Hey, great. Welcome back, everyone. Good afternoon. My name is Toshiya Hari. I cover the U.S. semiconductor space here at Goldman Sachs. Very excited to have the team from Microchip Technology with us this afternoon. We have Rich Simoncic, Chief Operating Officer, and Sajid Daudi, Head of IR. I have a bunch of questions, but before I dive in, I'll hand it over to Rich. Good morning. I guess I need to read the Safe Harbor first. So during this discussion, we'll make projections and other forward-looking statements regarding future events of the future financial performance of the company. We wish to caution you that such statements are predictions and that actual events or results may differ materially. We refer you to our recent filings with the SEC that identify important risk factors that may impact Microchip's business and results of operations. Wonderful. Thank you for coming, guys, first of all. Thank you. So, Rich, you were promoted to COO last month? Last month. I think it was. April 2nd. April 2nd. Congratulations. Thank you. But I know you've been with the company for, I think, 35 years. Right. Can you reflect on your career, what key responsibilities you've held, some of the turning points of your career, if you will, and Microchip as a company has done so well during that timeframe, if you can kind of walk us through the journey of the overall company? Yeah. So, you know, I've been Microchip from the beginning, when we first went public. I was the first vice president there, youngest vice president at 28 years old, and I ran the device and technology development groups at the company at that period of time. So I've been responsible for the integration of non-volatile memory onto our first microcontroller, responsible for integrating the first flash, creating the first flash technology that integrated onto a microcontroller. And then went on to develop the analog strategy from Microchip to build that analog capability within the company, and then also integrate the first analog components onto microcontrollers. So whether it was ADs, power, DACs, were all led by that development of that analog bench at the company. So we did that transition. Now it was never supposed to be that big as a standalone analog division, but now we do about $2.5 billion in standalone analog. But the premise of that strategy was to integrate as much analog onto our microcontrollers as possible. And then, the other transition point was, when we were doing all of the acquisitions, I convinced Microchip to do the first public acquisition of TelCom Semiconductor in 2001, which led to setting up the strategy internally on how to do all future acquisitions, and that led us to that whole technology integration boom starting in 2008. And then we were doing acquisitions, and realized that it was very easy to get synergy within the first 12 months of any acquisition, but how do you get real revenue synergy? And that's when came up with the strategy of total system solution. And total system solution was really put together to take all of these various technologies and bind them together, so that when we walk into a customer, they see a singular product front. And that's helped to take these acquisitions and give lasting revenue growth from them. And then the latest transition I've been responsible for at Microchip was about six years ago, took Microchip down the AI path, and started our first AI projects from an operations standpoint. You know, most people don't realize when we talk AI, there's four levels of AI: AI, machine learning, deep learning, and generative AI. We've been doing ML and deep learning integrations for quite some time. You know, about 87% of all orders placed on Microchip is auto-scheduled by an AI engine, actually, a deep learning engine. All product recommendations that our sales force uses on a daily basis are all done by deep learning or generative AI recommendations, so they know what TSS to do at a customer site from a revenue generation standpoint. Product recommendations and even distributor stocking profiles are put together and recommended by our internal engines. Now we're using generative AI to actually read through our data sheets, application notes, our entire software library, and is actually writing code now for applications and even tests. We've now enabled even the various languages, whether it's Thai or Filipino, to for our test engineers to write code for test programs in the back end. So, second level of AI is, on the learning side, you know, we've constructed or built a portfolio of products that attach to a GPU, and that's driving revenue growth. And then we've just completed our fourth acquisition, Neuronix, a company out of Israel, that helps us offer a much lower power algorithms or use of algorithms on the edge for IoT applications. And so we're starting to develop more and more products for inferencing or edge, IoT, and that's leading to new areas of growth too, whether it's in vision or a predictability in terms of maintenance for different components. Well, really cool. Thank you. It's been an interesting technology journey. Yeah. Thank you for sharing that. You've been working closely with Steve and Ganesh for a long time- Yes. So I doubt you differ too much in views and how you think about strategy. But now that you are the COO role and perhaps you have a more holistic view of the company, any new projects or initiatives that you're focused on, or in general, how are you spending your time now that you're the COO? I think probably a vast majority of time right now is being spent on what do we do with AI, right? And like I said, the three areas of AI is, one, you know, how do we reduce the amount of tasks that are taking place at Microchip? And how do we become more productive? How do we use it to leverage and grow revenue faster? How do we manage our business better? So that's the first part. The second part is, you know, how do we continue to bundle our products on the learning side and with the hyperscalers, and putting our products on all the reference designs with GPUs? So spending quite a bit of time there. and then also spending time to figure out what are the next technologies or companies that we should be buying or purchasing or integrating into Microchip to take us to the next level of growth. Interesting. So, you know, looking at quite a bit of tuck-in companies or technologies or acquisitions that could help us in various product segments. Okay. So if I'm a salesman at Microchip and, you know, I put in my system, I'm going to customer ABC, do I get some sort of guidance through whatever device he should be- Yeah, so- - as a customer, a discrete component or a TSS or what have you? Is that how it works? It's a good question. So, the salesman would say, "Okay, I'm going to customer B, and they're designing a smoke detector, and my core anchor device is this 32-bit MCU." It will then populate the rest of the block diagram with what are the products with 90% correlation factors. Mm. And then it will also provide them with all of the application notes, reference design materials, and code examples, everything else that they would need to support that particular client. Interesting. You've been working on this for the past five years or? Yes, six years. Six years? Uh, yeah. Okay. So this, we first launched this about, three years ago, four years ago, and have been steadily training it. Sorry. Sorry. Slowly been training it and then continually grounding it with new data and new databases and new information. Okay. Thank you. Going back to higher level topics, this cycle versus past cycles, you've been in the industry for a long time. You've experienced, you know, firsthand lots of upturns and downturns. As you compare and contrast this current cycle you guys are working through with past cycles, what are some of the fundamental similarities, and what are some of the fundamental differences? So in this cycle, we've never had so many products that went to 52 weeks plus lead time. You know, we would have subsegments or certain technologies that would hit 52 weeks, but never across all technologies, fabs, product lines. And that led to multiple customers over ordering. So when you had multiple companies over ordering, they overcorrected significantly on the upside across a large swath of products and technologies. And then on the downside, because of the high interest rate environment that we're in today, people were looking to preserve cash or capital, they are really overcorrecting on the downside- Mm across a wide array of products and technology. And so we have some customers that on, on one device, they may have seven months of material, and then on another device, they're begging for product because they've run out. Right? And so it, it's mixed signals across the customer base. Right. And then slowly that inventory overhang is being eaten up or digested, and then we're starting to see now new orders. Okay. In a nutshell, is it fair to say COVID essentially created this really odd upturn, and to your point, drove lead times beyond 52 weeks, and again, your customers... With the interest rate environment and the evolution there, overshooting or undershooting the- Yeah, they overshot on the way up. Right. Now they're severely overcorrecting on the way down because of the interest rate environment. Right. Right. Okay, got it. A question on PSP. I think you get this question all the time, but you introduced a program earlier on in COVID. It worked really well initially. The very late part, perhaps not so much. Internally, what did you guys learn, to the extent you're faced with, hopefully never a global pandemic, but something similar. Would you go about introducing something similar next time? And how would you tweak it, should you decide? Yeah, so we're actually still doing the postmortem on that because there were so many positives. So, you know, you call it, we call it PSP. It really was an NCNR program, non-cancellable, non-returnable, and non-rescheduleable. And we put the program in place to try and battle two bad behaviors that occur. One, double or triple ordering, and two, where people order to sell to broker channels, right? And so that was the main reason for doing it. And the third reason was to try and prioritize or give service to customers, because we'd have people swearing that they're not over ordering, that they need every bit of this. Well, then if you really need this, then commit. Right. Right? And so we put that out there, but we found that, you know, human behavior is still human behavior. People are still gonna double order. People will still overbook because they just don't know, right? Their demand signals are just as confused as ours. Right, and so I think if we did it again in the future, we probably would not go out as far. In fact, we were asking for as much as 12 months, and we would limit the number of customers that are involved. Mm-hmm. Right? And so we had so many customers signing up to it that I think that was not credible. Mm-hmm. I mean, we probably should have limited the number of customers. So it will have a different— When we do it next time, we'll take many... There were more positives than downsides, but we'll take the downsides and try to redo that, so limit it- Mm-hmm. limit the time frame. Interesting. And how many customers were signing up for the PSP, roughly? We had... Yeah, I mean, you can I don't have a true number in mind, but the vast majority of it, I think we said, you know, backlog at one point was greater than 55%. Right. Just representing PSP customers. The vast majority of them. Right. Okay. Okay. But to your point, next time, should it happen, you'd be a lot more selective. We'd be much, much more selective. Got it. Okay. All right, that makes sense. Shifting gears, near-term demand outlook, on your recent earnings call, you did guide June quarter revenue to decline 7% sequentially at the midpoint, but you did talk about bookings. I think the month of February was the highest in eight months, March was the highest of the fiscal year- Right. April was up as well. Right. Cancellation rates coming down or normalizing a little bit- Normalizing. and expedites coming in a little bit. All very good signs. Right. I guess it's been a month or so since you reported any new developments. How has progress been, interquarter? I mean, we're not reporting for May, but you know that the four big green shoots that we're seeing is one month after month positive bookings improvement. Mm-hmm. We're seeing customers ask for pull-ins. We're seeing customers ask for expedites. So pull-ins are where someone puts product in a July or August or September timeframe, and now asking to be pulled into next month or, or, or this month. Right. And then we're also seeing, with higher bookings, the amount of those bookings being placed within the 90- or 180-day window. So it used to be that a lot of the bookings were out past the 2 to 6-month window. That has actually changed. So we've got much higher bookings, but most of it being booked short term. Got it. And so that's, that's also a good sign, and one of the other indicators that I don't think we've talked much about. Okay. Interesting. Got it. So, so you've been cutting loadings in your fab. I believe you've been reducing your, your foundry orders as well, and that's to be expected, given the, the weaker demand backdrop. Looking ahead, what would you need to see to, to start taking up, wafer starts? I, I know it's not a zero one, right, but, what are you guys monitoring as, as a team as you make that decision? You know, we look at when we're talking to our foundry partners, we're looking at what the queue time is, you know, from when we place an order and before it starts in their fabs, or we're monitoring queue times on different technologies. And they were also looking at turns that are coming in and projecting out from there, where we may need to load more into the factory. So, I mean, when we're used to turns at Microchip, at least in 2018 and 2019, you know, as much as 20%-30% of what we book shipped in the quarter was booked or purchased in that period of timeframe. And for the last three years, that hasn't been the case. You know, we're essentially- Right you know, booking what was already on backlog. And so we're having to now predict what people will want. So we're starting to rebuild die inventories. We're rebuilding a finished goods bank. We're rebuilding inventory buffers so that as demand comes in, we can build it and then pull from those inventory buffers and then replenish those. And so it's expected that inventory would go up because in many cases we had drained every inventory buffer that we had. Mm-hmm. There was no inventory anywhere. Okay. And so those are all being replenished. And so hopefully we get to a point where we've rebuilt all those inventory buffers during this part of the cycle, and then as they're being drained, we're replenishing, and that's what helps drive what we purchase from our foundry partners. Got it. Okay. Got it. I was gonna ask about inventory next. I think as of today, inventory on your balance sheet is nearly 2x of what you had before the pandemic. And Rich, you just talked about some of the strategic moves that you guys are making, but how should we think about inventory management going forward? Is this sort of the new normal, or do we start to come down over time? Well, you know, it's fascinating, you know, during COVID, you know, there was one population of customers that we didn't have delivery issues with, and majority of those customers were our Japanese clients. And so our Japanese customers based inventory prediction on cycle time, not on lead time. Lead time is the worst indicator for you to do your capacity planning on, right? That's not a true indication of what-- how long it takes to build a semiconductor product. And so a classic semiconductor product takes anywhere from six to 18 months. Mm-hmm. Right? So as you start to drain, the only reason that we're sitting at eight weeks and around it today, is because we have filled up our inventory buffers, die bank, probe, finished goods, and so you're drawing from inventory. But as orders start to come in, and we're trying to replenish those banks, that's when lead times start to go out. Mm-hmm. and so most Japanese customers, because of volcanoes and tsunamis, have all looked at what it takes to build critical products, and they base their inventory buffers, their inventory buffers, on the cycle time of those technologies. So they will have anywhere from two months to six months of inventory sitting on a shelf. Mm-hmm. That particular customer base did not have the issues that the rest of the world suffered with. We thought that they would have more customers that would have learned from that, 'cause that would help smooth out the overall cycles in the semiconductor industry. But we're finding a lot of customers are trying to revert back to the six weeks or three weeks or eight weeks of inventory. Some have learned from that customer group, and we have some customers that are now saying, "Hey, you know what? We're always gonna keep three months. We're always gonna keep two months." But unfortunately, you know, I feel like we can almost schedule the meetings with some customers because they're reverting back to their old ways. Mm-hmm. Interesting. Shifting gears a little bit. Long-term demand drivers. I know Microchip, in a very positive sense, you guys are diversified, right? Not one end market or end application accounts for 20%, 30% of revenue. And I know you guys have talked about secular growth drivers over the past couple of years, particularly at your Analyst Day. But as you sit here today, what are you most excited about? You talked a little bit about AI, not only leveraging it internally, but also as a, you know, potential growth driver or growth driver. No, a growth driver. Yeah. I mean, that is- Yeah. You know, when it comes to, you know, data center right now is about 17% of Microchip's revenue, and it is continuing to grow. You know, and AI or GPU-based servers are continuing to grow as well. Another area that is also pretty exciting on Microchip is FPGAs. Mm-hmm. You know, we typically report once a year on FPGAs, and what's fascinating, when we first acquired Microsemi, they were solely focused on A&D, aerospace and defense. Mm-hmm. The reason for that is they had a unique combination of technologies that were required for aerospace and defense. So when you need an FPGA for, let's say, a Boeing or an Airbus, and you have 100 FPGAs on that plane, that's running off a battery in the air, how you need to have extremely low power devices, FPGAs. When you're taking pictures on the James Webb, and you're needing to transmit those video images back to Earth, you need to have an extremely low power FPGA that's processing that information, and then sending that back, right? In order for it to deliver from battery. Well, you also need to make sure that that's secure, highly secure from a communication standpoint, and nonvolatile, so you can reprogram it and update it if needed over time. So those three elements were the basis of the Microsemi FPGAs. We took that FPGA product line and then showed that to our industrial customers, and those were product attributes that they didn't think were possible in FPGAs, right? You know, highly secure, nonvolatile memory that's reprogrammable, and extremely low power. In fact, you know, 60% lower power compared to all other FPGAs, right? And so you take that combination now, and people are looking at new ways to use that technology. You know, whether it's an ultrasound application, where you know, you may have a technician with fatigue by using the heat that's generated in the ultrasound wand that goes over your body. Now you can make that smaller, with less heat, so that you don't have a technician that's fatigued during the day after using that for eight or 10 or 12 hours. IoT nodes that run off of batteries are now possible using an FPGA... vision systems on the edge are now possible. Secure, of highly secure, because we have military-grade encryption on our devices, highly secure communications on the edge where needed, that were not possible before. And that's why we're seeing tremendous amount of growth in that area. Right. I just wanted to double-click on GPU-based accelerated servers. What exactly is Microchip supplying into that ecosystem, if you will? So we're providing PCIe Gen 4 and Gen 5 communication devices. We're providing timing devices that all surround those chips. We're providing power semiconductors that go around those chips. We're providing the secure boot for those devices, so the security that also surrounds that chip, we're the leading, in fact, the provider of secure boot devices for that technology. Mm-hmm. So timing, Secure Boot, power, memory products that may go around it, microcontrollers that do, you know, some support functions that surround the device as well. Mm-hmm. Ethernet is also provided by Microchip for those applications. So there's probably about 5-7 key technologies of ours that surround those GPUs that are provided in the marketplace today. Not to mention, you know, the support that we provide, you know, in the infrastructure, the AC, the DC conversion, you know, historically, our 16, our dsPIC devices. Mm-hmm. Mm-hmm. And that's been there for a long time. Great. Great, thank you for that. The TSS strategy, as you spoke to earlier, has been in place for a while. I guess my main question on this one is, there are other companies that also have analog technology, microcontroller technology, maybe less so FPGAs. But you know, how does your TSS approach differentiate vis-a-vis, perhaps others that have a similar integrated approach when it comes to delivering solutions? You know, within Microchip was put in as a way to combine all of the technologies from all the acquisitions. Mm-hmm. Right? So it's not just putting parts together, right? It's how do we leverage technology from one group to the next. So, TSS starts all the way from product definition, right? And so we, you know, we're coming out with, for instance, the new 64-bit microcontroller, PIC64. So we have teams of people from all the groups sitting down together: Okay, what timing devices, what interface devices, what power devices, what PMIC do we need? And so all of the different BUs of the company now are developing the products that go with that product. So when a customer picks out that PIC64, there's a unified support for that technology. Mm-hmm. and so the TSS goes pretty deep in the company in terms of, from definition of the products to how we go after markets, and how we share in that overall growth. Okay. It's not just putting a bunch of parts together. Your peers, it's more of that, as opposed to- A lot of our peers, it's still very much siloed- Mm-hmm In terms of the way the companies run. The way Microchip runs, it's not siloed like that. It's very much we're sitting down together in a group, and we're saying: Okay, how do we mix or match, or how do we work together? Or how do we fund this effort so that you have this product that goes along with that product? Mm-hmm. Mm-hmm. There's multiple team, we call them anchor teams. We have an anchor team for dsPIC, an anchor team for PCIe 5 type devices, an anchor team for our 64-bit devices or our Ethernet products. Those anchor teams then bring in all of the other BUs to make sure that their product development strategy is aligned with their product development strategy. Yeah, and if I could add a little bit to what Rich was saying. Yeah, please. So today we're probably the only company that's innovating all the way from 8-bit micros to 64-bit and FPGAs. And the whole concept of TSS is largely to, you know, reduce the cost of capital that the customers are looking at, go to markets, speed to market, and total cost of ownership, right? And this fits in perfectly with that strategy as well, as we're almost kind of product agnostic, and we're looking for the solution that the customer is trying to drive, and really focused in on that, and then bring in all the rest of the TSS part. And under the same software environment as well, right? Mm-hmm. An engineer can start developing on the 8-bit side and graduate as you get more input from marketing and everybody else, into 64-bit, to 32-bit, and they can move their codes around as well. So it really makes it easy for customers, and that's the end goal. Got it. Yeah, appreciate that. I am going to pause here and see if we have any questions from the audience. I'll keep going. So wanted to pivot back to markets and demand and pricing. From a pricing perspective, clearly over the past couple of years, it's been inflationar. Mm-hmm Given all the dynamics that we talked about. I think on the most recent call, Ganesh reminded us that you're not in the commodity business, and pricing doesn't go up and down in a week, or a quarter, or a month. But he did say, from a design-in perspective... I forget the exact language you used, but perhaps being a little bit more aggressive or the market being a little bit more aggressive. How do you guys think about pricing, not in the near term, but medium to long term? Do we go back to pricing being flat to down low singles, or do we stay flat? How do you plan around that? We're looking back at what our model was, and that's what we're planning now. So you know, you've got—you're going to be highly competitive on the front end, right? You know, so when we're competing against whatever company to win that socket. But you know, with like most mixed signal or analog companies, you know, even on microcontroller, is considered more mixed signal than anything else. You know, those are designs that's been there for 10, 15, 20, 25 years, right? So you've got a many years of layered designs, right, that sit there. And then you've got new designs. So you've got these layers of designs that may be 15 or 20 years old, where there's inflationary pressures causing pricing to go up. And then you've got new designs where the prices are going down, but also the cost of those components are going down, so the margins are relatively the same. So you see some degradation in ASP, but it's buffered by the old designs that aren't going anywhere. But then you've also got new designs coming out, where we're integrating more net device, driving higher ASPs. Mm-hmm. Right? And so it's a combination of mix, a combination of standard products, and a combination of older technologies that are still going up in price. And that's how you get that relatively flat, slightly down- Mm-hmm ... ASP ASP range. Okay. Okay. At least for traditional analog-type-ish companies. Mm-hmm. Mm-hmm. I guess the most extreme scenario or the question that we get is, well, if pricing increased double digits per year over a two-year, three-year timeframe, why couldn't it come down all the way, right? Which is, again, very extreme, but based on what you just said, you don't really see that happening. Yeah, it doesn't happen because, you know, what happened was there was a great deal of investment by Microchip and the entire China supply chain. Mm-hmm. and the depreciation of those assets won't start rolling off for another five years or so, right? And so, you know, for a long time, there was this trickle-down economy of equipment and services, depreciated equipment. That trickle-down has ended, right? There's no more trickle down. So as they're building these, you know, 2-nanometer and 3-nanometer and 6-nanometer fabs, those are all surrounded by analog microcontrollers, timing devices, and we're having to grow capacity in order to meet those demands, right? Mm-hmm. The technology that's used to create those products do not have the ability to trickle down and service the demand anymore. That ship has sailed in the semiconductor industry. So if you have older technologies or lagging nodes, for you to expand them, you have to invest in capacity. Mm-hmm. Mm-hmm. Makes sense. Trickle down is no more. It doesn't exist anymore. Got it. Makes sense. The other question I get, and I'm sure Sajid gets all the time, is competition in China. It's come up on a couple of conference calls. What do you see from a competitive standpoint in China? Is it the usual suspects, the incumbents, primarily in the West and some of the East, or are you starting to see local competitors show up, and do you start running into them? You know, we've been dealing with local competitors in China for 25 years, right? And so, you know, the idea that it's new, it's always been there, right? I think what's new is the demands by the Chinese government to have X% locally made. Mm-hmm. That's new. Right. Right? But, I guess, is there an acceleration or more intense competition, I guess, is- You know, the difference on at least on the analog front, you know, the. You know, you don't have many designs, you know, or number of our SKUs, you know, maybe less than $1 million a year, right? Mm-hmm. So our business is built on, you know, these SKUs or individual devices that are $500,000 a year, $1 million a year. You know, it is extremely rare that you have a singular product that's $10 million a year in analog, right? When they do, you know, everybody, you know, sets their sights on that product and is trying to copy it, right? What happens is, you know, as these companies are coming up, in China, they're targeting those higher volume SKUs. Mm-hmm. For them to layer on and go after these $500,000-a-year devices will take years- Mm-hmm For them to get there. You know, and that's sort of the way the analog business runs. There's always a new entrant. There's always someone coming in to try to go after the product line, but it takes years to build up a large enough portfolio to do that, to make a substantial change. Got it. That makes sense. From a gross margin standpoint, you're just above 60% at the moment. I think long term, and obviously, that's on depressed revenue, depressed- Right F actory loadings. Longer term, 67.5-68.5 is your long-term target. You were kind of there, I think. Yeah A couple of quarters ago. But the bridge from where you are today to those levels, is that purely just revenue utilization rates driven, or is there more going on there? I think it's a combination of, okay. Go ahead. I think it's a combination of utilization, and it's also a combination of, you know, we have products that are driving substantially higher than corporate average- Mm-hmm - margins, right? Our FPGAs are driving higher than corporate average margins. Our connectivity devices, such as PCIe 5 and others, are driving higher than corporate average margins. You know, so we're releasing a number of products that are driving or being adopted, that are driving higher than corporate average margins. Yeah. So to your point, I think the 67.5%-68.5% range remains our- Mm-hmm ... North Star, and, you know, the actions that we're taking and, you know, what our expectation is to get back to that 68% range, at some point. The timing of that is somewhat unsure of it today, because it'll depend on the curve, recovery curve as well. Mm-hmm. You know, obviously, as we kind of get back into growth mode, the inventory reserve charges will reduce, the utilization charges will, or, will improve, and then, as Rich was saying, the richer product mix will help as well get us back to that level. So we're pretty confident that we will. It's just the timing part on when that happens is somewhat subjective right now. Okay, got it. Just wanted to come back to FPGAs real quick, since you made that comment. You talked earlier about taking sort of the A&D-heavy exposure at Microsemi to something, something broader. Are you still in that process? As in, could that process alone drive continued outperformance in that market? Because I think based on what you reported, vis-à-vis your competition- Right whether it be the classic Xilinx business or the classic Altera business, you're outperforming. So are you in the early innings of that process? Are you in the middle innings? We are still, you know, bringing it into customers. We are still doing seminars or technology days at numbers of customers that are looking to, one, enhance security, are looking to significantly lower the power consumption of a product. So, you know, we are finding from an ESG standpoint, a sustainability standpoint, many customers have to show significant power reduction in their products. And those products that are using classic FPGA technology are using substantial amounts of power. And that's where these FPGAs come in and solve a considerable issue with customers. Mm-hmm. So I would say power reduction is probably our leading reason why people are adopting this technology, where they have to meet certain savings. Mm-hmm. And I would probably say security is probably the second thing. And then we've done a good job with our FPGA group of trying to simplify the usage of the product, making it more appealing and easier for our clients to use. And, you know, it's sort of been, you know, that secret behind Microchip is, you know, creating a development environment that makes it easy for people to migrate, to move around and adopt new technology, and where we're trying to use those same learnings and work with our FPGA team and turn it into more of a mass market-type product. Mm-hmm. Got it. Thank you. I guess in the last couple of minutes, I wanted to hit on two topics. One is, you know, OpEx, and the other is capital allocation. From an OpEx perspective, you know, you guys have this culture where you share the upside, and when times are tough, like today, you usually kind of share the pain, if you will. Right. The OpEx reductions that we're seeing today, is any of that permanent or structural, or as you come out of this downturn and you start to recover, as analysts, should we model OpEx to snap back? I'll let Sajid lead on that. Yeah, no. I'll jump in. No, no, definitely. I think, yeah, so majority of the OpEx reduction that you've seen is temporarily. Obviously, a large portion of it is the salary reductions- Yep That people have taken. The one component of it, which, if you remember the last couple of years, the bonus, we pay quarterly bonuses, and that was 2x, 3x the target range. So that aspect is probably gonna be muted here. Obviously, if we get in a situation- Mm-hmm Where that is back on, on, that would be a good problem. But so that, and the salary reductions, again, expect to take a more graduated approach in kind of bringing that back, and that's what we've done historically. So, you know, a portion at a time, so slower recovery on the back, on the OpEx side. And then on a longer term basis, our target model is 23% of revenue. So we'd look to kind of settle in somewhere around that. Pre- in the COVID timeframe, we were running well below that, at 20, because we just couldn't keep up with growth, and now obviously we're above that. So somewhere in that range is where we should expect us to settle. Okay. And then again, lastly, in terms of capital allocation, historically, you guys had been quite acquisitive, and it's worked really well. Rich, you talked a little bit about tuck-ins. Steve has been super transparent about capital return, so I feel like we have all the information, but how do you think about priorities internally? What's sort of the debate? So we have a list of technologies that we're going after- Mm-hmm. Right? Or things that can bolt on or enhance our TSS capabilities. And so when we have our megatrend teams and our anchor teams, we actually put together the technologies that would add to our solution that we're offering. And so we're constantly on hunt for those assets and can we get those at an affordable price that makes sense for the company? And so we're still looking, we're still acquiring. We just did two, where we'll do some more each quarter. You know, large acquisitions, you know, we have this belief that they have to be closed and integrated within a 90-day period. Mm-hmm. Otherwise, there's too much leakage of, technology or people or information. And the reason why you buy companies or, or, you're not just buying revenue, you're buying talent, right? And, and, and you want that talent to still exist there. And so, we like to close larger transactions within that 90-day period, and that's almost impossible in this period of time. So we're going after smaller, companies wherever possible. Okay, great. In the last 90 seconds, anything that we didn't ask or we didn't discuss that you'd love to highlight or before we close? You know, we have a number of interesting technologies at Microchip. You know, one that probably is not discussed much is just the amount that we do in clocks and timing- Mm-hmm. You know, you know, everyone's phone in here, the timestamp on it is probably our cesium or atomic clocks, and GPS signals are done by Microchip. Those are all also growing businesses within the company itself, and it also is needed with all of the hyperscalers and driving that are our time sync products are all high growth products within the company. And so it's more than just the mixed signal microcontrollers now. It's really expanded. And I think with the PIC64, you know, that gives a lot of customers some new choices that they didn't have before. Building that into the same ecosystem that we have, you know, allows people to use code and the work that they've done and migrate it up and down that compute stream. We're gonna continue to widen that as well, you know, whether it's adding CPLD or adding switching regulators or, you know, other non-traditional analog that you would typically see outside of a microcontroller. We're gonna continue integrating those onto microcontrollers. Great. Awesome. Thank you so much. Really appreciate the time. Thank you. Thank you, everyone, for joining.