Good day, and welcome to the Qorvo Inc. Q2 2022 conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Vivek Arya, Vice President of Investor Relations. Please go ahead. Thanks very much, Todd. Hello, everybody, and welcome to Qorvo's fiscal 2022 second quarter earnings conference call. This call will include forward-looking statements that involve risk factors that could cause our actual results to differ materially from management's current expectations. We encourage you to review the safe harbor statement contained in the earnings release published today, as well as the risk factors associated with our business and our annual report on Form 10-K filed with the Securities and Exchange Commission, because these risk factors may affect our operations and financial results. In today's release and on today's call, we provide both GAAP and non-GAAP financial results. We provide this supplemental information to enable investors to perform additional comparisons of operating results and to analyze financial performance without the impact of certain non-cash expenses or other items that may obscure trends in our underlying performance. During our call, our comments and comparisons to income statement items will be based primarily on non-GAAP results. For a complete reconciliation of GAAP to non-GAAP financial measures, please refer to our earnings release issued earlier today, available on our website at qorvo.com under Investors. Joining us today are Bob Bruggeworth, President and CEO, Bob Bruggeworth, Chief Financial Officer, Eric Creviston, President of Qorvo's Mobile Products Group, Philip Chesley, incoming President of Qorvo's Infrastructure and Defense Products Group, and James Klein, outgoing President of Qorvo's Infrastructure and Defense Products Group, as well as other members of Qorvo's management team. With that, I'll turn the call over to Bob. Thank you, Doug, and welcome everyone to our call. The Qorvo team delivered an exceptional September quarter with revenue and EPS at all-time highs. Strength during the quarter was broad-based across customers and supported by new product launches. In mobile products, the multi-year migration of 5G continues to drive RF content and integration trends. What began in top-tier flagship phones is now playing out in the mass market, where the RF content increase is greater on a percent basis than in flagship devices. Qorvo enjoys broad exposure to mass market designs at customers like Honor, OPPO, Pixel, Samsung, vivo, and Xiaomi. As a preferred supplier with leading products and a robust technology roadmap, Qorvo is well positioned as 5G devices and Android ecosystem contribute increasingly to the growth in the RF TAM. In other connectivity markets, ultra-wideband adoption in smartphones is serving as the infrastructure for a growing ecosystem of ultra-wideband-enabled devices. The opportunity set spans mobile, automotive, and IoT markets, creating a strong foundation for growth over the coming years. In Wi-Fi, the adoption of Wi-Fi 6E and the performance limitations of smaller node CMOS integrated PAs are driving the migration to chip-on-board FEMs and iFEMs like ours. In Wi-Fi and other markets, Qorvo's products and technologies are at the forefront of multi-year upgrade cycles, enabling new ecosystems and use cases and transforming the user experience. Now let's look at some of the quarterly highlights in our end markets, starting with mobile. For Google, we commenced shipments of mid-high and ultra-high band PADs, antenna tuners, and multiple connectivity solutions to support the ramp of their recently announced Pixel 6. For an upcoming Korea-based 5G mass market smartphone platform, we received the first production orders for our mid-high and ultra-high band PADs, Wi-Fi FEMs, and multiple high-performance discrete solutions. In mobile Wi-Fi, we secured a Wi-Fi 6 FEM design wins with multiple top-tier smartphone OEMs and began sampling Wi-Fi 7 FEMs, enabling higher data rates and improved performance. In ultra-wideband, Qorvo is advancing technologies for a diverse ecosystem of proximity-aware connected devices. We secured an ultra-wideband design win to enable real-time device tracking and other location-aware applications in home mesh networks. We were selected to supply ultra-wideband solutions for enterprise access points as well. We also expanded our engagement with a leading provider of consumer IoT products across a broad set of connected home devices, including smart speakers, point-and-control fans, and air conditioners. In automotive manufacturing, Qorvo was selected to supply ultra-wideband and Zigbee solutions with ConcurrentConnect technology to an automaker in Korea, streamlining automation and manufacturing. In other connectivity markets, we began sampling a Wi-Fi 6 iFEM covering 5.2 GHz and 5.6 GHz and featuring an integrated BAW filter. Qorvo's 5 GHz iFEMs enable higher capacity and improved efficiency in a reduced form factor. In broadband, we begin sampling a triple output DOCSIS 3.1 amplifier module supporting network upgrades for major cable operators in the U.S. and in Europe. In infrastructure, design win activity was strong across OEMs, including small cells and base stations. Wins included all of the RF transmit and receive path content, including BAW filters for 5G small cells at a major base station OEM. We see infrastructure markets picking up in 2022, with Qorvo SAM growing year-over-year. The SAM for Qorvo outside of China will post significant growth next year and support a strong double-digit CAGR through 2025. In aerospace and defense, we expanded our product portfolio with an industry-leading 125-watt S-band power amplifier module and a 1.8-kilowatt L-band radar pallet for commercial and defense radar applications. In RF-based biotechnology testing, we received our first commercial orders and commenced shipments of our Omnia antigen test platform. During the quarter, the NIH RADx Variant Task Force conducted an external study that demonstrated the performance of our Omnia antigen test platform in effectively detecting COVID variants, including the Delta variant. Although this is a new market for us, we believe we bring a novel technology that offers unique and real value as the world moves to more testing protocols, including for Flu A/B and other seasonal pathogens. Our platform offers a unique combination of accuracy and speed at the point of care with improved process flow, including real-time wireless delivery of results. We have seen its benefits in our own operations as part of our protocol for our own internal testing. After the quarter closed, Qorvo acquired United Silicon Carbide, an innovator in silicon carbide power devices and a pioneer in silicon carbide JFETs. The combination will further differentiate Qorvo's power portfolio, enabling more highly integrated power device solutions and expand our addressable market to include higher voltage applications that demand maximum power efficiency, such as electric vehicles, charging stations, and renewable energy systems. We welcome Chris Dries and his team and look forward to helping them accelerate the growth in their business. For Qorvo, our ability to deliver more power, more efficiently, and using less current help put us at the center of the digital transformation. We are eager to expand these competencies as global markets move to electrification and renewable energy. Qorvo's technology portfolio is best in class, our product position is strong, our end market exposure is expanding, and we are operating very well. Yes, we are seeing constraints, and we are working closely with our customers and our partners. Mark will have more comments about the operating environment, and we look forward to discussions during the question and answers. Big picture, we see the industry working through this as it always has. For Qorvo, we see a business with unique competencies and expanding set of growth drivers, and we expect a continuation of double-digit growth over several years. Before handing the call over to Mark, I'm pleased to welcome Philip Chesley as President of Qorvo's Infrastructure and Defense Products group. Philip has a proven track record growing global semiconductor businesses with experience in RF, power, data communications, automotive, industrial, aerospace, and defense. We are very pleased Philip has joined Qorvo to lead our IDP team. I also wanna thank James Klein. Since the formation of Qorvo, James and the team have more than doubled IDP revenue while creating a recognized industry leader. We thank James for his many contributions to Qorvo and wish him the very best. James will remain with us through November to help ensure a smooth transition with the change in the IDP leadership. With that, I'll hand the call over to Mark. Thanks, Bob, and good afternoon, everyone. In the September quarter, Qorvo delivered the strongest quarterly revenue and earnings in the company's history. Qorvo's revenue for the fiscal year 2022 second quarter was $1,255 million, $5 million above the midpoint of our guidance and $195 million or 18% higher than last year's September quarter. When comparing September quarter numbers, recall that our fiscal year 2021 was a 53-week fiscal year and a September quarter last year was a 14-week quarter versus this fiscal year's more typical 13-week quarter. Mobile Products revenue of $996 million was up 32% year-over-year on the continued growth of higher content 5G smartphones. Infrastructure and Defense Products revenue of $260 million was slightly below expectations due to reduced supply from outsourced assembly and test operations in Malaysia and elsewhere. As expected, IDP was down year-over-year due primarily to last year's strong infrastructure build-out and the 14-week quarter. We expect IDP to return to year-over-year growth in the December quarter and growth to accelerate in the March quarter. Non-GAAP gross margin in the September quarter was 52.4%, above the midpoint of our guidance despite supply chain disruptions that worsened through the quarter. Non-GAAP operating expenses in the second quarter were less than expected at $222 million or 17.7% of sales. The sequential and year-over-year increases in OpEx were driven by technology and product development expenses associated with key growth programs and recent acquisitions. Non-GAAP operating income in the September quarter was $435 million and 34.7% of sales. This was the fourth consecutive quarter of operating margin over 33%. Non-GAAP net income in the second quarter was $385 million, and diluted earnings per share of $3.42 was $0.18 above the midpoint of our guidance. Cash flow from operations in the second quarter was $245 million. Our working capital includes an increase in payables associated with a long-term silicon supply agreement. The largest of these payments is a deposit which we expect to recoup by the end of the agreement in calendar 2025. This agreement is a structured way to advance our differentiated technology position and simplify our long-term planning. Furthermore, it's only one of a number of examples whereby Qorvo is building longer-term and more collaborative partnerships to provide our customers supply assurance and meet their product and technology needs. Concurrently, our customer relationships are broadening and strengthening, allowing us to invest with more certainty. As we have indicated previously, the challenges the industry is currently experiencing are driving more constructive and longer-term relationships that we see enhancing the overall durability and value of the business. Capital expenditures in the September quarter were $47 million, lower than expected on spend timing and an earlier than expected reimbursement for a portion of our government-funded work on advanced packaging. Free cash flow was $198 million, and we repurchased $223 million of shares. Over the last two quarters, we've purchased $523 million of shares, which was 110% of our free cash flow. We continue to repurchase shares as our outlook is positive, our free cash flow and ability to sustain investment in technology and growth is strong, and our leverage remains low. On the balance sheet, cash and debt remained largely unchanged from the prior quarter at $1.2 billion and $1.7 billion, respectively. In the December quarter, our cash is projected to decline following payments associated with the previously mentioned agreement and with our acquisition of United Silicon Carbide. Now turning to our current quarter outlook. We expect revenue between $1.09 billion and $1.12 billion. Non-GAAP gross margin between 52% and 52.5%. non-GAAP diluted earnings per share of $2.75 at the midpoint of our guidance. Our December quarter revenue outlook reflects broad-based challenges in supply impacting mobile and IDP and near-term weakness in demand, principally in Asia. Starting with supply, we have several areas of constraint. Our external supply chain is still recovering from disruptions in September, including shutdowns in Southeast Asia. Beyond that, select materials, products, and production capacity remain tight. These are industry-wide issues affecting all suppliers, and our customers are challenged in producing matched sets for products. For example, in smartphones, even where channel inventory for certain parts is healthy, customers lack silicon chips to produce phones. This, in turn, creates changes in demand that add to constraints on our own production as we work to adjust mix. Mix changes are part of our business, but in a normal environment, Qorvo can move swiftly to respond and capture demand. These supply-driven gaps are making recent demand softness in select areas, such as our Asia smartphone customers, harder to quantify. We see the industry working through this situation with some supply effects beginning to moderate this quarter and supply-demand alignment improving more broadly through the March quarter. Given these supply and demand effects, we now see 5G smartphone volumes coming in below 550 million in calendar 2021. Qorvo's December forecasted revenue of $1.105 billion at the midpoint is down 12% sequentially and up slightly year-over-year. We forecast mobile revenue in the current quarter to be approximately $830 million at the midpoint, down 17% sequentially and flat year over year. In the March quarter, we expect mobile to be up slightly sequentially as a typical seasonal decline is offset by improved supply and demand. In IDP, we project revenue to increase in the December quarter to $275 million and the segment to return to year-over-year growth. We expect IDP to be over $300 million in the March quarter. Our December quarter gross margin guide of 52.25% at the midpoint is up versus the view we provided last quarter, despite a more challenging supply demand environment than expected. We see our technology and product mix and operating and capital efficiency yielding a gross margin above 52% for the fiscal year. We expect the March quarter to be around 52%. We project non-GAAP operating expenses to increase slightly in the December quarter to approximately $224 million, reflecting higher investments in core technologies and expanding capabilities and new businesses, including the addition of the United Silicon Carbide team. We now project our current quarter and full year non-GAAP tax rate to be between 8.5% and 9%. Capital expenditures are projected to exceed $70 million in the December quarter as we work to meet demand and support long-term supply agreements with multiple customers. Currently, we are supply constrained and project to remain so through our fiscal year-end. We continue to expand GaN and GaAs capacity as well as biosensor production capacity to support our growth projections for fiscal 2023. In summary, we expect year-over-year revenue growth in the December quarter, though less than we had expected previously. The current supply challenges and near-term demand weakness are acute, but more temporary than durable. We expect supply effects to moderate starting this quarter and improved supply demand alignment early next calendar year. For full fiscal year 2022, we expect revenue growth over 15%, gross margin over 52%, and operating margin of approximately 33%. Looking beyond this fiscal year, we expect double-digit growth to continue as Qorvo's premium technology, product portfolio, and operating capability support 5G, Wi-Fi, IoT, defense, power, and other growth markets. Overall, we are investing to grow mobile and IDP at or above market. Looking at our business by end markets instead of operating segments helps highlight the strength of our portfolio and market position. On advanced cellular RF front ends for smartphones, Qorvo's technology and product breadth is world-class. We expect this part of Qorvo's business, near $3.3 billion this fiscal year, to deliver high single-digit to low double-digit growth as increasing RF complexity and integration trends support years of content expansion. Next, looking at other connectivity beyond cellular solutions for smartphones, Qorvo enjoys exposure across multiple wireless protocols and serves industrial automation, connected home, automotive, and other high-growth IoT markets. This fiscal year, connectivity solutions spread across our mobile and IDP segments combined to approximately $700 million and can grow in the strong double digits. Finally, defense, infrastructure, and power solutions support multiple long-term secular growth drivers. These include the multiyear build-out of 5G infrastructure, increasing semiconductor spend in defense, and worldwide demand for power semis driven by megatrends like electrification. We expect to sustain long-term double-digit growth in this business from a base of over $600 million this fiscal year. Our December quarter is off what we expected previously, but still guided up year over year, as is our view of the March quarter. We expect the business to strengthen through the second half of our fiscal year and contribute to a record full-year performance, including earnings growth over 20%. Longer term, the outlook is bright. Qorvo is exceptionally well positioned to deliver earnings and free cash flow growth, serving the large and growing need for more efficient power and greater connectivity. Now, Todd, would you please open the line for questions? At this time, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Please limit yourself to one question and one follow-up question. Again, to ask a question, press star one. We'll take our first question from Toshiya Hari with Goldman Sachs. Hi, guys. Good afternoon. Thanks so much for taking the question. I have two, if I may. My first one is probably for Mark. The 17% sequential decline you're guiding to in your mobile business for December, it's probably hard, but can you sort of break that down into supply factors and demand factors, to the extent possible? And then on the demand side, you talked about weakness in Asia, but if you can elaborate on that would be super helpful. I got a quick follow-up. Sure. Toshiya, we decrease our December number about, you know, about $150 million, as you can see. About $135 million of that was in mobile, where we went from roughly 965 to 830 in the December quarter. The balance of the decrease was IDP. IDP is the most straightforward. It's all supply in IDP. Just keep that in mind. Of the roughly 135 in mobile, you know, as we characterize supply constraints, which is our suppliers not having supply for us, our customers not having the chipsets, thus not able to build their product and use our product, and then finally our own internal constraints. We see up to $100 million that we would characterize as supply related of that $135 million. The balance, so $35 million, we would view as net demand. Some demand is up, and we're able to intersect that, but some demand is clearly down, and I think that's well-publicized, particularly in parts of Asia. Broad brushstrokes, we're three quarters or less down on supply in mobile and one quarter or more related to demand. Now, if you add in the IDP, which is all supply, then, you know, that proportion is stronger. That's our view, Toshiya. Great. Thanks for the color. As my follow-up, you guys talked quite a bit about, you know, having constructive longer term conversations with your customers. You also talked about your long-term silicon supply agreement. As you kind of compare and contrast the visibility you have today versus three years ago, five years ago, how would you characterize the key differences? I'm sure you've had long-term agreements in the past, but how much bigger are they as a percentage of your backlog, and how enforceable are they going forward relative to history? Thank you. Yeah, Toshiya, this is Eric. I'll take that. I think, you know, one of the silver linings in this environment is how constructive the conversations have gotten in terms of much longer term. Not just, you know, one or even two years, but in some cases up to three years of discussions about how we're gonna outline both our technology and supply roadmap to our customers' product roadmaps, their markets, and what they expect to ship. Of course, there's no crystal ball. It's not perfect, but at least we have ranges of alignment, and sort of volume bars, share windows, and things like this that we can talk both to our customers and to our suppliers. I think for suppliers, it's a great benefit to them and us to have more stability. For our customers, of course, supply assurance is paramount. For us to have more confidence in our growth of the business is, of course, very important as well. It's a very different environment driven by all the factors we've talked about already on this call. Got it. Thank you. Thank you. We'll take our next question from Vivek Arya of Bank of America. Thank you for taking my question. For the first one, I'm curious, given the supply constraints in the industry, does that change the competitive landscape in the RF side in some way as we look at next year? For example, you know, if one of your competitors can bundle their apps, processors, and modems along with the RF side, do you think that gives them perhaps an advantage from a competitive perspective as we look at next year? Hey, Vivek. This is Eric. I don't think so. Technology decisions are still critical to enable next generation phones and, you know, best in class RF is still gonna win in the front end section. You know, I don't think we're competing against people that have advantages of bundling across the boundary, if you will, from the apps and modem side to the RF side, really. I think, again, just as in the last question with Toshiya, I think the long-term visibility we have and kind of planning our technology roadmaps, we're getting no signs that there's any change, if you will, in terms of the bundling or the architectures that would change that. Vivek, this is Bob. Thanks for your question. I think the other point that's interesting is that, you know, a lot of the things that our customers are waiting on are from some of those very people you mentioned. I think we need to keep that in mind. It's not us, the primary reason. It's we have the parts, we can get the parts for them. They've been saying, as we've mentioned many times through last quarter as well as this quarter, the challenges our customers have with match sets or kitting, whatever vocabulary you wanna use, that's been their bigger problem is in, you know, SoCs, not with RF front-ends, at least not from us. Got it. On the acquisition that was announced, I was hoping you could give us some more color in terms of what is the right way to reflect that in the model. You know, our sense of the silicon carbide and the power semi space is, of course, it's in front of a very large growth opportunity in autos and industrials and so forth. It's a very capital-intensive space, right? A number of the established players have margins well below your corporate average. Bob, what's the right way to think about the strategy, and is it gonna be accretive over time for you? Yeah. Let me take some of the financial elements, Vivek, and I'll turn it over to James. You know, first of all, we're not in the capital-intensive part, we're in a device manufacturing part, so that's the expertise, and we're leveraging our silicon carbide, you know, GaN and silicon carbide knowledge and, you know, which will be an advantage here. So that's maybe first thing is realizing that, you know, these are things that we can foundry and source the material. There'll be more disclosure in our Q tomorrow, but, you know, it'll be over $200 million that we're paying for United Silicon Carbide. It is dilutive initially. We expect that to be accretive, you know, maybe at the end of next fiscal year, and we expect it to be a, you know, significant business for us several years out. James. Yeah. Vivek, this is James. So as you stated, we like the aspect that it gets us into several fast-growing markets like electric vehicles, industrial power, and data centers, maybe in longer term, even in things like circuit protection. We see it in current year expanding our addressable market by almost $1 billion, and we think that, you know, that certainly continues to grow at a high growth rate as we go over the next several years. We do believe that we have industry-leading performance in efficiency and in die size. We think when we compare those differentiated type capabilities with our existing power management capabilities, we really do believe we have the ability to continue to grow and scale the business. Thank you. Thank you. Our next question comes from Blayne Curtis of Barclays. Hey, good afternoon. Thanks for my question. I just wanna go back on the supply issues. You know, if you look at the shipments from the two major modem companies, I guess they're up and you're seeing a correction. I'm just kind of curious, there's a couple ways that could happen. Just kind of curious, if now in retrospect, did you ship more RF than maybe modems in the first half of the year and that has to correct? Or just kind of curious to your thoughts on that. I know you probably haven't seen Qualcomm's guide, but with that MediaTek, they're not seeing as sharp of a decline in December. Just kind of thoughts between the disconnect there. Hey, Blayne. This is Eric. It's yeah, it's a good question, and I think to a certain extent, there's some of that, and I think a lot of it comes down to mix as well. I think we did a good job of responding to customer demand. Now we still have, you know, several parts where we're on allocation as well and chasing and behind, of course, as we talked about. For the most part, we did a pretty good job of satisfying customer demand. What happens is as the mix shifts, I mean, they're essentially taking every baseband chip they can get, regardless of which RF it's on. Yeah, it could be that, net we shipped a bit ahead up to this point. Okay. Just for your perspective on it. Go ahead. I was just gonna add, Blayne, that, you know, we're disappointed with the December guide, but I think it's also to reinforce our commitment to keep the channel healthy and give you a guide best we see on, you know, the supply-demand fronts. It's never easy, but admittedly, it's more difficult than usual environment right now. I do think it's important with this adjustment to step back, not lose sight of how good a business we've got. For this fiscal year, you know, we called down, but we missed, but that's against consensus that clearly the supply environment worsened through the quarter, particularly in mid to late September. These, you know, publicized weakness in demand emerged. You know, we see things improving. We think December is, you know, as bad as it gets for us, and we see improving in March, and broadly. We had given a guidance range of 15%-20%, and, with this 2.5% adjustment for the year, we're down at the lower end of that range. We're still in the range that we had provided. Listen, our gross margin outlook is intact around 52%. OpEx is in control, and we're investing in the future of the business. That's both traditional parts of the business and newer parts of the business. In the end, we're taking EPS roughly a dime above $12, to roughly a dime below $12. You know, there is a bit of a correction there, but I would say it's the right thing for us to do. If we look into next year and beyond, we're just, you know, feel great about our position. You know, premium technology and products, serving attractive end markets, growing double digits, and we expect to grow double digits. We're operating well, sustaining margins over 52%, expanding operating margins. Lots to talk about in the positive beyond this quarter. Thanks. I guess when you look at your supply constraints on this, constraints on your business, you did grow inventory in September with that level of sales. I guess I'm looking at now sales down teens. I guess I'm kind of wondering, did the supply situation get that bad between September, December, or is there another factor there? I'm just trying to understand those moving pieces. No, we're worse. It did get worse in mid to late September, Blayne, for sure. That's what we've tried to explain. The supply environment, which has been tough for a year and a half, you know, almost two years now, got worse. Then demand, you know, over the past three weeks or so has deteriorated. But, you know, our work, our. You know, some of that inventory is just again, it's a mismatch of sets and so forth like that. But having said that, our inventories are okay. I mean, our turns are at the high end of historical range, and even with the slowdown, the turns will be within the normal historical range. This is why we're dealing with this now, and again, we think it's a short-term issue that we work through, and are in better shape in the March quarter. Thanks. Thank you. We'll take our next question from Karl Ackerman with Cowen and Company. Yes, thank you. For your December quarter outlook, are the bottlenecks you described at least for mobile concentrated in the Android ecosystem? If I may just as a follow-up, you know, if you could highlight whether the growth trajectory of Android into December is better or worse than your guide of down 17% for mobile. That would be very helpful. Thank you. Yeah, Karl, this is Eric. I don't think we can break them up between ecosystems like that and give any more color given the concentration of the ecosystem, so. Okay. If I may then, you know, just going back to this acquisition you've made in silicon carbide. You know, I understand that most of United Silicon Carbide's products are aimed at high voltage server and general industrial power supplies, where you have some pretty good customer overlap today. Could you discuss your go-to-market plan for United Silicon Carbide and whether they have existing relationships with tier one automotive OEMs? Thank you. Yeah. Today, you're right. I mean, it's predominantly, I would say on the lower voltage scale, and it's in power supplies around automotive and data center applications. If you look at how we plan to take the business on a go-forward basis, certainly we'll use our channels to expand substantially. As you know, we've got a broad base into the automotive and in many other places like the defense market, we'll be able to take this technology over the long term. We'll also be scaling the technology up in voltage, which will allow us to enter other parts of the automotive space, motor controls and things like that on a go-forward basis. Thank you. Thank you. We'll take our next question from Gary Mobley with Wells Fargo Securities. Hey, guys. Thanks for taking my question. I wanted to pick up with some line of questioning on the acquisition. James, your core competency historically in wide bandgap semiconductor materials, and correct me if I'm wrong, has been in GaN power, or I'm sorry, GaN RF. United Silicon Carbide's core competency, of course, is in silicon carbide, and the company's always outsourced manufacturing to X-FAB. My question is the plan to eventually bring in the manufacturing, you know, internally leveraging some of the Qorvo's historical wide bandgap processing capabilities? Related to trying to penetrate the automotive market, it has been important so far for car OEMs to align with silicon carbide providers that are vertically stacked with wafers, materials, and power devices for supply chain security. My question is, as a matter of strategy, is that the intent long term for this business? Well, let me take the second one first. You know, certainly we'll use our very large and strong supply chain to make sure we supply that. Of course, you know, we have expertise also in very high power packaging. We'll combine that with the power control that we have, you know, from the active semiconductor acquisition, that's been a couple of years ago now. We really intend to take this business much more into a module play where we'll have that integrated capability. Of course, we'll use our supply chain to make sure we've got stable supply of raw material and the ability to manufacture the wafers and things like that. As far as moving inside, you know, we'll certainly, as we go over the period of scale in the business, we're gonna take a hard look at what makes sense and what doesn't make sense. I think there's parts of that process that maybe will adapt well to some of our internal capabilities and some that may be a bit more of a challenge. I think we'll just look at that as we go through the next several years as we scale, to see what makes the most economic sense go forward basis. Yeah. Thank you. Correct me if I'm using the wrong term here, but the prepayment of wafer- Sorry, Gary, the question? Looks like we've lost Mr. Mobley. Oh. I'd like to go to the next question. Sure. Next question comes from Edward Snyder with Charter Equity Research. Thanks very much. Eric, it's clearly Qualcomm is gaining some share in the low- and mid- to high-end in the low-end China and Samsung's mass market. How can you be sure that some of your demand weakness is in share loss in a few slots in that area? I know they don't participate as much in uncertain, but I'm just trying to figure out how you figure that out given some of their gains. Mark, I'm really puzzled by this SiC power acquisition. Buying wafers from Cree and foundry through X-FAB will work if it's—it would seem if it's like the industrial market or more of a diversified analog. But you face a huge disadvantage in scale against STMicroelectronics and Infineon, and especially Wolfspeed's new foundry in New York. I'm just curious, where do you see this going? What levers do you think you can pull or lever do you have for this new acquisition to get you into EVs? Because it isn't gonna be cost and given the size of the fab and the fact that there'd be fabbing on wafers, you can't even get the 200 millimeter wafers, you're gonna be facing a big issue in terms of of scale too. So I'm just trying to get a little bit more clarity on what markets you're addressing, why you think. Then I have one final question for James before he leaves. Okay. I'll start with the question about share and how we can be certain about our share gains or losses. It's fairly straightforward for us. I don't think there's a phone platform of any significance that we don't have content on. We know exactly how many phones in every model are being built. We know exactly what our share is. We do all the teardowns and figure out what all the other slots are if we don't already know. It's easily trackable, and I can assure you it's not a share issue at all. In fact, we're excited, you know, as we exit this summer quarter and go into March, I think we've got some very nice content pickups with Samsung in particular, new platforms that we're really happy about that tailwind. You know, right now, you know, to your question, I think we're quite certain of our share position, especially against Qualcomm or frankly any RF supplier. Ed, this is James. I'll take on the acquisition question. So for us the technology benefit there is low loss and therefore a smaller die size. We agree, you know, competitive market, but we are sort of the high-end performance side of that side of the market. You know, it's gonna take that customer set that's really looking for a high performance part. Now going forward basis, we'll take both the power management things that we have in the prior acquisition and our packaging capability, and we'll move more into a module space. Again, we'll do that, you know, selectively where we see parts of the market that are really gonna be driven by performance. We're not trying to take on the world. you're gonna be high performance application specific in the module side of it, but you did mention EVs quite a bit, and all EVs are built into big modules, for power- Well, they'll be high performance applications in that space as well. Okay. I hate to see you go. I know it's time to retire. Everybody's got that time. I'll miss coming on and bugging you. Before you get off and push off into the prairie, I had a question about your 5G. You guided or the guide for IDP was outside of China. You're gonna expect to see growth. Given how pervasive China was to the 5G infrastructure business and how it's not coming back, and the U.S. looks to be a lot more skittish about, what's the long term next year on 5G for IDP? Will you get back to the point where the 5G MIMO stuff is at parity where you were in China, or do you expect that to be a longer haul? Thanks. Yeah, I think on 5G specific, I suspect it'll be a bit of a longer haul. I will tell you, Ed, you know, I'm really pleased with the progress we've made. We've had wins, significant wins outside of China in that MIMO space. You know, we've begun getting out our first integrated modules or what we call PAMs, power amplifier modules, and really pleased with those wins and the performance that we have there. If you do look at our core, you know, the IDP business minus the infrastructure side, this year will grow north of 20%. It really is the story for us is just the lack of deployments going on in China. If you look at that base station business outside of China, it's actually growing way up over 30%. It really is a story for us about slowdown in China is the IDP story. The rest of it, the rest of the business is doing very, very well. Hey, on your comment about my retirement, I want to say a few words. First of all, I really wanted to thank the Qorvo team. For all the work over this past decade or so, they've done just an absolutely tremendous job, and we've been able to accomplish a tremendous amount. I also want to thank Bob for all of his leadership in building Qorvo. I have a lot of pride associated with the company that we've built, and I wanna thank Bob for, I guess, guiding us through that. Maybe dragging us, but I wanna thank you very much. Third, I want to thank Philip for accepting the challenge to lead the IDP team. I'm really confident that he's gonna do a great job in the future with the organization, so I want to thank him for joining us. Thanks, James. Thanks, James. Thank you. We'll take our next question from Christopher Rolland of Susquehanna. Thanks for the question, guys. I did want to go back to Blayne's earlier question. Qualcomm did post some very impressive RFFE numbers. They're now at about $1.2 billion a quarter and probably going up from there. They actually said that their supply constraints were lessening and had been better than initially expected. I did want to circle back on the differences between you and them and what you're seeing here in December. I think you guys did say it could be a timing, it could be an inventory issue. But I'd really love to flesh the rest out here. Is there a difference tied to more MediaTek modem-centric customers or different OEM customers here? Is there anything else that would mark the difference between the two? Hey, Chris. This is Bob, and I'll make a few comments and obviously let Eric add some color. You know, without seeing what they said or understood, it's a little bit difficult, but I believe in that number you gave, there is the millimeter wave front ends that they do sell to our mutually largest customer. You know, if they broke that out, that probably would be helpful. You know, yes, we do see them out there. We don't see them on any MediaTek platforms, that's for sure. You know, we sit alongside them. They don't have the entire RF at the same customers as Eric already outlined, so I think we got a pretty good handle on what's going on. You know, yes, they have more RF content, I would say, at our largest customer. That's a fact. That could be part of it easily. Eric, if you think there's anything that I may have missed. No, just maybe the distinction. You know, I'm not saying Qualcomm's not doing well. They've got some drivers, of course. I think my response to Ed is that I know it's not at our expense, so we're not losing share to them, was the question. Yeah. Thank you for that. Indeed, the millimeter wave is a big portion for sure. Then I did wanna switch to M&A for a second, and congrats on the acquisition. You know, it's this United Silicon Carbide and Decawave. These do appear to be somewhat niche businesses. I guess my question is, do you guys have a desire for more broad-based businesses or even a catalog business, you know, whether it's analog or microcontroller or mixed signal, something like that. You know, what is your desire to move in that direction? Well, let me start with Chris. I appreciate the question, and, you know, I think we said before, we'll never telegraph the areas that we wanna go after, that's for sure. I think Eric would probably take exception, and I'll let him talk about it, but call ultra-wideband a niche is probably a different view than what we have, that's for sure. We think that is a nice growth area, and, I'll let Eric speak to that because I think what we demonstrated with the bullets in our press release and my own comments, I think this is proliferating a lot greater than what most people thought. Eric, if you would. Yeah. Yeah, maybe to kind of take a step towards your question, I think, you know, we're always looking for opportunities that allow us to leverage our scale in mobile and then use that same technology at an unfair advantage everywhere else where in smaller markets, right? I mean, that's one of the advantages we have with our corporate structure. UWB fits that perfectly. The mobile phone itself, of course, is gonna drive, you know, billions of units. But around that, there'll be 5, 6, 7 things that talk to those billions of units, right? The whole connected home ecosystem and so forth, it will be a major franchise over time. Continuing to expand into industrial, some of the things we talked about in the press release, you know, there's industrial things like auto manufacturing, autos themselves. Certainly not a niche business to Bob's point, and we're thrilled with the progress that we're making with ultra-wideband today. I would just add that we're looking at this several years out, and they're most definitely not niche businesses at that point. I mean, the TAM that we see associated with the $1.6 billion or so acquisitions that we've done over the last several years, and I'm including this recent $200 million+ on United Silicon Carbide. We see that TAM at about $5 billion. We see that TAM doubling to $10 billion or more over the next several years. We expect these businesses to be material and enjoy that growth, which is significant. That's not including, you know, biotechnologies. Yeah, very good points. Thanks a lot and congrats on the acquisition. Thanks, Chris. Thank you. We'll take our next question from Rajvindra Gill with Needham & Company. Raj? Sorry. Our next question comes from Rajvindra Gill with Needham & Company. Hi, guys. Can you hear me? Yes. Great. This is Dennis on for Raj. I just wanted to ask you guys a question regarding the comment you made about mass market handsets and the content increases. Could you provide some more color, please, about what you're seeing, you know, how much of a difference you're seeing in percent? I think you'd mentioned that it was higher versus the high-end kind of 5G handsets. Can you guys please talk in a little bit more detail about that? Sure. Looking at the RF content and, you know, as 5G proliferates down, we've said there's like a $5-$7 increase, you know, from 4G Advanced Pro, for example, up to the 5G. What we said previously is what's interesting is we see that $5-$7 consistent as the phones go down. You know, on a high-tier phone, high-tier smartphone, you might be looking at $30-$35 RF BOM. You're adding $5-$7 to that's a good growth. But as you go down into the mid-tier, you're adding that $5-$7 on top of maybe $13 or $10 in some cases, right? I think that was like, you know, the interesting kind of content growth story as you go down. Some of the fundamental RF challenges in 5G that drive a lot of complexity around filtering and multi-band, multi-mode operation, you know, receive diversity requirements going up, transmit diversity coming and so forth. All of that are sort of independent of tier because a lot of them aren't driven specifically by consumer features and things that you see. It's driven just as much by sort of network infrastructure, efficiency and economies, driven by the provider, the carriers. I think that's the essence of the comments we made in the past that you're asking about. Yeah, that was perfect. Thank you. For my follow-up, I just wanted to ask you regarding the gross margins. You had mentioned that kind of gross margins are holding up well this quarter despite challenges. Can you discuss the chief drivers of this resilience in the gross margins, please? Oh, we've covered that at length in previous calls, and it's the same factors, which is, you know, what we had hoped would happen. We have premium products and those allow us to price better and compete where we most want to compete. We've maintained the utilization of our factory network. We've continued to drive productivity programs aggressively. It's, you know, it's these and other factors that have contributed to the gross margin quantum improvement and then the consistency we're seeing. Appreciate it. Thank you. Thank you. We'll take our last question from Ambrish Srivastava of BMO Capital Markets. Let me in. I had a question on the demand side. What are your assumptions for the Asia market in the March quarter? Are you assuming a snapback or what is embedded in your guide for what you think about that market? Then you made a comment on holding back to keep the channel healthy. Can you talk a little bit about, give us some color on what the channel inventory looks like? For my follow-up, Mark, given all the tightness, you have kept CapEx intensity very low for a while. Does that change in fiscal 2023? Thank you. Right. Ambrish. First of all, looking at the mobile market, you asked about Asia specifically in March. I mean, clearly, I think as you saw from our guide, this is not a normal year, right? We're booking seasonality in our projection in March going up. You know, I think that's that there's no you know, normality here to the seasonality. We're expecting that it'll be you know, roughly in line growing a bit over December quarter, most likely. the channel inventory? Channel inventory. Yeah, that also varies dramatically by part numbers as we talked about. We have some where we're back up to healthy levels, for sure, others that we're still absolutely hand-to-mouth or even, you know, constrained on in some cases. There's a wide range. You know, we've been saying, I think over the past quarter or two that, you know, we're beginning to see channel inventories begin to get healthier. In some parts we've definitely gotten there, and that's where we're making sure that we don't, you know, over ship into the channel to Mark's point. Next- Ambrish, on your- Sorry, Mark. Yeah, Ambrish, go ahead. Sorry. Go ahead, Mark. Go ahead, please. Sorry. Go ahead. I was gonna ask your CapEx question, but if you had a follow-on. I did have a follow-on. Eric, we've heard the memory guys talk about builds at the Vivo complex. Is that specific to the memory guys, or are you seeing that kind of manifest in your business as well, that there was some overbuild there? You said inventory? Did you say at Vivo, Vivo, Xiaomi, is that what you said? Yeah. Yeah, 'cause the memory guys have called that out, you know, without picking the names, but they've talked about and the desire to take share. Well, one thing in which I don't think we've touched on this call yet, we do see very, very lean inventories in the finished goods channel. In terms of phone inventory in the channel from vivo and Xiaomi, we see pretty tight discipline there. We don't see overbuilds in phone inventory building up. I'm not sure if you're asking that or whether they're building up a stockpile of memory chips. I don't know. I can't comment on that. Well, on the component side, if you saw anything on the component side that. Yeah, sorry. That was my- I see. No, I don't think they're intentionally doing that. They're dealing with mix shifts due to supply changes week to week, which basebands they can get depend on which phones they can ship. Yeah, I think that's the key factor. Got it. Thank you. Ambrish, on your CapEx question, it's still our long-term goal to, you know, keep our capital intensity as low as we can, as we grow and stay around that mid-single digits% of sales. Now, that will move a bit up and down as we're going through various investment cycles. That's the long-term goal. I do think it's important to call out that, you know, our CapEx is staying at sustained levels through this weaker period in December because we see on the other side of it, we're only talking the March quarter where we see things rising. We see next year as being a good year, so we need to invest capacity to realize that growth potential. Got it. Thank you. Thank you. At this time, I'd like to turn the call back to management for closing remarks. We wanna thank everyone for joining us today. We look forward to speaking with you again at upcoming investor conferences. Thanks again, and have a good night. This concludes today's call. Thank you for your participation. You may now disconnect.