Good day, and thank you for standing by. Welcome to the conference call to review first quarter fiscal year 2023 financial results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sam Franklin, Head of Capital Markets and Investor Relations. Please go ahead. Thank you, operator. Good morning, everyone, and welcome to GlobalFoundries first quarter 2023 earnings call. On the call with me today are Dr. Thomas Caulfield, CEO, and David Reeder, CFO. A short while ago, we released GF's first quarter financial results, which are available on our website at investors.gf.com, along with today's accompanying slide presentation. This call is being recorded and a replay will be made available on our investor relations webpage. During this call, we will present both IFRS and adjusted non-IFRS financial measures. The most directly comparable IFRS measures and reconciliation for adjusted non-IFRS measures are available in today's press release and accompanying slides. I would remind you that these financial results are unaudited and subject to change. Certain statements on today's call may be deemed to be forward-looking statements. Such statements can be identified by terms such as believe, expect, intend, anticipate, and may, or by the use of the future tense. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as the risks and uncertainties described in our SEC filings, including the sections under the caption Risk Factors in our annual report on Form 20-F filed with the SEC on April fourteenth, twenty twenty-three. We'll begin today's call with Tom providing a summary update on the current business environment and technologies, following which Dave will provide details on our end markets and first quarter results, and also provide second quarter 2023 guidance. We will open the call for questions. We request that you please limit your questions to one with one follow-up. I'll now turn the call over to Tom for his prepared remarks. Thank you, Sam, and welcome everyone to our first quarter earnings call. I'm pleased to report Q1 results that are in line with the guidance we provided in February as we continue to deliver resilient financial performance amidst a challenging macroeconomic and cyclical backdrop. Let me start by providing a brief update on the current business environment. Similar to others in the industry, we believe that semiconductor inventories are coming down more slowly than previously expected, and that the rebalancing of demand will extend at least through the second quarter, particularly in end markets such as smart mobile devices, communications infrastructure, and data centers, as well as the lower end of the consumer and home electronics markets in general. Based on discussions with our customers prior to our fourth quarter update, we previously anticipated that the first half of 2023, and likely the first quarter of 2023, would mark the low point in revenue and the peak of the inventory cycle. Based on more recent conversations with customers and our own internal models, we continue to anticipate that the first quarter revenue will represent the low point of our 2023 quarterly revenue and that we'll have quarter-to-quarter modest sequential growth throughout the year. We are expecting continued sequential revenue growth, the return to more normalized inventory and demand levels is forecast to happen more slowly than previously anticipated and will most likely occur later in the year, well into the second half of 2023. Despite forecasting slight year-over-year improvements in ASP, or our average selling price per wafer, we are now anticipating that revenue will decline year-over-year in the mid to high single-digit% range. David will comment on this further in his section. Despite the headwinds in the aforementioned end markets, we continue to see healthy demand in faster-growing segments such as industrial IoT, aerospace and defense, and the automotive markets. We are continuing to grow our single-source design wins, add customers, and sign new LTAs. Let me now touch on our results. In the first quarter, GF revenue declined 5% year-over-year and 12% sequentially, with reduced wafer shipments being partially offset by year-over-year improvements in ASP and mix. Coupled with strong operational execution, this resulted in a resilient adjusted gross margin for the quarter as we continue to proactively manage our costs to help offset the broader industry headwinds. We reported adjusted gross margin of 28.5% in the quarter, and we delivered Adjusted Earnings Per Share of $0.52, which were at the high end of our guidance range. Dave will give more color on our financials in a moment, but let me now provide a brief update on some of our recent customer partnership activities. Consistent with continuing to build our customer partnership strategy, we added an additional 5 long-term agreements during the quarter, which added incremental prepayments and access fees of roughly $200 million and revenues of approximately $1.4 billion under these LTAs. With respect to our differentiated product platforms, we continue to make progress in the first quarter with new GF product qualifications, serving our customer needs across communications, infrastructure, and data center, automotive, as well as smart mobile devices and IoT end markets. Starting with automotive, we continue to deliver new power management products with expanded voltage handling capabilities on our highly competitive 130 BCDLite product line at automotive grade. This adds additional differentiated feature on our growing automotive product portfolio. In the communications infrastructure and data center end market, at the most recent Optical Fiber Communication Conference in March, we were pleased to have no less than 5 of our customers, including Ayar Labs and Ranovus, share demos of their data center solutions using GF Photonics, specifically our 45CLO technology. Ayar Labs also demonstrated the industry's first 4 terabytes per second optical solution for chip-to-chip connectivity. For smart mobile devices, we are accelerating the delivery of enhanced features on ADSW. That's our leading RF silicon on insulator-based product line for front-end module components, including an enhanced low noise amplifier. This technology will be making its way into the next releases of premium-tier handsets. In IoT, we continue to innovate our differentiated technologies focused on enhanced power efficiency and embedded memory for secure intelligence solutions at the edge. One example of this is our customer Nordic Semiconductor, the market share leader in Bluetooth Low Energy microcontrollers, recently announced their next generation product series using GlobalFoundries 22FDX. This is an exciting application of 22FDX as it enables an integrated single chip solution delivering more RF range at industry-leading low power efficiency and embedded nonvolatile memory for security. Finally, continuing our research partnership efforts under GF Labs, we executed and announced a strategic university partnership agreement with Georgia Tech. This agreement spans a broad range of research activities, including their leadership capabilities in advanced packaging, silicon photonics, and workforce development initiatives. To summarize, I am pleased to report resilient financial performance in line with our guidance as our dedicated teams around the world continue to execute on the targets that we set and to deliver to our customers and our stakeholders. With that, over to you, Dave. Thank you, Tom, and welcome to our first quarter earnings call. For the remainder of the call, including guidance, I will reference adjusted metrics, which exclude stock-based compensation and restructuring charges. Our first quarter results were in line with the financial range we provided in our last quarterly update. First quarter revenue was approximately $1.84 billion. We shipped approximately 511,300 millimeter equivalent wafers in the quarter, an 18% decrease from the year prior period. Driven by reduced wafer shipments primarily related to mobile and consumer-driven end markets. ASP increased approximately 12% year-over-year, driven by ramping long-term customer agreements with better pricing as well as continued improvement in product mix. Wafer revenue from our end markets accounted for approximately 87% of total revenue. Non-wafer revenue, which includes revenue from reticles, nonrecurring engineering, expedite fees, and other items, accounted for approximately 13% of total revenue for the first quarter, broadly consistent with our expectations. Let me now provide an update on our revenues by end markets. Smart mobile devices represented approximately 38% of the quarter's total revenue. First quarter revenue declined 29% from the prior year period, principally driven by reduced volumes in the low to mid-tier smartphone segments and a continuation of the well-publicized inventory correction within the broader smart mobile market. This decline was partially offset by higher ASPs, premium tier mix growth, and continued content growth in our RF transceiver and audio products, which recorded double-digit growth from the prior year period. As you've heard from others, inventory levels have remained higher than expected in most of the smart mobile markets during the first quarter as the inventory correction continues to work through the supply chain. We believe that inventory levels will be largely normalized throughout the first half of 2023, and that more historical inventory levels will be achieved by the second half of the year. We continue to focus on growth opportunities in our RF transceiver and Wi-Fi SoC technologies as we seek greater value capture from the premium tier smartphone segment by supporting the transition towards more feature-rich handsets. In the first quarter, revenue for the home and industrial IoT market grew approximately 7% year-over-year, representing approximately 19% of the quarter's total revenue. Year-over-year growth in this end market was primarily driven by our aerospace and defense business, where we continued to ramp to volume our design wins and driven by our wireless technologies that enable the broadening use of digital payments as well as industrial and government connected devices. We expect increased customer demand for next generation analog and mixed signal technologies, particularly within the smart card and aerospace and defense end markets, to largely offset the near term inventory correction and market softness and the more consumer-centric portions of the IoT market. As Tom discussed, automotive continues to be a strong growth segment for us. First quarter revenue grew 122% year-over-year, representing approximately 10% of the quarter's total revenue. As discussed in our fourth quarter results, we expect to see a continued ramp across our processing, sensing, connectivity, and vehicle infrastructure technologies throughout 2023. We have and will continue to allocate more of our existing capacity, as well as add additional capacity to support the continued growth of silicon content within the automotive market. Next, moving to our communications infrastructure and data center end market. First quarter revenue grew approximately 8% year-over-year and comprised approximately 19% of the quarter's total revenue, which was broadly in line with expectations. Due to the buildup of data center inventory in 2022 and demand softening for enterprise wired infrastructure, we expect to see a decline in revenues for this end market through the first half of 2023, with volumes expected to improve later in the second half of 2023. Finally, our personal computing end market declined 12% year-over-year in the first quarter and comprised approximately 2% of the quarter's total revenue. PC and notebook demand continues to be soft. We expect this end market to continue to decline as a percentage of our overall revenue in 2023. In the first quarter, we were awarded and received a tax refund of $152 million by the State of New York related to the significant manufacturing investments we've made in the state. We're proud to have partnered with the State of New York to create tremendous value for the local community. For the first quarter, we delivered adjusted gross profit of $525 million, which was at the high end of our guided range and translates into approximately 28.5% adjusted gross margin. The roughly 320 basis point year-over-year improvement was driven by higher ASPs and a richer product mix. Operating expenses for the first quarter represented approximately 11% of total revenue. R&D for the quarter was approximately $105 million, and SG&A declined sequentially to $94 million. Total operating expenses were about $199 million as we continue to prudently manage our costs. We delivered operating profit of $326 million for the quarter, which translates into an approximately 17.7% adjusted operating margin, roughly 330 basis points better than the year ago period and above the high end of our guided range. First quarter net interest and other expense was $13 million, and we incurred a tax expense of $23 million in the quarter. We delivered first quarter adjusted net income of approximately $290 million, an increase of approximately $58 million from the year ago period. we reported adjusted diluted earnings of $0.52 per share for the quarter. Let me now provide some key balance sheet and cash flow metrics. Cash flow from operations for the first quarter was $479 million. CapEx for the quarter was $957 million or roughly 52% of revenue. At the end of the first quarter, our combined total of cash equivalents, and marketable securities stood at approximately $3.2 billion. We also have a $1 billion revolving credit facility which remains undrawn. Before I transition to guidance for the second quarter, I will comment briefly on the outlook for the year. As Tom articulated in his prepared commentary, we believe that the first quarter represents the low point for our revenue in 2023, and that we will grow slightly on a sequential basis quarter to quarter throughout the year. Although we only guide one quarter at a time, our expectation based on our internal models and our discussions with customers is that the second half of 2023 will signal the normalization of inventory levels, and that increased volumes are forecast to occur later in the second half than previously anticipated. Based on updated models, we expect that year-over-year shipment volumes for 2023 will decline in the high single-digit percentage points range, partially offset by modest improvements in ASP and mix, resulting in a 2023 year-over-year revenue decline in the mid-to-high single digits. Next, let me provide you with our outlook for the second quarter. We expect total GF revenue to be between $1.81 billion and $1.85 billion. Of this, we expect non-wafer revenue to be approximately 10% of total revenue. We expect adjusted gross profit to be between $498 million and $527 million. We expect adjusted operating profit to be between $288 million and $327 million. Excluding share-based compensation for the quarter, we expect total OpEx to be between $200 million and $210 million. At the midpoint of our guidance, we expect share-based compensation to be approximately $45 million, of which roughly $16 million is related to cost of goods sold and approximately $29 million is related to OpEx. We expect net interest and other expense for the quarter to be between $4 million and $12 million and tax expense to be between $20 million and $25 million. We expect adjusted net income to be between $256 million and $299 million on a fully diluted share count of approximately 558 million shares. We expect adjusted earnings per share for the first quarter to be between $0.46 and $0.54. For the full year 2023, we continue to expect CapEx to be approximately $2.25 billion. In summary, strong operational performance and proactive decision-making across our business enabled us to deliver first quarter results broadly in line with the guidance ranges we provided in our fourth quarter earnings update. We are continuing to tackle the challenges presented by the cyclical headwinds impacting our industry and are implementing initiatives to mitigate their impacts on our business as we remain focused on delivering the strategic goals and financial targets set out in our long-term model. With that, I'll turn the call back over to Tom. Thanks, Dave. We are proud of GF's 14-year history and specifically the strong progress we've made over the last several years. The opportunity ahead is even more exciting for GF. In a world that depends on the supply of semiconductors for economic, national, and supply chain security, we offer our customers a unique and differentiated value proposition. We achieve this by focusing our innovation on application-specific features our end markets require and deliver these via deep customer partnerships. You've heard this story play out as we've continued to achieve significant growth in sectors such as automotive and IoT, two of the most exciting growth engines for our industry. What's different about these markets is that innovation required to win is not based on Moore's Law scaling. GF wins in these end markets because we deliver industry-leading power efficiency with our proprietary FDX technology. We win because we bring world-class RF connectivity across all our technology platforms, allowing for optimized digital and analog content in customer designs. We win because we add intelligence and security at the edge with a range of world-class embedded memory technologies. The proof is in the numbers. As you heard early on during the call, we are continuing to grow our revenue in these markets, and it's our differentiation that is driving that. We see secular acceleration of the role of semiconductors in the world. We believe in the criticality of secure manufacturing to deliver products to global markets, and we are committed to continuing to invest in our global talent so that GF can play an increasingly vital role in the future of this industry. It is in that context that I'm delighted to announce two accomplished leaders who are joining the GF leadership team to help drive our business and our technology leadership and accelerate our financial performance during the next exciting phase of our journey. Industry veteran Niels Anderskouv will be joining us in June as our Chief Business Officer. Niels will own and deliver our product and technology roadmap, our commercial strategy, and our go-to-market execution. Niels comes to us following a 20+ year career at Texas Instruments, where his last role was as Senior Vice President and Executive Officer responsible for the company's multibillion-dollar analog power business. He brings deep expertise in power management, analog and mixed signal technologies, and an impeccable track record of driving and delivering financial performance. Our existing product, end markets, sales, and technology teams will report to Niels. Additionally, Tim Stone will be joining GF in June as our chief financial officer. Tim will build on the strong foundation laid by David Reeder and will focus on accelerating our financial performance, enhancing our investment discipline, and continuing to bring transparent communication to all of our stakeholders. He brings a world-class finance pedigree to GF, including 20 years at Amazon in senior finance roles, including as CFO for the AWS and Devices business. Tim is a seasoned public company CFO with experience at Ford Motor Company, Snap, and most recently as the CFO for a private AI software company. With his breadth of experience and track record of delivering business outcomes in fast-moving technology-enabled industries that GF serves today, Tim brings new and vital perspectives to help guide GF in its next chapter. David Reeder will be leaving GF after transitioning to Tim Stone over the coming months. Dave has been a true partner to me through our transition to the public markets and has left an indelible imprint on GF and on me personally. On behalf of the entire GF family, I wish Dave the best of success in his next chapter. Dave, I'll turn it back to you for your final thoughts before we head into Q&A. Thanks, Tom. Three years ago, I joined GlobalFoundries with a singular mission, one that was shared across GF's talented and diverse workforce: to build the world's leading and only geographically diversified, feature-rich semiconductor foundry. We have made tremendous progress towards this goal and have never been better positioned to serve our customers' increasing demand across multiple markets as a secure, geographically diverse partner with best-in-class technology. With all the progress GF has made, I'm ready to hand over the reins to Tim Stone. I look forward to welcoming him to GF and will continue to support the company as we complete the transition over the coming months. In closing, I wanted to extend my appreciation to our 13,000 employees around the globe who deliver every day for our customers. With that, let's open the call for Q&A. Operator? As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please limit your question to one question and one follow-up only. Thank you. Please stand by while we go by the Q&A roster. Our first question comes from the line of Harlan Sur with JP Morgan. Your line is now open. Good morning. Thanks for letting me ask a question. Dave, thanks for all the support and helping the team drive the strong execution profile, and best of luck on future endeavors. Thanks, Harlan. You know the team's pricing. Yeah, thank you. The team's pricing is based on technology differentiation, right? Which drives the very high mix of sole source engagements. Your partnerships are not arm's length, right, but very strategic. On the flip side, I mean, the supply demand dynamics in the industry have weakened. Competitors continue to add capacity. You did say that the team is still on track to grow ASPs this year. What about on new business and LTAs that you're winning, LTAs that you're negotiating? What's the ASP trend on the new business? Thanks, Harlan. Look, when I think about our pricing, you know, the first time we talked about pricing for 2023 was on our November call, where we said we thought pricing was gonna increase on a year-over-year basis in 2023 versus 2022. We reiterated that again in February. We delivered it in Q1, and we're kind of reiterating it for the year here in 2023, that we believe that pricing will increase slightly on a year-over-year basis, 2023 versus 2022. When we look out in time, and we think about the D wins that we're winning and the LTAs that we're signing, five of them in the first quarter, another $1.4 billion of LTAs. You know, those LTAs deliver the economic value that GF needs to deliver our long-term financial model. I think customers are looking through this kind of near-term perturbation with the inventory in their channel. They're looking out into time, and they are seeing, you know, capacity constraints in the future, particularly in the geographies where they want that capacity. They're hungry for that geographic diversification as well as the technology that GF delivers. Tom, anything you'd add to that? Yeah, I'd add, you know, this is in the bottom of our slowdown, and we sign these kinds of long-term agreements. You know, our single source business, if you look at the design win mix, for the first quarter, over 90% were single source business. You know, our discipline around design wins, we make sure that all new design wins are accretive to our financial model. That's the way we're driving our business. It's not about all business. It's about accretive business. Appreciate that. For my follow-up. You know, given the weaker full-year revenue outlook, you should still grow your revenues on average, like mid-single digit sequentially in Q3 and Q4. You've got the strong ASP profile. How should we think about the gross margin profile for the remainder of the year? Can the team exit this year at 30%, you know, or better gross margins? Harlan, as you know, we'll guide one quarter at a time, but we did wanna give you some of that color for the year. That stated, I would like to add a little bit more context. When you think about 2022 or the year of 2022, you know, we ran utilization in the very high 90% for the entire year, almost 100% for the entire year. When you think about 2023, in the first quarter, we, you know, guided that we would run in the mid-80s, from a utilization perspective. As you know, every five points of utilization is roughly two points of gross margin. Yet, when you look at what we delivered in Q1 from a gross margin perspective, it was actually, you know, very much in line with what we delivered for the year of 2022. So we've been able, through good operational performance, improved mix, improved pricing, to be able to reset the gross margin baseline for 2023. So when you think about the full year, Q1 being the lowest quarter for our revenue, we stated that we believe we would guide on a Q- to- Q- to- Q basis sequentially throughout the year. I would expect there to be a high correlation of, gross margin and revenue. Perfect. Thank you very much. One moment for your next question. Your next question comes from the line of Mark Lipacis with Jefferies. Your line is now open. Hi. Thanks for taking my question. Dave, sorry you're leaving. really appreciate all the great support, that you've given, us over here at Jefferies. Thank you for that. Thank you, Mark. Maybe a question on the topic of reshoring, which is interesting for many investors. It sounds like your engagement with customers is very high and, you know, I imagine that this is because you guys are providing great technology with good value. I guess I'm wondering, is there a way to quantify or, you know, how the trend of reshoring is impacting your engagements? Are customers telling you that part of your value proposition is, you know, the ability to bring, you know, the manufacturing back to local markets? You know, if you can provide any color on the conversations that you're having with your customers on that topic. Thank you. Thanks, Mark. I think the realization of how important it is to first get a more balanced A supply chain. You know, concentration in very small pockets of the world are not good for geopolitical, geological reasons, for a lot of reasons. The realization is there, and now it always comes down to execution implementation. You know, I would tell you a lot more awareness and drive in more sensitive applications. Think of aerospace and defense, where supply chains out of China, for example, would be very problematic for those types of applications. A lot of energy out of the fabulous companies in China and Taiwan. Their businesses could be shut down if they don't have a global supply chain. I think what we're seeing is a lot more conversations, companies trying to plan their next move. I don't think it's realistic for anybody to say, "Let me take an existing design and report it somewhere else." That's a lot of, over, you know, reuse of important engineering talent, but thinking about future designs and planning it not only on technology and application space, but who and where it can be built. I would tell you in the net of all of that, this still remains an opportunity for us, ahead, very little of it in the present P&L, that you've heard today. Gotcha. That, that's helpful. A follow-up on the, on the auto business, which is, you know, more than doubled on a year-over-year basis. You expect to see continued ramp here and you're adding capacity. How, like, can you just remind us, like, how you think about the growth vector in auto is, you know, doubling annually? Is this kinda how we should think about this, for you guys? Or, you know, could you just talk about, you know, how you see this business, you know, over the next several years? Thank you. I'll go in reverse order. It's all about what you believe. If you believe that the transition from an internal combustion engine to what we call ACE, an autonomous connected electrified vehicle, drives significant content growth of semiconductors in the automotive industry somewhere, you know, between 10% and 15% compounded. You know, eventually, you know, that's the rate at which we expect our growth, but because we're starting with new design wins on new models and off a relatively smaller base, you'll see a higher growth rate like you've seen from us. You know, think about if we go back in 2020, our automotive revenue was less than $100 million. Last year it was around the $375 million mark. This year we still feel that we're gonna be bumping our head up on $1 billion, where earlier we were talking about a fourth quarter run rate. We have high visibility to the types of applications our technology's going into, what cars and the types of features to feel very confident that, you know, we're not done growing in this space. You know, doubling on big base is a lot harder than doubling on small base. I firmly believe that we will continue to grow revenue in this market and gain share, more importantly. Great. Thank you. Very helpful. One moment for your next question. Your next question comes from the line of Vivek Arya with Bank of America Securities. Your line is now open. Thanks for the question, and thanks and best wishes to Dave on his next adventure. He'll be really missed. First, I wanted to ask Tom, you mentioned second half 2023 to, you know, mark a return to some kind of, you know, normal trends. Is that based on historical seasonality? Is that based on specific customer orders? Your large smartphone customer was talking about the weakness in the smartphone market kind of persisting towards the end of the year. That's why I'm just curious, what is giving you the confidence that the second half could mark a return to, you know, some level of, seasonal trends? Well, I think a point was, we start to see normalization of inventories in the second half. As a result, that's why our revenue will have very modest sequential growth. Inventories are coming down. If you look on aggregate, first quarter, we saw from an industry range, modest decrease in inventories. That bodes well for the second half, especially with certain customers are telling us, they wanna let the inventories come down. They're, you know, more normalized how they're feeding the channels. They wanna get this past us. The real change, I think, is when we came into this year, there was a belief that the second half would be a strong recovery, and what we're seeing in the second half is a more muted recovery. That was the point we were trying to make. If I could just build on that just a little bit in a couple of end markets. With respect to smart mobile, obviously, you know, that market's a bit more challenged with some of the inventory there as well as some of the handset volumes. The bright spot for us is that we do play in that premium segment of the market, where we actually not only play in that premium segment, but we also attach more silicon in that premium segment, and that's a segment of the market that's held up a little bit better. We talked a little bit about automotive earlier in the call, I won't reiterate that point. The other end market or maybe sub-end market that I would talk about is the, you know, the Aerospace and Defense business as well as the industrial side and governmental side of the IoT business has also held up quite well. While we've seen smartphone general weakness, and we've also seen some of the lower end consumer-centric weakness, we do have some other businesses that are helping to offset that weakness, and we've been able to reallocate capacity in a very capital efficient way to those markets that are growing. My second question is, you know, what is the report card on LTAs that were supposed to be executed this year? If you go back, let's say a year, right, and think about the LTAs that were supposed to come through in 2023, what has been the actual realization, you know, of that? How much has been pushed out or canceled? You know, what I'm trying to get a sense for is, you know, how flexible are you guys with the LTAs, and how much can we depend on them to, right, deliver on a certain amount of revenue expectation for a given year? Great. Let me address that one, and then Tom, maybe you can build on it as well. From an LTA perspective, you know, the LTAs are actually performing to their stated purpose. What was that stated purpose? Well, that stated purpose was that they would create a framework for discussion for GlobalFoundries and our customers, such that when there were inflection points in the market, that we would sit down in a rational way and in an equal way and have a, you know, healthy conversation around the investments that we've made for maybe demand that perhaps isn't materializing the way we originally expected. We all recognize that we're in an environment where there's too much inventory in the channel, and so just continuing to ship more inventory in the channel actually isn't helpful. That framework has really, you know, come into play, where we have sat down with our customers, and we have looked at the entire economic life and value of that contract, and we've worked across the three main elements that we had spoken about previously, I mean, as early as, even our roadshow. That was, you know, we talked to our customers about price, we talked to them about volume, we talked to them about duration, and we also talked to them about future design win opportunities such that we can capture more share of their wallet in the future to preserve, if not enhance, the economic value of those LTAs. We've been able to deliver on that. As we mentioned, last quarter, you know, we had one customer where we had an underutilization fee settlement. That one was fairly well-publicized. We do not have any other new settlements to announce. What we have been able to do with those contracts is work across that framework that I discussed to not only preserve, but also enhance the economic value to GF. Tom, anything you'd add to that? I think that was exactly the intent. It was to create partnerships, to go to manage the upsides and the downsides together, and the operative term is preserve the overall economic value of the agreement. A lot of that has to do with new wins and new opportunities and extending the life of these. Again, back to a quarter that we're all calling kind of the low point for our industry, we still brought in $1.5 billion of new long-term agreement and $200 million of prepay as part of that. Thank you. One moment for your next question. Your next question comes from the line of Ross Seymore with Deutsche Bank. Your line is now open. Hi, guys. Thanks for letting me ask a question. David, best of luck. Sad to see you go. I wanted to go back to the pricing side of the equation. I know you guys don't guide by wafer units and pricing, but it looks like the first half of this year is, on the pricing side, gonna be up double digits, and you said the full year was gonna be slightly up year-over-year. That seems to imply the second half is going to go down. If that math is correct, is that something to do with mix? Are you having to price more aggressively as part of the negotiations with the LTAs that you just discussed in the last question? Is there any sort of metric that I'm missing in that analysis? Sure, Ross. Obviously, the compares in the first half are a little bit easier than the compares to the second half of last year. You know, what we've always talked about is we've talked about the pricing would continue to improve as we ramp those LTAs, many of which started ramping in the middle to the last half of 2022. The way we think about pricing is, we think pricing at the current levels is very stable, slightly up, and then you're gonna bump around a little bit depending on what the mix of your business is. When you think about a year-over-year basis, that would lead you to the, you know, kind of double the high single-digit, low teens type of growth that you mentioned. As you get towards the back half of the year, you look at pricing that's relatively flat, depending on exactly what the final mix is. Got it. Thanks for that. Then, from an end market perspective, you said earlier that you reiterated the bumping up against $1 billion in the automotive side of things, that's really impressive growth. It seems like that could get you that slight sequential growth in the back half quarters all by itself. Are there other segments that you expect to continue to go down in the back half? It seemed like you said that inventory should be pretty normalized, so I wouldn't expect them to go up that fast necessarily, but it didn't sound like anything was gonna go down. What's really the offset to the automotive growth? Sure. When you think about the sequential growth in the back half of the year, you know, really what you're looking at is you're hearing us say when we say slight, you're hearing us say, we feel good about the industrial and the governmental portion of home and industrial IoT. That's the A&D as well as the industrial business in IoT. We feel good about automotive. We've taken a more cautious outlook on the low end of consumer, as well as the lower end of the handset market. That's what you've heard us communicate, is just the fact that we feel good about those markets, you know, on the aforementioned comments. The other markets, we've just taken a cautious outlook. If the inventory normalizes the way we expected, then perhaps we'll do slightly better. If the inventory and the macroeconomic kind of low-end malaise continues, then we'll be in line with what we told you. We feel like we've positioned ourselves, conservative. Thank you. One moment for your next question. Your next question comes from the line of Joseph Moore with Morgan Stanley. Your line is now open. Great, thank you. Let me add my thanks to David and good luck. In terms of the CapEx, you guys, you know, maintained this $2.25 billion from last quarter. Your revenue outlook is a little lower for the year. I wonder, you know, if you could just kinda walk us through the trade-offs that you're making, is that confidence in 2024? What are the trade-offs between trying to drive more cash flow versus trying to invest in the business? Sure. First, let me start with just by saying that the majority of that CapEx is really related to Fab 7H on our campus there in Singapore, and really giving us the capability longer term to be able to satisfy some of these LTAs that we're signing today, as well as some of those LTAs that we've signed in the past. Before I just immediately direct your question, I do address your question, I do wanna provide a little bit of context. You know, when we talked about our expansion plans, we talked about increasing our wafer capacity from about 2 million wafers in 2020 to about 2.4 million wafers in 2021, to about 2.6 million wafers last year, to about 2.8 million wafers this year, to north of 3 million wafers in 2024. We're actually very much on track to deliver that capacity. In fact, we're on track to deliver that capacity with probably what will be something like $3 billion less CapEx than originally anticipated for that total expansion that I just mentioned. We feel like we have appropriately positioned ourselves for growth in the future for the business that we're winning, both through LTAs and design wins. We will continue to make trade-offs with regards to free cash flow for the period. In fact, we stated last quarter that we thought we would be free cash flow positive for the year. I'll reiterate that on this call that we believe we'll be free cash flow positive for the year. As we look to the future, we are very well positioned with capacity for future growth. Tom, anything you'd add to that? Yeah. Joseph Moore, let me do a little P x Q here. average price 3,000, 3 million wafers. We've essentially positioned the facilities, our factories to give $9 billion-plus of revenue for the future without any, you know, just on the wafer business, not even the non-wafer revenue. The capital we've planted is gonna allow us to grow and actually respond to the market much more quickly than we were in 2021 when we had to build that capacity. I think the capital that we've deployed has really positioned the company for the eventual growth, and it'll make us a lot more capital efficient as we think about 2023 and 2024 and beyond. Great. Thank you for that. In terms of your overall utilization of your capacity, you know, we continue to hear about, from some of the automotive-centric companies that there are some bottlenecks still in terms of specifically, you know, non-volatile memory-oriented MCU processes for automotive, things like that. I know you've talked about broad fungibility. Are there still any areas where you guys would say, "You know, here's a hotspot where if we can add a little bit more of this type of capacity, we can grow more? Yeah, you know, there's never a perfect world. This idea that supply matches demand every day, every month, for years is not there. There are segments and customers where we are scrambling to fund enough capacity in a corridor to make those very specific platforms with the features. We see that too. We see that we're still in a game of trying to respond to the complete set of customer demand. Notwithstanding that, we still will deliver our full outlook on the automotive business for this year. Great. Thank you. One moment for your next question. Your next question comes from the line of Rajvindra Gill with Needham & Co. Your line is now open. Yes, thank you for taking my questions, and best of the luck to you, Dave, as well. Just a question on the smart mobile market that's really one of the main drivers of the weakness. I wonder if you could maybe break it down a little bit more specifically in terms of where you're seeing the softness in terms of technology. Is it more with the RF front-end module customers? Is it with some of the NFC, or is it just kind of across the board, given kind of the large inventory correction that's occurring in the smartphone industry? Any color on the smart mobile will be helpful. Maybe, Dave, I'll start on this one. So, you know, with the industry outlook, you know, last year, double-digit decline in handsets. This year, 3% with an inventory climbing. This is the broadest stroke and most heavily weighted is just in unit sales. As David pointed out before-At least the premium handsets are impacted less than any other handset, and that's where we have high content. In fact, I think our smart mobile, smart devices, smart mobile device business is faring better, because of some important design wins we had last year that are shipping this year that's offsetting some of this decline. It's not any particular element or feature in the handsets. It's just the overall volume that's, you know, a high fraction of the, of the fact that our smart mobile device revenue was only 38% in Q1 of this year. David, anything to add to that? No. Well stated, Tom. Thanks. Just for my follow-up, you know, regarding pricing, you talked about some of the pricing in the near term. If you kind of think about long term, there's been, you know, discussions around, if wafers are made in the U.S. that, domestic foundries could charge a premium in terms of pricing. There's been chatter about that. Is that something that you are, you know, debating with customers? Is that a reality, premium pricing for kind of wafers made in the U.S.A.? I would say it this way. What you're hearing about is capacity being put on. Capacity drives investments, and investments require competitive returns. You're seeing is the reality of the right economics to go create new capacity on these nodes, and how do we do it in the most efficient and economic way? The answer is, we have a very disciplined in-industry environment. Capacity is being put on in partnership, investments that's being put on with long-term agreements. What I think that does, it's really healthy for the industry, and it creates a very constructive environment that through partnerships, that the investments that companies make will get healthy and competitive returns. Appreciate it. Best of luck, David. Thank you. Thanks, Brad. One moment for your next question. Your next question comes from the line of Chris Danely with Citi. Your line is now open. Hey. Thanks, guys. Just to get a little more specific in terms of what's going on this year, can you just talk about how much an aggregate of the LTAs have been pushed out, and then what's been the change or how much change in pricing have you had to renegotiate? Sure, Chris. Look, when we think of this year, if you go back to our capital markets day, you know, we thought we were going to essentially be fully utilized this year. Now, not all of that was covered with LTAs. But that between LTAs and POs, I mean, that was our expectation this year. As we kind of rolled into the year and we looked at the inventory positions in the channel, and we looked at how the sell-through was going based upon the, you know, macroeconomic backdrop that we're in, we recognized with our customers that, you know, continuing to build inventory was the wrong decision. We sat down with those customers, we started working on the framework of the LTAs to be able to preserve the economic value of those contracts because of the dollars that we had invested in capacity. You know, what I can say, I can't speak specifically contract by contract. I can tell you that we did close a contract that we disclosed or maybe they disclosed, but it was broadly talked about where there was an underutilization fee. I do not believe that we're going to have significant underutilization fees that are required throughout the year, and certainly that's not really factored in a meaningful way, I would say, for our annual forecast for 2023. We've been working with those customers to take the economic value of those contracts, preserve them, as well as to ultimately enhance our value and deliver our long-term model. I think that's probably, the most that I would add there. Tom, anything that you would add to that? Yeah. A minor add to that. When you think of single-source business, it's not if there's price elasticity, if I lower price, would I get more volume? The volume is the volume, and the price is the price, and the question is, how do you go work through an inventory correction like this? It's not let's go win share by price elasticity. That's the, you know, the value proposition that we provide to our customers. We have single source business differentiate. They can differentiate their products, and we can be a better supplier to them in the great times and in the inventory correction times. If I could just add one point, I don't know of a, of a contract that we've amended, in which price went down, in the LTA amendment. When the volumes are being decommitted, you know, the conversation isn't about how do you decrease price to try to stimulate demand when you have too much inventory. It's usually the going in the other direction. Hopefully that's a helpful clarification. Very helpful. Thanks. For my follow-up, great job on landing Niels. He's got a good reputation. I guess, Tom, can you talk about the genesis of the CBO job? I don't think you guys have had this before. Is this just to sort of manage this downturn that seems a little more longer and serious than expected? Just talk about, you know, why he's coming over and what his specific duties are going to be? Yeah, very good. It has nothing to do with this downturn. It has everything to do about our future. The complexity of our business, and the uniqueness of being a foundry requires a tight coupling between understanding the end markets and the specific requirements in end markets. We need to be as much as an expert as our customers in understanding the future where end markets are going so that we can create product lines, by definition to meet those end markets and then drive our technology development in an aggressive and accelerated way. We need the three of those areas to come together with one executive who can integrate that activity. Our commercial team, under Juan Cordovez, with our pro- business unit team under Mike Hogan and our technology development under Gregg Bartlett, all together will report into Niels to drive that integration to accelerate our, you know, our financial, and commercial success and performance. Thanks. One moment for your next question. Your next question comes from the line of Mehdi Hosseini with SIG. Your line is now open. Yes. Thanks for letting me ask the question. Two follow-ups. David, do you have any guide for EBITDA in Q2 and 2023? I have a follow-up. Sure. Hi, Mehdi, I hope you're doing well. EBIT, EBITDA guide. I would think about EBITDA on a sequential basis as, you know, tracking with the marginal fall through that you'd see from slight revenue growth. I think that statement holds true for second quarter as well as the subsequent quarters where we are expecting sequential growth throughout the year, kind of Q- to- Q- to- Q, for the remainder of 2023. Got it. Best of luck in your next endeavor. A question for Tom. I understand there's a lot of anxiety over the inventory correction, which is nothing new given cyclical nature of the industry. What I wanna learn from you, maybe it's a good time for you to remind us in a smartphone and electric vehicle and outside of the SOI wafer, what are the some of the key product or drivers for increased content, especially as you look into post-inventory correction? It would be great if you could remind us of those key growth drivers outside of the core SOI wafers. It starts with embedded memory for microcontrollers for automotive. It starts with our BiCMOS device technology for higher voltage. If you think of power management chips with embedded memory for both control and power management, it's a suite of applications and technologies beyond RFSOI, which features in the front-end module of phones. I said it earlier in my remarks, we are the ultimate player in low power on our FDX platform. We bring a broad range of RF to all our platforms, not just for front-end modules, but for all levels of connectivity, especially in the IoT space. The winning play is to create intelligent and secure processing capability by having industry-leading embedded memory in our solutions. That's what plays to the strength in these end markets. Is there a key milestone or a threshold for increased adoption, specifically in electric vehicle? Is this or is this just going to be a steady eddy kind of adoption as electric vehicles proliferate, then you will see increased content? Or is there a milestone that would accelerate that adoption? I think if it was just an electrification of cars, you'd start to look for, you know, inflection points of how model years come where units of ice internal combustion cars go down and fleets change or brands change their fleet strategy. Because it's about autonomous and connectivity in the car, it's not just one driver. We play in a broad range of those applications. I don't think I could pick a particular car model year-on-year has less features in it. In fact, it becomes the standard each year. Think of this as about a transformation of the auto industry, not just to electrification, but to connected cars, to autonomous cars, and that's the range of and suite of products and applications we play. Bella, we'll take one last question, please. All right. Your last question comes from the line of Krish Sankar with Cowen and Company. Your line is now open. Yeah. Thanks for taking my question. David, thanks for your help and good luck on the next endeavor. I have two questions, either Tom or David. Number one, on ASPs, it's nice to see ASPs holding up despite lower volumes. Next year as more double-digit nanometer capacity comes online for the industry, how to think about ASPs into next year? Then I had a follow-up. When we think about ASPs for 2024, again, I'll kind of point you back to that Capital Markets Day presentation. If you stood back and kind of squinted at that chart, you would see that we had LTAs that covered about three-quarters of the capacity for 2024. I would say that a lot of the pricing discussion has already happened. It's already been memorialized. It's already been signed in a contract. Then you know, you look to the future and you say, "Well, what does pricing look like in the future?" When I look at the new design wins and the new LTAs that we're signing, pricing is holding up very, very well. In fact, I'd say pricing is actually delivering a... It's accretive to our long-term financial model that we had put out as we became a public company. It remains a very constructive pricing environment in the future. I recognize that there's more single digit nanometer capacity that's come online. Even in some regions of the world, more double digit nanometer capacity that has come online. As we've always stated, you know, our interest is in differentiated accretive business, where we provide and attach a lot of GF technologies. More than 90% of our design wins in Q1 were single source design wins. We remain kind of around that 2/3 of revenue is single source revenue, and over time, those two numbers will converge. We feel quite good about pricing. Tom, anything you'd Yes. You'd add? It's back, it's back to, you know, the economics for investment. We'll be forced for a much more constructive environment for how we all fund the doubling of this industry over the next decade. Got it. Super helpful. Just a quick follow-up. You know, obviously the auto industrial segment has held up pretty well, for you folks and many, many other folks across the industry. Quite curious, do you worry that that could be the next shoe to drop or it could moderate as smartphones start getting better and dampen what could be a stronger recovery? For the horizon that we see in talking to our customers and the fact that this transition we've been talking about this morning, to autonomous, connected, and electrification of cars, see the next decade, you know, automotive's a key driver for our industry as we continue to add more and more content to these cars. You know, the key for GF is to make sure that we are developing the technologies that best meet those needs and provide differentiation for our customers. All right. Thanks a lot, Tom, and congrats Dave. Thank you. We don't have any further questions at this time. I will now turn the call back over to Sam Franklin. Thank you, Bella, thank you everyone for joining us today. Appreciate the questions, as always, look forward to seeing many of you on the upcoming conference circuit. This concludes today's conference call. Thank you for your participation. You may now disconnect. Have a good day.