Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm First Quarter Fiscal 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. If you would like to ask a question during this time, press star then the number 1 on your telephone keypad. To withdraw your question, press star then the number 2. If you are using a speakerphone, please pick up your handset before pressing the numbers. Please limit your questions to one question and one follow-up. As a reminder, this conference is being recorded February 2, 2022. The playback number for today's call is 877-660-6853. International callers, please dial 201-612-7415. 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, and good afternoon, everyone. Today's call will include prepared remarks by Cristiano Amon and Akash Palkhiwala. In addition, Alex Rogers will join the question-and-answer session. You can access our earnings release and its live 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 today, 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 President and Chief Executive Officer, Cristiano Amon. Thank you, Mauricio, and good afternoon, everyone. Thanks for joining us today. Based on our performance over the past several quarters and the strong fiscal second-quarter guidance, it is clear that our strategy is working. Demand for our products and solutions continues to accelerate as our One Technology Roadmap is driving the growth of premium Android smartphones, as well as enabling the connected intelligent edge, which is driving digital transformation for the cloud-connected economy. As you can see from our results today, strong performance in our chipset and licensing business led to record fiscal first-quarter revenues of $10.7 billion and record non-GAAP earnings per share of $3.23. Our chipset business had its second consecutive quarter of record performance, with revenues of $8.8 billion, EBT of $3.1 billion, and EBT margin of 35%. Notably, QCT revenues exceeded those of any fabless semiconductor company. These results demonstrate the continued success of our diversification strategy. In IoT, we continue to see strong momentum, with revenue growth of 41% year-over-year in the first quarter across consumer, edge networking, and industrial. In consumer IoT, our early investments, collaboration with Microsoft and the recent acquisition of NUVIA uniquely positions us to drive the PC industry transition to Arm-based computing for next-generation connected laptops. We recently introduced two new platforms, the 8cx Gen 3 and 7c+ Gen 3. And at CES, we highlighted broad support from ecosystem partners, including Acer, ASUS, HP, Lenovo, and Microsoft, as well as 200 enterprise customers currently testing or deploying Windows on Snapdragon laptops and two-in-one devices. We're also seeing strong growth in premium and high-tier Android tablets, further highlighting the convergence of mobile and PC. Notably, we have already doubled the total number of premium-tier Android tablet design wins launched or in the pipeline versus all of fiscal 2021. Additionally, as the metaverse opportunity materializes, we continue to build on our industry leadership position in VR and AR devices with key ecosystem players, including Meta and Microsoft. At CES, we announced a collaboration with Microsoft to expand and accelerate the adoption of augmented reality in both the consumer and enterprise sectors. This partnership includes custom AR chips to enable a new wave of power-efficient, lightweight AR glasses that deliver rich and immersive experiences, as well as plans to integrate our Snapdragon Spaces XR developer platform into Microsoft Mesh. We're also very pleased that Time Magazine named our Snapdragon XR2 platform as one of the best inventions of 2021, and we're seeing strong support for our VR and AR platforms from virtually all ecosystem providers, OEMs, and content creators. In edge networking, we continue to lead in current and next-generation high-performance Wi-Fi 6 and Wi-Fi 6E solutions, which now make up more than 80% of our Wi-Fi access point revenues. Recently, we launched the world's first quad band Wi-Fi 6E mesh system with NETGEAR, which was rated the best-in-class mesh platform by PC Magazine. Additionally, our Wi-Fi 6 immersive home platforms continue to gain momentum across regions, with significant growth now expanding into China, one of the fastest-growing markets for Wi-Fi 6 for both retail and carrier deployments. 5G as wireless fiber continues to gain scale and expand globally. In addition to our extended range millimeter wave platforms, we recently expanded our portfolio to include 5G fixed wireless access solutions with extended range sub-6, and we're seeing strong traction. In industrial, we're still in the early phases of digital transformation across many industries and demand for our solutions continues to accelerate. As an example, combined smart utility meter, tracking, robotics and retail revenues more than doubled over the last year. In robotics specifically, we expect total fiscal 2022 product launches using our platforms to increase by over 50% year-over-year, spanning applications from warehouse automation to public safety, delivery services, and in-home assistance. The diversity of vertical segments and applications reflects our ability to provide a common platform that integrates advanced computer vision on-device AI, high-performance and low-power computing, and industry-leading connectivity technologies. In RF front-end, we successfully launched our latest 5G modules, which now include our ultraBAW technology. Our modem to antenna strategy is working, enhancing power and performance with every generation of Snapdragon. Notably, virtually all our Snapdragon 8 Gen 1 design wins now include Qualcomm ultraBAW filter technology. Building on our success in handsets, we're seeing traction with our modem to antenna solution across automotive and IoT. As examples, we're well-positioned to address up to $30 of 5G RF content per vehicle, and we're also intersecting our RF front-end roadmap with Wi-Fi 7. In automotive, Qualcomm is becoming the technology partner of choice for the industry, and we're enabling the transition of the automobile to a digital cloud-connected platform. Our innovative Snapdragon Digital Chassis is an open and scalable cloud-enabled platform for telematics, connectivity, digital cockpit, and ADAS, and uniquely position us as the leading system solution provider for silicon, software, systems, and services across multiple domains. As a reminder, General Motors, BMW, and now Renault Group are cornerstone customers for our platform, including ADAS. At CES, we announced an addition to our ADAS and autonomy platform, the Snapdragon Ride Vision System. A new modular computer vision solution that combines our Snapdragon Ride SoCs with the next-generation vision perception software from Arriver. It supports the various compute functions needed for enhanced perception around the vehicle and it scales across applications from entry tier, NCAP front camera to comprehensive front and surround view camera for enhanced autonomy. We expect the Snapdragon Ride Vision System to be available in production in 2024. In handsets, we recently announced our most advanced 5G mobile platform for flagship smartphones, the Snapdragon 8 Gen 1, at our annual Snapdragon Summit. The announcement was viewed by more than 50 million people worldwide. The new Snapdragon 8 Gen 1 leads the way to a new era of premium mobile technology with category-defining enhancements across modem RF, camera, AI, gaming, security, and more. Snapdragon 8 Gen 1 is the world's first 5G modem RF solution to reach 10 gigabit download speeds. It's the first to include commercial 18-bit mobile image sensor and the world's first platform compliant with the Android Ready SE Alliance. We also announced new mobile platforms in every Snapdragon series to address global customer demand across every smartphone tier. In our licensing business, first quarter results reflect a favorable mix in the strength of smartphone shipments. With over 150 5G license agreements, QTL is well-positioned for the future and we continue to expect 5G to have a longer life cycle than prior generations due to its broad application across multiple industries. Lastly, demand remains strong across all of our technologies and continues to exceed supply. Despite ongoing challenges across the global supply chain, our multi-sourcing and capacity expansion initiatives will provide incremental improvements to our supply throughout the year. I would now like to turn the call over to Akash. Thank you, Cristiano, and good afternoon, everyone. We're extremely pleased to report strong results to start our fiscal year. We delivered our second consecutive quarter of record non-GAAP earnings with revenues of $10.7 billion and non-GAAP EPS of $3.23. These results reflect year-over-year increases of 30% and 49% respectively, driven by strength across both QCT and QTL. For QCT, this was another record quarter, with revenues of $8.8 billion and EBT of $3.1 billion, up 35% and 62% respectively, versus the year-ago quarter. QCT EBT margins of 35% surpassed the high end of our guidance range and increased 6 points versus the year-ago quarter, driven by revenue scale and operating leverage. Handset revenues of $6 billion increased 42% year-over-year, due to greater than 60% growth in revenues from Snapdragon chipsets for Android devices. RF front-end revenues of $1.1 billion grew 7% versus the year-ago quarter, reflecting the previously mentioned pull-in of demand into the fourth fiscal quarter. Our RF front-end revenues for Android devices grew by greater than 25% versus the year-ago quarter as we continued to see strong traction across all major OEMs. IoT revenues were up 41% year-over-year to $1.5 billion on continued demand for our cloud-connected intelligent edge devices. Each of the consumer, edge networking, and industrial categories grew by at least 30% compared to the year-ago quarter. Automotive revenues of $256 million grew 21% year-over-year on the strength of our design wins across our Snapdragon Digital Chassis. We recorded QTL revenues of $1.8 billion, an increase of 10% year-over-year, and EBT margins of 77%, which was above the midpoint of the guidance. These results reflect a favorable mix and slightly higher handset shipments. Turning to global handsets and our guidance for the second fiscal quarter. For calendar 2021, consistent with the previous guidance, we estimate global 3G, 4G, 5G handsets grew 7% year-over-year, including approximately 535 million 5G handsets. For calendar 2022, there is no change to the forecast provided at our Investor Day, with greater than 750 million 5G handsets. For the second fiscal quarter, we are forecasting revenues of $10.2 billion-$11 billion and non-GAAP EPS of $2.80-$3.00. In QCT, we expect revenues of $8.7 billion-$9.3 billion and EBT margins of 32%-34%. At the midpoints, this implies year-over-year revenue growth of 43% and EBT dollar growth of $1.4 billion. For handsets and RF front-end, we expect revenues to be in line sequentially as seasonal decline in Apple revenues is offset by continued growth in revenues from Android devices. Within handsets, the increase in Android revenue is driven by the launch of our new Snapdragon premium chipset and additional shipments across high and mid-tiers due to our second sourcing efforts. Additionally, we expect strong year-over-year and sequential growth in our IoT and automotive revenue streams. We estimate QTL revenues of $1.45 billion-$1.65 billion and EBT margins of 70%-74%. This reflects the normal pre-COVID trends following the strong holiday quarter. We anticipate non-GAAP operating expenses to be up 7%-9% sequentially on normal seasonality, including calendar year resets for certain employee-related costs. The remaining increase reflects select investments in long-term growth initiatives that we outlined at our Investor Day. Looking forward to the third fiscal quarter, we are forecasting year-over-year non-GAAP EPS growth of greater than 30%. For QCT, this reflects the seasonality following Chinese New Year purchases and the launch of our new Snapdragon premium chipset in the second quarter. We expect the next inflection point in QCT to be in the second half of the calendar year, with launch of new 5G handsets across several major OEMs. Lastly, we published our annual corporate responsibility and ESG report yesterday, which outlines progress against our company-wide targets, including environmental sustainability, diversity and inclusion, and power efficiency of our Snapdragon products. We are pleased to have been recognized by several organizations, including making the Dow Jones Sustainability Index and Newsweek's Most Responsible Company list for the third consecutive year. Thank you. Back to you, Mauricio. Thank you, AKash. Operator, we are now ready for questions. Thank you to que a question press star and the number one, to withdraw your question press star two. If you are using a speakerphone please pickup your hand before pressing the numbers, one moment before the first question. Our first question is from the line of Samik Chatterjee with JP Morgan. Please proceed. Yes, thanks. Thanks for taking my questions and, congrats on the results. I guess if I can start with, you talked about the strong launch with Android customers that you've had in both phones and tablets, and I think you mentioned doubling the pace of launches with Android. As we look to the beyond the first half, that is, your fiscal first half, December and March, how should we think about how much of the Android share gains for you or launches for you is already in the run rate, and how much of that is, like, weighted for the remainder of the year beyond sort of this first half of the year? If you can share some color on how to think about share gains continuing for the remainder of the year with Android, and then I have a follow-up, please. Thanks, Samik. This is Cristiano. Look, Android is a success story for us. This quarter continues to validate what we said before. You know, OEM Share in shifts in China is benefiting Qualcomm, and we saw significant growth of Qualcomm share within the market benefiting as we have this new TAM opportunity. We've seen that reflected in the growth we've seen in premium and high tiers. It continues to be story. It was the highlight of what happened in the handset within the quarter. You know, what Akash outlined 60% year-over-year growth on Android. I'll shift over to Akash to talk about the seasonality. Yeah, Samik, I think this is something that'll sustain for us going forward. We are in a very strong position, as you see in the numbers. Our product portfolio is very strong as well. As we keep going forward, we continue to expect to see this benefit in our financials. Yeah, got it. Just for my follow-up, I know you talked about the second source helping in terms of, obviously in terms of realizing better revenues. If you can talk about what you're seeing in terms of the cadence of the improvement there, do you get to where you want to be with supply during the year, or does it take longer? If you can just give us an update on how you're thinking about supply here. Sure. Overall, the demand, as Cristiano mentioned in his prepared remarks, is extremely strong across the board, and we are continuing to see demand outpacing supply. As you rightly mentioned, we had put plans in place very early in the process, anticipating some of these challenges, and you're seeing the benefit of that, right? We have three second sourcing parts, especially in the mid-high tiers that are shipping at scale now, and that shows up in our financial performance. We have additional parts coming up as well. That's definitely something that's helping us. The second is, we're seeing capacity builds from some of our suppliers, and that's playing a role as well. As you look forward, we expect supply to continue to improve gradually through the year, in addition to where we are at now. This entire picture, obviously, as you'd expect, is factored into our guidance. Look, just Cristiano. Nothing more to add other than in simple terms. We see supply improvements. Our forward guide, you know, it contemplates the visibility we have in supply. We still have more demand than supply. We'll ship more if we could. Thank you. Our next question is coming from Chris Caso with Raymond James. Please proceed with your question. Yes, thank you. Good evening. I wanted to ask about the commentary about the June quarter and the second half of the calendar year, your commentary there. Can you give a little more color on that? It's not typical for you to provide color two quarters in advance, so I imagine it's purposeful. Why you're doing that. Maybe talk a little bit about the second half of the calendar year. Is that really a function of more supply coming on, allowing you to, you know, perhaps balance supply and demand as you get to the second half of the calendar year? Sure, Chris, thanks for the question. Overall, when you look at our fiscal year, we are tracking well ahead of plan. We're very, very happy with how the year is playing out for us. That obviously puts us in a very strong position to meet and exceed our long-term Investor Day targets. If you look at the first half outperformance, beyond that, as we go into the third fiscal quarter, we are projecting EPS growth of at least 30% and opportunity beyond that. As you get into the September quarter, as you know well, that's kind of the next inflection point for us with launches, additional phone launches across several major OEMs. We are expecting very strong year-over-year growth in the September quarter as well. Also when you look beyond handsets and we look at second half of fiscal 2022, RF front-end, IoT, and automotive, all are poised to continue to show very strong year-over-year growth as we go through the year. Generally when you step back, we had a very strong second half fiscal 2021. Fiscal 2022 is shaping up just like that, very strong year-over-year growth rates. That's very helpful. Thanks. You know, in addition to the longer term goals you present at the Analyst Day, you also talked about fiscal 2022 guidance for at least 20% EPS growth. You know, based on what you're saying for June, again, it seems like you're well ahead of that as well. You know, any commentary update on that fiscal 2022 guidance? Yeah, Chris, that's the right conclusion. We're tracking well ahead of it. We're not updating that number yet, but I think based on the guidance that you have for second fiscal quarter and third fiscal quarter and the comments I gave on the fourth, what you're drawing is a very reasonable conclusion. Thank you. Our next question is coming from Rod Hall with Goldman Sachs. Please proceed with your question. Yeah, thanks, guys. Appreciate the question. I was just taking a look and I, you know, we've been looking at this for a while, the quarter-on-quarter marginal contribution. The QCT marginal contribution, if I look at the change in EBT and the change in revenue, I'm calculating 58% there in this quarter. I know some of that is scaling, but I wonder if there's any way you could maybe at least give us some color on how much of that is the new marginal sales in QCT being higher margin and how much it is just scaling effect on the revenue. Thanks. I have a follow-up. Rod, just to confirm, this is Akash. Just to confirm, your question was about the actuals for the December quarter? Yeah. Akash, what all I've done is taken the EBT of the December quarter, less the EBT of the September quarter and put it over the revenue difference. Correct. Great. Yeah. I think it's a great story. You're seeing a combination of all three drivers, right? You have revenue scale benefiting us, gross margin strength quarter-over-quarter also benefiting us and then, operating leverage of the business. It's a combination of all three, and we're pretty excited that, you know, not just gross margin performance is great when you look at operating margins as well, 35% is really a great benchmark for us. It's the highest margin in a long time for us, pretty excited about where we are at and where we're going with it. Great, thanks. On my follow-up, I wanted to ask you, Cristiano, if you could maybe comment on the. There's been a lot of noise in the high-end Android chip market about upcoming competition and so on. I just wonder, maybe could you comment on the competitive environment a little bit there, what you're seeing, what you anticipate seeing the next six or nine months? Thanks. Happy to do it. Before I answer that question, I just wanna add one thing to the prior question that Akash answered. Look, we've been talking about our one technology roadmap that really scales, and this is exactly what you see. As our diversification strategy, you know, unfolds and more and more of the revenue coming towards QCT is from non-handset business, it gives a scale to the business, it's all accretive to margins, and I think that's reflected in the numbers, and I think that will continue to be the story as we are able to leverage the roadmap. Now, back to your question on competition. We're very happy where we are. Look, I provided a metric that we don't usually do that in my prepared remarks. When we launched the new Snapdragon 8 series, we had 50 million views off the launch event, and we have done that simultaneously both in the United States as well in two different locations in China. Snapdragon is becoming the preferred brand for premium tier Android. Not a single one of our customers think about flagship without thinking Snapdragon 8 series. It's a very strong position to be in. As our customers move to the premium tier, we've seen that turn into gains of share of the market for Qualcomm. That's why Android is the story of our handset business right now. Reality is, as we look at the OEM share shifts that happen in China, there's plenty of opportunity for us to grow and our competitors to grow. You know, I expect that we'll continue to have good results and more and more our customers will be betting on the Snapdragon brand. Thank you. Our next question is coming from the line of Michael Walkley with Canaccord Genuity. Please proceed with your question. Great, thanks. Congratulations on the results, also. I guess a question for me on the $10 billion SAM opportunity within Android that you've previously highlighted. You know, how much do you think of that benefiting this first half of the year guidance, and how much further do you think you have to go in penetrating that SAM? Yeah. Mike, this is Akash. What's really happening with the $10 billion SAM opportunity is with the OEM mix change in China, all of our customers, Xiaomi, Oppo, Vivo, Honor, they're all picking up share. As they pick up share and also go up tier, going into the high and the premium tier, as Cristiano just outlined, it gives us a tremendous opportunity to tap into it. We've done a lot of it through, obviously our products being great, but also working on the second sources that we mentioned in our prepared remarks. We still think that there is an opportunity to continue to expand into that SAM going forward. Great, thanks. Just my follow-up question. You know, I think you previously highlighted, you know, to start the first half of the year, you kind of prioritized the strong Android premium to your handsets. You talked about demand outstripping supply. As it gets to maybe a softer handset quarter in the June quarter, should we see maybe automotive and IoT start to close that supply demand balance in those businesses, maybe accelerate in terms of a sequential growth trend? Yeah. Mike, we're definitely. That's a decision that we definitely make where if we can bias the supply in certain directions based on the market demands, we take advantage of that. It's something that we'll definitely do as we get to the June quarter. Look, this is Cristiano. Let me just add one thing. I wanna. Hopefully, this will explain. We're seeing demand for all of our product lines. We're seeing more demand than supply right now. I think demand continues to be up. I think we're very fortunate position to be in. When you think about the handset business, and you did see this very high growth rate on Android, 60% growth of Android within the quarter, we prioritize supply, as we said in the prior quarters, for the Chinese New Year launches. We will still have more demand than supply in all the growth business. As we go to the next quarters, you're gonna see the growth business and a lot of the non-handset business, you know, growing. Then the next inflection point for handsets is the holiday season, which is our September quarter. As we expect supply improvements throughout the year, I think we'll be able to continue to drive growth in all business. We're very happy how the year is unfolding. As I said, our supply picture is reflected in our forward guide. Having said that, demand continue to go up, and it's a good thing. Thank you. Our next question is coming from Stacy Rasgon with Bernstein Research. Please proceed with your question. Hi, guys. Thanks for taking my questions. First I wanted to ask about chipset gross margins in the quarter. I know you don't report them, but if I sort of stare at it. I think they probably were up a couple of hundred basis points, and I found that interesting, just given the relative strength of handsets versus the adjacencies, which I think do have higher margins. Was that just the Android strength that you talked about that drove that margin in the quarter? Then how should we think about that into March as sort of the mix reverses, but you should have some of the higher margins of the adjacencies actually growing sequentially into March. I mean, is there room for more margin expansion as we go into the next quarter? Yes. Stacy, it's Akash. So it's a combination of obviously the adjacents outside non-handsets businesses helping the gross margin. Within handsets, you're seeing the benefit come through, especially as premium and high-tier devices at the high end of Android are being consumed and we're selling into that market. As you'll see in the guidance that we gave, we're still continuing to be optimistic with the gross margin picture. Got it. That's helpful. For my follow-up, I wanted to ask about the buyback. You know, you bought back quite a bit of stock, I believe in the quarter. I think at the Analyst Day, you talked about buybacks as only really being anti-dilutive, but it looks like we are seeing share counts come down. I guess, how should we be thinking about the buyback going forward, given the cash generation? I noticed this quarter you didn't guide the share count, on a more structural level. It does look like it's down a little lower. Should we be thinking about share count continuing to go down through the year, given the capital return that we've seen? Stacy, no change on the framework that we've given on buybacks before. We're continuing to focus on prioritizing anti-dilutive buybacks and opportunistically look for on top of that if we can do additional buybacks. What you're seeing in the quarter is a portion of that showing up. Fundamentally our framework doesn't change. Thank you. Our next question is coming from the line of Tal Liani with Bank of America. Please proceed with your question. Hi. I have two questions. The first one is other suppliers of Apple noted that orders for March were strong, but then at least one of them said that the guidance for June is very weak because there's gonna be reversion to the mean. The question I have is: Is there any concentration of QCT handsets that gives you some concerns over any big customer that might be reducing orders? That there is any abnormal behavior this quarter might be reducing orders later on? That's my first question. Sure. Okay, we'll take it one by one, sorry. Sure. Yeah, Tal, nothing to look at there. I mean, there isn't a story. Apple is going to have their buying pattern across the quarters, and so that'll flow through. Really our focus is on the Android market and there isn't a specific story that we're worried about there. Our position is good and design traction going forward looks great. Okay. The second question, and I don't know how to look at it, but when I look at handset revenues, you are well above the consensus estimates. RF, auto, and IoT, you reported slightly below consensus estimates for the quarter. I'm just wondering. First of all, can you discuss the quarter for these non-handset markets? Or maybe RF is part of handsets and then can you discuss seasonality? These are new markets relatively speaking. What should we think about seasonality here? Yeah, sure. Tal, as we had said at previous earnings call, December being a strong quarter for the handset business, we definitely prioritize the handset business over some of the other new opportunities. Still great demand in those areas. As we go forward, you'll see that growth rates ramp in each of those businesses. It's reflected in our guidance. As I said in my prepared remarks, we expect auto and IoT to see strong sequential growth in the second quarter and also strong year-over-year growth. As you look at the second half of the year, you're gonna see the same trend, strong year-over-year growth across the board. 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. Whether it's Cristiano or Akash, I'm not sure who this is better aligned to, but I wanted to see what your strategy is on the pricing side of the equation. Costs are increasing. Everybody's trying to get more supply. Are you passing along those costs? Is it margin accretive? How are you using price on the revenue side of things as a tailwind? Should we be assuming that some of the goodness that we're seeing year-over-year is coming from the price side of the equation or not? Thanks, Ross. This is Cristiano. Thanks for the question. Here's how you should think about it. One thing that probably separate us, we're being very focused in premium and high-tier devices, high-value devices, a lot of new technology. Therefore we're kinda less impacted by semiconductor cost increases. It's more about the value of the platform we offer. The second part of the answer is what we said, I think earlier. Our One Technology Roadmap really scales. As we use the technology in our R&D to serve more markets, we gain scale with our application processor in premium Android, and Android becomes the key story of mobile, not the modem. It's really the application processor, and the Snapdragon 8 is the key story. Plus we have the processing and connectivity into automotive and IoT. It is accretive to margins. The business gains scale and those, you know, are highly profitable, I think, product offerings. Those two things have a factor, and it's reflected in the QCT 35% operating margin. Thanks for that color. I guess as my follow-up, one probably for Akash on the OpEx side of things. Looks like the March quarter is doing what it typically does in your guidance up seasonally. Any sort of puts and takes for the rest of the year that would be different than your traditional seasonality in that line? Not really. It'll be consistent with our historical seasonality. The one thing to keep in mind is, as we close the Veoneer transaction, they'll become a factor in our OpEx trend going forward. Overall, you should expect the trend to be consistent with historical. Thank you. Our next question is coming from Matthew Ramsay with Cowen. Please proceed with your question. Thank you very much. Good afternoon, everybody. Cristiano, a lot of the conversation here has been focused on supply versus demand for your products and the wafers and et cetera that it takes to make your products. A lot of the calls we all do in semis, we're hearing about matched set issues and kitting issues for your end customers making devices. What I've heard more about in the last six months, and I expect to going forward, is maybe a push by Qualcomm to use your scale to help your OEM customers get the remainder of the kit to make phones, pushing people more closely to be strictly aligned around the reference design, where you can control more of the components in those reference designs. I wonder if you're finding your scale to be an advantage, one, and number two, does that have implications on attach rates of RFs and other types of components that might generate revenue for Qualcomm in those designs? Thanks. No, thanks for the question. It's a complicated thing. Here, I'll try to provide a simple answer. Look, when we talk, for example, and I'm just gonna pick this product as an example, we talk about Snapdragon 8 Gen 1, and it's a leading node, you know, SoC, but it has a lot of attach. You know, the transceiver has entire front-end attach. It has power management IC. And at the end of the day, when we provide a chipset solution to our customers, we need capacity across a number of different nodes. When we think about multi-sourcing our products and put capacity expansion plans in place, so we have supply to support both our handsets and the growth business, we have been building capacity across all of those different technologies. As an example, when you think of things like a power management IC or even transceiver, we work with four or five foundries. In the semiconductor supply chain shortage, it is across everything. Now, having said that, the second part of the answer is scale has been very helpful. Two things have been very helpful for Qualcomm. One is the high predictability we have on our demand. We can bet on ourselves, and therefore, we have the ability to make long-term capacity planning and get long-term capacity commitments from our vendors. Also the scale that we have to be able to utilize multi-sourcing, that has put us in a good position to navigate through this. Now, having said that, I'll repeat what I said before. We still have more demand than supply, even though we're very happy with the growth rates and how good was the quarter, the guide, how we've been managing, I think, the seasonality between handsets and the growth business. As we said, supply is gonna get better as we get to the second half of 2022. Very helpful. Thank you for that. Just as a follow-up on the auto business, you guys presented a very compelling story around ADAS at the Investor Day, but I was a bit surprised at the Ultra Cruise announcement so quickly. Congrats on that. Maybe if you'd give a little bit more details behind that relationship with GM and if you have other irons in the fire of similar profile. Thanks. Thanks for the question. You know, automotive is really an incredible opportunity for Qualcomm. We're super excited about everything that's happening in automotive. It's happened in a very short period of time, and I think we have something that is very unique. It's separate us from everybody else. It's not about having a component, it's about creating a digital chassis with capabilities in all domains, from connecting the car to the cloud, telematics, the entire immersive digital cockpit experience, and of course, ADAS and autonomy, plus a service platform. GM is, as, like we said, a cornerstone customer that is not only looking into the capability of ADAS, and we're super proud of the work with them both on Super Cruise and Ultra Cruise, but also the ability to look up the entire chassis. BMW was another one, which we announced towards our Analyst Day. At CES, we announced Renault as an addition to the digital chassis. You should expect that we have a lot of other irons in the fire and overall, automotive is a good story for Qualcomm. It's something that we can actually take a platform approach and take some of the things we have done in mobile, is take the technology to scale up and down to every tier of automobile. You know, I think we're just in the beginning of having more ADAS design wins and having the chassis be recognized as a key platform going forward. Thank you. Our next question is coming from Joseph Moore with Morgan Stanley. Please proceed with your question. Great. Thank you. I wonder if you could talk about RF for the year, you know, the RF business's ability to keep pace with handsets overall and kind of what are the metrics we should look at? Is millimeter wave rollout kind of more broadly an important factor or is it, you know, content growth and then sort of next 200 million 5G handsets? Just how are you thinking about overall RF for the year? Sure. Joe, it's Akash. If you go back to what we said at Analyst Day and the target that we set for the RF business, really no change there. 2022 is playing out as we expected. It's on track to position us to achieve the target that we laid out. You should also think of RF as not just handsets. Today most of the business is handsets, but we're going to have RF opportunities with 5G in automotive, with 5G in IoT and then Wi-Fi RF as well. Tremendous growth opportunities outside of handsets, that's in front of us. On millimeter wave, the guidance that we gave at Analyst Day did not have any heroic assumptions of growth of millimeter wave globally. We think of that as an upside opportunity. Great. Thank you. Thank you. Our final question is coming from the line of Brett Simpson with Arete Research. Please proceed with your question. Yeah, thanks very much. I have a question for Cristiano. You talked a lot about Android strength this year, but I guess on China smartphones, we've seen some volatility in sort of sell-in versus sell-through last quarter. Is this sort of typical kind of buildup ahead of Chinese New Year that we should expect? I guess when you look at new product launches in China, last year we didn't get any new premium Android launches in the June quarter, nothing meaningful from Chinese customers. I'm just keen to get your perspective around demand from Chinese customers in the March and June quarters as things look a little bit more volatile than we'd expect. No, that's a great question. I think as we've been trying to talk about on this call, when you think about the handset Android, you know, revenue for us and the growth we're having in Android, you see a lot of growth right now. You saw that 60% year-over-year growth of Android, and we also have sequential growth. That's because of the Chinese New Year and we're more skewed towards premium and high tier. Then we have the next inflection point will be the holiday season. I think this is all contemplated in our guide. The market, we continue to see high demand. Because I think we're more concentrated in the premium and high tiers, we have been a little bit less impacted by some of the puts and takes that you see in the mid and the low tier of handsets. Great. Thanks, Cristiano. Maybe just to follow up on Windows and Arm. I mean, this is something you guys have led over the last, I don't know, three or four years, but can you talk a bit about your share ambitions? I mean, what do you think an Arm platform and Windows ecosystem can command on a sort of two or three-year view with, especially with the Nuvia asset you've got now and the Hamoa project? Any sort of market share ambitions you can share with us just to give us some perspective on how you see this opportunity playing out. Thanks. Great question. Look, let's talk about short term and then let's talk about mid term. The way we look at this, and we have been very clear and very consistent with our vision. At the end of the day, for Qualcomm, it's inevitable that you're gonna have a big portion of the PC market moving towards a connected Arm platform. I think you saw that happening already with Apple when you think about the Apple devices. When you think about the use cases of PCs are changing at least for the workhorse of you know, laptop. It's about camera, it's about connectivity, it's about multimedia, it's about streaming with 5G, including you know, streaming of gaming, et cetera. Our view is very clear. There's gonna be a big portion of the market is going to transition to an Arm architecture. When you think of everybody else in the industry, we are the best positioned company to do that for the Windows ecosystem. I think that's reflected not only the developments in the partnership we have with Microsoft over the years, but also the acquisition of Nuvia. Short term, you know, as we prepare for Windows 11, Windows 11 is really the time that you have the Arm ecosystem able to support 32-bit, 64-bit. You have things like the Android apps coming to Windows. Our new part that we just announced, the 8cx, you know, Gen 3. We talk about at CES about having now the device being tested in 200 large enterprises. It's a step function. You know, we'll continue to work with our partners on that transition. I think every OEM that you're gonna talk to, especially on the PC Windows side, they believe there's gonna be room for Arm-based laptop, and that's what Qualcomm is doing. Thank you. That concludes today's question- and- answer session. Mr. Amon, do you have anything further to add before adjourning the call? Yes. First of all, I would like to thank everyone for joining the call today. I'm really excited for what 2022 will bring. Demand for technology is accelerating across virtually every sector, and we remain at the beginning of one of the largest opportunities in our history. Our One Technology Roadmap with incomparable capabilities in wireless communications, low power, advanced computing and on-device AI extends from mobile to automotive and IoT, expanding our addressable market by more than seven times to approximately $700 billion in the next decade. In closing, we have the vision and the execution capabilities that will ensure we are at the forefront of innovation. As the world transforms, we will continue to move early and quickly to address these new opportunities and deliver technologies that enable industries and communities to advance. Most important, I would like to thank our 45,000 employees worldwide. I'm incredibly proud of the significant achievements we made. Thank you. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.