Good day, and thank you for standing by. Welcome to the NXP fourth quarter 2021 earnings conference call. At this time, all participants are in a listen only mode. Later after the speaker's presentation, there'll be a question-and-answer session. To ask a question during this session, you'll need to press star one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jeff Palmer, Senior Vice President of Investor Relations. Please go ahead. Thank you, Catherine, and good morning, everyone. Welcome to the NXP Semiconductors fourth quarter 2021 earnings call. With me on the call today is Kurt Sievers, NXP's President and CEO, and Bill Betz, our CFO. The call today is being recorded and will be available for replay from our corporate website. Today's call will include forward-looking statements that involve risks and uncertainties that can cause NXP's results to differ materially from management's current expectations. These risks and uncertainties include, but are not limited to, statements regarding the continued impact of the COVID-19 pandemic on our business, the macroeconomic impact on specific end markets in which we operate, the sale of new and existing products, and our expectations for financial results for the first quarter of 2022. Please be reminded that NXP undertakes no obligation to revise or update publicly any forward-looking statements. For a full disclosure on forward-looking statements, please refer to our press release. Additionally, we will refer to certain non-GAAP financial measures, which are driven primarily by discrete events that management does not consider to be directly related to NXP's underlying core operating performance. Pursuant to Regulation G, NXP has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures in our fourth quarter 2021 earnings press release, which will be furnished to the SEC on Form 8-K and available on NXP's website in the Investor Relations section at nxp.com. Before we start the call today, I'd like to highlight NXP will be attending the Morgan Stanley TMT conference in San Francisco on March 7th and 8th. Now I'd like to turn the call over to Kurt. Thank you, very much, Jeff, and good morning, everyone. We really appreciate you all joining our call today. I will review both our quarter four and our full year 2021 performance, and then I will discuss our guidance for quarter one. Beginning with quarter four, our revenue was $39 million better than the midpoint of our guidance, with most end markets stronger than planned and with the trends in the communication infrastructure markets more in line with our expectations. Taken together, NXP delivered quarter four revenue of $3.04 billion, an increase of 21% year-over-year. Non-GAAP operating margin in quarter four was a strong 34.9%, 440 basis points better than the year ago period, and about 110 basis points above the midpoint of our guidance. Year-over-year outperformance was largely due to the impact of improved factory utilization and higher revenues. For the full year, revenue was a record $11.06 billion, an increase of 28% year-over-year. As 2021 progressed, our customers continued to accelerate orders on NXP. We consistently found ourselves in a situation where robust demand outstripped available supply, even as production levels both internally and from our supply partners improved across the year. We do anticipate a continuation of strong demand throughout 2022, likely better than we originally contemplated at our recent Investor Day in November. The full year non-GAAP operating margin was solid 32.9%, a 700 basis point improvement as a result of improved factory loadings, higher revenue, and positive leverage on our operating expenses. Now let me turn to the specific trends in our focus end markets. In automotive, full year revenue was $5.49 billion, up 44% year-on-year, a reflection of the strong company-specific product drivers we noted at our Investor Day, the step up in content per vehicle as OEMs prioritized premium vehicles in a limited supply environment, and the accelerated transition towards electric vehicles, which have fundamentally higher semiconductor content. For quarter four, automotive revenue was $1.55 billion, up 30% versus the year ago period and slightly better than our guidance. Moving to industrial and IoT, full year revenue was $2.41 billion, up 31% year-on-year, driven by our solutions offering with a combination of industrial and crossover processors, wireless connectivity, and our analog attached products all driving the year-on-year growth. For quarter four, industrial and IoT revenue was $661 million, up 29% versus the year-ago period and better than our guidance. In mobile, full year revenue was $1.41 billion, up 13% year-over-year. During the year, we experienced continued strong adoption of our secure mobile wallet and early ramps of secure ultra-wideband solutions, and a good traction for our mobile embedded power solutions. These positive trends were modestly offset by a discontinuation of certain custom analog products. For quarter four, mobile revenue was $374 million, down 9% versus the year-ago period, and better than our guidance. Lastly, I will move to communication infrastructure and other. Full year revenue was $1.75 billion, up 3% year-over-year. The year-on-year growth was due to a rebound in demand for secure transit, tagging, and access solutions, as well as solid demand for RF power products for the cellular base station market, somewhat tempered by the anticipated moderation in demand for network processing solutions. For quarter four, revenue was $457 million, up 16% year-on-year and in line with our guidance. In review, 2021 was an excellent year for NXP. We experienced significant design win traction across the entire portfolio, and especially within the areas of our strategic growth drivers. Our priority has been to assure the health and safety of all our employees, and it is their engagement and performance which has been truly outstanding. We are extremely proud of their adaptability, dedication, and hard work in the face of adversity. Now, before I will turn to our expectations for quarter one, I'd like to offer you some perspective on the coming year. For those who were able to join us at our recent Investor Day in November, you will remember we offered a positive view of 2022, expecting revenue growth near the high end of our 8%-12% long-term growth target. Now, as we enter into early 2022, we are more optimistic about the opportunities in front of us, both in the short term as well as over the intermediate horizon. The demand signals from our customers continue to be very strong. Inventories across all end markets appear very lean, and our ability to supply continues to improve. Hence, we anticipate 2022 will be another year of demand supply imbalance, with lead times extending out across almost the entire portfolio and the level and intensity of supply-related escalation conversations with our customers remains elevated. Against this backdrop, we are guiding quarter one revenue at $3.1 billion, up about 21% versus the first quarter of 2021, within a range of up 18%-24% year-over-year. From a sequential perspective, this represents growth of about 2% at the midpoint versus the prior quarter. At the midpoint, we anticipate the following trends in our business. Automotive is expected to be up in the mid-20% range versus quarter one 2021, and flat versus quarter four 2021. Industrial and IoT is expected to be up mid-teens year-over-year and flat versus quarter four 2021. Mobile is expected to be up about 10% year-over-year and up in the low single-digit range versus Q4 2021. Finally, communication infrastructure and other is expected to be up in the low 20% range versus the same period a year ago, and up in the low double-digit range on a sequential basis. In summary, we do continue to see growing customer demand outstripping our improving supply as inventory across all end markets remains very lean. Customer engagement levels and design win momentum in our strategic focus areas continues to be very positive. This underpins our continued confidence of robust growth throughout 2022, and we do continue to be very optimistic about the long-term potential of NXP. Now, at this point, I would like to pass the call over to you, Bill, for a review of our financial performance. Thank you, Kurt, and good morning to everyone on today's call. As Kurt has already covered the drivers of the revenue during Q4 and provided our revenue outlook for Q1, I will move to the financial highlights. Overall, our Q4 financial performance was very good. Revenue was above the midpoint of our guidance range, and both non-GAAP gross profit and non-GAAP operating profit were above the high end of our guidance. I will first provide full year highlights and then move to the Q4 results. Full year revenue for 2021 was $11.06 billion, up 28% year-on-year. We generate $6.21 billion in non-GAAP gross profit and reported a non-GAAP gross margin of 56.1%, up 500 basis points year-on-year as a result of increased internal factory utilization, higher revenue levels, and product mix. Total non-GAAP operating expenses were $2.56 billion or 23.2% of the revenue in line with our long-term model. Total non-GAAP operating profit was $3.64 billion, up 63% year-over-year. This reflects a non-GAAP operating margin of 32.9%, up 700 basis points year-over-year and consistent with our long-term financial model. Non-GAAP interest expense was $365 million. Cash taxes for ongoing operations were $276 million. Non-controlling interest of $35 million, and stock-based compensation, which is not included in our non-GAAP earnings, was $353 million. Full year cash flow highlights include $3.08 billion in cash flow from operations, $766 million in net CapEx investments, resulting in $2.31 billion of non-GAAP free cash flow or a solid 21% of revenue. During 2021, we repurchased 20.6 million shares for a total of $4.02 billion and paid cash dividends of $562 million. In total, we returned $4.58 billion to our owners, which was nearly 200% of the total non-GAAP free cash flow generated during the year. Now moving to the details of Q4. Total revenue was $3.04 billion, up 21% year-on-year and above the midpoint of our guidance range. We generated $1.74 billion in non-GAAP gross profit and reported a non-GAAP gross margin of 57.3%, up 440 basis points year-on-year and above the upper end of our guidance range, driven by improved utilization, higher revenue, and product mix. Total non-GAAP operating expenses were $681 million or 22.4%, up $118 million year-on-year and up $24 million from Q3, in line with the midpoint of our guidance and again consistent with our long-term model. From a total operating profit perspective, non-GAAP operating profit was $1.06 billion and non-GAAP operating margin was 34.9%, up 440 basis points year-on-year, which is above the high end of our guidance, reflecting solid flow-through and operating leverage on the increased revenue level. non-GAAP interest expense was $93 million, with cash taxes for ongoing operations of $100 million and non-controlling interest was $8 million. Stock-based compensation, which is not included in our non-GAAP earnings, was $88 million. Now I would like to turn to the changes in our cash and debt. Our total debt at the end of Q4 was $10.57 billion, up $979 million sequentially as we issued $2 billion of new notes at very attractive rates with longer durations and retired early the 2022 $1 billion notes with a rate of 3.875%. Our ending cash position was $2.83 billion, up $527 million sequentially due to the cumulative effect of the previous note debt repayments, capital returns, increased CapEx investments, and cash generation during Q4. The resulting net debt was $7.74 billion, and we exited the quarter with a trailing month adjusted EBITDA of $4.23 billion. Our ratio of net debt to trailing 12-month adjusted EBITDA at the end of Q4 was 1.8x, and our twelve-month adjusted EBITDA interest coverage was 11.6x. Cash flow generation of the business continues to be excellent, and our balance sheet continues to be very strong. During Q4, we paid $150 million in cash dividends and repurchased $750 million of our shares. Subsequent to the end of Q4, between January 1st and January 31st of 2022, we repurchased an additional $400 million of our shares via 10b5-1 program. Additionally, the NXP board of directors has authorized an incremental $2 billion in the company's repurchase capacity, bringing the total new authorization and remaining authorization to $3.35 billion. Further, the board has approved a 50% increase in the quarterly cash dividend, bringing the quarterly cash dividend to $0.845 per share. These actions are all in line with our capital allocation strategy that we continue to execute to. Turning to working capital metrics, days of inventory was 83 days, a decrease of two days sequentially, which is below our long-term target. We continue to closely manage our distribution channel with inventory in the channel at 1.5 months, also below our long-term targets. Both metrics reflect the continuation of customer shipments at a robust pace, combined with supply challenges we continue to experience. We anticipate the coming year will be very similar to 2021, where customer demand is in excess of available supply. Days receivable were 28 days, down three sequentially, and days payable were 87, an increase of four days versus the prior quarter as we continue to increase orders with our suppliers. Taken together, our cash conversion cycle was 24 days, an improvement of nine days versus the prior quarter, reflecting strong customer demand, solid receivable collections, and positioning for customer deliveries in future periods. Cash flow from operations was $785 million, and net CapEx was $266 million, resulting in a non-GAAP free cash flow of $519 million. Turning now to our expectations in the first quarter. As Kurt mentioned, we anticipate Q1 revenue to be about $3.1 billion ± $75 million. At the midpoint, this is up 21% year-over-year and 2% sequentially. We expect non-GAAP gross margin to be about 57.3% ±50 basis points. Operating expenses are expected to be about $693 million ±$10 million. Taken together, we see non-GAAP operating margin to be about 35% at the midpoint. We estimate non-GAAP financial expense to be about $105 million and anticipate cash tax related to ongoing operations to be about $125 million. Non-controlling interest will be about $9 million. For Q1, we suggest, for modeling purposes, you use an average share count of 266 million shares. Finally, I have a few closing comments I'd like to make. First, as a housekeeping reminder, we anticipate our cash tax payments will trend towards 15% in 2022 based on the current U.S. tax legislation and law. As can be seen in our Q1 guidance, we are expecting a slightly lower tax rate in the short term and anticipate it will increase as we progress through the year. Secondly, we are investing to support our profitable long-term growth. We currently have about $4 billion of long-term material supply obligations, as discussed at the Investor Day. Our CapEx investments for 2022 will be above the high end of our long-term CapEx model. These investments are focused on the combination of assured external foundry wafer supply, expansion of our internal backend capacity, and a modest expansion of our internal frontend capabilities. While significant, the investments we are committed to are more than balanced by the robust level of non-cancellable, non-returnable orders from our customers. In closing, we are very confident in our profitable growth over the intermediate to long term, especially in the key areas of the Accelerated Growth Drivers as we highlighted during Investor Day. Our gross profit will continue to expand, and we have demonstrated solid control over our operating expenses while consistently investing in those areas which will enable our long-term growth. Together, this results in solid operating profit leverage and robust cash flow generation. Lastly, we have a proven track record of returning all excess free cash flow to our owners via our clear capital return policy. With that, I'd like to turn it back to the operator for questions. Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Our first question comes from Ross Seymore with Deutsche Bank. Your line is open. Hi, guys. Thanks for letting me ask a question. Congrats on the strong results. I guess, Kurt, the first question I have is on the full year commentary. At the analyst meeting, you talked about I guess at the high end of your range before, about 12%, and now you're saying better than that. What changed? And do you have the supply necessary to grow sequentially through the year to what seems to be, you know, something in the mid-teens, roughly, that you're guiding to now? Yeah. Hey, good morning, Ross. Thanks for your question. Indeed, the commentary I made is that we have growing optimism that we can grow above the high end of our long-term growth range, which was 8%-12%, so above 12%. So indeed. Yes, we do have the supply capability. We are gradually building more supply capability through the year. It's a huge amount of different actions, both in our own back-end test and assembly sites, in our internal front-ends. Mind you that this year we will be running full out with our internal front-end factories, while last year we had the winter storm taking capacity away, and we had only started to ramp the factories full up during the first and second quarter. From a year-on-year perspective alone, that gives us more supply. Also with third-party foundry suppliers, and Bill just mentioned our supply commitments and obligations here. We have purchase obligations from our perspective here, we are growing our supply capabilities. Yes, the supply capability is here. And while we will not guide the full year, Ross, it was still important I felt to make that comment because the demand situation has continued to be very, very strong, and I'd say continued to be very strong since our Investor Day in November. We see the inventories, both our own ones, and I think we talked about the 83 days, we talked about the channel inventory even coming a little bit down, but also at our customers. We think inventories continue to be super lean, such that we see that potential of outgrowing the 12% high end of our long-term growth trajectory. Thanks for those details, Kurt. I guess as my follow-up, just sticking on the revenue line and going a little shorter term for the first quarter. Are there any specific dynamics that are keeping automotive and industrial flat sequentially? Is it simply a supply issue? I think that's the first time in, I don't know, six quarters that those will have been flat sequentially. The dichotomy between auto and industrial flat and the relatively smaller segments growing was a little surprising to me. Any color on those dynamics would be helpful. Yes. It is actually totally supply regulated. I mean, we have more than enough demand. It is all a function of supply. Maybe here it is worthwhile to note that you all might have seen that in the city of Tianjin in China there was a controlled movement order which actually meant factory shutdowns. One of our test and assembly back-end sites is in Tianjin, so we had a factory shutdown there for between one and two weeks. Think about maybe $50 million impact for the first quarter, and that is all sitting on industrial and auto, which is another factor which is actually hampering the supply a little bit further than we would have wished into the first quarter. Mobile on the other hand side, Ross, you know that the last two quarters we've been really struggling with supply in mobile. I think we talked about this consistently in the call. This starts to get better, which actually helps us to start to do much better in mobile. All of the, say the movements quarter-over-quarter are much more a function of supply capability rather than demand. Thanks, Kurt. Thank you. Our next question comes from CJ Muse with Evercore. Your line is open. Yeah, good morning. Good afternoon. Thank you for taking the question. I guess first question on gross margins. You know, you're 70 bps away from the high end of your target. In your prepared remarks, Bill, you talked about expectations for gross margins to continue to expand. Curious how you're thinking about, you know, upward bias here in 2022 and then moreover, I guess 2023, 2024, as new products that carry higher margins come through the model. Hi, C.J. Yes. For the rest of the year, we're not guiding, but our goal is to maintain, I'd say, a gross margin in the 57% range with the pluses and minuses we continue to talk about in any given quarter. Kurt just mentioned about the slight impact with Tianjin, which is impacting our margin a little bit in Q1, but that is offset by the higher revenue and volume that we're experiencing quarter-over-quarter by $60 million. So that kinda keeps it flat there for Q1. As we go forward, again, mix will play an important role as we are supply constrained. Over the long, long term, as we talked about, is really driven by our new product introductions out further. Very helpful. As my follow-up, I guess, Kurt, you talked in your prepared remarks about making you know real traction with some of the newer products. I know in particular on the S32 domain processor side there's significant architectural decisions being made today by your potential customers. Curious any update in terms of the traction there and I guess how to think about maybe some of these new products and which we should be focused on in terms of driving you know real incremental growth into 2023, 2024. Yeah. CJ, absolutely. I think at Investor Day, we tried to give a bit more of the deep dive on where we are in this area, and it's indeed especially about what we call the S32 platform, which is a software compatible growing family of products, mainly for the networking infrastructure part of the car. There is a very rapid, and I would also say very forceful re-architecture, action in place with all of the OEM customers. And one of the big features here is gonna be over-the-air updates, including the required security. To make sure that the performance of the car over its lifetime can be upgraded by software updates without changing the hardware. The way to do this is over-the-air updates and then a very, say, both elegant and efficient network architecture inside the car. The chip which does this, over-the-air update, is a gateway chip, and that's one of the flagship products which we are ramping. It's called S32G for gateway. That is ramping with major OEM names through the next few years. So that's just one nice example. There is obviously more. I'm actually proud to mention because it's, you know, it's always difficult with OEM names in that particular industry. I'm proud to mention or reflect on the announcement which we did, I think, in November with Ford Motor Company together, where we spoke about the fact that their new F-150, the Bronco, the Mustang Mach-E, they will all be using, amongst others, this S32G platform for the gateway functionality. Very helpful. Thank you. Thank you. Our next question comes from Vivek Arya with Bank of America Securities. Your line is open. Thanks for taking my question. I just wanted clarification first. You identified the material weakness in internal controls in your earnings press release. I was just hoping you could you know, maybe just discuss that issue. How much is any potential impact, and how soon can those issues be rectified? Hey, Vivek. I'll take that question. As shared in our EPR, as part of our annual year-end audit process, we did identify a potential material weakness associated with our general internal IT controls in the areas of user access, change management and documentation. At this moment, we are very comfortable there have been no impact on our current or past financial statements. We are actually very pleased with the fixes the teams are implementing, which just take time. We feel confident that we'll be able to remediate these internal IT controls in 2022 and ensure the proper monitoring throughout the year. We want to disclose this now for full transparency, and we plan to disclose more about the details in our annual 10-K per our normal scheduling in the late February. Very good. Very helpful. Thanks, Bill. For my follow-up, Kurt, if I look at last year, we saw a nearly 40-point delta between auto unit production and your sales. I'm curious, what is the way you think about a more sustainable kind of content delta we should think about between units and sales over time? What are you doing to ensure the quality of orders and the utilization of your products so we are not surprised by any excess inventory that might be there at your OEMs or Tier 1s? Yeah. Thanks, Vivek. First, let me just highlight again that indeed we are not at all concerned about that delta between the 44% of our revenue growth and the 2.5%, I think, SAR growth last year. That is given the content increases relative to premium vehicle mix changes and electric vehicle acceleration, but also the fact that in 2020 and already earlier in 2019, a lot of inventory in the very complex extended supply chain has been or had been depleted. Then of course, I definitely see that we also have grown market share. Indeed, for the history, we are not concerned about this. On the contrary, I continue to be chased on a really on a daily level to ship more product into automotive. It's still not enough as we speak. Now, the measures to cope with this are one, a very much higher level of transparency, which we not only do with our Tier 1 customers, but also especially with the OEM customers. So, we have a lot of direct relationships built up now with the OEMs and get multi-year forecasts, which are very specific by model, by equipment, which gives us a much better view into the future in what is realistic content growth and whatnot. In the shorter term, of course, we work with the NCNR order concept, which I think Bill had in his prepared remarks, which we actually do, especially in automotive, not only in automotive, but especially in automotive, which gives us a confirmed and non-cancelable or non-reschedulable order pattern for the full calendar year 2022, which is a hell of a lot more stability than we've ever had in the past. From just a directional perspective, Vivek, I do believe the content increase continues to accelerate. Probably on the midterm, the two main factors are actually the acceleration of the share of xEVs, so electric and hybrid electric vehicles, which simply have so much more semiconductor content. also, the level two plus level three autonomy efforts are getting more and more traction again, which is a big deal for us when you think about our position in radar. We do believe that we will continue to outgrow this market, win share, and have at the same time a faster market development given these changes. With the NCNR orders and our relationships to the OEMs, I think we have a good handle to keep this in good check. Thank you, Kurt. Thank you. Our next question comes from William Stein with Truist. Your line is open. Thanks. Good morning, everyone. There's been a clear imbalance between supply and demand for the last few quarters. It's triggering, you know, very extended lead times in the last year. I don't think I've heard an update on that condition during the call or in the press release or presentation. I'm hoping you can update us as to how that's trended in the most recent quarter. I would imagine, given the inventory decline, that lead times are still quite stretched. Any normalization you anticipate for that through this year? Yeah. Bill, clearly it has not improved. If I think about it from a supply perspective, or if I put my more positive perspective on this, the demand continues to be very, very strong. If I look forward into Q1 and into the rest of the year, Q1 very clearly, and I just want to be very explicit here relative to the guidance, this is completely capped by available supply, so much more demand than what we have in terms of supply. You mentioned some of the metrics which we can actually use in order to get a better feel on where this is going. Indeed, our internal inventory has further reduced. I'm not happy to say that also the channel inventory dropped a little bit to 1.5 months. I mean, we've been standing now at 1.6 for quite a long time, all through last year. Mind you, this compares to a target of 2.4-2.5 months, and that's also the level we have come from. The loan debt delta is about $500 million. I do not think that we get out of this imbalance through this calendar year. It might get better in certain spots. Overall, in the markets which we are serving, and again, I don't make comments here about the whole semiconductor industry, but I make a comment about the key markets we are being exposed to. There, I do not see that we totally come out of this imbalance until the end of the year. That really helps. Thank you. One other, if I can. I'm gonna ask the automotive content question a little differently. It's clear, and you've made a pretty good case that some of this content is a more permanent shift, like the new networking architectures and the like. But I think it's fair to say that some of the growth that we've seen in the last year has resulted from favorable mix shift to higher-end models and higher-end trims within those models that probably drive a little bit better semi content, that's more profitable for the OEM customers. What would you encourage investors to think about for this trend over the coming year? Does it continue, or would it reverse as availability becomes more plentiful? Thank you. Yeah. So Bill, I completely confirm what you said. Definitely last year has seen a spike in content increase due to the mix change to more premium vehicles. Absolutely agreed. I think this is gonna find the natural balance. As long as overall supply of the semi industry into the auto industry will continue to be constrained, they will continue to build the more profitable, the premium vehicles. I mean, that's very natural. As soon as this maybe gets over time into a better balance, they will also start to build more of the volume cars again. But again, that is not a... I cannot see this as a negative, Bill, because they want to build and could sell more cars anyway. I mean, if you look at dealer inventories in the meantime, not only in the U.S., but also in China, they are just at rock-bottom all-time lows, and it's getting worse and worse. Yes, it will change a little, but that is not gonna go against as a negative against our demand, because then they simply build more cars as a result. Great. Thank you. Our next question comes from John Pitzer with Credit Suisse. Your line is open. Yeah, good morning, guys. Thanks for letting me ask the question. Kurt, I wonder if you could spend a couple minutes just talking about the impact of inflationary pressures on the business right now, both on revenue and on OpEx. I know you've said historically that you're not raising pricing above your increase in cost, but I'm trying to get a sense of how much of a tailwind price is to your view that you'll be above the high end of that eight-12 this year. Conversely, you know, what's the impact it's having on OpEx relative to higher prices? Well, in general, John, I absolutely want to reconfirm loud and clear that we will not use this current, or abuse, I would almost say, this current situation, to pad our margins. We do absolutely stick to the policy I've talked about before, which is that, of course, we are passing on the increased input cost and raise prices to our customers along with that. That is something we had to start doing last year, and we have to continue to do through this year. This is a function of the kind and the type of business we are in, which is the opposite of a commodity business. It's very application-specific. It has, I think, very specific and long-term customer relations where this is the only way to do it. Trust me, it's not an easy one for us to do this. Yes, that's what we do. I mean, I anyway can't guide the year going out into Q2, Q3 and Q4, but I can tell you, John, that for last year, the impact of pricing was absolutely minimal to the revenue growth. Don't think about this being the key factor here. Maybe Bill, you want to speak a little bit about the impact on OpEx. Yes, Kurt. Hi, John. I'd say we continue to do well here and near our 23% long-term model. As you know, Q4 finished at 22.4% of sales, which was better than our guidance of the 22.7%. We just guided Q1 to be about 22.4%. You know, this is up mainly because of the U.S. benefits for FICA and 401(k) trying to be higher in the U.S. in Q1. As you think ahead, and if this is where you're going, we mentioned during Investor Day, we like to run around 23% with quarters, you know, fluctuating a bit. We do see that we can get additional leverage on the model, especially in the SG&A side. That's helpful. Guys, as my follow-up, Bill, you talked about in your prepared comments, CapEx this year being above target. I'm wondering if you could give us a little bit more granularity as to kind of what number you're thinking about for the full year. Kurt, as he answers that, I'm curious as to what your internal versus external sort of capacity strategy is, especially in the auto business, where historically you've done more of the front end internally, and especially against some of your peers that are looking to really expand their internal capacity. How confident are you that given the strong growth you expect, especially in autos over the next several years, that you can get everything you need from your outsourcing partners? Yeah. Let me maybe get started, John, on the strategy here. We absolutely stick to our hybrid manufacturing strategy. I also wanna highlight it has never been a function of doing this in auto and doing that in industrial and something else in mobile. It's much more a function of the kind of processing technology. There's simply anything which is below 90 nm, we will not do in-house, and we see no reason to change this. Honestly speaking, if you look at our results for last year, I think we've grown 28.5% year-over-year. We've probably grown faster than most of the comparable peers, which might partially have more of an in-house manufacturing strategy. I think last year, the flexibility which we could apply is actually a fantastic proof point that this manufacturing strategy is not wrong. Now, going forward, we clearly are intensifying and working on long-term partnerships also with foundry partners. I mean, as much as I talked earlier about the longer term nature of our relationship with customers, and the better transparency we gain here from a demand perspective, obviously we are doing exactly the same thing on the foundry side in order to make sure this is in good balance. No change here. Where of course we are investing and increasing our output capability is in the on the back end. Because there, I think currently it's like 85% or so which we are doing in-house. We don't see a reason to change that either. Here we are continuing to expand. Relating to. Yeah, let me jump in on the CapEx. Excuse me? Sorry about that. Yes. Let me do that. Yes, Bill, go ahead. Yes. Thank you. Again, if you look at CapEx, just a quick recap. In 2020, we spent 4.6%. In 2021, we spent 6.9%. You just saw in Q4, we spent 8.8%. We think that's gonna go up a little bit more for 2021 without giving you the absolute guide, but you know, think maybe another point or so on it related to it. Perfect, guys. Thank you very much. Yep. Thank you. Our next question comes from Stacy Rasgon with Bernstein Research. Your line is open. Hi, guys. Thanks for taking my question. I wanted to first ask about the mobile strength into Q1. I get what you said on some of the supply constraints in that business that have been there easing a little bit. But is there anything else there around customer pull forward or anything like that? What is actually driving that strength, and how do we think about the sustainability of that profile into Q2 and beyond, just given the above seasonal nature of it into Q1? Yeah, Stacy, it's indeed two things. It is demand, and I speak about this in a second, and it is obviously supply. We've really been held back by supply the last two quarters. Q3 and Q4 of last year, we clearly had a significant issue here from a supply perspective. By the way, not everything resolved, but at least improving into Q1. That's one element. The element is demand. I mean, I think I can understand why you are asking, but you know that we are not overly dependent on only one customer, on one mobile customer in that particular segment. If you think about the mix of our customers, you will appreciate that there is a strong case to be made for demand going into the first quarter. Also don't think about it as a spike, Stacy. This is not just a spike or something. It's, I think it continues with our strategy of the attach rate of the mobile wallet. I mean, that's the main factor in there. The more and more growing, early growing part of our secure ultra-wideband solutions. Got it. Thank you. My follow-up, I wanted to ask about industrial, particularly in China. What are you seeing there? I mean, they have COVID zero. There were shutdowns, as you mentioned, on something. Some of the data points are not great. Are you seeing any issues, particularly around China, especially for the industrial business? No, we don't see it at this stage, Stacy. I mean, I'm reading the same news. Our main concern is indeed in China, much more about our own production, which I said this before, it's in the meantime fully up and running again. That is actually where we see the issue from a demand perspective, which indeed is largely the industrial markets largely served through distribution. We do not see any slowing at all. On the contrary, when you think about the fact that our channel inventory has further dropped, unfortunately, you know that a good solid portion of that is actually in China. So no, we are not concerned here about the demand slowing in industrial China. Got it. Thank you, guys. Thank you. Our next question comes from Chris Caso with Raymond James. Your line is open. Yes, thank you. Good morning. Kurt, I wonder if you could go through a bit about some of the commitments that you've had to make to secure that additional capacity. You know, what is the commitment now to the foundry partners and how has that changed versus prior cycles? You know, I'm guessing by your comments that your feeling is that that's backed up by the commitments from your customers to you. How resilient do you think that that will be over time as conditions change? Obviously this seems like this is something different for the industry. Yeah, thanks, Chris. Maybe, Bill, you wanna speak a little bit first about the $4 billion+ purchasing obligations which we entered into. Yes, that was in my prepared remarks. At the moment, we have $4 billion, and those are strongly supported by actually greater than our supply commitments, backed by the non-cancelable, non-returnable orders that we see. The demand continues to be strong. Our customers are actually coming to us, and unfortunately, we can't serve them all. Yeah, adding to this, Chris, on the NCNR, on the order side, I mean, it is as strong as a contract can be, Chris. We all know how the world can flip around. But there is solid contracts behind that, so we really feel good about it. I would tell you, we have actually customers who want more. Just no confusion here. It is not that we were hungry for these NCNR orders. It's actually the opposite. We cannot cover them all. We are oversubscribed here. We cannot fulfill them all. Customers would love to place them actually over even longer periods of time. Reaching out into 2023 and 2024, where we are still seeing how we can best do this. That dynamic is still going one way only. We don't see any softening. I actually didn't say it before, but maybe I should just highlight this here. We see absolutely no order cancellation. We see no pushouts or no rescheduling of any backlog. Got it. That's very helpful. For a follow-on question, and maybe we'll return to pricing. Really kind of two questions on pricing. One is, you know, obviously we've seen foundry price increases announced last year. Do you think that is now behind us? With the continuing tight supply situation, is there potential for additional input cost increases as we go through the year? With that, you know, I think there's an investor concern that, you know, some of these price increases are transitory because of the strong conditions. Obviously the input costs and you're passing along to the customers. You know, what's your view of the stickiness of these price increases? You know, that this is, you know, kind of a permanent ratchet up as opposed to something that's transitory just because of the supply conditions. Yeah, I actually think, Chris, unfortunately, there is always a chance for more cost increases. This can never be totally ruled out. On the first part of your question, I trust we have good visibility and also good agreements for this year. Is it truly the end forever? I don't know. I mean, there could always be something. On the durability of that, I have a very firm view that this is really a reset of the industry. No, I do not think that things will go backwards. Unfortunately, neither the input costs nor our pricing to our customers. I think the four or five quarters now of this really tough supply situation has taught the world a lot more about the value of semiconductors in many critical infrastructure and other applications. I think the appreciation for this industry and for the kind of product which we do to enable applications, end applications, has significantly grown. With that, hand in hand has gone a reset of the pricing structure. I don't think this is gonna go backwards. Thank you. Thank you. Our last question comes from Joe Moore with Morgan Stanley. Your line is open. Great. Thank you. You talked about non-cancelable backlog throughout the year. I think that was an automotive comment. Can you talk about your backlog coverage for the other businesses and, you know, how far out does that extend? Do you see it, if in the areas like auto, as you see it, you know, extending out a full year? Do you think we continue to get that one-year visibility, you know, as we move forward? Are people still booking out that far? Joe, yeah. First, I talked about automotive, but this is not just a phenomenon in automotive. I'd say with all of our direct customers, this NCNR pattern is a big desire because all of our customers consider this as a way to secure supply over a short to medium-term period. It ranges well beyond automotive. I should maybe also highlight that the shortages in the industry are at least as bad in industrial and other applications as in automotive. It's just that automotive continues to catch better headlines in the news, but it's not that the situation is any easier in any of the other segments we are serving. If you think about the order visibility, customers want to have it longer. I said, I think earlier, I might have mentioned it already that they would love to have NCNRs for two years out. Yes, I'm definitely sure on your question if they wanna continue to go with a one-year horizon. They definitely want to. I think actually if we are prepared for it, there might be also more cases coming where people want to have it even lower, so more than a year. Again, think about this commentary really being commentary mainly about automotive and industrial markets with very sticky products, very long life cycles. It fits the nature of those industries. I think it's a learning from our overall industry in order to better deal with the requirements of those markets. I don't know if this is ever gonna be the case in markets like mobile and computing. It might be different there, where also the end product cycles are much shorter. That's why my commentary is probably biased to the automotive and industrial side of the house, where I think it is a big learning out of last year for the entire industry. Great. Thank you very much. Now, at this point, I think. Yeah, sure, Joe. I guess we run now to the end of the call, so I just wanna summarize and highlight again. We feel we come off a very strong 2021 with more than 28% revenue growth. Maybe it's also worthwhile to say that if we look at the revenue growth over 2019, which was the pre-pandemic year, it is still a 25% growth. 2021 over 2019 is 25% growth. We feel we are very well on track to our projected 8%-12% long-term growth target. If we look more into the near term, into this year, we feel increasingly optimistic, as I said, that we can be above the high end of that 8%-12% for the calendar year 2022. With that, I would like to thank you all for your attention today and speak to you next. Thank you very much. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.