Good afternoon, everybody. Welcome to Silicon Labs 2022 Analyst Day. It's great to be back in New York, and we had a great time this morning opening the market over at the Nasdaq, where we've been a publicly listed company for 22 years now. I'm John Hollister. I'm the Chief Financial Officer. I've been with the company for 18 years, and I've been in this role for the past 9 years. I'm joined today by several members of our executive team, some of whom you all know, and some you will be meeting for the first time, and I'll quickly walk through our agenda. Matt Johnson, our President and CEO, will kick things off with an introduction and overview of the tremendous opportunity we have in the IoT market. Next, you'll hear from our Chief Technology Officer, Daniel Cooley, who will cover our technologies and platform strategy. After that, you'll hear from Ross Sabolcik and Jake Alamat, who will cover our business units and dive deeper into specific applications, understand how our technology is put to work with our customers. After Jake's presentation, we'll have a short break and give you a chance to have a Q&A session with Daniel, Ross, and Jake, and then we'll have a short break. Following the break, Brandon Tolany, our SVP of Sales and Marketing, will cover our journey and evolution to a broad-based business model, as well as our go-to-market strategies. Finally, I'll wrap it up with some comments on sustainability and a financial overview. With that, let's get started. I'd like to hand it over to Matt for the intro. Thank you, John. Everyone, welcome. Good afternoon. Glad you're here for our 2022 Analyst Day. For those of you who do not know me, I'm Matt Johnson, the new President and CEO here at Silicon Labs. Prior to this role, I led our IoT business, and prior to that, I spent the last almost 20 years in the industry in the mobile handset space and the automotive space. In both of those markets, it was an awesome opportunity to see the growth and transformation that they drove globally. I can honestly say that what we experienced there is not as exciting as what we see right now in the IoT and the position we find ourselves in the IoT. We're gonna share more about that today in terms of the company and the opportunity we see moving forward. Before we do that, I'd just like to pause for a minute and recognize what's going on in the Ukraine. Just to share that, you know, our prayers and support are going out to all the people impacted there. At the same time, it's important that we share that we do not have any employees that are directly impacted, but we definitely have multiple employees who are indirectly impacted by what's going on there. At the same time, we've made a donation to help out with the humanitarian efforts there, and we're gonna stay, you know, focused on this like I think everybody is as this progresses. With that, I'm gonna transition and talk a little bit about big takeaways. If you think about all the material you're gonna see today, there's some fantastic content. I wanna make sure if you take away one thing, it's remembering that Silicon Labs is the largest IoT wireless pure play company in the world. There's three reasons that that is so exciting. The first is the market we're focused on has at least a couple decades of amazing growth in front of it. We're looking at a market that's already large, but it's accelerating. Think of a large secular growth opportunity. The second is our position in that market. We've been focused on this space now for almost 15 years. With that, we find ourselves in an incredible position to grow, scale, and capture that opportunity. At the same time, we are now 100% focused on this and nothing else. Think of that large market with a couple decades of growth, well-positioned in that market and focused on nothing else but capturing and maximizing that opportunity. It's a very exciting time to be at Silicon Labs. I thought it'd be good to start and just give some overview on what we do as a company and who we are. For those of you who are not aware. Whoops. Just give me one second here. Slide's progressing for anybody? I'll wait for that to. I'm not moving. I'm kinda stuck. I'll give it a second if it moves forward. I need to go to the next slide. If it doesn't, I know most of it in my head, so I can just keep going. While we're waiting for that to transition, I'll give you some high-level context and perspective on the company. The first thing to remember when you think of Silicon Labs is we're focused. We're focused on end or edge nodes for IoT wireless. Think of embedded computing and wireless performance for the billions and billions of devices that sit on the end or the edge of the network. This is a space that is, you know, we don't cover automotive or handsets or PCs. We're really focused on everything else that sits on the edge of that network that needs wireless connectivity. As part of that, we provide complete solutions for that space. We provide, obviously, the silicon. We're a semiconductor company. We also provide the software, the tools, and all the service and support that are required to go with that solution, which is very important because some customers are experts at wireless, others are just learning about wireless and need a turnkey solution. At the same time, we do this with incredible breadth and depth of technology. A lot of companies have a tendency to focus and support one or two wireless technologies. At Silicon Labs, when we started this, we committed ourselves to making the IoT successful, and as part of that, supporting the requisite wireless technologies needed for the IoT. We've been the foundation of multiple technologies, and I'll share more about that with you later. It's important to remember we support multiple technologies, and we know how to make them work well and work well together. At the same time, we do this across an incredible diversity of customers. Literally think about tens of thousands of customers, thousands of applications, and over 100 different ecosystems. This creates billions and billions of connections. It's really important because we've figured out how to do mass market wireless, and that's the way the market is in terms of us being positioned to capture this opportunity. How we do that is with a platform approach. Think of a platform that includes hardware, software, tools, and that was purpose-built for the IoT, purpose-built to scale, and that's how we address this. But ultimately, we do it with our people team. We have an amazing team, culture, and values as a company that ultimately will allow this all to happen and be possible. I'll share more about this with you today. There we go. The first thing is we have big expectations for future growth, but these future expectations are underpinned by historical performance. The numbers you see are our historical IoT revenue, which is total Silicon Labs now. You can see that over the last decade, we've 4X'd our revenue growth. What's even more amazing is during that time, the transformation that happened within that revenue. Think of the diversity of customers I just mentioned that exist within this revenue number. Or another example is when we started out, this was around 20% wireless business back 10 years ago. This is now more than 70% wireless business today in all IoT. It's really a remarkable transition and transformation that's happened during this timeframe. Also, at the same time, our confidence in the future has been increasing every year. Our opportunity funnel has been increasing, our design win momentum has been increasing, and our position within the market has been improving. As a result of that, I'm really excited that here at our Analyst Day, we're gonna give you full year guidance on what our 2022 outlook looks like. The reason is we're seeing performance that is ahead of our expectation, and we're really excited to share that with you. You'll hear more about that from John later. I think it's the best proof point you can see in terms of the momentum we're talking about. As part of that, though, it's not just about the revenue growth, it's about our performance relative to the market. How does that revenue compare to the market? If you look, you can see that over the last decade, we've been outperforming the market almost that entire timeframe. Specifically, we've been gaining market share or outperforming the market the last 8 years. The last 8 years we've been gaining share, and we expect this to continue. We're not immune to the movement in the market, but we have a consistent track record of outperforming it. For sure, this doesn't guarantee that we'll be able to do it in the future, but we do believe it speaks to our position and ability to execute in the space. We are confident that we're gonna be able to continue driving this moving forward. What about the market itself? The IoT. Everyone talks about the IoT. It means different things to different people. What's the big deal, right? For us, there's a couple things I'd like to start with that make this such a big deal. The first is think of the sheer scale and volume and quantity of devices that we're thinking about and talking about here. You know, we're all. If you think of other transformational markets, think of PCs, handsets, automotive, and then think of the size of the IoT today already. It's already significantly larger just in terms of the actual size of the market, in terms of unit volume. Think these devices are already so pervasive and ubiquitous in our lives, right? They're on your, you know, you wear them, they're in your home, your office, your schools, hospitals, factories, job sites, you name it. That's why we're just seeing the tip of the iceberg in terms of the growth to expect moving forward. The expectation is, you know, end devices are gonna grow to somewhere around 40-50 billion units per year in the next decade. Think about how big this market is already, and think about the future growth potential that we haven't even realized yet. That's the quantitative side of it, if you wanna think of it that way. What about the qualitative side of it? What's the impact of this? What's it doing? I think that's the most exciting piece if you think about the impact this will have and make, right? It's always difficult to imagine before it happens all the ways the world will change with these technologies. Think of, you know, like I mentioned, PCs and handsets. Think about the IoT in terms of some of the biggest trends that are underpinned or supported by IoT technology. For example, think about the digitization that was accelerated so much during the pandemic. You're gonna hear from Jake soon about home and life and time and well-being and the way the IoT can make a huge impact on that. You're gonna hear from Ross talking about the environmental impact and sustainability that the IoT can help accelerate, as well as the, you know, just Industry 4.0 or the fourth industrial revolution in terms of the way the IoT can help and is such an integral part of that. The point is, each of, you know, these has a key role in terms of how the IoT helps it and accelerates it, and that's another reason the IoT is so exciting. It's not just the quantity, but it's also the quality of the impact and what it's gonna do. Simply put, it's an exciting time and place for the IoT. We're a wireless technology company, so the market's big. It's gonna make a big impact. It's gonna do great things. As a wireless technology company, what wireless technologies are gonna underpin this? What wireless technologies are gonna drive this? We get asked that question all the time. I hate to disappoint, but the answer is not what people want. It's not that there's gonna be one wireless technology to rule them all. There are multiple wireless technologies that are critical and integral to the IoT. They're needed to make it work and needed to make it succeed. The reason is, excuse me, they each have their purpose, they each have their reason. They were made for a reason to help the IoT. There won't be just one, but there are some clear trends that you can see within that. One of those is low-power wireless technology. When I say low-power wireless technology, I mean technologies like Zigbee, Z-Wave, Bluetooth, Thread, Wi-Fi. These technologies were made for these types of applications. Why that matters is they can help drive and accelerate adoption within the IoT. Specifically, over 75% of edge devices today are driven or utilize low-power wireless, and that's expected to continue moving forward. Why that matters so much is it helps people understand the underlying technology performance that is needed to drive the IoT. Just to compare, take cellular technology. Cellular, by comparison, can cost ten times more and have a fraction of the battery life. Wireless, low-power wireless allows more than ten times battery life at a fraction of the cost. In doing so, it opens up the door to so many applications that couldn't otherwise benefit and utilize wireless technology. That's not to say, there won't be a place for cellular. In fact, they'll coexist, and it will work very well. The bulk of the market will be driven by low power, and that's where we are incredibly well-positioned, and that's why we're focused there. An easy way to think of the coexistence is to think of a cellular handset, right? Cellular handset has multiple wireless technologies, including 4G or 5G, Wi-Fi, Bluetooth, GPS, and the reason is they each bring a benefit. They each play a role and make a better experience. This is an easy way to conceptualize the IoT in terms of multiple technologies being needed and coexisting well together. A key takeaway here is, low-power wireless, the majority of the market and the major driving force, and that's where we're focused because that's where we see the biggest opportunity. If you put this all together, it's really incredible in terms of the size of the market and the opportunity. When we had our last Analyst Day a couple years ago, we did anticipate that the market would accelerate. We didn't anticipate by how much. We just saw an incredible acceleration over the last year or two, and as a result of that, we expect the market in 2025 for our served available market will be over $17 billion, which is really exciting. Also, at the same time, we saw our position meaningfully improve in the market. We saw our ability to capture this market improve, our ability to serve this market improve, and that's what I wanna talk about next. The reason I'm gonna focus on this a little bit is it's getting more difficult, right? As the IoT gets bigger, it gets more attractive, more shiny. You see more people in the IoT, more people claiming IoT positions, right? That we have IoT and it's getting difficult to understand how everyone's different, what their roles are, how they're positioned, what they do. I'm gonna walk through a few reasons Silicon Labs sticks out and is differentiated versus other companies in the space. Think of it as why us. The first one is our focus. We are 100% focused on IoT and nothing else. The reason this matters is the IoT is incredibly complex. It's large. It has an unprecedented scale. It's diffuse across so many customers, applications, technologies, markets, you name it. It's unlike anything we've ever seen. We didn't start this way. We decided to make ourselves this way as a company because we realized this is what it would take if we were gonna capture this opportunity. Specifically, we believe that this has to be your number one thing and the thing that you do if you're gonna capture this, and we're gonna talk more about why that's so important given the market diversity and all the technologies out there. The first is 100% focus. The second is that unmatched wireless breadth and depth. As I said earlier, we've been focusing on this space for almost 15 years now. Before people even believed or knew what the IoT was, we were buying and building technology for this application and this purpose. We talked about the importance of low-power wireless for the IoT. Why this matters is, think about our customers and what they need, right? They need solutions that are not one technology. They need solutions that integrate Wi-Fi and sub-gig, or solutions that integrate Bluetooth and 15.4. Our goal is not to make one wireless technology or two wireless technologies succeed. Our goal is to make the IoT succeed, and that's an important distinction. We support the requisite technologies our customers need to make this successful. It's another reason that it's getting more complicated when you look at our market, because of the way our customers are using multiple wireless technologies, it's really hard to report. We get asked all the time, "Hey, how's Bluetooth doing? How's Wi-Fi doing? How's Zigbee doing? How's Wi-Fi doing?" We want that information too, and we track that to the extent we can, but they're increasingly getting blended together. Customers want multiple technologies. It's increasingly difficult to share each one because they want combo devices. They want multi-protocol devices, which isn't surprising. The way we are gonna report moving forward, and we'll share more with you today, is by application segment. This is the way we're structured, this is the way we focus, and we believe this is the right way to approach the market because we're looking at those applications and saying, "How do we make them successful?" Not how do we drive a particular technology into those applications. It's a very important distinction. Just so people know, many of these technologies, either we acquired, we built, or we were the foundation of, and we have meaningful positions in each, which is important. We don't just say we support them, we actually have them and know how to make them work well and work well together, which is incredibly important for our customers. If you were to think about a way to take away this concept, think of this as the IoT is not a point solution play. It's not about one technology, it's not about one customer, it's not about one application, it's about a platform. You need a platform approach to be able to serve and really maximize your exposure and ability to serve this market. The next concept is diversity. This one's really exciting for us because, as I said earlier, as a company, we have figured out how to do mass market wireless, which is really a tremendous accomplishment if you think about it. You know, the first way to break it down is our application segments that I mentioned before. We're now structured with a Home and Life focus. That's one of our business units. You'll hear more from Jake, who leads that, in a few minutes. The other is Industrial and Commercial. Very different market, very different care abouts. That's led by Ross Sabolcik, who will be up here in a few minutes. Each of those roughly represent about half of our business. That in itself represents a lot of diversity, but it's much bigger than that. We have geographic diversity, we have tens of thousands of customers. We have those thousands of applications I mentioned, over 100 different ecosystems. Why that matters, if you look at, donut chart, that's a breakout of our customers. There's no customer over 5%, and the tail that we serve is remarkable. The reason that matters so much is we found a way to service experts in wireless as well as newcomers who need a turnkey solution. Brandon Tolany's gonna share more with you how we use that as a competitive advantage. Another reason this matters, it's not just that we've figured out how to service so much market and we have so much broad exposure, it also helps us competitively. One of the biggest challenges in the IoT, and you may know this as consumers, is interoperability. Getting things to work well and work well together easily, quickly. Think of user experience, developer experience, customer experience. It matters so much. Think of our positioning. We support all these technologies, all these customers, all these applications. If there's any company in the world that has a front and center problem with interoperability, it's us. That's why we've dedicated ourselves for the last few years to improving that experience. We want wireless that just works. We want wireless that everybody can use. We want wireless that people don't have to think about. We've made huge strides towards that, given the diversity we've already been able to accomplish, and we're far from done. Like I said, because of that exposure we have with so much diversity, it gives us an advantage to keep improving the interoperability in that experience each time. Think of wireless that just works. The way we accomplish that is with our platform. I mentioned the platform earlier and why it's so important. Think of a platform that is custom built for the IoT. We're not trying to repurpose anything and push it into the IoT. It is made for the IoT. At the same time, it's made to scale for the IoT. We knew since the beginning that the IoT was gonna explode in its growth and would be very large and diffuse. We needed a way to scale, address, and capture that market. The way we did that is we turned software into a core competency. In doing so, we've been able to integrate software and hardware in a way that makes our platform an important competitive advantage for us. Three reasons to take away. The first is efficiency. By using this approach, we can do so much more in terms of addressing more market with less effort. We'll use the same wireless SoC to address multiple markets, multiple applications, multiple customers, multiple technologies. At the same time, our customers also benefit from that efficiency. You'll hear from Brandon later that when a customer uses us once, it's easier for them to use us the second time, third time, fourth time, which creates a reuse paradigm and an R&D efficiency for them as well, which is really important. Efficiency is a first. The second is adoption. We talked about that wireless that just works, ease of use. We focus on making this experience so easy that if there's a customer that's never used wireless before, and they have a great application that they wanna connect to the cloud, we can do that for them. We can do it with low effort, low touch, and a great experience for them. That's important if we're gonna scale and maximize this opportunity and capture as much of the market as possible. Third is differentiation. It's really important when you do a platform that you can still differentiate. Why that matters so much is we use a platform to differentiate because we can quickly and easily update software for our customers' needs and wants and the way they wanna differentiate, so that helps them differentiate their product and allows us to differentiate our product. This is one of the reasons that our gross margins are at the high end of our peers in the space because we're able to operate this way. The last reason is critical, and we differentiate on our people, our talent, our culture, and our values. This isn't something that the tech industry talks about as much, but it's foundational. Everything you see that we do, it's because of our team and their ability to do this, deliver it, and execute. So many things that we talk about, ability to innovate, integrity, ability to make great decisions, ability to be, you know, agile and adjust, it all comes from that culture, and it all comes from the team. This is gonna be increasingly important in our industry moving forward. We think and we like our position here. The reason is we've been focused on this from the beginning. From the very beginning, people have been our number one, and our team knows this. This is why we're recognized consistently as a great place to work, or we receive industry recognition as a great company. It's because we put our team first. It doesn't mean we're ever done, but we believe that this is gonna matter incredibly in our industry from a competitive perspective. We also know internally it matters incredibly that if we're gonna maximize this amazing opportunity, that market that is so big and growing, we need to have the team that's ready to go maximize and capture it, and that's what we have, which is really exciting. Those are a few of the reasons we see ourselves so well positioned, and the team's gonna share more about these and fill in the next level of detail. Before I transition, I wanna talk to you about something we call SLAB 4.0. At our last Analyst Day a couple years ago, we introduced this concept. The reason we had this initiative internally is because we saw that the market was going to accelerate. We knew as a company, if we wanted to capture this, if we wanted to maximize this, we'd have to change. It was just too big for our size to go after. We came up with what we called SLAB 4.0, Silicon Labs 4.0, which was a substantial transformation that we embarked on. We're not done yet, but we took this incredibly seriously, and it resulted in some really big changes for us as a company. The first was the divestiture of anything that was not IoT. That resulted in the sale of what we call our I&A business to Skyworks last year. We could focus on this and nothing else because we believe that's what it would take to get and maximize the opportunity. The second was simplifying our structure. It was less layers, more simple organizations, less complexity, and getting to two business units that represented all our business in the two segments that you're gonna hear about in a few minutes. The last one was increasing our productivity or output of our R&D. We found a way to increase our Silicon or SoC output by 2x over the last couple of years. At the same time, for our software, what we call our software product, we were able to increase it by more than 2x. Why that matters is those are impacts that are massive that haven't even been seen yet that will impact future growth and future revenue, and that's incredibly exciting. Simply put, you know, this transformation is substantial. It's allowing us to be so well positioned. You're seeing our results accelerate, and it's making a big difference. We are not done. We're just getting started on this because we believe this is an integral part of capturing the IoT space and market. Simply put, it, for us, it's a really exciting time to be in the IoT, and we're excited to share more with you about that in the next few minutes. I'm gonna take a pause. I'm gonna turn it over to the team to talk to you and share with you the next level of detail, starting with Daniel Cooley, our CTO. Daniel? Thank you, Matt. Good afternoon, everyone. My name is Daniel Cooley. I'm the CTO of Silicon Labs. This is my 17th year at the company, and I've had the pleasure in serving various R&D, business, and corporate roles. Believe it or not, the majority of that time, however, was leading up to now. You know, I'm really excited to be here today to talk about the world's best wireless technology, purpose-built for the IoT. You're gonna hear a lot of people say that, purpose-built, and we're gonna go into that in a lot of depth here on the technology and then later into the customers. We'll see here that we've spent decades building our portfolio, and we are simply the best at delivering it in a software-friendly way that really matters. In our platform, these things combine to form the most complete and scalable one in the market. The IoT is really about connecting embedded computers to the internet. Before we go deeper there, it's worth taking a step back and seeing how it lives in the context of other markets that connect to the internet, like data center, PC, and mobile. First, we look at device volume and number of customers. You can see that PC data center and mobile are fairly consolidated at this point. The volume is large and reasonable, but there are typically only about 5 to 10 customers that matter. When you get to embedded, however, the volume and number of customers absolutely explodes. This is really unique because of the unique application needs and the diversity that we see there. To make that real, earlier today, I came in and counted how many IoT sockets could there be in this room. Believe it or not, it was well into the hundreds. I got some notes here. There are 116 light bulbs in this room, 26 plugs, 14 speakers, 12 window and screen motors, eight PIR sensors, six light switches, six microphones, three projectors, three fire detectors, two exit signs, ten access points, and I could keep going. That's before we get the smartwatches on your wrist, whatever's in your bag, maybe you have a Tile or something like that sitting in there. It goes on and on and on. That's one room in one building in one city. The volume here is going to be massive. Moving on to the constraints, I selected storage, power, lifetime, and cost. There are others, but I think this really encapsulates a lot about the technology. If you start scanning across the page, you'll see orders of magnitude difference there. In the data center, you know, on the far left, this is really the most unconstrained platform. It's the cloud. It forms the central nervous system for all of the other platforms. The further you get out of that cloud, the more constraints that you see. When you get to embedded, our engineers deliver breathtaking technology with a fraction of the resources of the other platforms. This is key. This is key to how we build and deliver our technology. Nothing can go to waste, and it's at the core of what we do. Probably most importantly on this is the networking timeline. The data center's connected in the 1980s, PCs from about 1995 to 2005, and smartphone the decade after that. The IoT and embedded is making that transition now. We're still in the early days, and we have a lot of work left to do, but the global impact of driving the majority of these embedded applications online is going to be massive. This unique combination of market size, customer diversity, application constraints, and connectivity is really at the core of how we architect, build, and deliver that technology to the customer. Let's take a deeper look. We've been in this business for a very long time, long before it was called the IoT. In the mid-2000s, we saw our customers pulling together early embedded connectivity with simple eight-bit MCUs and sub-gigahertz transceivers. These were multi-chip solutions with things that you know, like garage door openers. The applications were fairly well-established. The use cases were well-established. The volume was not very large. Around the end of the decade, we launched the first systems-on-chip for the IoT. Networking standards that were purpose-built for the IoT came to the stage to address smart home applications and metering applications, things like that. With the introduction of these products, it was exciting for our customers. It was the first time they saw the CPU, the transceiver, and the full software stack together into one solution. It was finally getting easier to use this stuff. The volume started ramping, and we could see that the IoT was clearly gonna be no fad. In 2012, we made the strategic decision to focus the company on IoT and subsequently set out to develop the first multi-band, multi-protocol SoCs in the market. Launched around 2015, these chips brought much more functionality, connectivity, and integration to the table. We added protocols, peripherals, power management, modules, and even cryptographic acceleration to the chips. This took everything to the next level. Our customers began shipping product in the tens of millions of units and really started to turn their eyes towards the hundreds of millions or billions. We weren't finished there, of course. Our next generation took it up a notch. Launched around 2020, these brought more connectivity like Wi-Fi, Wi-SUN, and Matter. More security with a slew of functions, secure programming, secure boot and debug, key storage and management, anti-tamper, and even new services like and even advanced cryptography. Crucially, these are also the first wireless SoCs in the market with hardware-accelerated machine learning. Machine learning is not just gonna be for the data center, for auto, for the PC, and the handset. It's gonna be all around us, and our customers are starting to use it today. These chips are ramping right now and we're not done there. To date, the company has over 1400 patents. We're developing our next generation, and they're really excited about what we're gonna be delivering. This is a very hardware-centric view. We spent decades building up what we believe is the best hardware portfolio in the industry. We're very proud of what we've accomplished there. It's unique, it's scaling, it's exciting. What tends to get a lot less airtime is the software, the amount of code we're writing. We're gonna take a look there. Simply put, we have the most complete, robust, and secure software platform for the IoT. We spent the past decade. You heard Matt talk about this. We spent the past decade turning software from an afterthought into a core competency that our customers rely on every day. Our M&A strategy here that you see is just an example of that. With each transaction, software IP and capabilities were a key factor in the process. With the teams and learning that came in, we not only accelerated our product portfolio faster than anybody else, we steadily added to the bench of talent inside. At this point, we actually have far more software engineers at the company than hardware engineers, and that's a trend we expect to continue in perpetuity. What are all these software engineers doing? Well, they're writing code. They're writing code across all four of those compute platforms that I mentioned. You know, embedded up there you see is the core of what we do. These are the wireless connectivity stacks, real-time operating systems, and other system utilities that our customers use. It really doesn't end there. We're writing mobile software for demonstration and production. We're writing PC software for tools to speed the customer's time to market. Then there's the cloud itself. This is crucial because this is where the IoT comes together. It's connected to the cloud in that dance that lasts for decades. We're writing more and more software up there to help our customers as they manage large scale deployments, things like lifecycle management, securing their supply chains, and the services that we've built up, like secure programming. It's this combination, this package that's the complete product of what we do, and that's how we view it, a complete product. This is not sample or demonstration code. We test this software obsessively to ensure the highest levels of quality. In every software release, which happens monthly, we put it through millions of regression tests. We do this in a production environment with large networks to find those one in a million or one in a billion corner cases and fix them before they get to the customer. This is where that decades of learning and understanding really comes in. We know what they're gonna do, we know what to look for, and we find it first. On top of this, we run the code through strong internal and third-party quality and security testing. When we deliver the software, it's battle tested and ready to scale. That's a really key differentiator. No one does that in embedded. Getting a few parts up and running on the bench is trivial, but shipping in the hundreds of millions or billions of units on a continuous basis is not. All this is building up to one thing. Our customers are primarily software developers. 99% of the product is experienced through software. It's on bench, and then later in the cloud. If we're really gonna win, and that's what we intend to do, we have to meet those customers where they are. We have to deliver what they need. Let's talk about that. First and foremost, they need wireless that just works. These embedded and cloud developers are not wireless experts, nor should they have to be. When they come to us, they need to know we have the wireless covered, that we worry about it, so they don't have to. Next, they wanna move quickly. They're in a race just like us. Embedded is going, scaling, ramping very, very quickly now and they're racing. They need tools. They need to get to market quickly. They need to know that we can help them debug as they get there. We provide unique tools to help do that. Embedded's come a long way in the last 20 years, but wireless is new here, and it's harder. Debugging that wireless link can be a mystery for a software developer. Or how to get the last bit of energy out of the battery is just as tough. We provide unique tools to help demystify, clarify, and then make it reproducible. Moving on, connecting anything, an embedded device, a car, whatever, to the internet, brings security requirements that simply don't exist in air-gapped systems. Our platform provides the most secure environment for our customers to debug and deploy their product and protect it from remote and local attacks. This is crucial because they're putting more and more software IP into these products, and then they manage them for up to a decade or more from the cloud. Continuously, they need secure links to make that stuff happen seamlessly. Next, this is where the reuse comes in. We deliver predictable releases on that monthly cadence, maximizes reuse, runs on all the operating systems, and integrates deeply with unmatched ecosystem support. Last, but certainly not least, these developers want long-term support. This isn't 2 years on a phone or 4 years on a computer or 8 years in a data center. It's gotta last for a decade. We provide the industry's only guaranteed 10-year software development kit. Match that with at least 10-year chip availability. All those SoCs you saw on the last page, more than a dozen of them, we're shipping them. tend to ship them as long as customers are willing to buy them. We're doing the best at meeting these embedded and cloud developers where they are today and into the future. We can pull the technology together, stack it up against the competition. We come out on top. Top to bottom of this page, we deliver the most protocols, and that's really important. These customers buy many kinds of wireless technology, just like they buy many kinds of processors. Think about it that way. The analogy is a really good one. They need to know they can get the Bluetooth, the Wi-Fi, the Zigbee, the Thread, the Matter today and in the future. We got that for them. And then we can support them as they ramp. Ramping from 0 to 1 million to 10 million to 100 million units each have its own challenges. We're there for them. We bring them to market quickly. We provide the ecosystem support, all the tools that they need, and importantly, the performance, ruggedness, and security today and in the future. A lot of our customers are doing it for the first time, and then they wanna reuse it over and over across their portfolio, devices they haven't even imagined yet, and they need to know that we have them covered. That performance angle, that temperature angle, the long life, the security, that's kinda the big thing right now is how to secure an in-field deployment. Bringing this home, our platform is the key to make the IoT work. We deliver the right combination of chips, software, and tools, each purpose-built for connecting embedded devices to the internet. The platform is built to scale. Through very careful choices, we can sell virtually the same chip into almost any end application. We have real-world examples of selling the same chip into a light bulb, a smart meter, a home gateway, or even low-cost, low-power smart home sensors. Each has its own set of constraints, and we've thought them through. Our customers can then reuse this design over and over and over across their portfolio. Think about the tools manufacturer who has 100 or 1,000 SKUs. The shelf label company, smart home company. How many sensors can there be? They have to be able to reuse their designs. Finally, the flexibility and modularity of the platform allows us to rapidly respond to the market. It's evolving now. Security standards are changing, wireless standards are changing. The ML standards are about to hit us really hard. Our flexibility through those platform choices allow us to do it better than anybody else. Simply put, we win because we sell to everybody. If the customer needs security, long life, low power, adaptability, low cost, high safety, ruggedness, or privacy, we have them covered. Wrapping up, I'll leave you with three key points. First, unlike most, our technology is purpose-built for connecting embedded applications to the internet. This is really important. We don't repurpose IP from other platforms and try to sell it in here. Those constraints really matter. You have to know what your customers are gonna do with it, and we built it for them. We have decades of understanding their needs. This is actually crucial in knowing what technology to bring to the table at what time, in what form. That chart that you saw from Matt that had that diversity, you can't service it unless you think about it this way. We think we're the best. Finally, we deliver the most complete and scalable platform of hardware and software, period. It's not one, it's not the other, it's both. Our customers are really asking us only for one thing, and that's to do it faster. It's a great spot to be in. Thank you for your time today. I'm now gonna turn it over to Ross Sabolcik, who heads our industrial and commercial business. Good afternoon, everyone. My name is Ross Sabolcik. I'm the Senior Vice President and General Manager in charge of our industrial and commercial business unit. I've been with Silicon Labs now for over 23 years in a variety of engineering, management, and business roles. In my 23 years, I've never been more excited than I am today about the opportunity we have in the industrial and commercial space. Matt talked earlier a lot about the market opportunity, and I'm gonna talk to you specifically about the market opportunity in I and C, some of the underlying forces that are causing the market to grow, and why we think these forces are long-lived and durable. We also heard from Daniel a lot about our platform, and I'll give you some specific examples of how we use that platform with industrial and commercial customers to solve their problems the best in the industry. If you look at the industrial and commercial IoT space, we are servicing business-to-business applications that are transforming the way cities, retailers, and employers operate to maximize their return. The industrial IoT is a massive market that is driving significant ROI for customers who are adopting it today. The value of these applications that are being unleashed with the industrial and commercial IoT is estimated to be $8 trillion in 2030, up from $2 trillion today. There are underlying market forces that are global and durable that are causing that market to grow at that kind of rate. I'll talk to you about how Silicon Labs, with our decades-long experience in this market, is incredibly well-positioned to capture that opportunity. Up front, though, I'd like to talk a little bit about those mega trends that I mentioned earlier. We service multiple verticals, but one thing we see across all those verticals is the need for energy efficiency. Energy efficiency can take multiple forms. Consider, for example, the global electric grid. The grid is seeing demands on it that have never been there in the past, from new loads like electric vehicles and new energy sources like solar, and utilities need to adapt so that the grid can handle those new challenges. Consider that there's about $100 billion that's going to be invested in the next decade in smart grid technology. That technology will not only allow utilities to run their grids more efficiently, but also greener, resulting in about an 18% reduction in greenhouse gases from smart grid technology. We could look at building automation, where about 40% of all the energy in the U.S. is in buildings, and that by deploying IoT technology, building operators can reduce that energy consumption by up to 20%. This theme of energy efficiency you'll see across multiple applications. Next, we could talk a little bit about what I call operational excellence. Operational excellence is ways that businesses can use insights from IoT to improve the way they run their businesses and get greater efficiency out of it. Consider that up to 42% of unplanned downtime for manufacturers is due to equipment failure, and that for every hour a machine is down, that's a quarter of a million dollars in lost productivity. That can add up to about $50 billion annually, and 82% of manufacturers will experience this at some point during the year. Predictive maintenance, that maintenance often built on top of the AI ML technology that Daniel mentioned earlier, can be crucial to identifying those failures before they occur. Applications like these are driving the industrial IoT spending to over $20 billion in the next five years. Let's also look at commercial spaces. Buildings are becoming connected, smart, and aware, and building operators are demanding more and more insights into how those spaces are being used and how to use them more efficiently. In a typical commercial space, only about 37% of the space is actually utilized most effectively. By building out an IoT network, building operators can understand what is the most valuable space and which space could be utilized more effectively. Daniel gave you that great example of all the light bulbs in this room when he talked about it earlier. When you look at these industrial and commercial applications, oftentimes what you'll see is customers deploy a network like that for one primary purpose, controlling the lights in the room. But once you've built out that network, you can offer additional value-added services on top of it. Commercial lighting, for example, is being used to track people, objects, and things through commercial spaces. Consider that by 2025, it's expected that the market will be about 500 million units a year for smart Bluetooth devices that will track people in commercial spaces. This theme you'll also see in the I&C of using networks that are deployed for one primary purpose to deliver other value-added services is pretty pervasive. Finally, let's look at retail. COVID-19 fundamentally accelerated the shift to online shopping. Now as we're coming back to a more normal condition, customers are returning to brick-and-mortar stores, and they're demanding a different experience when they return to those stores. Retail operators facing severe staffing shortages are looking for ways to reduce their costs. This is driving the demand for systems like self-checkout, electronic shelf labels, and on-shelf inventory management and loss prevention. Over 50% of retailers see staff-free stores as the norm in the next 5 years, and automated checkout solutions can reduce staffing by up to 75%. These mega trends are driving a significant increase in IoT devices to service those applications. These underlying mega trends are common across all the verticals. The verticals that we service are very different and diverse. Industrial and commercial, we're broken up into 3 main verticals. The first is what we call smart cities. These are the large networks that are deployed across an entire metro area. Think of smart metering, street lighting, electric vehicle infrastructure, and even applications like agriculture. This is a large market for us, and we are well-positioned in this market with well over a decade worth of experience selling to these customers. Next, we have the industrial market. These are the rugged, reliable networks that are being deployed for the industrial IoT for those applications that Matt alluded to earlier around Industry 4.0. These are applications like predictive maintenance, asset tracking, professional tools, and worker access and safety. Finally, we have the commercial space. These are covering applications in the commercial, retail, and clinical setting, applications such as building automation, electronic shelf labels, loss prevention, commercial lighting, and clinical medical. In 2021, all of these verticals grew for us well north of 30%. Daniel talked a lot about the need for long-term reliability and the durability of these applications. If you consider building out one of these networks and the cost associated with all of the installation, customers expect these networks to last 5-20 years or more, which results in an incredibly sticky customer and application base for us. We've talked some about the applications. Let's look a little more closely at the market. The industrial commercial space that we're serving is a $5 billion market opportunity today that is growing to over $9 billion in 2025. That growth is fueled by those mega trends I mentioned earlier that we believe are long-term and durable, and is driving growth across all the verticals that we service, resulting in about a 15% CAGR from 2021 through 2025. While these markets are large and diverse, they're also incredibly difficult to service. If we look at these industrial and commercial applications, there's a few reasons why. Let's think about some of those applications. Street lighting or electric meters, connected lighting in a building, electronic shelf labels. These networks share some common traits. The first is they have incredible scale. Daniel gave the 200 device example of the connected lighting in this, in this room. Multiply that up and consider this entire building and all the buildings that are in Manhattan. These networks can be very, very large, ranging from hundreds of devices for connected lighting in a room to tens of thousands of devices for electronic shelf labels in a store, up to hundreds of thousands or millions of devices in a smart utility network. Industrial and commercial networks have scale. They also cover very long distances, be it hundreds of feet in an industrial complex up to kilometers that would be required for a smart city application. They're also complex. Daniel talked about the need for having multiple wireless standards, and Matt talked about there won't be one standard to rule them all. If you just consider the humble electric meter that's on the side of your house today, it's a pretty complicated device. There's probably three networks in it. There's what we call a field area network for the meter to talk back to the utility. There's a Wi-Fi network where customers can get much more detailed data from the meter, and there might be a Bluetooth network where a technician can walk up and service the meter. Those three networks have to work together and work together flawlessly. There also can be combinations of line and battery powered applications. The lighting example Daniel gave, all the lights in the room have line power, but an occupancy sensor or a door sensor would be battery operated. We need to have both devices that can work off line power and be extremely power efficient to work off batteries. Also, these networks must be compatible. If you've deployed a smart utility network that maybe took you 5 years to roll out in the field and you wanna upgrade it, you can't just rip the network out in one go and replace it. Customers often need a solution that will be backwards compatible with what they have already installed, but also future-proof so they can upgrade it. The platform that Daniel talked about earlier and all the tools that support it are critical for delivering that compatibility. Finally, networks are mission critical. If you think about the utility grid monitoring system going down or a retailer losing their electronic shelf labels, these have severe consequences if the networks fail. That means reliability and security are mission critical. While these are incredibly challenging applications to service, we are incredibly well positioned to service them. We have decades of deployment and billions of devices in the field. We're deployed in the largest wireless utility networks on the planet, and we have some hard-earned lessons from all of those deployments. We offer an industry-leading portfolio. Daniel talked about all the products, but we've built those products up over five generations. We understand the customers, we understand the applications, and we understand how to service them. We have a complete portfolio from Bluetooth for short-range connectivity through Wi-Fi and what we call LPWAN, long-range networks. We've given examples of why you need all those networks and how they have to work together and why that's so important. The flexible platform that Daniel mentioned earlier is also not just words that we use. Our customers appreciate that. They don't have to rip and replace the design and relearn tooling, relearn the products. They can use what they've already learned and bring our latest technology to bear. We do all this with security built in from the ground up. In summary, the industrial and commercial space is a large and growing market. It's a $5 billion market, $5 billion market today growing to $9 billion in the future. This is driven by solid ROIs for the applications that our customers deploy. This is a diverse, high quality and sticky customer base that we service with our complete wireless technology, our portfolio and our platform. We solve customers' immediate needs in areas like energy efficiency while allowing them to do value-added services over top of the wireless networks that they build. I've given you my impression of why we think we're the best positioned in the market on this, but I think it would be great to hear from some of our customers. Let's hear what they have to say. Silicon Labs is uniquely positioned to lead the IoT evolution, accelerating industrial and commercial solutions from the ground up. Two years ago, we decided to go out and launch the first connectivity play for hand tools on construction sites, connecting data through our telematics device. In there we were seeking a innovative partner that could really not just leapfrog us into the Bluetooth space, but also give us a competitive advantage that allowed us to really put forward a solution that the market hadn't seen before. Silicon Labs to us represents a trusted partnership that has demonstrated its worth and its impact to Trackunit's business for years now. The dramatic increase in performance, both range as well as battery life, has allowed these kind of solutions to be implemented by hospitals, by clinics, pharmacies, labs, restaurants, grocery stores, trucking and logistics companies. It's gonna ultimately make our supply chain not just more efficient but safer. That kind of opportunity would have been not cost-effective 10 or 20 years ago. It's a great example of how we're leveraging the Silicon Labs technology to help real-world applications. We're in companies like CVS Health, where we're deployed over 10,000 locations. Well, when we're deploying in a water utility, we don't have energy, so we have to use batteries. Battery management, power management is really critical to our designs, and it's one of the big hurdles in any new design we do. Silicon Labs with their, you know, ultra-low energy performance really helps us with that. That's a big part of how we got together and why we continue to develop products together. Silicon Labs for us has been an extremely important partner. As we've looked at our new lighting controls platforms, Silicon Labs really rose to the top for us. We were looking to combine Bluetooth plus sub-GHz radios. Schréder and Schréder Hyperion have made the choice already a couple of years ago to have an open and interoperable system to start with smart lighting and then really looking into our smart city. For us, wanting to go open and interoperable, it was essential to partner up with a company that could understand us, that could also inform us about market standards, market evolutions. This is really what we found in the partnership with Silicon Labs. I think it's very rare that you see partnerships where suppliers have such a deep interest in your product, have such a deep interest in actually helping you elevate your product, looking for new ways to innovate on the technology that you are using, and also entering into partnerships between customers. It's priceless for a vendor like Trackunit to work with a professional partner that can insert themselves in the ideation, in the roadmap, you know, allowing us even in these times where shortage of chipsets are such a big thing, that even when we get into those type of situations, that we can work together to find a plausible way through the issues which we really have. It is about us working together to partner and really brainstorm, not just about the technology itself, but also the applications that we can serve our customers and how we can create those spaces and experiences that really aren't out there today. With that, you can see some of the reasons why we're so excited about this opportunity and why our customers are excited to work with us. Thank you. With that, I'd like to turn it over to Jake Alamat, who's gonna talk about our home and life business unit. Thanks, Ross. Home and Life applications like the ones that you just saw in this video, they're forecasted to unlock up to $2.5 trillion per year of economic value by 2030. What that means to the average person is lower energy and healthcare bills, more time and better health, and real reductions to our impact on the planet. Today, you are much more likely to have a smartwatch on your wrist or a voice assistant in your home than at any other time. That trend is only accelerating. As more and more people see the benefits that IoT can have in their daily lives, it's only served to accelerate demand. Over the last 5 years, the install base of IoT devices in home and life Internet of Things applications has grown at a 20% CAGR, and that growth is forecasted to continue through the next decade with the total install base of IoT devices in home and life applications forecasted to be greater than 35 billion units by 2030. My name is Jake Alamat. I manage the home and life business for Silicon Labs. I've been in the semiconductor industry for over 20 years, leading businesses for greater than 12 of them, and I've been with the company now for a little over 2 years. Our part of the business is focused on providing wireless solutions to developers of products that land in the hands of everyday people like you or I, making our lives safer and more efficient. Today, what I'll be walking you through is our vision and the impact it's having on the world, the opportunity and what's driving it, and our value proposition to the market, so that you'll clearly see how and why Silicon Labs is truly in a strong and unique position to enable and capitalize on this massive opportunity. Now, when Matt talked about our goal in IoT at the company level being to enable the market, not to enable a wireless technology, it's the same in the home and life business. Our ultimate vision is to make smart, connected devices as commonplace to you as the smartphone in your pocket or the electricity in your home. The application segments we focus on, they represent a large, growing, durable opportunity because they solve real-world problems, making our lives safer and more efficient. For example, these applications are reducing our energy consumption, saving people money while reducing waste in the environment through applications like home automation. In a study by Fraunhofer, it was estimated that if all U.S. residential homes leveraged home automation, it would save greater than 200 million metric tons of CO2 from being released into our atmosphere every year. To put that number into perspective, that would be equivalent to offsetting the carbon impact of greater than 30 million people, or the equivalent of charging greater than 25 trillion cell phones. These applications are also improving safety and security, keeping our family safer. In a study of convicted burglars, 60% of them said they would stay away from homes with security systems installed. These applications are also reducing healthcare costs and improving patient outcomes through real-time monitoring and drug delivery that comes from portable medical applications. As more and more people have begun to realize the benefits that IoT can have in their daily lives, it has only driven further adoption and accelerated demand. That accelerated demand creates a strong, growing, durable opportunity for us at Silicon Labs. The home and life markets that we service represent a greater than $5 billion serviceable opportunity in 2021, and that's forecasted to grow at a very healthy 12% CAGR from 2021 through to 2025. Now, as Daniel said, this is not us being a new entrant in the market. We've been in the market for a very long time, since its inception. We are recognized as a leading provider of wireless IoT solutions across a diverse set of applications and ecosystems. Our products can be found across thousands of applications and tens of thousands of customers, with more applications coming on every single day as developers and device makers identify new and unique ways of adding value to people through the inclusion of wireless in their products. From smart lawnmowers saving time to continuous glucose monitors saving lives, our wireless solutions enable a wide range of use cases that is improving our overall quality of life. Now, the value that we add to the market, it's not just driven by our portfolio alone. At Silicon Labs, we are actively shaping the future of the wireless market. Our strategy has been to lead in IoT wireless by actively defining and driving the market by working with organizations and groups of companies that are defining the future, like wireless ecosystems and wireless alliances and standards bodies. Now, when you think of what these organizations are and what they represent, I'll spend a little bit of time talking through that. Wireless ecosystems, these are the companies who are providing the IoT platforms that enable devices to communicate with each other, enabling better value at a system level. Daniel talked about all the different lights in this room. Well, there's companies that have to come together to say, "How do all these lights talk together with the switch, talk together with the cloud?" Think of programs like the Google Home platform or the Works with Xfinity program. When you think of wireless alliances and standards bodies, these are the groups of companies that come together to define, develop, and promote the enabling technologies that drive wireless connectivity for the Internet of Things. Think of organizations like the Bluetooth SIG or the Connectivity Standards Alliance, formerly Zigbee Alliance. Now, we take those engagements, and we leverage it to influence the future direction of the market and get better knowledge of where the market is going. We take that knowledge, and we use it to develop differentiated, easy-to-use wireless solutions that we take and enable our customer base with. Now, when it comes to engagement with the market, at Silicon Labs, we don't just follow, we lead. We are engaged across major standards bodies worldwide, and we were founding members of the Zigbee, CSA, Z-Wave, and Thread Alliances. We're actively partnered with companies and groups of companies to define future standards and ecosystems like Matter and Amazon Sidewalk. Now, while the opportunity spans across many different customers and applications and ecosystems, and the care abouts of each individual device category and ecosystem can vary, there are four main themes that are present across all of them, driven by end customer demand. First, people want to purchase products that are gonna add material value to their lives and are gonna be affordable. Device makers, they want to be able to provide this value quickly without having to reinvent the wheel every single project. Second, people wanna know that they're gonna be able to trust the products that they purchase with their personal data. Device makers, they want people to trust their products and their brand. Third, people and device makers, they want wireless that just works without having to have a PhD in wireless connectivity. The vast majority of device makers that we work with, they're not RF experts, nor do they care to be. They want to be experts in the problems that they solve and the value that they add to the market. Last but not least, people wanna know that the products that they just gonna work with the other products that they already have. Device makers, they want that to be as easy as possible. At Silicon Labs, if you looked at how we performed, we've consistently outperformed the market because of our relentless focus to address these needs. Our industry-leading wireless platform offers optimized solutions at a system level that reduce product and development costs, enabling device makers to get to market quickly with products that add value. It offers industry-leading hardware, software and services that enable device makers to easily provision trust in their products. It supports major wireless protocols in a common platform, enabling device makers to deploy connectivity with ease across technologies, all with built-in integration to major wireless ecosystems, enabling frustration-free development and improved end-user experience. The differentiation that we provide here, it's truly unique in the industry. Device makers know that when they're working with Silicon Labs, they're gonna be able to get to market quickly with highly robust, optimized, secure products that will just work across ecosystems. As you can see, Silicon Labs truly is in a strong and unique position to enable and capitalize on this massive opportunity. If you take nothing away from this presentation, take these three things. First, the home and life markets that we service, they represent a large growing opportunity across a wide range of applications and use cases. Second, the growth is strong, and it's gonna continue to be strong because of the impact these applications are having on our daily lives. Third, Silicon Labs has, and will continue, to outperform the market because we address market needs better than anybody else, and we are actively shaping the future of how the market adds wireless connectivity to their products. As you can see, we're super excited about what the future's gonna bring and the things that we're doing in the Internet of Things for home and life, and so are our customers and ecosystem partners. I'd like you to hear from some of them now. Silicon Labs is transforming how consumers will live their lives, shaping the future of smart homes and healthcare. Comcast, of course, provides connectivity for about a third of U.S. consumers, and part of our story is extended to IoT and home security. Silicon Labs is a partner in that. All of our chipsets that run in our gateways and routers are based on the Silicon Labs design. We integrate the software from Silicon Labs as well, and we use it very heavily in our home security business too. Where Silicon Labs has been so helpful to us in the development of Matter is any time you're starting with a brand-new technology like this, getting it off the ground, the collaboration between everybody that's part of this has to be so high. When you think about the complexity of bringing together so many device makers, so many big platform companies, and what's happening at the chip level, it's been great to work with Silicon Labs on this and get our early adopter partners up and going. One of the big things that's really made Silicon Labs incredibly beneficial to have as a partner for Garmin is that they're really investing heavily in the low-power aspects. There's a few partners that we feel like we can really engage with early on and see how we can look at where their roadmap is headed, where our roadmap is headed, find the close intersection points, and then work with each other to kind of push each other forward into taking something that maybe goes even beyond what each company individually would have thought was possible. We've got a long-standing relationship with Silicon Labs. We've released a number of products using your chipsets. Most recently, it's mostly around Thread and the upcoming Matter spec, so the chips that go into our light bulbs, our light strips, and we've worked very closely with the team at Silicon Labs to develop those products. Part of as a company like Amazon that has Ring and Echo and the Alexa devices, but we really see the overall opportunity of Sidewalk much broader than that. We have developers that are looking at building solutions like pharmaceutical shipping tracking solutions or services to do water metering. Yes, there is the consumer aspect, but it doesn't stop at the smart home. It's so much bigger than that. We have opportunities in public sector to enable smart parking. Developers can use to build all kind of solutions for smart homes and outside the homes. As we transition from a large Zigbee ecosystem into adopting the new Matter standard, Silicon Labs has partnered with us to help us enable already deployed hardware that's in the field to support the new Matter protocol without any physical updates to the devices. We're able to extend that Matter support out to millions of gateways that are already in the field today with help from Silicon Labs. We are able to look ahead 2-3, maybe 5 years ahead in terms of what do we think together as two companies is needed for, let's say, next generation silicon to be fulfilling the use cases that we see on our roadmap, but also be competitive in terms of landscape. The other key element that is critical for us is security. We felt that Silicon Labs is also very well aligned with our security requirements, and we put a lot of emphasis around privacy, and security. When I think of Silicon Labs, I think pure IoT play. That is the first half. We are now gonna transition, break things up a little bit, and move into a short Q&A, followed by a break. Just a short announcement also. We have two microphones in the room, and when you get that microphone, please announce your name and your organization just so we have that. Thank you. Yes. Make sure this is turned on. Yeah, Gary. Hey. Hey, everybody. Thanks for hosting this. Really appreciate it. This is my name is Gary Mobley with Wells Fargo Securities. I had a couple questions. Since we just got an overview from both the consumer and industrial markets, I'm curious, on the consumer side of the market, how do you maintain R&D efficiency or in general expense efficiency with your customers that typically renew their products, product designs every year? Are a lot of those IoT connectivity design wins reusable cycle after cycle? In this supply constrained environment, how do you balance, you know, shipping to consumer or industrial customers? I would presume it's tempting to ship to industrial more since it's probably higher gross margin product. Thank you. Why don't I just start with the R&D part? I think that's an easier answer than those other ones. The leverage that we get is extremely high on our platform. There's a lot of modularity, a lot of reuse, not just for our customers, but also internally. We for example build one quality assurance and software quality network and system that we use for all wireless standards. We're actually amortizing it, enabling it to address it with more efficiency than anybody else. Those SoCs that you see as well, there's a lot of reuse there on each of those generations that Ross was pointing to. We believe there's a tremendous amount of reuse, not just for consumer, but actually between consumer and in the industrial. I'll turn it over to Jake for the next. Yeah. And beyond the reuse side, 'cause that reuse gives us the ability to be able to be very, very efficient in our R&D expenditure to support multiple protocols. But when that gets into customers' hands, the actual implementation of wireless connectivity in their projects, that takes a bunch of work. Once you get that working, you want that to stay there. We stay fairly sticky in the applications that we get in. Even though our customers may be refreshing their products from year to year, because they have a robust working wireless system that works across it, once we're in, we typically stay in. That you know that's really important, and that goes to the value proposition that we talked about earlier in my section is you know addressing these needs, making it easy to deploy, making it easy to get in those ecosystems. That's what keeps customers with us long term. Yeah. On the split between the businesses- Yeah. You know, I think if you look at our goal, our goal is to win and be the largest supplier for IoT devices. That's right. We're not optimizing in a short-term window here. We believe we're gonna need both businesses to be strong and growing going forward. We're placing the best bets that we have in both businesses to ensure that we get on the other side of this. We're with the customers that we think are gonna drive that growth. It's a long-term play for us, and we're doing allocation decisions with that long-term view. Right here. Do you wanna announce your name? Hi. Thanks. It's John Vinh from KeyBanc. Couple questions for you guys. In terms of multiple protocols, you're starting to see some of the more Wi-Fi established incumbents introduce kind of multiple protocol radios and start to move into kind of 802.15.4. Conversely, you know, you're coming at it from the other side with the acquisition of Redpine. You know, how do you guys see that kinda playing out from a competitive perspective? Then, you know, Ross, on the commercial IoT side, I'd love to get your thoughts on 5G. You know, cellular really hasn't been a commercial IoT play in the past, but you hear a lot more about it these days. How does that intersect what you do? Is it more complementary, or are there areas of overlap? Do you wanna start? First on the multi-protocol, we're really excited to see that. We felt from the beginning that there wasn't gonna be one wireless standard to win. First and foremost, our platform's built to incorporate more standards over time. Second, from the kind of more established Wi-Fi players coming into the fold. What we see now is that Wi-Fi standard has evolved into servicing more than just PC and cellular applications, which is really what it was built for the longest time, into IoT-friendly portions. Wi-Fi 6 is a perfect example of that. A lot of tech there, but Target Wake Time, BSS coloring. There's a lot of things there for IoT. I'm not surprised to see them coming in. I see a lot of M&A on that front. You know, there's countless examples of Wi-Fi in the last few years. We believe very passionately that our understanding of the use cases, because use cases are the same as they've always been. They're connecting to Wi-Fi now. It's not fundamental what technology you're using. The power drill is a power drill. A microwave is a microwave, regardless of what wireless they're using. Our customers trust us. We're sampling the xG products for them and ramping pretty high now. Yeah. On the cellular front, I think it's a great question. You know, cellular is gonna have a place. There's two things I would say about cellular. The large number, the disparity between the end node devices and the cellular devices, we think is gonna persist. We see a lot of applications that are wildly complementary. If you take asset tracking, you might have one cellular modem on a refrigerated truck, but then every pallet in there has a Bluetooth device that's talking back to that to backhaul. We think it'll be complementary. In our space, there's three real challenges with cellular. One, customers typically don't wanna pay for access, so that's been a challenge. Two, if you're deploying a network that's gonna last for a decade, I don't know if anyone else has had this experience, but I just got a note yesterday from Audi that because the 3G network shut down in the U.S., my car can't talk to the cloud anymore. If you build a Yeah a utility network and the cellular shuts off on you, that's a real challenge. Cellular will have its place, but whether or not it will be the predominant kind of end node device technology, I think those challenges are gonna persist. Why don't we go to this side? Rajvindra Gill from Needham & Company. Daniel, you mentioned, you know, your expertise in multiple wireless protocols. What about on the embedded processing side? Where do you see the processing going? Because it seems like the kind of the second generation of IoT devices are gonna be processing different types of data, whether it's vision, whether it's voice, whether it's you know, just pure straight data streams. Having the ability to be kind of multimodal and process different types of data streams is gonna be, I would imagine, important in addition to kind of dominating the different wireless connectivity technologies. Yeah. I was wondering if you could speak to that. Absolutely. That's a great question. So first we think about the four key technologies in IoT: compute, connect, secure, and smart. I mean, that's how we frame this internally, and we have, like, the four pillars there. On the compute side, I think two most exciting things that are happening is we're starting to get to the memory and kind of MIPS in these products that allow for real-time operating system only applications. So no more bare metal, if you all know what that means. So it's very rich from a software developer experience that it wasn't simply like five years ago. So that's driving a lot more compute. The second thing is machine learning. These data streams that are coming in that are connecting to almost any sensor, an image sensor, a microphone, a camera, aren't necessarily storing all that data there. They wanna do the classification on the device and then transmit only, you know, the important information. How many people are in a room, for example, like a PIR sensor might do that. Or that, hey, someone has come to your door and it's Jake or it's Ross, and not the data stream going all the way back to the cloud where it has to get stored and secured and a bunch of other stuff. Those two things are happening, driving a lot of compute needs today and the future. We see a lot of evolution in the ISAs that are out there, both on Arm and RISC-V, and the memory that's coming into the fold. I'll just add on to that. Building on what Daniel said, what you have to take into account as you're putting more effort into identifying what's going around you in a sensor, being able to do that in a very optimized system solution and with the right energy efficiency is critical. We just released a device, our XG24 line, that is the world's first wireless SoC with a built-in AI ML accelerator. What that does is it actually provides some of these capabilities that Daniel's talking about directly to developers today, where they're gonna be able to do some signal processing that they would not have been able to do before in terms of detections, classifications, and all that stuff. In a form factor that still makes it affordable, in a thermal thing that gives them the ability to have long battery life but stay in a really tiny form factor, that's critical. The parts are gonna get a lot smaller, but where the volume is gonna be is how do you do that in the most system-optimized way? With some of the accelerators that we're bringing into our devices, that's completely changing the game. I think we have time for one more question before we break, and we will have a second Q&A session at the end. Thanks. It's Blayne Curtis of Barclays. Two questions. One for Daniel. I just wanted to ask about your decisions to invest in all these wireless technologies. If you look at the return on investment, I think if you look at the profitability of IoT in 2020, it was basically break even. You've seen some leverage, and we'll get to the financial model later. I'm assuming you're talking about heavy software load and I think, you know, some of these wireless technologies might remain kind of niche technologies and it might be a negative investment. The more mainstream wireless technologies that could sell millions of units, you might have more competition, but you know, obviously you benefit from the higher units. I'm just trying to think about how you look at the investment and, you know, you can't do everything for everyone. Just for Jacob, just quickly, I mean, you have big TAMs, but I think a lot of your segment might play into the more mainstream technologies, talking to cell phones and PCs, and it might just be a vanilla, you know, Wi-Fi chip or combo chip. First on the technology, I mean, I'll let others handle the business model aspect of it, but, it's actually that we have such a rich infrastructure to support all these standards that we can do at lower cost. We reuse a lot in our development for Wi-Fi, for Bluetooth, for Z-Wave, for Zigbee, for Thread, for Matter, for Wi-SUN, I mean, and others. We have more than 100 wireless stacks, believe it or not, running on our stuff. We actually think we're doing it better than others because of that, and that the OpEx that we have to put in is very, very efficient on this. Yeah. I'd just make one comment on the wireless standards, and we've just seen this. We just started to support a standard called Wi-SUN. Wi-SUN is an open standard for utility networks. If you look at the R&D effort we had to put into that, it was actually relatively low because we were able to leverage so much of the underlying infrastructure and tools from the other technologies that we could bring it on in a really cost-effective manner. I think, you know, we talk a lot about the platform, but that's where we'll see it. As these new standards come along, we're able to support them in a pretty efficient way because we have a decade worth of building all of that underlying plumbing. We think that'll let us do it in a way we can scale. I just wanna add one follow on before you get to Jake's part. Our investment in software actually makes the business go faster. You know, we see investment in software here accelerating revenue. I don't see it as a drag or anything else like that, but the more we're able to deliver for software, not just in the function we deliver, but the ease of use and the form factor of that actually makes the business go. Yeah. On the Bluetooth Wi-Fi thing, we're super excited about Bluetooth and Wi-Fi. With the acquisition of Redpine Signals a couple of years ago, that gives us the ability to bring power levels that no one's ever seen in the market, and we've been extending our position there immensely. As we continue to integrate that into our portfolio, we've got a huge room for upside, given how small a share we are in that general market. On Bluetooth, the interesting thing is in our core markets where we're really strong today, Bluetooth is becoming more and more integrated for commissioning and debug and all that stuff. Our ability to do that dynamically with the other protocols gives us a really strong lock. As some of the more traditional personal electronics grow and start getting integrated into these ecosystems, we see our value proposition in terms of ecosystems and systems optimizations to give us an edge to really grow in those areas. I'm actually super excited about the trajectory that we've seen in the businesses on the Bluetooth and Wi-Fi side and expect that to continue. I think the only hard part for me is it because some of those are more established, you see the SAM not moving as fast, but we still are outperforming every single year. Thank you. We're gonna take a five-minute break, so please come back in five minutes, and we'll get started with Brandon Tolany, our head of sales and marketing. Welcome back. Thank you very much. I gotta get Daniel to stop talking about technology here, and we'll get started. My name is Brandon Tolany, and I'm responsible for the sales and marketing organization for Silicon Labs. I've got great news. I am the last speaker that you'll hear before the financial update from John. I appreciate your patience. I've been with Silicon Labs just over six years now, and I'm responsible for the sales and marketing organization. My entire career has been in product and sales and marketing roles in the semiconductor industry for the last 25 years. I know that's surprising with my youthful face. I'm here today to talk about this, one of the best assets that we have as a company, and I feel like I got the best gig on the stage today 'cause I get to talk about our customers. You've heard from Matt and Daniel, really all of us, about this purpose-built hardware and software platform for the Internet of Things. From the beginning, the Silicon Labs culture has always been. In fact, our founders wrote it down on a piece of paper that sits in our headquarters today behind some glass. It's always been about hiring outstanding engineers to solve complex problems and to allow our customers to simplify their designs. That is rooted in the platform we have been talking about all day today. From the beginning, through hard-earned knowledge, we've learned the value of customer diversification. Today we're stronger because of that. To understand the shape of our customers today and how we go to market, it's really helpful to go back and look at how the go-to-market strategy has evolved over the last 20-plus years. The company was founded in 1996. It was funded in 1997, and just three years later, had our initial public offering in March 2000. That timing is rare, and it was rare then as well. The first product we built was for the modem market. It was an absolute home run right out of the gate. So much so that in that year, 2000, we shipped on a run rate of 100 million units. We did so by following the foundational culture of the company by hiring outstanding engineers. At that time, though, there were only around 10 customers, and one customer represented greater than 75% of our revenue, and all of you know what that risk could represent for a company. So the need to diversify was obvious. With Austin's engineers, the first thing that came was product diversification. The next product we built was for the cellular market. Once again, we found something complex, simplified it, absolute home run out of the gate. The modem market would evolve over time. We saw that. The cellular market would evolve over time, and we did not control the integration path. We had to continue to diversify, rinse and repeat. We continued to build home run products time and again. At the end, we had a remarkably broad portfolio. The challenge within this broad portfolio is these products were largely siloed. They were great individually, but they weren't complementary. There was very little leverage across the individual products and technology. This complicated the selling motion. All of our sales organization, all of our field organization, the go-to-market organization, had to spend time and training on each of the individual products. Depth is very difficult on any of these individual products when you're spread so thin. At that time, through all of this development, we started to see a trend emerging, this Internet of Things market. We had a platform, we had connected microcontrollers, we had embedded connectivity that we saw if we could foundationally add protocols and build on top of the foundation, it would enable scale and reuse, both in our customer base as well as our R&D motion and our selling motion. That's what we did. What that opened up in the IoT market was literally thousands of applications, tens of thousands of customers, and billions and billions of connectivity sockets. I call them sockets because those are opportunities for us to go win designs. If we could build that common software platform, a common hardware platform, we would become sticky to our customers, and it answers some of the questions we heard earlier. As you become sticky to your customers, it enables reuse on your platform. They build the first design, they scale to the second and the third and the fourth. That's what we embarked on. This platform drove focus in our R&D efforts. It drove simplicity in our selling motion and scalability as we gain more and more customers over time. At the same time, the specific focus on embedded wireless systems simplified the selling motion. That is what we focused on in the field. It narrowed the focus of the training. It allowed that expertise to develop on our specific platform and throughout our go-to-market organization. Here is what it delivered. This is our open opportunity funnel. It is the combined lifetime revenue of all open and qualified opportunities in our sales funnel. If a design is won or it begins to ship revenue, it is removed from the funnel. This is just opportunities to be won. We've delivered a 22% compound annual growth rate over this period of time, and as a sales guy would, if you just shift it and start in 2013, that's a 30% compound annual growth rate, and it's accelerating. In this last year, in 2021, our funnel grew more than 40%. These are open opportunities to be won. It's now at $14 billion. The open funnel feeds the design win. The design win funnel, for us to flip something as a design win, our process is it has to ship $1,000 of revenue. We do not flip designs based on award letters or verbal commitments for our customers. We only flip those designs when we start to ship volume. $1,000 might not seem like much, but average selling price, you know, just north of a dollar, that's production volume. These are designs that are won into production. Over this period of time, our compound annual growth rate in our design portfolio was 27%, and that is also accelerating. In the last year, our design wins grew year-on-year 44%. Back to the IPO. We had one customer that represented greater than 75% of our revenue. We had to, we wanted to, and we needed to diversify our customer base. It's this funnel in design win and connectivity that is feeding our revenue growth. As we look at our revenue growth, I'll show you the shape of the customers as we really embarked on this journey into IoT. Twenty twelve, we had already started to build diversification in our customer base. Our largest customer was 19% of our revenue. Still fairly concentrated, but certainly a different picture than the beginning. We had $31 million or more customers, and our top 10 customers represented 35% of our overall revenue. What you see on the left side of that donut, that long tail, that's more than 2,000 customers. Diversification was already taking hold a decade ago. Thousands of customers, a little bit of concentration. Looking at our regional diversification, still pretty concentrated, with 60% of our revenue coming from the Asia Pacific region. Let's fast-forward now to 2021. Our largest customer was less than 5% of our revenue. We had more than 125 $1 million or more customers, and the top 10 customers were less than 20% of our overall revenue. That's diversification. That long tail that you see on the left side represents tens of thousands of customers. The regional diversification is balanced as well. In this geopolitical environment, and frankly, any geopolitical environment, this is ideal balance. Our largest region is 37% of our revenue, and China, within the APAC region, is 25% of our revenue. That is different than with the rest of the complexion of the industry. When we put all this together and I saw this chart, I thought to myself, "If I could draw it up, what is the ideal state for the shape of the business? It would look a lot like this. We have built a diverse business, both in customers and markets, addressing those thousands of applications and tens of thousands of customers, and this is how we will continue to scale. We have figured out mass market wireless. That is hard and it's unique, but there's so much more that we can do, and this is the focus of my organization right now. The mass market wireless is uniquely difficult. The first design is infinitely harder with your customers than the second design, and it's just complex. Anybody who has served as the home IT director in their own homes over the last decade or decade and a half recognizes that wireless hasn't always been easy. If you imagine two little kids running around in the yard playing with walkie-talkies, and one of them goes behind the house or gets a little bit out of range, compound that by dozens of nodes or hundreds of nodes, and think about it has to be running commercial data. That commercial data, your customers rely on it. It could be hot or it can be cold, or it can be humid, or it can be dry, or it can be driving through thick walls in buildings in Europe, and it has different protocols layered on top of it. All of the developers are developing in different languages all around the world. It's hard to do this in the mass market, but we've gotten very good at it. We're sticky to our customers. 14 of our 15 largest customers five years ago remain partners with us. What I'm showing you here is that it's clear when our direct field resources, Silicon Labs resources, FAEs, and salespeople are driving focus accounts, our conversion rate from opportunity to design win is higher. The gap is narrowing, and this is the secret to how we'll continue to scale our business. We have to use and leverage a distributed sales force. We have partnered with the best distributors in our industry. These are long-standing partnerships, executive commitment both ways. We trust them. They're important to us, and we're important to them. The reason is they make money selling our product. They recognize that our platform is scalable and sticky to our mutual customers, and they recognize that once they win that first design with us, there's a clear path to the second and the third and the fourth design. That is the whole value of the platform that we've been delivering. The side benefit of that is we continue to drive cost out of our selling motion as, and the support infrastructure as we make it easier and easier to get onto our platform. This is how we will scale. Ease of use. Ease of use is everything. Bluetooth, proprietary Wi-Fi, Zigbee, Z-Wave, no matter the protocol, all of our products use common software and development tools. If you start with Zigbee and then you move to Bluetooth or Z-Wave, you'll already be familiar with our tools and our workflows. This is ease of use. Another real competitive differentiator for us is our Works With conference. This conference started a few years ago. We bring together software developers, hardware engineers, executives, ecosystem partners, this community, and these thousands and thousands of people are all focused on the same thing, and that is accelerating the adoption and ease of use and interoperability in our industry. The annual event then generates hundreds of hours of on-demand content. We then leverage that content to onboard new distributors, new field engineers, new salespeople, and it's a virtuous cycle. All of this content then allows us to continue to scale our selling motion. We meet our customers and our potential customers where they seek us through this digital outreach, and it's never been more evident and valuable than the past few years when you're no longer going and seeing customers face-to-face. Whether it's digital or a community or an ecosystem, we meet them where they seek us. This relentless focus by the company on making it easier to use our products drives cost out of our selling motion. It enables reuse in our R&D. It drives diversity in our markets and our customer base, and it continues to expand the lower touch scale in our distribution channel. This will continue to allow us to accelerate our revenue. Silicon Labs today, through this journey, our customer base is healthy and it's diverse. We have a fantastic platform upon which to scale, rinse, and repeat, scale, rinse, and repeat with our customers. That makes us important, and it makes us sticky to these customers as they continue to leverage it generation after generation, after generation. We've got hard-earned expertise. Over this decade and a half, through all of those complex environments through which we function across all of these protocols, to continue to attack what is an explosive market opportunity right in front of us. We've already got an identified $14 billion funnel for us to go win. I thank you for your time today. With that, I'm gonna hand it back over to John Hollister, our Chief Financial Officer, for our finance update. Thanks, Brandon. I'm gonna cover several topics to wrap up. First, I'm gonna talk about corporate sustainability. I'll recap some of the business comments you heard from my colleagues. Then I'll touch on our capital deployment and supply chain dynamics, and then I'll wrap up with an overview of our financials and an update to the financial model. Silicon Labs is very much committed to operating a sustainable business. We're a global company with a global team. We have operations in more than a dozen countries. One of our most important values from our board of directors through the global team is to do the right thing, and we strive to live that value in our approach to sustainability. We approach sustainability throughout the commercial life cycle from our suppliers who exercise sound environmental practices, have fair labor practices and excellent quality control systems, to our internal operations, where we're focused on carbon reduction. We have strong programs to support diversity, equity, and inclusion, as well as employee wellness and development. Of course, onto our customers, where the very nature of the products and solutions we provide the market are used at scale to drive sustainable activities out in the market. Our products operate on low power. They're used to optimize precious resources like electricity and water. They're used to drive better safety and security, health and wellness, and enhanced productivity and efficiency in the economy. We are a very attractive, sustainable business to invest in. Looking ahead, we're gonna continue to set goals for ourselves on sustainability and measure our progress. Our second corporate sustainability report is now ready, and we intend to publish that along with our proxy statement here in about a week. Also, in 2022, we plan to adopt the SASB standard for ESG tracking and reporting. I also wanna note that starting last year, we began to incorporate specific ESG metrics in our executive compensation program, and that's something we intend to continue with going forward. Let me now turn to the financial update. As many of you know, last year, we divested our non-IoT product lines, the infrastructure and automotive business, to Skyworks Solutions for $2.75 billion. This transaction has proceeded smoothly and with a high degree of collaboration with the Skyworks team, and I wanna thank them for that. It's been very well received by our employees, our customers, and our suppliers, which is an important point I'll talk about a little more. Now that we're a pure-play company, we're focused, one team with one mission on the IoT opportunity. For the past decade, as you heard from Matt earlier, we've been growing very much. You can see on this chart, this is quarterly revenue. We've been operating at a near 20% CAGR over the past 10 years, achieving more than a 4x increase in revenue. As you can see from the colored segments of the pie charts here, the technology mix represented by wireless on the colored segments has grown from around 20% in 2012 to around 70% in 2021. Wireless has been leading the charge as we've added additional connectivity portfolios and built out the platform, organically and inorganically. As you just heard, for the past several years, our business has been organized into two market-facing business units, Home and Life, and Industrial and Commercial. Each of these are addressing very large SAM opportunities with attractive growth rates, and we've been taking share in both of them and intend to continue to take share in both of them. We also have a very diverse set of customers, tens of thousands of customers addressing thousands of different types of applications in a very diverse, well-represented global footprint of business, with strong representation in the North American and European markets and around 25% of the business in mainland China. Next, I'll turn to capital deployment. Silicon Labs, for a long time, has had a successful track record of capital deployment rested on the twin pillars of capital return to our shareholders, as well as investment in strategic M&A to augment our growth. We've deployed about $1.5 billion in total over the last 10 years in share repurchase and about $900 million in strategic M&A. Since we announced the divestiture last year, we concluded that we had an additional amount of capital available to return, so we set forth to do that, and that's exactly what we did last year. We initiated a series of transactions from open market repurchases to a $640 million successful tender offer completed in the third quarter, quickly followed by a $400 million accelerated share repurchase launched in the fourth quarter and just concluded in January. The board of directors has authorized an additional $250 million of open market repurchase this year, which, if fully deployed, would represent $1.4 billion since we announced the divestiture. Since the announcement, we indicated that we would return a significant amount of the capital from the divestiture, and that's exactly what we've done and what we plan to continue doing. Looking ahead, we expect to continue to return capital through share repurchase and look for opportunities to augment our growth and grow our share of market through strategic M&A. Let me turn to the supply chain. You know, as we all know, it's been a challenging time in terms of capacity and demand outpacing supply. We're very proud that we've been able to leverage the strong relationships we have with our suppliers, going back decades, to meaningfully increase our unit output in fiscal 2021 by nearly 40%. Looking ahead, we will continue to work with our suppliers to drive our growth, and we're confident that we can do that. Our inventory levels are lean, and we are taking steps, both with existing sources of supply and new sources of supply, to expand our capacity, serve our demand, and build inventory over time. I expect we'll make some progress in terms of our distributor inventory levels in the first quarter, as we indicated on the January call. It may be a while before we get our in-house inventory where we need it to be, but we're very committed to doing that and working aggressively with our suppliers to drive that outcome. You know, when we set out with the divestiture, we put forth a model to help guide our future, and the target levels that we set in the early fiscal 2021 are indicated on the right-hand part of this chart. You can see that we have outperformed the targets that we set, both in terms of top-line growth, where we delivered 41% growth in fiscal 2021, and in profitability, where we ended with 10% operating margin in 2021 versus our initial target in the mid-single digits. This is driven by sustained strong demand, and we see the opportunity now to continue to leverage our OpEx and drive further accretion and margins as we move forward. As a result of all the trends you've heard about today, we are scaling the company faster, and we see the ability this year to continue to outperform our model with the opportunity to grow top line, again, 35%-40% in fiscal 2022. We're also maintaining our long-term revenue CAGR of 20%. Please note that that's coming off of what is now a significantly larger base of business. In summary, as we look at these dynamics, we see the opportunity to become a multi-billion dollar company over the coming decade, and that's exactly what we plan to do. That brings me to my last slide. Looking ahead longer term, our model calls for sustained 20% compound annual growth, outperforming the market, which, as you saw, is in the mid-teens. We're supported by a $14 billion opportunity pipeline. You heard Brandon just refer to very strong design win momentum and premium gross margins in the mid-50s% over time. Near term, as we see the opportunity to do so, we can see the ability to outperform that model with 35%-40% growth this year, margins in the high 50s%, and operating margins on target. We're very excited about the opportunity that we have, and we think the financial returns are showing. With that, let me turn it to Matt for the conclusion. Thanks, John. I'd also just like to thank the whole team for presenting and sharing so well about the company and the opportunity and why we're excited about it. If you step back to the beginning and remember what we talked about first, and making sure that that takeaway is clear, right? That if you step back, Silicon Labs is the largest IoT wireless company in the world, and we're so excited about that for the three reasons I mentioned, right? We have a large and fast-growing market that just has a couple decades of incredible potential moving forward. The second is the position we have in that market, right? It's our ability to capture that, our exposure to that market, our ability to scale. We've spent literally almost 15 years getting ready for this. The last piece is that 100% focus. This is the only thing we are focused on capturing, maximizing, and executing on moving forward, and you're seeing that momentum build, right? You see the results in 2021. You just heard the update from John about 2022. It's exciting. What I'd like to do is have the team come up on stage. Please join me, and we'd love to open the door to some M&A. I'm sorry, Q&A. Okay. While the team is assembling, we'll start with a, yeah, question that came in online from Tore Svanberg with Stifel. How is SLAB delivering more intelligence to the edge? You focus a lot on connectivity, but what is your development on the MCU side? Daniel, it's probably... Is this working now? Yep. Okay, good. I'll just hold on to this. I have that one, right? Great question, Tore. It's one we think about because, again, as wireless is core to what we do, there's so much more. There's the compute, secure, and the smart element that comes here. We're seeing a lot of advancement on the core compute side these days, more coming in, like I said, from Arm and from RISC-V. Those are our primary kind of compute platforms that we run on. What we're seeing in that is a lot of real-time operating systems coming to the fold with a lot more software and the machine learning that's gonna be riding the next kind of 5 to 10 years. Beyond that, though, what we've seen is that, you know, we strike the balance between RF and compute, we think, better than anybody else. If you're pure RF trying to add an MCU, or if you're an MCU trying to add RF, they're two very different things here. If you're starting on the MCU side, which a lot of big companies are, it's really, really hard to integrate these things together. The wireless that's running on that chip touches everything. It's not just the stack running on the CPU, it's spur management. It's kind of core RF stuff. This is the bread and the butter of the company. We feel like we're in a really, really good position having this integrated solution, forming the middle, not starting from one connectivity standard or pure connectivity or from the MCU front. Hi, Joe Moore from Morgan Stanley. I wonder if you could talk a little bit to the competitive chart that you showed versus the analog companies. You know, I think you guys made a very compelling case that the focus really matters that you have. But just to give you a chance to respond to how those big companies would answer this, you know, they have other building blocks that you guys may not have. They may not have the depth of IoT-type portfolio, but they have other things. You know, how do you see the benefit of competing with the focus that you guys have versus someone competing with a broader portfolio that maybe doesn't have all those capabilities? Why don't I start, and then I'll let you go because it's your chart. The first thing is we like the position we see ourselves in with literally a 10- or 15-year head start from a lot of these companies, which is not trivial, and also the 100% focus; we really think that matters. In terms of other companies, you know, we never take that for granted. We're humble about that. We're always watching the competitive landscape and being, you know, I'd say just productively paranoid about that. But at the same time, we do not see another company that has a larger scale than us in the IoT space, which I think is really important. We feel comfortable we have the building blocks, the capability that we need to go capture and maximize this market. That's, you know, the first level of answer, and it would also be important to hear from Daniel on the next piece of it. Sure. Yeah, we run into those companies, we run into many in the market. It's very fragmented right now. They're, you know, it's kind of reflective of the embedded market itself, also fragmented. We do start to see the pooling of technology, though, as these things are starting to connect to the cloud, things like how to secure a device, how to run the connectivity or standard no matter what you do, as an example there. You call them analog companies. I'm assuming you're referring to NXP and TI on that chart. They're coming at it traditionally from more of the compute, pure compute side and adding more wireless into that portfolio over time. This is where I kinda come back to the it's really hard to add wireless into a compute platform. These things don't necessarily co-grow together on the way up, like ours did. We know how to balance our software versus the customer software running on chip. Remember, we write in a ton of the software that ships on our products, all those connectivity stacks, the security stack, the machine learning that runs on that device. Getting that co-development that you heard the customers in Jake Alamat and Ross Sabolcik's presentation together really matters. Not everybody approaches it that way in partnership. The constraints. I'll just kinda come back to that. There's a reason I led with that. I mean, when you update the app on your phone, calculator apps, hundreds of megabytes, I have no idea why. We have to do really hard stuff with very little resources, and that doesn't necessarily. If you're starting from the compute side of world, it doesn't really work that way. We feel like we're in a really good spot from where we started and where we're gonna go, and the sales funnel is reflective of that. Our customers are asking for more over time, if anything. I'll just add to that. You know, getting something to run over 10 years on a watch battery wirelessly is very difficult, right? There's a real capability there. On the competitive landscape, it's probably worth pausing and talking about that a little bit for everyone, because we get that question a lot, and it's difficult for people to understand. You know, the question would be, "Who's your biggest competitor?" Or, you know, "Who do you see the most?" The reason that matters is we don't have that one competitor. Let me be clear, there's a lot of competition, and we expect it'll only continue to increase as this market becomes more attractive to many. The reason we don't have the one competitor is it depends on the technology area, right? Some companies are hyper-focused on Bluetooth, some on Wi-Fi, some on sub-GHz, and that's where we see them the most. But there's no one company we see in a majority of our opportunities, and that's very important. It's because we focus on bringing these together, and that's where we thrive. When we're doing that, we don't see the same type of competition versus when it's one technology. That's an important point for people to understand. Building on that point. It's not just the wireless level, it's the full system level. We've been partnered with folks making light bulbs, making tiny door and window sensors. It's not just a wireless component, but how all those things come together to make it as optimized for that particular end system as anything that you can do. While, as Matt said, many folks will come at it from, it's this technology or it's that technology, we're really looking at it saying, "Hey, how do we make the best, most optimized ESL or the best, most optimized light bulb or door and window sensor," or things of that nature. Hey, guys. This question is perhaps more for John. Again, Gary Mobley at Wells Fargo Securities. Looking at your fiscal year 2022 revenue growth outlook, it looks like you're forecasting about $50 million more revenue than what the current consensus sets at. The questions related to that, is it better supply that's driving that upside? Is it a better demand profile? Is it both? Are you calling for upside to the first quarter as well? Thank you. Thanks, Gary. No update to guidance on Q1. You're right about comparisons to consensus. I would also note that at the top end of that range would put us at $1 billion for the first time in the company's history, which is really exciting. I will also like to note that this is for today, the annual indication. Moving forward, starting with the April call, we'll be reverting to normal quarterly guidance. It really is supply driven. I mean, the demand profile we have is significantly outpacing our supply. We've been working with our suppliers to expand our capacity and also with our customers, in some cases, to target their designs to areas of available supply to better optimize the match of demand and supply. I wanna be, like, crystal clear on it. We got a lot of demand. I'm staring at our ops guy, wondering why he's here and not out getting us more silicon, so. It is a supply answer right now in the shorter term. Gary, just wanna add one more point 'cause, you know, we touched on this in the January call as far as the shape of the quarter. We do expect more upside in the second half, so to think about it that way. John Vinh, KeyBanc. A question for you, John, and maybe for you, Matt, as well. When I look at your business model and even longer term, why aren't you guys more profitable? I wonder that because you guys have clearly established what you do is very complex, the software, the multiple protocol integration. Matt, you talked about having experience selling into the smartphone business, right? You know, when you look at the smartphone business, very competitive business, but your peers who focus on the smartphone business have significantly higher operating margins because on the gross margins, maybe you could argue it's a little bit lower 'cause they've, you know, got higher volumes. For you guys, your customers are so fragmented, why aren't you guys seemingly being compensated for that, and why aren't we seeing more leverage in the model, or do we just need to go further out and you expect a little bit more increase there? You know, John, just the simple answer really is that. I mean, we have been building the portfolio for years, and now we're scaling the portfolio. It's really exciting, and we're seeing the returns coming. We're seeing the improvement in profitability. You know, we set forth the model when we first announced the divestiture, and we're on or above that model in profitability. So, we feel that it's coming together well. You know, to be the leader, to continue to have a strong leadership position in this market, we need to do a lot, as you heard, but the opportunity is massive. For most, to get to where we are to becoming this multi-billion dollar top-line company, which we absolutely believe is possible, it is taking some investment. The returns, we believe, will come in time. Hi, Rajvindra Gill from Needham again. Thanks. Just on the fiscal year 2022 guidance of kind of 35%-40%, a question we get from investors, not only as it pertains to SLAB but in general, is how much of the growth is being driven by kind of unit growth versus ASP growth? I think you mentioned in 2021 that you grew units nearly 40%. Your IoT business, I think, grew 41%. Right. Maybe there's, you know, some, a little bit of ASP, maybe 2% improvement on top of that. When you're looking at your 35%-40% growth in 2022, and then you're looking at your 1.2-1.5 long-term target, how much price increases are you baking in this year as well as in your future contracts? Yeah. Roger- I just have one follow-up after that. Yeah. It, you know, it definitely is relevant in the current environment. You know, we had visibility to rising input costs that emerged in the second half of last year, and we implemented a series of price increases late last year. So you've got a little bit of price benefit in the fourth quarter and really throughout the year in 2021 in various forms. You know, we're not breaking it out specifically, but suffice to say, we see units and pricing up solid double digits in fiscal 2022. Another point that's really worth commenting on is given the strength in the demand and the tight capacity situation, pricing and units are inextricably linked. You know, if we didn't have the tight capacity, units would be up, perhaps pricing would not be where it's at. So they're really. It's a combination effect that's going on. You know, over time, as you know, pricing will moderate to more steady state behavior as we're all more accustomed to. You know, customer inventories get more replenished. We see more of a reversion to the long-term growth trajectory that we call out at 20%, which again, is still ahead of the SAM growth rates that we see out there. Yep. I'd just add, it's probably important to step back and just frame the demand supply environment, 'cause that's a very common question, and make sure everyone understands that, you know, Brandon touched on this. Our goal and what we've been able to do is to continue increasing our supply to our customer base. You know, we were able to do that last year. We expect we're gonna be able to do that this year. At the same time, demand has remained incredibly strong, and that gap is, you know, significant. We haven't seen that change. Even as we make progress increasing our supply, the demand remains incredibly robust and, you know, we're gonna continue working on that gap for our customers. It's exciting to see the demand, and it's painful to have the discussions is the easiest way I can describe it. That the environment situation hasn't changed at all for us. Just one quick follow-up, John. You mentioned your capital redeployment. You're sitting on about a little over $2 billion of cash currently. You generated about $90 million of cash flow from operations, but historically it's been, you know, maybe $130 million, $150 million. Right. Right. You still have a lot of dry powder. We do. you know, to deploy. You've spent about $1 billion or over $1.4 billion in buybacks since the divestment. How are you balancing M&A versus, you know, stock buyback, given you have these kind of new longer term, you know, higher revenue targets and higher operating margin targets? If you do more buyback, it could be, you know, accretive to the earnings versus, you know, adding more strategically in M&A. Yeah. You know, we're continuing to evaluate that, Raji. We're pleased with the work we've done in this area since the divestiture. We feel like we've really been on a front foot there and aggressively deploying. At the same time, you know, we're mindful of opportunities to grow our share, perhaps inorganically, and we'll continue to work on that. I see us continue to be active in both portions of that as we move forward here. Thanks. Blayne Curtis again. Just, John, if you can just help us with gross margin a little bit and the shape for the year. You guided 63%, but then for the full year it's high 50s%. I want to figure out how literal to take that. A lot of companies saw a benefit as, you know, the wafer costs hadn't caught up yet. Right. does it come down and then kind of normalize off Q2, or does it come down throughout the year? Just any help on that and any perspective, you know, getting to that mid-fifties- You bet. You know, long term as well. You bet, Blayne. You know, we implemented price increases late last year in anticipation of cost increases that are forthcoming, and they're beginning to materialize now. What you're seeing in the first quarter that led to our guide was the asynchronicity between ASP and cost, where we're selling through legacy cost of material. Right now in the first quarter, the inventory is turning very fast, so that's really gonna clear out here in the first quarter. Starting in second quarter, moving forward, we'll be on more 2022 cost structure. We expect a meaningful drop in the second quarter and further drops through the course of this year as more cost increases are forthcoming in the model. You know, to the second part of your question, we, you know, view ourselves as a premium gross margin play in the IoT space, and that's also relative to our long-term model as well, given the differentiation and additional features that we offer the market. Okay, we'll take a question from online, from Tore Svanberg with Stifel. Several semi companies are writing big checks to their wafer suppliers to guarantee supply. How is SLAB positioned to guarantee enough wafer supply to continue to grow? Yeah. You know, we have very strong relationships with our suppliers going back decades. While we have entered into some modest arrangements to secure supply, for the most part, we're relying on the strength of those relationships, and it's been working, and we think that's going to continue to work for us going forward. We also have diversity in our supply chain with additional fabs, new sources of supply coming into the fold, and that's really our strategy. Okay. We can take another question from online, from Prashant Kothari. Can you specifically address competition with Nordic Semi, which has similar scale, similar focus, et cetera, as SLAB does? I'll start there. Oh, sorry, before you, what was the last piece of that? It's similar focus and, systems. I'm not quite sure what that means. Okay. Go ahead. I'll just start on the technology side. That's fairly easy, and then I'll let the businesses take that. We do see Nordic in the market. They kind of got off the ground earlier in the IoT than most, like us. We see them really in one spot, and that's in Bluetooth. There's a lot of legacy there. We don't typically see them in the other wireless protocols. They are building out cellular. They have done some work in Wi-Fi, but we have yet to run into them there. We do see them doing well. They're growing. They're a fierce competitor. They also have focus. All the things that we said they probably benefit from as well. We just don't see them in the other technologies. Yep. Yeah. I think that covers it. Go ahead, Ross. I would maybe just add to that on the Bluetooth side as well, a lot of the focus has been more on that point-to-point connectivity. You know, that's a large market. They're incredibly successful there. When you get into these mesh networks, the complexity gets quite a bit higher. It's no longer just a point-to-point data stream. Now you have to worry about numerous devices working over the network. That's an area where I think we're incredibly well positioned and incredibly strong. Yeah. The only thing I'd add to what Ross or Daniel brought up is. With the latest releases that we've had in our line of products, we feel really good about our opportunity to grow both in the mainstream point-to-point. Good point. As well as Ross said, the meshing side. If you look at what's happening to some of the end equipments that are traditionally in these market segments, they're starting to adopt some of the things that are just directly in our wheelhouse in terms of ecosystem engagements and security and all these areas, which is allowing us to not only have something that's really strong in just the core traditional, but also is gonna help us scale and grow faster. With the portfolio we have today and where we see those end equipments going in the markets, we're pretty happy about where we stand and where we'll be able to end up. Can I just add one more thing? Yeah. This is a really important point. Yeah. Sorry. It's not Nordic specific, but it is that the use cases in the IoT are evolving. They're getting more complex, more feature rich. That point-to-point link now has to be secure. An example, we have blood continuous glucose monitors. You know, imagine the data that's going from the phone mobile app to that continuous glucose monitor and the amount of security and privacy that you have to have. A doctor is administering medicine based on this data. We bring that to the forefront. We have the mesh networking that Ross is talking about. We have the fact that it starts with Bluetooth and then it adds something else. We need Bluetooth plus Wi-Fi, Bluetooth plus Sub-G, Bluetooth Sub-G plus something else. Machine learning, we're getting there. We're hitting it on so many fronts. The IoT use cases are getting rich. They're getting high value. Someone launches a product for one reason, and they find a dozen reasons to use it for other stuff. Those are all in our wheelhouse on a competitive basis. We'll probably take one more. I think we'll take one last question. Yeah. Thanks. I want to deconstruct your long-term gross margin view of mid-50%, roughly down 700 basis points from where you're running right now, and deconstruct it from the perspective of mixed contribution, right? You have your Gecko modules, you have discrete RF transceivers, you have microcontrollers, sensors, you know, the radio, you have consumer versus industrial. What are all those different variables, the way you see it, in deconstructing or contributing to that mid-50% gross margin? We have a very diverse business and, you know, it cuts across technologies, customers, geographies, applications, you know, literally serving tens of thousands of customers. You know, probably the best way to think about it at a summary level is between the two business units. We clearly see both business units offering premium gross margin profiles for their respective areas. Ross's gross margins are a little higher, clearly, but, you know, both of them are offering premium gross margin, and we expect that to continue to be the case. You know, as industry conditions warrant, you know, it's dynamic. There can be, you know, various factors at work that would push the industry up or down. The point is, whether it's going up or down, we expect to be delivering a premium as we've done in the past. That's a compelling part of this story. Sure. All right. I think that's a wrap. First of all, just a quick recap for everybody, 'cause I know we covered a lot of material and we've been here a while. Think back to the beginning of what we said. Silicon Labs is now the largest IoT wireless pure play in the world, and that focus is on that large, fast-growing market. We have long-term secular growth, and we're extremely well-positioned and honestly excited about that position to go capture that market. We're now 100% focused to go maximize that. You're seeing that come through last year, this year, and each time we see ourselves in a better and better position. We wanna thank you for making and taking the time to be here. Really appreciate it. That goes to everyone who's joining us remotely as well. I'd also like to thank this team right here and everyone else for all the time and effort that went into this. Really appreciate it. Thank you. Thanks, everyone. Before we fully wrap, the presentation that we delivered today will be posted on our website on the investor relations section of silabs.com. For those of you in the live audience, we'll have a opportunity for a brief reception in the room next door here. Thanks, everybody. Thank you. Thank you.