industrial. Energy for us is about renewable energy, about distribution and transmission of energy. As you think about, like, EVs, AI, all this consume a lot of energy, you're gonna need an upgrade of the grid. I think what you'll see is that business today, which points out is like 7%-8% of industrial, that's probably what... It's small, but probably one of the faster growing areas of industrial over the next five, 10 years. You'll probably hear us talk more about that over the next couple of years as we build that design win pipeline. What is going on in the automation side? As your customers, obviously weak right now, not a surprise. On a go-forward basis, obviously, a lot of new manufacturing programs being dialed in by your customers over the next few years, automation is extremely important. When I think about Analog Devices, I can think about things like robotics, I can think about things like you know, if I look at what Maxim brought with their programmable logic control and your signal conditioning, a lot of good things happening on that front. But when we think about automation, what are some of the sort of key, sort of new opportunities there for the team? Is it robotics really kind of the biggest opportunity? I think robotics is one of the biggest opportunities. You know, we're continuing to see advancements from, you know, the fixed arm robot to the- ... autonomous mobile robot to eventually, you know, a more humanoid-type robot and performing incremental functions. But and so we're very confident because we've got a lot of content in all of those spaces. Yeah. But a little bit of what's happening on the automation side is, you know, broadly, the industrial CapEx? That's right. Right? Yeah. Look, it would be great to see China pick back up- Because a lot of our, you know, non-China customers are shipping a lot of their automation equipment into China. So as the broader, you know, broader economy improves, we'll see some growth. But I do feel like we're very well positioned, 'cause as you mentioned, earlier on, Harlan, it is about, you know, the physical, real-world signals and converting them into actions, you know, through the automation process that's gonna be valuable, and we have tons of content in that space, as you know. That's... Let's turn to automotive. 30% of your revenues, you know, we did discuss the profile of the business over the past few quarters. Orders improving first half, little bit of a step down in June, June/July time period. You're seeing the order inflection back again in automotive, so that's a good trend. When, and I think you did mention this, but when do you think this segment actually bottoms from a revenue and shipment perspective? And how do you think about the segments that have been negatively impacted the most versus segments that are doing better, given your leadership in areas like connectivity, right? Both ADAS, in-cabin connectivity, and power management. Right. Look, I think our view now is that the downturn continues into Q1. Yep. Now, I'm optimistic that that could be an inflection point for us, but we don't have good enough visibility for me to say that definitively, Harlan. But again, on parts of our business that are growing, we continue to have really strong double-digit growth across the parts, the A2B, the GMSL, and the functionally safe power. You know, and on the... You know, just if you think about the broader auto, right? Yes. And I sort of carve it up into the three obvious pieces. You know, your ICE, and your plug-in hybrid- Yeah ... your full EV, right? Regardless of which platform they're in, we have a lot of content, because even your cheapest ICE vehicle has microphones, cameras, and needs connectivity for all those systems, so that's positive. But obviously, we get a bigger and bigger benefit on auto as you move, right? So we get a little more content when we get to the plug-in hybrid, and we get the most content when we get into the full EV. There's an interesting dynamic that's been happening in the last couple of quarters. The plug-in hybrids are growing significantly faster than the full EVs. So that is a bit of a headwind in the moment just because we have much higher content, right? The BMS is a big value add for us- Right ... in the full EV, and that's not as critical in the plug-in hybrids. However, we are still in the camp that, you know, we are going to a full EV world. You know, we're still only penetrated, I think, the industry analysts say we're penetrated 18%- That's right ... in EVs, and could get to 30% by 2030. So we still think that that's a great long-term growth opportunity. But near term, obviously, there's broad pressure on vehicle units. If I look at the segments that are doing well, A2B, GMSL, functional safety, I think you guys said and continue to say that that business is driving strong year-over-year growth dynamics. What portion of the mix is that of the auto business right now? Yeah, sure. If you look at it, so the growth areas outlined are about half the auto mix. About half. Half. Okay. It's interesting, if you look at it, and I get the question all the time: "Why won't auto be as bad as other markets from peak to trough? Yeah. And it's that content piece, that 50% that's still growing. If you look at the other half of auto, we call it the production part, that's more tied to SAAR or production, that production part will be down over 30% based on our outlook. So it is similar to the other parts like industrial- Yes ... non-consumer, but you have the other part that's lifting up the peak to trough, the content piece. So we've already digested the inventory between this quarter and next quarter for the SAAR component, and the other part's still growing. Why? Each car every year has more content, more radars, more cameras, which means more connectivity, means more functionally safe power. We have new wins coming to market. So that's what gives us comfort that we're pretty much at that trough in auto, too. And yes, it got a little softer over the summer, but it's not falling off a cliff. It got softer. Right. As Rich pointed out, things got better from there. Yes, it's not as strong as it was three months ago, but it's not continuing to fall, which is also a good sign. Yeah. What are you, what are you seeing in the automotive business from a geographical perspective? Europe, North America, Asia, China. I think I mentioned it's been strongest in China. We've actually seen, you know, two straight very strong quarters in China, and then obviously we're, you know, it's soft, it's softer everywhere else, right? Yes. Any questions from the audience on industrial and automotive? I'd just be interested to know your... As you think about the future revenue growth rate of the company, the 7- 10 you laid out, and you mentioned kind of 300 basis points, kind of, help you'll get versus history, are there any areas we should be putting a minus in front, markets that might not have developed the way you thought or, you know, areas that become more commoditized or something that just is not trending the way, you know? Is anything coming out of the bucket effectively? I don't think anything's coming out of the bucket, but, you know, we've talked about this in a number of forums, and one thing I will continue to keep my eye on, just from a pricing perspective, is the, you know, the continued increase in capacity that we're gonna see from our domestic competitors and the increases in China investments. However, my counter to that is, you know, we feel like we're very well positioned. We are not in the high-volume, ship as much silicon game as possible, right? You know, we tend to go for the high-value, complex areas where we need more design and analog expertise to solve those problems. So I think that we're well-positioned, and we continue to win even this is where we are a bit higher priced, but... So I don't have anything that I think is growing in a worse way than we expected. I just think we have to continue to watch, 'cause the pricing pressure is gonna be most challenging in China and in auto for us. I think the only area I would say wireless communications is much worse than we thought two years ago- Yeah ... on the 5G standpoint, but that's okay. With ADI, we're so diverse that that is definitely weaker than we thought, but we didn't envision AI two, three years ago, and the wire, the wireline piece. I think the wireless part growth comes down, the wireline piece comes up, and you're probably in the same spot. That's what helps being diverse. You get your goal. We put 10 - 15 growth drivers in the business. We'll be right and wrong in some of those, some high, some low, but that's what gives us that confidence in the seven to 10, is there's so many different growth drivers that will build up to that seven, ten. It's not one thing for ADI, it's multiple things that drive that growth. We have a question over here. Those design wins that you've seen in China. Can you just give us a bit of a sense for what you're seeing in terms of the credibility of local competition, analog, and how hard-fought those design wins have been more recently? You're asking how hard? They're always hard. I mean, even before geopolitics, design wins are always hard, whether it's China, Europe, North America. That hasn't changed at all, and what gives us the most confidence, I mean, we get a lot of questions on China, as we should, is our design wins in China continue to grow, which gives us good confidence that that business will continue to grow the next few years. The design wins won't tell us what happens five, ten years from now, but the design win pipeline, that it keeps expanding in China and globally, gives... is what gives us the confidence that that business will continue to grow. Good, a good example, right, and we've talked about, you know, have pressure in the BMS space over the, you know, over a period here. We have actually gotten incremental design wins in BMS in China. Again, hard-fought, and I think I've said this before, the most difficult price challenges and challenging environment is clearly in China, but we are continuing to win, and we are continuing to get it, you know, in some of the largest manufacturers in China. I guess the question that, to, to your point, we always do get questions relative to the China domestic competition, right? For the Analog and microcontroller and broad diversified semiconductor companies. Maybe you can provide us with a profile of your exposure to China, Analog's exposure to overall China domestic consumption, and which portion of that portfolio is really subject to kind of the more commodity segments of the market. My sense is it's a very small part of the overall business, but I'm not sure if there's any way that you guys can quantify that. So you're right. I mean, we don't play much in the high volume- Right ... commodity cycle- That's right ... whether it's China or anywhere in the globe. But if you look at our China revenue, only about 5% relates to consumer, and I think that's the part they're going after. Why? It's high volume. You don't need as robust or reliable technology in that market. If your cell phone fails, you get a new one. Yes. If your robot arm fails, it costs millions of dollars, and the line goes down. Right. So, we don't play in those higher volume area of the consumer. So, I think you're right. China wants to do more indigenous. They will over time. We don't really play what they're going after as much. Right. To say we're completely insulated would be fabrication. They'll try to do what we do, but they won't ever get to the performance we get. And Vince always says it good, "If you want the best performance chip, you will choose ADI. If you want something else, there's other suppliers, whether it's a China supplier or our competition. You mentioned this briefly in talking about the infrastructure, comm infrastructure part of the business, but the team is exposed to the nice trend of artificial intelligence, right? You participate in both compute, memory, networking segments of the AI market, right? So for example, you guys mentioned this, your high-speed products go into the ATE, or automated testers, that test the complex NVIDIA GPUs, the HBM memory stacks. On the flip side, you've got your control solutions, which go into these very sophisticated 800 gig, 1.6T optical modules, and then finally, your power management portfolio, you guys are taking your vertical power delivery to drive these very power-hungry sort of GPUs. So how big is the AI business for Analog, and how fast do you expect this segment to grow sort of going forward? So that the AI-exposed part of our business is about $400 million. Now, it's about split two-thirds, one-third. Two-thirds of that is in the instrumentation and test, and that is the, as you described, that is the high-bandwidth memory testing, you know, which is critical for all- ... these AI data center builds. You know, that continues to be very strong for us. Matter of fact, we're gonna have a record year this year in memory test. You know, on the connectivity and the power, you know, we and we talked about this a little before, we have two design wins that are coming online. You know, we have the 1.6 Tb optical module that's been designed- Yes ... one of the large high-performance compute companies. You know, that is gonna start to generate revenue in the back part of 2025, and then we have a vertical power solution in designing it at one of the hyperscalers, and that is expected to generate revenue sort of maybe late 2025, more likely into 2026. The combination of those two opportunities is worth about $100 million, so sort of 10% overall to the communications business. So pretty significant for us from a go-forward perspective, you know, and we continue to work across the hyperscalers and the high performance compute, you know, and are gaining traction there. So we are exposed there. You know, and look, and Vincent has talked about this a bunch, right? We're still in this first part of the infrastructure, you know, the AI world, right? This is the infrastructure build-out. You know, the next wave, which will be very powerful for ADI in the long term, is when we get, you know, the AI out at the edge, right? Doing the compute and at the edge where the data is being gathered, right? And that drives a ton of incremental benefits because you get lower latencies, you get lower power consumption, you get better security. Right. And so that's another significant opportunity if you think about where we're headed from a long-term perspective, from an AI exposure. Just rewinding back a little bit, in the comm infrastructure business, strong leadership in signal processing, RF, power management, DSP, really strong exposure to 5G infrastructure, cloud, hyperscale, right? It's clear that the overall infrastructure spending is cyclical, influenced heavily by the macro trends, and, you know, this segment has been soft for the analog team for over 18 months, right? The good news is it looks like it did trough in the first half of this year, down 45% year-over-year, grew sequentially last quarter, expected to be relatively flattish this quarter. How do you see the potential profile of recovery in infrastructure, kind of looking out over the next few quarters? So I actually, you know, we're not seeing a lot of traction in the traditional- Yes ... wireless and wireline. So I do think that the recovery there will be muted, but we will benefit from the pieces I just- Yeah ... described- ... on optical modules and power management as we continue to gain more traction there. Look, I also have a view longer term, this increase in speed inside the data centers is gonna drive a need for increased speed outside- That's right ... the data center. So I expect we will start to see a new wave of capital spending there. Because, you know, if you look at where the infra providers or telcos- Right ... they just haven't been spending on it, right? And we've talked about that a lot in- Yeah ... prior quarters. Let's talk about the financials in the manufacturing strategy. You did bring this up a couple of times, but, you know, the hybrid manufacturing strategy, the flex capacity that it enables, has allowed the team to drive 200-300 basis points better gross margins at the bottom of this current cycle, right? You have a target to qualify 70% of your products to run both internally in your fabs, externally at your foundry partners by the end of next year. First question is, is the team on track for this? And where does that sort of mix stand today, right? Percentage of products that can run both internal and external. You know, we've talked about this. You're starting to see our CapEx come down. We've talked about getting back, and that's because we're getting to the end of the resiliency campaign. You know, part of this resiliency campaign was qualifying more of our products, internal and external. You know, today we're still running about 50% internal and external, but we expect by the end of next year, we will have done the qualification for 70%, which gives us the ability. Now, you know, to be clear, it doesn't mean we can run 70%. Right ... of our products externally- That's right ... at any one point in time, it just means it gives us more products and families that we can swing internal and external, as we, you know, deal with both you know, the increase and decrease in demand, right? Because obviously, if we saw a steeper acceleration in the demand than we've currently got planned, we, we would fill our factories and then start to look to scale externally. So we feel very good where we are. The other piece of this resiliency campaign that was really important to us, because it was one of the things customers asked for, is, you know, we've, we've got this partnership we talked about with TSMC to get capacity in their, their new Japan fab. And so when that fab comes online, we'll have the ability to produce 95% of the product outside of China, including Taiwan. Now, clearly, we do not want to move our production outside of Taiwan- Right ... but having the ability to is an important resiliency for our customers. So again, and that's, you know, been part of what we've been doing, spending record amounts of capital over the last couple of years. Portfolio expansion in your target markets has been a driver of the outsized growth rate. Obviously, the team has done a phenomenal job on the organic growth of the portfolio, but you've also got a very, very strong track record of unlocking synergies within the acquisitions that you've done, Hittite, Linear Tech. Now you're in the midst of unlocking $1 billion of revenue synergies by fiscal 2027 via the Maxim acquisition that you completed in 2021. And we can already see some of this unfolding, right? GMSL, Maxim attached to Analog A2B connectivity solutions. We can see the synergies within the battery management portfolio. We can also see that within the focus on factory automation, right? Maxim's leadership in PLC, combined with ADI's leadership in signal chain. You know, where are you in that journey to $1 billion, and the confidence level on getting there by fiscal 2027, or does the downturn also kind of push out that revenue synergy extraction to maybe fiscal 2028? So despite what we've seen in the variability, I think we are still on track for the synergies in 2027. I should get you to write my scripts. You did a very, very nice job- Right ... summarizing where we're gaining traction on the synergies, but we are continuing to see design wins, you know, across the portfolio. We are seeing a lot of co-development work with our customers related to the synergies, so we feel very good about where we are, on track for the 2027 synergy goal. Any questions from the audience? Almost about out of time, but I did want to ask a question on the U.S. and European CHIPS Act bills, right? You've got fabs in both U.S. and Europe, or you know, we are seeing grant disbursements. So what's the status of grant disbursements and timing of incentive tax credits for the Analog team? And more importantly, have you seen an acceleration in customer engagements that are looking to source more of their semiconductor value from the Analog team going forward, especially as customers look to not only boost their supply chain, right, from a diversification, but also from a resiliency perspective? Sure. So I'll go back and I'll do the CHIPS Act first piece. So, at this point, we've got on our balance sheet about $300 million worth of investment tax credits that will start to come in over time. We have not seen significant amounts of cash where, you know, with our year-end off of in different tax sectors. Yes. So we'll start to see some of those come in. You know, we're expecting we'll see about $100 million of that come in in fiscal 2025. You know, we are also gonna receive some grant money. We've already been awarded some grant money in Europe. We are in the middle of finalizing our grant process with the U.S.. We expect we'll have more visibility on that in the next quarter or two. But to date, it hasn't had a material impact on cash or our P&L. We have some minor amounts flowing through our P&L, but I think, you know, year to date, it's less than that. So this is a more forward looking for us. You know, and clearly, you know, what we continue to see with customers, and this is both from a resiliency, but just from an overall perspective, is customers are coming to us when you need real domain expertise to solve a complex problem. And where we excel is the hardest problems, most complicated solutions, and delivering stuff that performs and lasts. You know, look, you can see in our products, right? Right. Our average industrial product lasts for 15 years. Great. Well, we're just about out of time. Rich and Mike, thank you for participation, great insights today, and we look forward to monitoring the execution of the team going forward. Thank you very much. Thanks for having us, Karl. Yeah. Thanks, everybody. Thank you.