Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm Third Quarter and Fiscal 2021 Earnings Conference Call. I would now like to turn the call over to Mauricio Lopez-Hodoyan, Vice President of Investor Relations. Mr. Lopez-Hodoyan, please go ahead. Thank you. Good afternoon, everyone. Today's call will include prepared remarks by Cristiano Amon and Akash Palkhiwala. In addition, Alex Rogers and Don Rosenberg will join the question-and-answer session. You can access our earnings release and a slide presentation that accompany this call on our investor relations website. In addition, this call is being webcast on qualcomm.com, and a replay will be available on our website later today. During the call, we will use non-GAAP financial measures as defined in Regulation G, and you can find the related reconciliations to GAAP on our website. We will also make forward-looking statements, including projections and estimates of future events, business or industry trends, or business or financial results. Actual events or results could differ materially from those projected in our forward-looking statements. Please refer to our SEC filings, including our most recent 10-K, which contain important factors that could cause actual results to differ materially from the forward-looking statements. Now to comments from Qualcomm's Chief Executive Officer, Cristiano Amon. Thank you, Mauricio, and good afternoon, everyone. Thanks for joining us today. This is an amazing time to be part of Qualcomm. The need for our technologies and products has never been more evident. We're seeing demand across virtually every industry because our products and technologies are essential ingredients that enable digital transformation in the cloud economy. We are leading and expect to continue to lead in mobile. In addition, we also expect to lead the evolution of the connected intelligent edge by transforming connectivity and processing in cars, the enterprise, the home, smart factories, next-generation PCs and tablets, XR, wearables, and many more. This is the foundation of our revenue diversification strategy. The strong performance in our business has led to fiscal third-quarter revenues and earnings per share that exceeded the high end of our guidance. Most importantly, we are on track to realize approximately $10 billion in combined revenues across IoT, RF front end, and automotive in fiscal year 2021, validating the positive financial impact of our revenue diversification strategy. Let me provide you now with some additional details. The foundation of our IoT strategy is edge connectivity and processing for the growing cloud-based economy. In consumer, we're seeing strong demand driven by a consumer electronics upgrade cycle and growth in emerging product categories such as XR and wearables. In edge networking, we had another great quarter with continued momentum driven by the enterprise transformation of the home and the second wave of enterprise demand driven by return to the workplace. We're also seeing rapid adoption of Wi-Fi 6 and increased demand for both 4G and 5G mobile broadband devices. In industrial, our product offerings are purpose-built for key verticals such as transportation and logistics, warehousing, video collaboration, smart cameras, retail, and more. We are at the forefront of enabling this new ecosystem and also making 5G for industrial applications a reality. We are becoming the connected intelligent edge partner of choice. As demand for our automotive solutions increase, we're pleased to report that our automotive revenue design win pipeline has reached approximately $10 billion, and based on our third-quarter results, our annualized automotive revenue run rate is now over $1 billion. This reflects continued traction across global automakers and tier one customers. Our automotive telematics and connectivity platforms, digital cockpit, and C-V2X solutions are at the intersection of key automotive industry trends, such as the continued growth of connected vehicles, the transformation of the in-car experience, and vehicle electrification. As the Digital Chassis becomes one of the most important assets of automakers, we remain well-positioned for continued growth as a leading technology partner for the industry. In RF front end, we believe we are on track to become the largest smartphone RF front end supplier by revenue. Looking forward, we expect to have technology leadership across virtually all handset RF front end components, while continue to lead in modem to antenna system performance. Now, I will provide an update on two key drivers for our handset revenues. First, we continue to be positively impacted by the growth in 5G and changing OEM landscape, resulting in the expansion of our addressable handset opportunity. Our Snapdragon 8 series mobile platforms have shown significant design win momentum. More than half of our 5G smartphone design wins to date are using our 8 series. In total design wins for our Snapdragon 888 increased more than 20% quarter-over-quarter. We're also seeing strong traction with our Snapdragon 7 series mobile platforms with nearly 40 new devices shipped or announced during this last quarter alone. Based on our design win traction and performance of our customers, we have increased confidence in growing our handset revenues. Snapdragon premium and high-tier solutions remain synonymous with Android flagship mobile experiences. Second, we're still on track to materially improve supply by the end of the calendar year. We're securing incremental capacity across both leading and mature nodes and optimizing the allocation of our products across the global supply chain. We're also making progress with our multi-sourcing initiatives. In fiscal Q3, the Snapdragon 778G, the first of several products from our multi-sourcing initiatives, was commercialized in record time and is now shipping in volume. Additional products from our multi-sourcing initiatives will be commercialized in the coming months. I would like to thank our employees, our suppliers, and our customers for helping us navigate the challenging supply environment. In our licensing business, our third quarter results reflect the strength of our patent portfolio and the stability of our licensing program. We are a global 5G IP leader with more than 150 5G license agreements signed to date, up from more than one-third last quarter. We continue to develop and patent new essential innovations for future releases of 5G. We expect 5G to have a longer life cycle than prior generations due to its broad application across multiple industries. I would now like to turn the call over to Akash. Thank you, Cristiano, and good afternoon, everyone. We are pleased to report another exceptional quarter in a challenging environment as we continue to execute on our priorities, including 5G adoption, revenue diversification, and operating leverage. Our third quarter results were above the high end of our guidance, with non-GAAP revenues of $8 billion and non-GAAP EPS of $1.92. These results reflect 63% year-over-year increase in non-GAAP revenues and more than doubling of EPS driven by strength across QCT and QTL, including a partial recovery from the impact of COVID in the year ago period. QTL revenues of $1.5 billion and EBT margins of 71% were above the midpoint of our guidance. These results reflect the impact of a stronger mix offset by lower than expected units in China and India. QCT revenues of $6.5 billion and EBT margins of 28% were above the high end of our guidance. EBT of $1.8 billion nearly tripled versus a year-ago period on revenue growth of 70% and 12 points of EBT margin expansion. Handset revenues increased 57% year-over-year to $3.9 billion, driven by the adoption of 5G products in premium and high-tier devices across all major OEMs. Combined RF front end, IoT, and automotive revenues accounted for approximately 40% of total QCT revenues within the quarter and grew 1.6 times faster than handset revenues year-over-year. RF front end revenues of $957 million more than doubled year-over-year on the strength of our broad product portfolio and customer traction. As a reminder, our RF front end revenues include power amplifiers, trackers, antenna tuners, filters, diversity, and millimeter wave modules, and excludes revenue from RF transceivers. IoT revenues grew 83% year-over-year to $1.4 billion, an increase of approximately $100 million versus guidance. The outperformance was driven by demand across consumer, edge networking, and industrial platforms. Automotive revenues of $253 million grew 83% year-over-year on the adoption of connected cars and expansion of digital cockpit revenues. Our increasing design win pipeline now puts us on track to exceed the 2024 revenue target outlined at last Investor Day. Turning to our guidance for handset units and fourth fiscal quarter. For calendar 2021, we're maintaining our forecast for high single-digit growth for global 3G, 4G, 5G handsets, including $450 million-$550 million 5G handsets. Given the strong adoption of 5G in developed regions in China, we have a bias towards the high end of our 5G forecast. In the fourth fiscal quarter, we are forecasting revenues of $8.4 billion-$9.2 billion and non-GAAP EPS of $2.15-$2.35. In QTL, we expect revenues of $1.45 billion-$1.65 billion and EBT margins of 69%-73%. In QCT, we expect revenues of $7 billion-$7.5 billion and EBT margins of 29%-31%. At the midpoints, this implies year-over-year revenue growth of 46% and EBT dollar growth of 114%. The strength of our QCT forecast reflects sequential growth across all revenue streams, including premium and high-tier device launches and operating leverage benefit from extending our mobile technology and investments across IoT and automotive. Lastly, we anticipate non-GAAP combined R&D and SG&A expenses to grow 2%-3% sequentially. Based on the midpoints of our fourth quarter guidance, I would like to emphasize some key metrics for fiscal 2021. We expect non-GAAP EPS of $8.24, nearly doubling relative to fiscal 2020. Within QCT, we expect year-over-year revenue growth of $10 billion and operating margin expansion from 17% in fiscal 2020 to 28% in fiscal 2021. With our continued focus on diversification, we are forecasting RF front-end, IoT, and automotive combined revenues to grow from $6 billion in fiscal 2020 to $10 billion in fiscal 2021. We expect to exit the fiscal year with a strong product roadmap, expanded design win pipeline, and increased customer traction. Before I finish my prepared remarks, I'd like to highlight a couple items. As part of our ongoing ESG efforts, we recently started purchasing 100% renewable solar energy for our San Diego headquarters, which will significantly reduce our annual greenhouse gas emissions. Lastly, we'll be hosting our Investor Day in New York on November 16th, where we will provide an update on our long-term strategy and financial outlook. Thank you, and I'll now turn the call back to Mauricio. Thank you, Akash. Operator, we are now ready for questions. Thank you. Our first question is coming from the line of Mike Walkley with Canaccord Genuity. Please proceed with your question. Great. Thank you. Congratulations on the strong results. Just wanted to focus on the QCT margins. While June is seemingly a softer quarter with Apple back in the model, the margins came in above your guidance and you're guiding to 30% sequentially. Could you, Akash, maybe provide any estimates for supply constraints or expedited shipments? Did that adversely impact guidance at all? Its 28% EBT margins, is that now good to think of as a floor? If not, what are some puts and takes that might move it lower over time? Sure, Mike. Thanks for the question. When you look at our operating leverage performance in the year, we are pretty happy with the way we've seen the operating margin expansion with revenue growth. If you look at what happened in the third quarter, we had a guidance midpoint of 25%. We came in at 28%, that's on the strength largely of revenue coming in higher and then strong gross margin performance as well. Now we are forecasting a midpoint of 30% in the fourth fiscal quarter. When you think about it, going forward, we plan our margins around revenue scale and R&D investments, and the trick really for us is to optimize those two. As we mentioned in our prepared remarks, as we exit the fiscal year, we feel like we're in a very strong position from a design win perspective to continue to grow revenues. As we optimize investments against it, I think we have an opportunity to continue to expand our operating margins. Great. Thanks. Just for my follow-up, maybe for Cristiano, just focusing on the IoT business, the impressive 83% year-over-year growth. Maybe you're going to save this for the Analyst Day, but how should we think about what's a reasonable CAGR for this business, and how much of the business today is 5G, and what could 5G do in terms of growing the IoT business? Thanks, Mike. That's a great question. We're very excited about this business for a number of reasons. First, it's very diversified. There's a lot of things in our IoT segment. It has consumer, it has networking, it has industrial. What we see is really secular growth trends, which is all based to an accelerated digital transformation. We are going to provide a lot more details about how we think about growth rates of this business in our Analyst Day. It is one of the largest SAM expansion opportunity for Qualcomm. It is highly diversified, it has not only higher growth rates than handsets. I think Akash outlined the 1.6 times our non-handset growth rate, also is accretive to margins and create operating leverage. Stay tuned for more, we're very happy about what we see with IoT right now. Thank you. Our next question is coming from Chris Caso with Raymond James. Please proceed with your question. Yes. Thank you. Good afternoon. I guess as a first question, maybe you could talk about what generated the upside in the quarter, as compared to your expectations. Was it a matter of getting more supply? Because I know supply constraints were a big concern coming in. If you could talk to us about the status of those supply constraints going into the end of the year. You talked about getting some additional supply. Does that benefit the December quarter, or does that supply come farther out in time? Hey, Chris, it's Akash. Let me try to answer both of your questions, and I'm sure Cristiano can add comments to it. For the third fiscal quarter, as you know, our guidance midpoint was $1.65. We came in at $1.92, and really most of the upside was driven by QCT. We did come in a slightly stronger on QTL, which was really just a trade-off between slightly lower units in India and China at the low tier, but offset by stronger product mix, especially with 5G in various regions. That helped us. Going over to QCT, what we really liked about the growth that we saw in the quarter is really we saw strength across all the different revenue streams. It's not just handsets, but also IoT and RF front end and auto. Within that, we had a stronger product mix that helped us. As we just discussed on the IoT side, significant upside, $100 million higher than the revenue guidance we had given. That helped as well. Maybe the last thing I'll highlight is the gross margin performance. We're pretty happy with the gross margin performance in the quarter. Those were kind of all the key factors that contributed to it. Turning over to supply, as we said in Cristiano's prepared remarks, consistent with what we provided last time, we continue to expect that supply will improve materially by the end of the year. It's really a combination of two drivers. We're seeing multi-sourcing initiatives that we put in place over the last several months. We're seeing the benefit of that as we can use available capacity across the foundries. The second is really previously planned capacity builds with some of our suppliers that comes online towards the end of the year as well. Both of those initiatives that we've previously discussed are in play, and that's helping us. The first one of our multi-sourcing product, we recently commercialized, and we have a couple more coming up. You're seeing some of the benefits of those initiatives in our September quarter guide, and we'll see even more benefit on the December quarter guide. Chris, this is Cristiano. Only thing I would like to add is, in spite of having great results, both revenue and EPS all exceeding the right end of our guidance, we still have demand outpacing supply. We have more demand than supply across all of our business. As you look of our guide in the next quarter, it's consistent with the statement we made that we see material improvement in supply to Qualcomm by the end of the year. That's great news. Overall, we continue to see strong demand in every single business outpacing supply. Very helpful. Thank you. For my follow-up, I wanted to address one of the investor concerns, to give you the opportunity to address it, and that's the modem socket at Apple. Of course, Apple has expressed that they're also working on their own modem, so that's a concern on investors. I know that, being Apple, you're limited in what you can say on that. I guess I wanted to hear what you could say on it and perhaps if you could talk about perhaps the magnitude of that risk. If Apple were to take that path, what would it mean for Qualcomm? Thanks for your follow-up question. Two answers for you, not any different than what you would expect from Qualcomm. I think the very first one is we're very happy with our relationship with Apple. We're just on their first phone. We have other phones to go, and we're very happy with the way things are progressing. At the end of the day, you should always think of Qualcomm, we have always been really focused on cellular technology, the first with every new generation of wireless. As long as modem continue to be relevant, there's always going to be a place for Qualcomm in this business. The second part of the answer, which I think is the most important and an opportunity to address investor concerns, is the biggest opportunity for Qualcomm in mobile is the changes that are happening in the mobile landscape right now. As a matter of fact, this quarter, Xiaomi is now the number two OEM in the world in shipments, and we see the shift in OEM market share create an incredible opportunity for us. Snapdragon became synonymous with Android premium and high-tier. That is how we're going to go faster than the market and incredible opportunity for revenue and earnings looking at the whole value of the Snapdragon platform. We're super focused on executing on this opportunity, and it's going to be one of the key drivers of growth in Qualcomm handset strategy going forward. Thank you. Our next question is coming from the line of Samik Chatterjee with JPMorgan. Please proceed with your question. Hi, good afternoon. Congrats on the results. Hi, Cristiano. Hi, Akash. Maybe I wanted to start off here on the results on the RF side and really great progress there. Does sound like you're on track and targeting to become one of the largest RF suppliers. If you can give us more of an update. I know you do it more annually, update on where you stand in terms of share relative to some of the incumbents there. What's driving the confidence here, particularly as you go into a heavy period of design wins and launches, what's driving the confidence about getting to that pole position in that market? I have a follow-up as well. Hey, Samik, it's Akash. Thanks for your question. Overall, on the RF front end side, the starting point for us obviously always is having the right product portfolio. Over the last 3 years, we've been investing in the breadth of the portfolio, and we're in a very good place. I think as you look forward, not only are we the leaders in the modem to RF end-to-end system solutions, but also each individual component within RF front end, we feel like we're in a very competitive and strong product position. The second is just the design win pipeline that we have in front of us. We have great relationships with the OEMs in the mobile industry, that relationship then extends into providing an end-to-end solution for them. As we look forward and based on our conversations, the commitments we have from the OEMs on the designs, we feel very confident that we have an upward trajectory going forward. Finally, in terms of scale, really when we look at the scale within handsets, we already feel like we're maybe the largest player in the industry in RF front-end. The opportunity for us is as 5G expands outside, how do we take our position in the handsets while we continue to grow within handsets, but also take it outside and grow in other areas. For my follow-up, Akash, you talked about the growth in handsets. Just kind of thinking a bit more longer term and into next year, how should we think about what is the primary driver here? Is it still content increase as you get more on 5G phones, or is it really the $10 billion Huawei TAM that you've talked about? In that context, can you talk about MediaTek's products and competitive landscape there, and how that's evolving? Yeah. Maybe I'll address the first part and then Cristiano Amon can address the MediaTek competitive landscape. Overall, I think the answer to your question is all of the above, right? We clearly have a long way to go within 5G. We're at the front end of it, and we're going to see the rest of the tiers transition over as well. As that happens, we still think the metric that we gave previously of a 1.5x multiplier on our revenue and margin opportunity still holds. In addition to that, as you're seeing, the changing OEM landscape is benefiting us with our customers winning share. As that happens, when you combine that with our product portfolio within 5G and design commitments from our customers, especially in the premium and high tiers, that positions us to grow significantly as we move into fiscal 2022. Maybe a quick data point to give on Honor. They are in the process of launching three phones with us. One is a premium tier Snapdragon 888 phone, and then two in the high tier. It's just an example of how we're expanding our customer base. Hi, Samik. Really simple answer. Not to talk about MediaTek, but we think that there's plenty of opportunities for growth for us and other companies in the changing landscape. What is really important for Qualcomm, and I'll give a couple metrics. One outlined by Akash. Not only do we have a strong roadmap, but we have customer commitments to premium and high-tier designs for Qualcomm. The total design wins for Snapdragon 800 increased 20% quarter-over-quarter, and of our total 5G design wins, half of the design is Snapdragon 8 series. It's the clear indication about Qualcomm opportunity in the premium and high, where we can capture the majority of the value of the market. We look at the growth of handset segment. I know we talk a lot about a growth outside handset, but handsets are up $6 billion year-over-year, Q3 2021 handset revenue up 57%. That's a clear indication that we're in a good position. We see this as one of the largest growth opportunities we have for the handset business, and we'll continue to be executing into this new TAM with premium and high-tier devices. Thank you. Our next question is coming from the line of Ross Seymore with Deutsche Bank. Please proceed with your question. Hi, guys. Thanks for letting me ask a question. I guess as my first one, I wanted to ask a question on gross margins to Akash. It's impressive that you guys grew your gross margin 70 basis points sequentially, despite the QCT side of the equation dropping in your mix. I just wanted to get into a little bit about what's driving that upside in gross margin in the quarter, and more importantly, structurally going forward, given the new markets you're entering into, the position you guys have in the market, is there anything structurally that would keep you from getting a gross margin more aligned to kind of even the mid-50s range where a lot of your fabless peers currently reside? Hey, Ross. Thanks for the question. Yeah, as I said earlier, I think pretty happy with how we did on the gross margins. It's really a combination of a couple things. One is just having a stronger mix of products, and so as we see more adoption of our solutions at premium and high tier, that helps our% gross margin profile in addition to dollar margins. The second is really mix of businesses, and it leads into your second point, is as we grow into these other areas, automotive and IoT, our margin profile at the gross margin level, that growth helps the gross margin profile. That's a key factor for us going forward, as you rightly noted. Great. Thanks for that color, yeah, I should have clarified, the mid-50s gross margin would be for the QCT side, not overall. I guess as my follow-up question separately, whether it's Cristiano or Akash, how should we think, just pluses and minuses for the calendar fourth quarter? You have a lot of different dynamics, the timing of premium launches, new launches from the Huawei Honor China ecosystem, supply coming on board. Just a lot of different puts and takes that could make historical seasonality really be thrown out the window. Any sort of just even directional color there on those puts and takes would be helpful. Sure. As you know well, it's a seasonally strong quarter for the company overall. Let me just maybe quickly hit the two businesses. Within QTL, we've said in the past that we expect the holiday quarter to be around $1.7 billion range. At this point, we're not seeing anything different at this point to give separate data points. On the QCT side, we expect the seasonality to be a favorable thing for all of our businesses. Not just handsets, but our Front End, IoT, and auto. We'll see a typical seasonal benefit. Within handsets, obviously, we're getting the benefit from launch of new handsets that happened during that time, especially in the premium and high tier. Some supply improvements coming into the picture as well. The one thing to keep in mind, as a reminder, last year, we had a higher than normal sequential increase from September to December quarter. That was obviously because of two reasons that we would not have this time. First is Apple coming back as a customer to Qualcomm, that exaggerated the seasonality. Also, there was a delay in their phone launch. Those are key factors. If you compare to last year, would not be factors that would imply this year. Thank you. Our next question is coming from the line of Blayne Curtis with Barclays. Please proceed with your question. Hey, good afternoon. Thanks for taking my question. Appreciate the detail on the IoT business that you released. Obviously a very broad business. I was just wondering if there's any way you can dial us in, maybe by the three sub-segments to where are you seeing the strength. Obviously, the business nearly doubled since you started breaking it out. I know there's a lot of segments in there. I know it's pretty diverse. I was just curious, how you would answer the question as to, within these segments, where are you seeing the most strength? Yeah, Blayne, it's Akash. Let me take a crack at that. If you look at what happened in our IoT business this year, we were somewhere in the $1.1 billion range, revenue range for March. We grew to $1.4 billion. As I mentioned earlier, we feel like we're in a strong position to continue to grow that revenue stream. Pretty interesting trends for us. When you break down the business, and we broke it down in the slide you're referring to in three buckets. We had edge networking, consumer, and industrial. Neither of those are dominant categories. You should think of all three as contributing very materially to the total amount of revenue. Maybe I'll highlight a couple things. Within edge networking, both the Wi-Fi access point business and the 5G fixed wireless business, they're both very strong for us. Especially when you think about the 5G fixed wireless business, we're really at the very front end of that having very material impact for us. We're looking forward to the growth that that offers to us over the next several years. In the consumer business, clearly there is a very broad set of products we have. The revenue is split between several products. Also, as you look forward, the opportunity within the next generation PCs and AR/VR are very material things that could be material growth drivers going forward. Within industrial, that's a very broad field, and we're really not even in the first innings on that market. A long ways to go for us, and we're excited all these markets are looking for technologies from us. Thank you. Our next question is coming from Matthew Ramsay with Cowen. Please proceed with your question. Thank you very much. Good afternoon. I guess my first question goes back to the TAM that you guys outlined as $10 billion from what Huawei is exiting and your customers are going to go into. We've been all trying to track as Huawei's kind of depleted their own inventory, and now yourselves and MediaTek are growing into that business against some supply constraints. Of that $10 billion TAM that's out there for you, just to ballpark about how much do you think you can realistically address in the September quarter, and how much of that TAM is still ahead of you guys as you go into fiscal 2022? Thanks. Thanks, Matt, for that question. I will stay away from kind of breaking down that TAM. I don't think we have that level of precision in kind of estimating our opportunity going forward. What gives us confidence that we will get a portion of it in the September quarter, but really, this is a big tailwind for us going into fiscal 2022, is our conversations with the OEMs, commitments from them on designs, and really the supply improvements that we'll get at the end of the year. Those are the three kind of factors that play into our confidence as we go into fiscal 2022. Got it. Thanks. As my follow-up, I wanted to ask a question, Cristiano, on your automotive business. It seems really well-positioned, and you guys have talked about the pipeline growing with 5G connectivity being a fulcrum, and then the ability to do Wi-Fi, GPS, Bluetooth, in-dash display, et cetera, on the same integrated platform. I guess, what's the competitive landscape like that across those sockets for Qualcomm right now, and what kind of ASPs are you guys envisioning for that business as you sell it as an integrated solution, including RF? Thanks. Thanks, Matt, for the question. Look, we really like our position in this space, especially because the trends of connecting the core to the cloud, it's just the first step. What you can do within the telematics or the communications box in the car, you can add to that Wi-Fi, Bluetooth, as you outlined, but also cellular V2X capabilities. A long roadmap. I think we have a very strong position given our understanding of the market and the ability to provide a very modular solution. I think we're highly differentiated in that space, and it's really showing based on our design wins. Also, we're starting to see digital cockpit becoming more material in the revenue, which is really a much richer silicon opportunity for us as we look at a dashboard, the infotainment, rear seat entertainment, heads-up display, smart mirrors, smart side view mirrors, and so forth. There is a complete redesign of the in-car experience. I will argue today, Qualcomm is now winning the absolute majority of premium tier car RFPs. We are engaged with 23 of the 26 brands. Highly differentiated in this space also because we can take a system approach connecting all those different systems together. You should start thinking about our automotive business as there are going to be a Digital Chassis that an automotive company will have to build, and we're differentiated because we have capabilities across multiple domains. It's starting to reflect in the magnitude of our contracted pipeline. Thank you. Our next question comes from the line of Joseph Moore with Morgan Stanley. Please proceed with your question. Great. Thank you. I wonder how the end of supply chain tightness and shortages affects your EBIT margin in QCT, is there an active process of thinking that through, of can we trade off some of that 30% EBIT margin to retake some share that maybe we lost? Just, how are you approaching that, and is there an ambition to achieve a certain EBIT margin or a certain market share, and what's the trade-off between those two things? Joe, it's Akash. Our framework on margins really is unchanged from the way we outlined it at Analyst Day last year. It's really a combination of two things. It's optimizing the gross margins, and the way we do that is a combination of the mix between premium high tiers, where the gross margins are a lot more attractive in handsets versus the lower tiers. Second is focusing on diversification outside. That adds scale to the margin profile. The next point I'd maybe highlight is a lot of the technology that funds the growth in IoT and auto is coming from mobile. Mobile technology is being reused in these areas in very large scale, and that allows us to really get the operating leverage benefit that we were planning for. Of course, we are balancing that with R&D investments and making sure we're investing in the right things that position us to continue to win in these exciting areas in the long term. It's a combination of those factors. Great. Thank you. Thank you. Our next question comes from Rod Hall with Goldman Sachs. Please proceed with your question. Yeah. Hi. Thanks for the question. I wanted to dig into millimeter wave a little bit. Last quarter, you said it was about 20% of RFFE revenues. I wonder if you could tell us what it was this quarter, and then if you might be able to indicate whether you expect that to continue. Assuming it's risen, do you expect it to continue to rise? Where does it end the year, the calendar year, for you? That's my first question, then I have a follow-up. Hi, Rod Hall, it's Akash. I'll give you the metric on it and then I'll defer to Cristiano Amon to add color on top of it. From a% of total RFFE revenue, this quarter was not that different than last quarter and pretty similar range. When you think about it very long-term, going into next year and the following year, as millimeter wave gets deployed, we expect that to be a vector for growth within RF front end, so it'll become a larger% of the total pie. Rod, on the second part of your question, here's how millimeter wave is tracking. Everything aligned over expectations, commercial networks, United States, Japan, Italy, and Singapore. The upcoming one is South Korea, Germany. There's some countries in Western Europe, Southeast Asia, and Russia as well. During the MWC Barcelona, the recent trade show, 150 carriers around the world indicated they were investing in millimeter wave technology. We're excited about that, and we continue to highlight what we think could be an incredible upside opportunity to the model, which is millimeter wave going to China. We'll continue to be engaged for the Winter Olympics in early 2022, and if that becomes a broader deployment in China, you should expect a lot of upsides to our model. Great. Okay. I wanted to dig into the China weakness a little bit more. I know that you guys called it out in your comments. There's the Huawei opportunity, I guess, but curious if you could just comment on the wider market there, the weakness that we are seeing in handsets. Do you think this is just consistent with the maturity of that market? Do you think there are macro factors that are coming into play here? Could you just give us a little bit more color on what you think is going on in China and maybe what the outlook there is the next six months or so? Thanks. Rod, it's Akash. I think, as I mentioned in my prepared remarks, we did see some weakness within the quarter relative to our expectations in China and in India. A lot of the weakness we saw was at the low tier. The phenomena we saw is really kind of weaker low tier, but then mix shift towards the high-end in these markets. That's a key trend that we're monitoring, which obviously on net net, the mix shift is a very positive thing for us. The impact in India that we saw in the June quarter obviously was related to the COVID situation there. As that improves and has improved materially already, we'd expect that some of those units come back into the September quarter, and that's been factored into our guide. Thank you. Our next question is coming from the line of Timothy Arcuri with UBS. Please proceed with your question. Hi, this is Pradeep Ramani for Tim Arcuri. I had a couple of questions. Maybe the first one, just given the recent Intel announcement where you're partnering with Intel, on IFS. What sort of commitment is this on your part? Is there sort of a volume commitment at this point? I realize it's some ways out, but would be fair to say that it's going to service a U.S. customer? Hi, thanks for the question. Look, it's actually very simple. Qualcomm, we're probably one of the few companies that, given our scale, is able to have multi-sourcing at the leading node. We have two strategic partners today, which is TSMC and Samsung, and we're very excited and happy about Intel deciding to become a foundry and investing in leading-node technology to become a foundry. I think that's great news for the U.S. fabless industry. We are engaged. We are evaluating their technology. We don't yet have a specific product plan at this point, but we're pretty excited about Intel entering the space. I think we all determined that semiconductors are important, and a resilient supply chain is only going to benefit our business. Okay. For my follow-up, can you provide some more color on how the 5G-related licensing agreements work for the non-smartphone adjacencies? Is there sort of a price cap, or is it revenue-based? Can you provide some color in the arrangements? What you see with QTL right now is, in the top-line numbers that you're seeing, a result of executing on long-term agreements with the major handset OEMs. On the non-handset side, we've had license agreements in place for a long time. Some of those agreements are on a percentage basis. Some of the agreements are on a dollars per unit basis. We don't break out those individual agreements or the collective non-handset revenue. We are moving forward successfully with 5G in the automotive space and in the IoT space as well. It's just that the overall revenue is a relatively smaller part of overall non-handset revenue, is a relatively smaller part of our overall licensing revenue, so we don't break it out. Thank you. Our next question comes from Brett Simpson with Arete Research. Please proceed with your question. Yeah, thanks very much. Cristiano, you made a lot of references to the Snapdragon 888 in your prepared remarks, and I wanted to ask more broadly about the Android flagship opportunity you see ahead. I guess historically, Huawei and Samsung has kind of dominated this segment, and that's limited your share to some extent in flagship. Can you share with us just your perspective on how you think this market plays out for Qualcomm? What sort of market share you think you can attain, and what sort of timeframe do you think it takes to be able to fully supply this segment of the market? Thanks. Great question. Look, the market right now is a lot more favorable, and I want to take a minute to outline this. It used to be highly concentrated. If you look at the opportunity right now we have, we have a great relationship with Samsung, which is expanding. We have a relationship with Xiaomi, OPPO, Vivo, all in the premium tier. We have a relationship with Honor. In record time, we launched a Snapdragon 888 with Honor, the Magic 3 device. If you look, it's a much healthier market. You have at least five companies at scale that driving the premium tier, and that creates an incredible opportunity for us. As you know, the Snapdragon premium tier devices, there are a lot more revenues in earnings compared, for example, to just the modem technology alone. The last comment I want to make into this, we're just at the beginning of this opportunity. We're showing with 5G a much better mix. Across the devices, the market is moving towards premium and high. We're very well-positioned in the space, and over time, with our investments we're doing in CPU with Nuvia, we expect to take the differentiation to a whole another level. Thank you. Thanks, Cristiano. Maybe just a quick follow-up on automotive because, obviously with the backlog growing to $10 billion, what sort of silicon content do you think Qualcomm can address in autos? You talked about digital cockpit and there's obviously 5G and there's RF. When you add it all up, what sort of total silicon can Qualcomm address say by the middle of the decade in typical cars? There is a lot of silicon opportunities for Qualcomm. Not to make an ASP disclosure, we will provide a lot more color in our Analyst Day, especially how all the different elements of the digital chassis is evolving. You see in the automotive business an opportunity for a lot more silicon content and much higher ASPs than we see in other business. Thank you. Our final question is coming from the line of Srini Pajjuri with SMBC. Please proceed with your question. Thank you. I have a clarification and a question. First on the RF business in the quarter that you reported, Akash. Historically, I've seen handset and RF move hand in hand, but this quarter, I think RF grew about 5% or 6%, and the handsets declined about 4% or 5%. Just trying to understand what explains that discrepancy? Yeah. Hi, Srini. There are a couple of reasons. One is, you will see some differences in purchase timing for various things within our portfolio. Sometimes, RF components are purchased earlier that are not explicitly tied to a specific handset. Sometimes you see a timing difference that impacts these things. Second is design wins. While RF is largely thought of as an attached business for our Qualcomm baseband, we do have business outside of Qualcomm baseband, so we do attach to other devices, and so that also becomes a different factor. Got it. On the QTL side, I think you said for the Q4, the run rate should be about $1.7 billion in the peak quarter. Just trying to understand how we should think about growth in this business, Akash, because obviously you're guiding for handset units to grow high single digits and obviously, 5G is potentially doubling or even more than that. And some of the adjacencies are adapting 5G. As we look into next one or two years, can you talk about some of the potential growth drivers, I mean, whether it's low-end or mid-end smartphones adapting 5G or some of the adjacencies? I'm just curious as to why we are not seeing a bit more pronounced growth here. Thank you. Yeah, Srini. I'll reiterate what we said at Analyst Day a couple of years ago. When you look at our licensing business, we kind of have a base case for the business, and we think of it other things as upside opportunities. The way to model our business is really you have our June quarter numbers, and then we are forecasting September, and then we gave a data point for December. Those are reasonable data points to project forward, to get to an annual number for the licensing business. There are a few things that could drive upside on top of that, but again, we think of it as upside opportunities. The growth outside handsets is a factor. Second is, as I mentioned earlier in the call, we're seeing a mix shift that's very positive for us. As mix shift continues, we'll see the benefit in QCT, but we'll also see the benefit in QTL. That'd be another upside driver, and especially with 5G penetrating the lower tiers, that'll be a factor for QTL as well. Again, it will show up through better ASPs and as a result, better revenues. Hopefully that helps in framing the forward path for it. Thank you. That concludes today's question and answer session. Mr. Amon, do you have anything further to add before adjourning the call? Thanks everyone for joining us on the call today. Once again, I would like to say thank you to our employees who are staying focused and delivering results. I look forward to leading Qualcomm, leading in 5G, and building on the success of our diversification strategy. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.