Oh, wow. All right. Good afternoon and welcome to the second day of JP Morgan's 51st annual Technology, Media, and Communications Conference. My name is Harlan Sur. I'm the semiconductor and semiconductor capital equipment analyst for the firm. Very pleased to have the team from onsemi here with us. We have Hassane El-Khoury, Chief Executive Officer, Thad Trent, Chief Financial Officer. The team held their analyst day a week ago. It was a great event. It's really been incredible to watch the team execute to its strategy of growth, margin, earnings, free cash flow power expansion over the past few years. What I've asked Hassane to do is to sort of just kick it off with just a brief, you know, two -minute summary of last week's analyst day. Yeah, I mean, like you said, it was a great day for a few reasons. I would say primarily it was a testament of a solid strategy that would continue and expand beyond what we've been doing in the last couple of years. Like you said, we've embarked on a transformation. Yes. That has been going exactly according to plan. Our strategy is solid. Our strategy has been stressed with the macro environment, and it's sustainable. Our results are proof of that. Our investments in the right areas, what I call the sustainable ecosystem of, you know, electrification... Mm-hmm. Of the infrastructure, electrification of mobility, have shown the results already. The way I judge was it a good analyst day is we didn't do a reset. We actually did a continuation about what's next, what's the journey ahead. That's what made it a great day for not just for our employees, but our shareholders and really more importantly, our customers who have been on that journey with us the last couple of years, and based on the long-term agreements we have with them, they'll be on the journey with us for the next 10 years. Perfect. I typically start off with near the midterm. I'm going to go backwards now because I do want to focus on some of the aspects of the Analyst Day and sort of the mid- to longer-term strategy. First question is going to be on your silicon carbide strategy, right? You guys have done a phenomenal job on ramping internal silicon carbide, sort of end-to-end manufacturing infrastructure, right? In fact, you're ahead of your ramp plan and looking at your internal capabilities to help drive your 70% per year sort of you know, silicon carbide revenue growth profile with a gross margin profile that is accretive, right, to your current gross margins. You still have some cost and efficiency tailwinds over the next few years. I do think that the move from 150 mm 6-in to 200 mm 8-in diameter wafers is part of that, further optimization and efficiency unlock. What's the status of the development efforts here, and what's the timing of the team's transition to 200 mm? Like you said, we've been exactly where we are, as far as what we've outlined. Right. On the silicon carbide ramp. You know, we've 5x the capacity on the substrate. Our yield since the time of the acquisition or when we embarked on the silicon carbide journey have been up 1.7x. We're basically doing exactly what we said we were gonna do and actually we're ahead of our own internal plans, which showed the results. Yes. We doubled our revenue quarter-on-quarter, and we're on track to deliver $1 billion. Right. That's what you need as a baseline in order to start talking about a transition. Mm-hmm. We have a very solid baseline. We have a solid technology, and more importantly, we have a solid LTSA or revenue committed by customers that we talked last week in analyst day, is at a $9 billion lifetime revenue for silicon carbide only. Right. All of these put us in a very good position to build upon, and building upon, one of the aspects we build upon is on the migration from 150 mm to 200 mm. Our plan has always been, we'll enter the market in 2024, we will generate revenue in 2025. We're still executing to that plan. We already have it today. Yes. Now people ask, "Well, why don't you accelerate it?" Because we don't have a reason to accelerate it. Mm-hmm. I'll tell you where, the balance needs to be. Our 150 mm is scaling. It's yielding. It's highly effective, and we're on track to absorb the startup costs for it, which puts us on that margin trajectory. Right. In order for us to establish a very solid baseline upon which to build the 200 millimeter. You know, some of our peers have had struggles when they need to ramp very quickly. We've been able to 5x because we had a very solid baseline on the 150 millimeter. We are establishing that same baseline right now on the 200 millimeter, so when it's time to ramp, we are able to ramp very quickly and effectively. I think you did mention, a number of years out, right? Your next brownfield expansion, for your silicon carbide manufacturing capabilities, you'll be committing $2 billion of investments, right? Do you expect that that brownfield will be 200 mm? Yeah. Look, as you look out in time. Yeah. All of our investment are. Right. 200 millimeters, because of again, the transition is inevitable. Mm-hmm. One thing I do wanna make sure everybody understands is our 150 mm capacity today is 200 mm capable. Yes. When I say we've been running 200 mm already to establish the baseline, we're actually running it on the equipment that we have already in place. It's not some new facility. That adds that baseline because you can expect when we convert to the 200 mm, if you have been running that 200 mm on the existing line, then you have the yields, you have the outlook, you have all of that already established to be able to run. If we are adding, you know, as we add the new capacity or the end-to-end manufacturing site, that will more likely be on the 200 mm just 'cause it will be in that time when we start the 200 mm conversion. You did bring this up in terms of some of the Challenges that some of your competitors have had. The onsemi team, you've been doing power for 30, 35 years. You've, you know, ramped, you've built a learning curve and all of the different flavors of power transistors, modules, packaging, right? I mean. Then obviously doing it in a very systematic fashion. In the same way that you just described, you know, doing it in a systematic fashion and moving from 150 mm to 200 mm, right? How much of this 30-year learning curve across power, you know, module capabilities, a lot of the special intellectual property and in-house expertise is responsible for where the team is today, the $9 billion of, you know, committed silicon carbide revenues. You know, how much of that is this learning curve and systematic approach to, you know, process manufacturing improvement and cost reductions? I would say pretty much all of it. Yeah. You know, you have to have solid I.P. Mm-hmm. You have to have competitive design. All of that are what I call, you know, the baseline upon which if you don't have the competitive advantage on a technology, and I categorize technology as device and packaging... Yeah. ... in one, if you don't have that, then it doesn't matter how quickly or how effectively you build capacity. We have that competitive moat that we have across all of our IP and the capabilities. To scale that- Yeah. ... very effectively, and not just effectively, but at the speed by which we scaled it, then it's all about the knowledge, the history, and really, you know, I call it scars on our back for the last 30 years of ramping fabs, ramping power semiconductors, and ramping customer designs in the automotive industry that's very demanding. Yeah. I feel like that's a pretty big competitive advantage, right? You can talk about figure of merit or transistor performance, all that kind of stuff, but I think people fail to realize one of the biggest barriers in this industry is learning curve, manufacturability, yield, cost improvement, intellectual property. That's right. That's right. The faster you can resolve these. Yeah. issues, the faster you can stay ahead of your learning curve. Mm-hmm ... and delivering and over-executing to your own plans, then you'll get the results. If you look at our first quarter results. Yeah. ... we came ahead because of exactly, all of these improvements and all of that, firepower we have within the company where we have individuals running those initiatives that have done it before and know what to look for kind of around the corner. As some of your competitors have struggled because, you know, they're still coming up their learning curve and cutting their teeth, you know, as it relates to the $9 billion in committed revenues for silicon carbide, has there been an acceleration of customer engagements, new commitments, just given what appears to be some issues with some of your competitors, start-up issues with your competitors? Yeah. Look, it's a natural. Yeah. ... where, you know, we have customers that have come to us because they have plans to ramp. Mm-hmm. Any concerns that will jeopardize- Yeah. ... their ramps, they have to find a solution. We've seen an uptick, in interest. Obviously in 2023, we've said we've sold out. Yeah. It's not something that's gonna impact the short term, but definitely this is a long-term view that is not yet reflected in our LTSA, because that's the engagement we're doing now. You're gonna start seeing more, more and more engagement that we make public. Again, at the end of the day, what you have to always remember is it's the technology and the superior technology that's going to make the win or loss. I tell my team, "We're not gonna win if somebody else doesn't win. Yeah. We need to win when everybody else is able to win, because that's the competitive advantage that is sustainable. Right. That's what we focus on, is that's why I always start and anchor on technology, technology, 'cause without that, any win is short-lived. You did a great job of giving us, you know, last week at the Analyst Day, a deep dive into your automotive, clearly, your industrial efforts, but often overlooked, you guys didn't overlook it, but, you know, I don't think focused a whole lot on it, but, you know, is your focus on 5G and cloud power, right? Because it's a great way to leverage your entire power portfolio in a high margin, fast-growing market, right? Last week you articulated a 20% growth outlook for your 5G and cloud power business. That's 2x faster growth than you had anticipated the last time you guys updated us two years ago, right? What's driving the better growth outlook? Is it higher dollar content? Is it the data center move from 12-volt to 48-volt infrastructure power? Is it higher computing performance? What's driving that? It's actually all of the above, which is, which is a great, a great market. Like you said, two years ago, when we talked about the cloud, we talked about an 11% growth rate. That's right. Now it's 22. Sudhir in Analyst Day talked about the power tree. Mm-hmm that also applies to the cloud, the same as it applies in automotive and industrial. That is where our technology competitive advantage comes in. You know, you mentioned 48 in volts. Right. We're already in production with 48-volt. We're at the cusp of this 48-volt conversion, and we're there to play more content. Mm-hmm ... in, call it per server, therefore per, cloud infrastructure. That content has gone up, which is also driving our growth with it. Really more important. The compute power is getting more and more. Yes. That's very important because it's not just adding more content because it requires more power, but it requires more efficient power, which means when the power requirements increase, they can be proportional, an increase of consumption to increase of power, therefore efficiency starts to matter. Yeah. Because that's all CapEx. Yeah. Mm-hmm. expenses that our customers, are going to have to absorb. By us making the power conversion more efficient, they will monetize it on the back end in, consumption, reduction on electricity and cooling and so on. That's why we're winning. Again, it goes back to the technology- Right. Right. to anchor on technology. When you have the right technology at the right time in a growth market, that's how we end up growing, outgrowing the market. You know, I think a metric that reflects all of the things that you've talked about, right, technology, leadership, share gains, increasing complexity, portfolio breadth, is cross-selling, right? I think it's the dynamics that have made the team so successful, is the breadth of the portfolio and the ability to cross-sell. I think last week you guys mentioned that your top 20 largest customers purchase on average per customer 8 in 100 products, 8 in 100 onsemi products. How does that compare to two to three years ago? Do you guys have particular marketing and sales programs in place that incentivizes the team to, as you're going after this opportunity, let's make sure that we maximize onsemi content per board, per car, per whatever the case may be? Yeah. It grew from the last two years. A lot of it is, you know, we've gone through a very constrained market dynamic. Yeah. We have made a very strategic approach to prioritize some of our strategic customer in the automotive and industrial at the expense of the broader, you know, consumer compute market that is not strategic for us. What that allowed us to do is be able to service a lot of our auto and industrial customers, when some of our peers could not. Yes. That created a much longer term share gain that we're benefiting from today. That's kind of the catalyst that started this whole thing. Do we focus on cross-selling as an active sales and marketing or a go-to-market? Absolutely. When, in Analyst Day, I talked about how, you know, the structural change, the go-to-market- Right. ... change that we do, that is definitely a pillar in it of share. It's always easier to sell to an existing customer a new product. Mm-hmm ...than to go and capture a new customer. We have to be able to do both in order to have the best, you know, best-in-class cost of sales. Yeah. You do it by getting big wins, strategic wins, cross-selling, so lower, customer capture and adopting new customers. That's our go broad strategy with our tools and the software. All of those are part of that efficiency that Thad talked about in the new model. Mm-hmm ... of getting to that 13%, OpEx. Right. We're going to keep investing in R&D, you know, SG&A is going to get, call it, subsidized by the growth on top and the efficiencies we do in the go-to-market. Harlan, I would also add that the, our strategy with LTSA. Yes. ... have elevated the engagement with our customers, now we're selling much more products to that same customer base. Right. because they have assurance of supply, right? They're co-investing with us. The relationships are much deeper, and that's allowing us to get more of their wallet at the same time. I'd like to, on the financial targets that you put out last week, 10%-12% revenue CAGR, 53% gross margins, 40% operating margins, and 25%-30% free cash flow margins. You know, the team has been defocusing away from low gross margin businesses, right, over the past number of years. You're clearly riching the mix of your portfolio with new products. Looking at that 53% gross margin target and looking at your current business today, what percentage of your current shipment mix, you know, is driving gross margins higher than that 53% range? More importantly, of the design win funnel, what percentage of the design win funnel that you're securing for the next few years carries gross margins that are higher than the midpoint of the target? Yes, let me take that. If you look at our design win funnel, and you look at anything coming out of R&D, it's at or accretive margins, right? Everything is accretive. As we think about new investments, it's at the target or above. Anything that we're working on currently should drive incremental gross margin improvement. If you think about the improvement steps of where we are to get to that 53%. Mm-hmm a big component of that is mix. Yes. It's two components of mix. One is auto and industrial... Mm-hmm ... as we flex more there, which we've been doing. Right. Last year, we were roughly 73% auto and industrial. In Q1, we're 79%. If you fast-forward, we're gonna be, you know, 85% auto and industrial. The other component is the mix to this higher value product, proprietary products that drive higher gross margin. That's these products and these markets that we've talked about. We're also exiting the low-margin business. Mm-hmm ... it's kind of historically low margin, competitive. We'll exit that. We'd get another $400 million that we're gonna exit this year. That helps with the gross margin over time as well. Today, that's good gross margin, but as supply comes online- Right. ... we expect our competitors to actually take some of that product and that business. That's fine. We're planning for that. We'll allocate that capacity into this high, high-margin products. You know, to give you, we talked about a digital-first strategy as part of the Analyst Day. Mm-hmm. That, of course, is a big portion, is the go-to-market with the tools and the efficiencies and so on. Internally, you know, you mentioned on the funnel and the visibility... Right. Right. Right. we have over a longer term, both Thad and I review, the funnel. Before opportunities go into the funnels. Yes. ... they're Paretoed. Nothing goes into the funnel if it's dilutive. We're not into the fab filler. Yep. We don't care about that. We're not going to be going after that. We're going to walk away from all that business and that culture in the company, now it's less and less. We're done. That's kind of phase one of our transformation. Phase two now is ramping and growing those new products that are all accretive to margin. You guys highlighted some interesting differentiators that last week, that we certainly don't hear very often from power and mixed-signal companies, right? That is software analytics and simulation platforms in the case of your power business, right? Your software development kit for your image sensor customers and the move to digital control architecture for your power customers to optimize the power flow in their systems, right? Sounds like the playbook for a leading edge, you know, bleeding edge digital semiconductor company, right? Is the role of software digital-based techniques a strong differentiator for the team? Is the team spending higher proportions of its R&D investments in this area? Yes. At a, at a high level, I agree with you. We are the, call it the, benchmark- Right. ...for, what power should be. Mm-hmm. I don't aspire to be like other power companies. We aspire to be like the best companies. Mm-hmm ...out there in the world, which is not typically, thought of for, power, but our financial target is the best in class, if you look at it. Right. Hands down, and not just in the power domain, but in semiconductors. Having said that requires a very different go-to-market and a different mindset of what you invest in. We've always said the combination and the competitive advantage is not on a piece part. It is, how can you make all pieces work together to solve a customer problem? One of the customer problem is it is expensive- Yep. It takes time to iterate on power semiconductor, because you have to build the unit and run it to get the efficiency. That was an anchor point on, okay, if that's the biggest problem, how can we solve it? We have the domain knowledge, we have all of the stuff because we're vertically integrated. We're able to allow the customer, with our tool sets, to iterate in a few hours what they otherwise would have done in a year. Mm-hmm. it doesn't cost them anything, 'cause there's no capital- Right. ...or they don't have to build samples or any of that, or wait for equipment to get delivered. That started off as a, you know, a few customers, lead customers, and it turned into a very broad approach that we have and that have allowed us to get a very big competitive advantage, because what the customer is able to do is simulate a lot of these architectures. You know, do I go with quad SiC? Mm-hmm. Do I go with 2 SiC? Right. Do I go with IGBT and SiC? Imagine those architectural decision at an OEM level, how valuable they are with our tool set, number one. Number two is when they actually get to the silicon and get the package and the performance is exactly the same as what they modeled, they now can proliferate it within the account. That is, again, a competitive advantage. The same thing applies with image sensing. Yep. How can we get the image sensor with software to be tailor-made for an application? That is competitive advantage, not just from a go-to-market, but from differentiation of the customer. If they're able to make things that are their own. Yeah. versus an off-the-shelf, they have a competitive edge against their peers, and we enable that, and that has value. Let me shift to some of the near to midterm trends in the business. Demand trends remain strong in auto and industrial. As you mentioned, you know, it's 79% of your revenue mix, while it seems like, you know, your non-strategic end markets, right? Which are primarily consumer focused, are stabilizing. Some of your peers have been cautiously optimistic on growth for the second half of the year. What's the team's view on growth for the second half of the year, let's say versus the June quarter levels? I think, look, a couple things are happening here, right? When you think about consumer and compute that got soft, mid last year, I think that's remained soft, and it's continued that way. Industrial got soft and then stabilized for us last quarter. Auto obviously has been robust for us and continues to be robust. I think when we look into the second half of the year, we're very optimistic, but we're cautiously optimistic. Yes. ...just given the uncertainty in the market. We have great visibility in what our customers' demand is because of the LTSA. We're building to the LTSA. When we look at where the street is for 2023, it feels good. I think we're in a good spot there. If you exclude the growth from silicon carbide and you exclude the exits, the $400 million of exits year-on-year, the second half should outgrow the first half. You know, if you take that base business excluding silicon carbide and the exits, it's growth of like- Yeah. ...low single digit. You know, I think that feels good right now, kind of in this environment. We've been very proactive in managing wafer starts, managing inventory in the distribution channel, just being cautious in terms of the outlook here and supporting our customers. I think we feel good about where consensus is and kind of the outlook for the rest of the year. Does some of that confidence come from, I mean, I know it is the case during periods of macro uncertainty and end market weakness, right? You go through these periods where customers are wanting to reschedule, move backlogs, very high levels of activity on that front. You go through a period of that activity sort of wanes, and then things start to sort of stabilize. Obviously the next move would hopefully be the upward inflection. You know, the team has accommodated customers on shifting timing, helping customers move shipments around. Has that activity level in terms of push-outs started to stabilize? More importantly, you know, is the team starting to see some improvements in like level of your global POS or sell-through? Yeah. you know, let's back up and talk about our business. Our LTSA are. Right. what we're managing here, right? Yes. When customers are coming in, they need help with LTSA, we're getting the call quarters in advance of something's gonna get solved. Right. If we can create a win-win with that customer, we'll try and help that customer, and there's gotta be a win for both companies. We saw a lot of that happening late last year. We've actually seen in the first quarter and even so far in the second quarter is that's actually stabilized. Good. Actually coming down a little bit, which gives you some confidence. Mm-hmm. Right. Mm-hmm. Right. in the second half as well. That's right. Think about that visibility we have with the LTSA, and the fact that we're getting less of those requests. There's pockets of them, but, you know, late last year we saw a lot more uncertainty. Yeah. ... and I think people were being cautious. So that allows us to really have a dialogue with our customers versus historically they'd place a PO. Right. PO would disappear. Right. ... 30 days before it shipped. Now we're getting that call in advance, and we're able to help those customers. it is kind of slowing in terms of the reschedule request. Yeah. You know, touch upon the LTSA. You know, you've done a really good job on these long-term supply agreements. It gives you visibility, right? Helps your customers, or helps you guys plan your production requirements, right? It gives your customers peace of mind and assurance of future supply. You guys have increased your LTSA, you know, by $1 billion, right, last quarter to $17.6 billion, with $5.8 billion committed revenue from those LTAs being recognized over the next 12 months, right? That's approximately 70% coverage on consensus next 4-quarter revenue outlook. Obviously, that's great visibility. Some of the LTSA obviously are running their course as well. Given how beneficial it is for these customers, I would assume that the renewal rate is quite high and maybe encompasses more, you know, products versus the last LTSA agreement. I think we talked about that. Does the team have any metrics to share with us, renewal rates and increasing part numbers? Yeah. I mean, your key metric right there... Right. ... you said it, is $1 billion in Q1, right? Yeah. Our LTSA value went up $1 billion in one quarter. In a market that's uncertain. A lot of that was renewal? A lot of that $1 billion was renewal or- It's a couple things. It's customers. Mm-hmm ... their LTSA. Yes. Maybe they're tacking on additional years. Right. On average, an LTSA is four to five years. Mm-hmm. We're a couple years into this. They may be tacking on to the end. The other is they may be expanding it, so we've got hundreds of part numbers on these LTSA. As they've worked, customers are wanting to put additional part numbers onto LTSA. The third element is customers that didn't have an LTSA that have now come in and saying, "That's the new mode of operation. It's working. We wanna get on an LTSA. Yeah. I would say that that is the leading indicator. $1 billion in Q1 is a very favorable sign in a soft market. I want to step back for a second on the image sensor business. Strong market position, 68% market share in auto ADAS. Overall, strong number one position in auto and industrial markets. This business has been constrained over the past three years. I think it's still somewhat constrained even now, I believe. Can you just give us an update, Hassane, on the efforts to bring in some of that image sensor mix in-house to your 300 mm fab? I mean, I assume that in addition to better supply management, some insourcing will help drive an even better gross margin profile, right, due to the lower cost of your 300 mm facility. Is there any way to kind of quantify that benefit as you bring some of that in-house? Yeah. just at a high level, that business, you know, just delivered over 50% gross margin. Mm-hmm. Right. ... from historically where it's been. Majority is outsourced, right? Majority is outsourced. Yeah. You can think about a gross margin trajectory that is favorable. Right. ... when you go, even, to 12 in. Right. 'Cause some of it was still on 8-inch going to 12 in. Some of it is 12 in to 12 in, but outside versus inside. Yes. which gives you a cost benefit. Where we are, we've already done a tape-out. Mm-hmm ... for that business. That tape-out is basically the first proof that we're able to do it in East Fishkill- Yes. ... which is, historically not an imaging fab. Mm-hmm. From a technology perspective, we have the technology readiness, a product sample, and then the proliferation. Obviously, these are go into the automotive market, so you have time for design-in before you start seeing the revenue and therefore the mix. What you said is absolutely true. The vector is more supply assurance. Yes. ... also a margin expansion. As you think about your prior fab-lite strategy and now Fab Right strategy, right? What is the optimal mix of image sensors in-source versus outsource, you think longer term? We're more focusing not on the optimal mix, we're more focusing on... Fab Right- Yeah. ... is more importantly is getting the right product in the right spot. Right. Whether it's inside or outside. There are products that would be more suited depending on the die area that are outside versus inside. That's Fab Right. Not just on image sensing, but across our whole chain. We have fabs that potentially are running, you know, six variants. Mm-hmm. They will end up running four variants and moving two out, so we can get more efficiency within the fab, and therefore more outs, which drop the cost. There's a lot of that benefit that's going to get us to that 53% margin. Mm-hmm. I would say, not a destination, but a milestone. That's all of the manufacturing efficiencies that we still have. Yes. ... ahead of us. There's a lot of margin expansion opportunities that are baked in that we need to execute to. Yeah. Absolutely. On the, maybe again, on some of the more near term, you know, on the supply side, lead times remain stable, 41-43 weeks. I think though traditionally, your historical average lead times were more in that sort of eight to 12-week range, right? This does obviously reflect, you know, the current 41-43 reflects continued supply tightness, but strong demand profile, right? The team has mentioned that there's still supply constraint. Can you just articulate some of the product categories where lead times are stretched beyond 41-43 weeks? Do you anticipate lead times coming back down to more normalized levels over the next few quarters? Yeah. Some of the technologies, obviously, I think we've been consistent with that. Obviously, silicon carbide is fully constrained... Right. -or sold out, IGBT or other silicon power technologies are still constrained, mixed-signal analog- Yes. image sensor. A lot of, you know, our strategic is still constrained, and that's where we're adding capacity in order to support the LTSA. We are adding a capacity for LTSA, which makes really the lead time not really a relevant metric anymore for the bulk of our business. Yeah. What I mean is, I don't think lead times are gonna go back to where they used to be. Yeah. Because you have fab cycle time. You know, our new technology is longer cycle time than that crank commodity. Right. we're not in a fab filler, therefore, we're not gonna keep building just to put inventory and reduce lead. Because there's a cost associated with short lead time. Mm-hmm. which I don't think is necessary anymore given the LTSA. They may come down for some technologies, but we don't see it come down to where it used to be because, again, it doesn't need to. Yeah. There's a better cost structure associated with a tight balance based on the LTSA versus just driving lead time to drive lead times down. I mean, I guess that's one of the benefits of the LTSA, right? They give you exact timing on delivery, right? From that perspective, lead times doesn't really sort of come into play. That's right. Look, lead time drop- Right. if you don't have an LTSA Yeah. does cancellation. Right. Right. It doesn't really matter. That's right. LTSA is what gives the visibility. Yeah. Everything else we do based on the LTSA is operational excellence. On the distribution channel business, you know, that remains lean at seven weeks and below the historical 10 to 12-week range because you guys continue to proactively, you know, manage your channel inventories. When the supply and demand environment does normalize at some point, does the team expect to maintain channel inventories above current levels, but maybe slightly below historical levels? I mean, I would think a linear profile is quite optimal for you guys, right? I think it drives better responsiveness from the channel. I just wanted to get your views. Do you ever go back to those that 10 to 12-week range? Yeah, I don't think so. I mean, historically, we've been 11-13 weeks. Yeah. you know, we've been running at seven weeks for several quarters now. That's been proactive management by us. Our distributors would take much more inventory if we would ship it to them. We are on a FIFO basis, and it's exactly what you said. It allows that channel to be more efficient-. Mm-hmm. for us to have better visibility on what's selling through and where there's inventory, pockets as well. I don't know that 7 is the end goal, but it's probably somewhere in between. Right. I don't think we go back to 11-13 because I really don't think we need that much inventory in there, especially as we shift more to proprietary products. Yes. You just don't need it sitting on the shelf, right? With the LTSA visibility, we don't need it. The distributors will support a long tail of customers, so we do have to have inventory there, but you just don't need, you know, 11 to 13. It's just not efficient, and it doesn't give us the visibility we need. Great. We are just about out of time. Hassane, Thad, great discussion. Appreciate you guys participating. Absolutely. Thank you. Thanks. Yeah. Thanks.