Hello, my name is Betsy. I will be your conference operator today. Welcome to Silicon Labs First Quarter Fiscal 2023 Earnings Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Giovanni Pacelli, Silicon Labs Senior Director of Finance. Giovanni, please go ahead. Thank you, Betsy, and good morning, everyone. We are recording this meeting, and a replay will be available for four weeks on the Investor Relations section of our website at silabs.com/investors. Our earnings press release and the accompanying financial tables are also available on our website. Joining me today are Silicon Labs President and Chief Executive Officer, Matt Johnson, and Chief Financial Officer, John Hollister. They will discuss our first quarter financial performance and review recent business activities. We'll take questions after our prepared comments, and our remarks today will include forward-looking statements subject to risks and uncertainties. We base these forward-looking statements on information available to us as of the date of this conference call and assume no obligation to update these statements in the future. We encourage you to review our SEC filings, which identify important risk factors that could cause actual results to differ materially from those contained in any forward-looking statements. Additionally, during our call today, we will refer to certain non-GAAP financial information. A reconciliation of our GAAP to non-GAAP results is included in the company's earnings press release and on the investor relations section of the Silicon Labs website. I'll now turn the call over to Silicon Labs Chief Executive Officer, Matt Johnson. Matt? Thanks, Giovanni, good morning, everyone. Last quarter, we discussed the success of our strategy to focus on the IoT market, the strength of our position to scale and lead the industry, our accelerating design wins, and significant market share gains. Our team continues to execute well. We posted solid results in the first quarter, driven in part by the performance of our Bluetooth portfolio, which was up 65% year-over-year and 11% sequentially. We also drove a record level of design wins in the quarter, up 36% over the design win level from Q1 of last year. As anticipated, weaker global market conditions are contributing to near-term softness in our Home & Life business. Our Industrial & Commercial end markets are not immune to market weakness but are demonstrating much more resilience. Despite the short-term volatility, we remain confident in our ability to outperform the market, underpinned by our breadth of our product portfolio, the depth of our wireless expertise, and our singular focus on wireless connectivity for the Internet of Things. I'll now hand it over to John to cover the financials. John? Thanks, Matt. Revenue for the first quarter met expectations at the midpoint of our guidance range at $247 million. As expected, we saw sequential declines in both businesses. Units were down sequentially in the quarter. Our ASPs benefited from favorable product mix and modest price increase activity. First quarter revenue for our Industrial & Commercial business unit was $151 million, up 19% from the same period of last year. We saw year-over-year growth in Q1 in all of our major I&C subcategories, industrial, smart cities, and commercial, with revenue from smart metering being a particularly strong growth driver, up 39% year-over-year and 16% sequentially. Home & Life revenue in the first quarter was down both sequentially and year-over-year due to a relatively weak demand environment for smart home products. We continue to hear from customers regarding high inventory in the consumer space, and we expect that to normalize as customers work down their inventory balances. Despite the overall weakness in home end markets, we continue to see durability in emerging applications within life, particularly portable medical. Geographically, during Q1, we saw the greatest strength in Europe, which was up both sequentially and year-on-year. Revenue was down for both the Americas and APAC regions sequentially. Our largest customer was about 3% of revenue, and our 10 customers were only 18% of revenue, representing the broad-based nature of our customer base. Distribution revenue in Q1 was 83% of our total sales, and DSI grew in the quarter to 79 days, as POS at some of our distributors was less than expected at the end of the quarter. We expect DSI to decline modestly in Q2. Non-GAAP gross margin for Q1 was 62.5%, above our model and reflecting the modest price increase activity at the beginning of the year. These price increases were related to further input cost increases, like as in Q1 of last year, though more targeted and smaller in magnitude. Non-GAAP operating expenses ended favorable to our guidance at $107 million as we reduced our hiring rate and dialed back certain flexible outside services costs. Non-GAAP operating income ended the quarter at $47 million or 19% of revenue, consistent with the fourth quarter despite lower revenue. Our non-GAAP effective tax rate was slightly higher than expected due to the geographical mix of income at 25.6%. Non-GAAP earnings per share ended at $1.12. On a GAAP basis, gross margin was 62.3%. GAAP operating expenses were $134 million, and GAAP operating income was $20 million or 8% of sales. Stock-based compensation was $17 million, and amortization of intangible assets was $7 million. GAAP earnings per share ended at $0.41 in line with expectations. Turning now to the balance sheet. We ended Q1 with $1.2 billion in cash and investments. During the quarter, we used $13 million in operating cash, primarily driven by growing our internal inventory to $133 million, with turns at quarter end declining to 2.8 x. As I commented last quarter, we have invested in strategic growth in our inventory balance to ensure we have the supply chain capacity to deliver on our growth objectives. During the quarter, we executed $14 million in share repurchases. We continue to have approximately $200 million in share repurchase authorization and intend to be opportunistic in the execution of our share repurchases. In Q1, we also issued a redemption notice on our outstanding 2025 convertible notes. We intend to settle the par value of the notes, $535 million in cash and any in-the-money value assignable to the notes and shares. The redemption process will be completed on June 20th. We continue to have a credit facility in place at $400 million to fund strategic liquidity needs in the business such as M&A. Before I turn the call over to Matt, I'll cover guidance for the second quarter. We expect revenue for Q2 to be in the range of $238 million to $248 million. As previously described, our revenue estimate comprehends a modest reduction in distributor inventory. In Q2, our goal is to optimize the channel for efficiency and flexibility while driving toward maximum success in customer ramps for both direct customers and a broad base of distribution customers. At the same time, we are seeing that supply and demand continue to normalize, and we are no longer facing severe capacity restrictions across process nodes. We expect non-GAAP gross margin to be between 60%-61%. The decline in gross margin from Q1 is expected due to the effect of pricing variations similar to what we experienced last year at this time. We expect non-GAAP operating expenses to be $106 million and non-GAAP earnings to be in the range of $0.98-$1.08 per share. We expect the non-GAAP effective tax rate to be 25%. On a GAAP basis, we expect gross margin to be about 60%. We expect GAAP operating expenses to be approximately $131 million and GAAP EPS to be in the range of $0.35-$0.45 per share. I will now turn the call back over to Matt. Matt? Thanks, John. We remain focused on disciplined execution as we navigate this time of economic uncertainty. We continue to deliver against our product roadmap, making excellent progress in expanding our Series 2 portfolio. This includes the new IC design for the smallest form factor IoT devices, the xG27 family of Bluetooth SoCs. The xG27 offers IoT device designers energy efficiency, high performance, trusted security, and wireless connectivity ideal for tiny battery optimized devices like connected medical devices, wearables, asset monitoring tags, and smart sensors. The xG27 SoCs are helping developers build exciting new products while also simplifying their development processes, all while maintaining the low power and small form factor requirements for extremely small devices. We also announced general availability of our flagship FG25 sub-GHz SoC, which is already being adopted for smart city applications and long range deployments, including smart metering products that will transform India's electrical grid. We announced the availability of our Pro Kit for Amazon Sidewalk, a comprehensive solution designed to simplify the development process, reduce costs, and accelerate time to revenue for Amazon Sidewalk devices. As one of Amazon Sidewalk's only 3 qualified hardware partners for developing Amazon Sidewalk devices, our Pro Kit provides all the necessary tools for developing high volume, scalable IoT applications. It's also designed to support the development of wireless IoT-based devices on Bluetooth and sub-GHz wireless protocols for Amazon Sidewalk. The Pro Kit for Amazon Sidewalk was awarded Best in Show at embedded world in March, a global conference dedicated to embedded computing. Silicon Labs CTO Daniel Cooley delivered the opening keynote at the conference, outlining our vision for a connected future and calling on the industry to join us in accelerating software development and securing products as 2 critical steps to achieve the full potential of cloud-connected embedded computing. In addition to the keynote, Silicon Labs speakers delivered 10 sessions at the event, covering a wide range of topics including Bluetooth, Matter, and machine learning. Building on the success we have seen with Series 2, our design team is deeply engaged in developing a Series 3 platform with more than half of our design resources already dedicated to its development. We are employing the same strategy with Series 3, albeit at a much larger scale, and fully expect it will be even more impactful to us and to the industry than Series 2. Silicon Labs has established itself as a leader in the IoT industry, driving the adoption of important wireless technologies such as Matter. Since the fall release of Matter 1.0, 80% of the Matter over Thread certified products are built with Silicon Labs SoCs. Matter will simplify the consumer experience by enabling interoperability among smart home ecosystems and devices. Looking ahead, wireless connectivity and the IoT continue to advance. While we navigate near-term volatility, we are encouraged by the expansion of our opportunity funnel, which is nearing $18 billion, and the significant amount of greenfield design wins we have secured in newly emerging applications and use cases. As a team, we are committed to strong execution with a focus on managing discretionary expenses, supporting and investing in the people and products that allow us to outperform the market and capture the tremendous growth potential ahead. I'll now hand it over to Giovanni for Q&A. Thank you, Matt. We'll now open the call for questions. To accommodate as many people as possible before the market opens, I ask that you limit your time to 1 question with 1 follow-up inquiry if needed. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. In the interest of time, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. The first question today comes from Matthew Ramsay with TD Cowen. Please go ahead. Thank you very much. Good morning, guys. I guess, Matt, I wanted to start out with a question, just sort of how you're seeing the year. I think we talked on this call a quarter ago about strength in pricing, and I think some of John's commentary in the script relative to increased input cost, I think would still support a pretty strong pricing environment for you guys. Maybe you could confirm if you see that continuing through the year. When we talked last quarter, I think you guys had talked about this year being a unit-driven year in terms of growth, just given the design wins that you had and the visibility that you had at that time. I mean, maybe you could help us square the circle with that and the commentary on some weakening end markets with the macro and the guidance that's much less than seasonal and down on a year-over-year basis. Are we still thinking about unit growth for the year? I know the last two years you've had a really strong pricing year, last year, a really strong unit year, the year before that. The drivers of the business on pricing and units would be really helpful. Thanks. S ure, Matt. Let me try to address each of those, starting with the pricing piece and units. F or sure, the last few years have all been unit growth-driven, but 2021 was a big unit year. 2022 wasn't as big, had a bigger pricing dynamic. We still expect unit growth in 2023. On the pricing side, we definitely are seeing price pressure out there, which isn't new. P eople ask us all the time about that dynamic. Maybe the easiest way to think about that is we saw maybe a temporary reprieve during the supply crisis where demand was greater than supply. W e've been consistent that market forces will prevail and that we didn't raise our model during that time, and we don't plan to lower our model. We feel comfortable that we can navigate that. No major changes there. We expect the market forces will continue as they normally do. W e mentioned in our prepared remarks that we're seeing strong design win growth, that gives us a good indicator of what future pricing is gonna need to look like. On the overall dynamics the consumer piece is tough to call, right? There's a lot of uncertainty and volatility out there on the consumer side. Definitely not calling the bottom or anything like that. I think what we have confidence in is that design win momentum we've been consistent about and the share gains we've been consistent about. We have a lot of ramps coming in the second half of the year. You know, what the consumer piece will be is difficult to see right now. What we know is on top of that, whatever that ends up being, we have those ramps and those design wins and share gains that should position us to do better than whatever the end market ends up being. Got it. No, I appreciate there's a lot of moving parts, Matt, and thanks for the color there. As a follow-up, I wanted to ask about a particular end market. I remember two, three years ago, the smart meter build-out in the U.K. was a pretty material driver for the company. Matt, maybe you can give us a few anecdotes about your position in India, what kind of partners you're working with, the size of the wins that you have. Obviously, everybody can figure the population differences between what's going on in India and what went on in the U.K. I'm just trying to calibrate the position and the potential of that build-out, given how material it was in a much smaller geography a few years ago. Thanks. Yep, sure. For anyone not familiar we've always had a strong position in metering as a company, and we see no change in that. I think the easy way to characterize it is it's only gotten stronger over the last few years. While we did the continue to do the build-out in the U.K., what we've seen is the desire to replicate that in other geos globally. W e do see that in multiple geographies all over the world, and we see ourselves as very well-positioned in each of those. The one we called out today is in India, where over the next few years, India has a substantial amount of tenders that are out there that as a company, we are very well-positioned to serve. With multiple positions with multiple suppliers and the technology that we have helped drive for the industry is a pretty fundamental piece of the rollout in India. We're very excited about that. It's early days, but that should be a multiyear growth driver for us in India as well as other geos, where smart metering, whether it's water, electric or gas, continues to be deployed. I'll jump back in the queue. Thanks very much, guys. Thanks, Bob. The next question comes from Tore Svanberg with Stifel. Please go ahead. Yes, thank you. Let me start with Matt. Matt, you talked about Series 3, and you mentioned same strategy but a much larger scale. I was hoping you could elaborate a little bit of that, especially as we start thinking about ASPs. I'm not asking about pricing, I'm asking about more value, more ASPs. If you could elaborate on that comment about scale, that'd be great. Sure. Q uick way to characterize it, we are incredibly excited about Series 2 right now and the way that's positioned and performing. W e couldn't be at a better time in that portfolio in the market and we're really excited about that. That's helping drive these design wins that we mentioned last year's growth was incredible, and we're already starting this year off at a faster pace. That's really based on Series 2. An easy way to think about it is our customers do not only design us in on the current generation. They need to see that roadmap in future that gives them confidence, they're betting on the right horse moving forward, and that's Series 3. W e've been working on Series 3 for a long time now, concurrently with Series 2, and the intent is Tore, easy way to think about it, take all those learnings from multiple generations and put that together in a way that allows us to do things for the industry and the company that haven't been possible in the past. That is already visible to a lot of our key customers and partners and is helping fuel not only the current Series 2 design wins, but also their confidence that they've picked the right partner moving forward. In terms of ASPs and that for sure, no comments around that, except that this will allow us to not only service the markets we're servicing more effectively, but even more effectively at a greater scale and more efficiency than in the past. That's very helpful. As my follow-up, I know the last couple of years have been sort of years of strong Bluetooth share gains. I know you bought a Wi-Fi asset several years ago that's probably now about to hit an inflection point. Could you comment a little bit on your design win pipeline when it comes to your Wi-Fi business, please? Sure. I'm gonna, I'm gonna answer it directly, Tore, I just wanna comment on the Bluetooth piece first because it gives a lot of color and perspective on the Wi-Fi piece. Bluetooth, if you went back a few years, we made a very public statement that we have decided to increase our focus on the space, double and triple down, and really bring all of our development capabilities and knowledge and domain expertise in IoT to bear on Bluetooth. That is exactly what we've done. We've seen incredible growth in Bluetooth over the last few years. We've seen share gains, and we see no sign of that abating at all. We're really excited about that. You saw that come through in some of our Q1 numbers. Keep me honest, guys, but I think it was over 60% year-on-year growth in Q1. What we've said now, we've done that in Bluetooth, and we're gonna continue to focus there. What we're adding is the Wi-Fi focus, and the intent is to do the same thing in Wi-Fi. You know, we've been clear that we've done acquisitions in the space, and we're moving large chunks of our R&D onto Wi-Fi, and that's gonna help us do the same thing in Wi-Fi. It's already started. We're seeing strong growth in Wi-Fi. Last year, this year, we expect to be strong growth years in Wi-Fi, and we see that easily able to continue. Granted, on much smaller numbers than the other areas. It is easier in the early days. You know, questions about it that we get asked, how are we gonna compete? How are we gonna operate there? Simply said, we're gonna bring the benefits that we bring to the other spaces, to the Wi-Fi space, the ability to integrate all the protocols for our customers, bring industry-leading power and security. We've shared that the 917, one of the first devices that we brought out, has the strongest momentum of any launch we've ever done, which is incredibly exciting. That's driven in part by bringing industry-leading power consumption to the space, along with our other capabilities. Easy way to think about it, we see good momentum there. You know, actually record momentum for any launch we've ever done. We do see this being a growth year for Wi-Fi, and there will be a lot more products and capabilities coming out of our portfolio moving forward. I would expect to see us do what we did in Bluetooth, in Wi-Fi in the years to come. Very helpful. Thank you. The next question comes from Cody Acree with Benchmark. Please go ahead. Thanks guys for taking my question. Maybe if I could start with your view of the health of your channel inventories, per the Home & Life and Industrial & Commercial. Cody. Sure. This is John. We did ship what we expected to ship in the first quarter in line with our expectations. What we saw late in the quarter was weaker POS out from the distributors. That's particularly notable in the Asia Pac region. We do expect that to moderate in the second quarter and come more in line as we progress through Q2. I will also note that, you know, having the inventory staged in the channel is a good thing as we look to ramp customers across multiple new platforms in both parts of the business. On the distribution side, as well as having organic inventory in-house on the direct side. Just with your internal inventory plans, can you talk about where you're comfortable and also just your order linearity through the quarter? O rder patterns were relatively linear through the quarter. That's typically the case. Again, you know, in line with our shipments, we did ship in line with what we expected to ship on a linear progression of orders. On the internal inventory view, where are we comfortable? W e're not changing our longer-term strategic model of 3x-4x on the inventory terms. We are looking across our process nodes and mindful of some of the structural issues around legacy process nodes that remain intact. W e're benefiting, if you will, in the current time from a lull in the market, and that is allowing us the ability to accumulate some strategic inventory. That said, some of the structural issues around capacity limitations are unchanged. W hat are we doing about that? Well, we are diversifying our supply base to a certain extent, and we're also building some inventory ahead of what we see longer term as significant customer ramps on numerous new greenfield opportunities. Any risk of obsolescence in that inventory build? Cody, it's a good question. You know, we store inventory in die bank form, and that allows us tremendous flexibility to customize the products and software and with different security protocols according to the actual customer demand as it comes through. You know, we believe the risk of inventory obsolescence is manageable and view investing in this inventory as a wise use of our available capital, given the various factors at work that I've described. Great. Thanks, guys. The only thing I'd add to that, Cody, to John said is, it's exactly right that there's so much of the customization happens post-silicon on top of that through software. You also have to remember the, you know, amazing diversity of the end demand across customers, geos, applications. You know, we don't have one part, one customer dynamics at all. That helps as well in terms of reducing the risk. It's a good question, Cody. Great. Thanks for the color. The next question comes from Rajvi Gill with Needham & Company. Please go ahead. Yes, good morning, and thanks for taking my questions. First question is on the commentary, Matt, about the expectation for still unit growth this year. Just wondering if you could maybe elaborate on that. You know, given the fact that we saw units down this quarter, there's still uncertainty around the consumer. I know Industrial & Commercial is resilient, but there's concern with industrial production potentially coming down. I'm curious how we're thinking about unit growth this year, and do you still expect to grow this year, based on previous conversations? Sure, Rajvi. Understand the question one thing that's important to point out we commented earlier, we don't see Industrial & Commercial as immune to this environment, it's been much more resilient. W e don't see Industrial & Commercial growing this year like we have in the last couple of years just to provide some context. Definitely, incredibly different experience than in straight consumer, just to give perspective. On your point, again, like I said earlier it's really difficult to know what the overall market environment will be in the second half. I don't think anyone knows for certain. There's a lot of uncertainty around the consumer side of things. What we do know is this our customer inventories are working down. We haven't seen, China come back yet, but we're seeing some encouraging signs. T o be clear, China is still down in Q1, but we expect that'll slowly work its way out. M ost importantly, we know what our ramps are and our design wins. You know, we've been very consistent, last year and even right now that our design win momentum is incredibly strong. You know, some of that is greenfield, new applications, new customers, some of that is share gains. You know, while we don't have a lot of those ramps in the first half of the year, we do have a lot of those ramps in the second half. For sure they're not immune to macro, but they will ride on top of whatever their market ends up being. That's what's giving us confidence that, you know, whatever that market ends up being, we think we'll do better than the market. Roger, this is John. I just wanna add on a quick point here. A key takeaway from all of this is the cost and price inflation dynamic in 2023 is much less than what it was in 2022. That's really a key point to take away from this. I appreciate that, John, and thanks, Matt, for that. Just for my follow-up, it really has to do with pricing as well and also the impact on margins. You've guided margins down to 60.5%. You've been telegraphing to the Street that margins will drift lower over time. I am curious to see the fact that prices have kinda held up. You saw a modest price increase, but with supply and demand coming back in balance, you're starting to see potential pricing pressure from competitors. There is more capacity coming online. How do we think about margins in the face of potentially unit headwinds and then pricing potentially reversing later this year? Any thoughts on that would be great. Thanks so much. I'll start, John. It'd be good for you to add. This topic like I said earlier, one important way to think about it is there's not a lot of new out here on pricing. What was new in the last couple of years was that demand greatly exceeded supply, and because of that the pricing pressure that was normal and typical in this market took a temporary reprieve. I think we're reverting back to as demand is not as strong and there's more supply out there, you're just seeing the market revert to its normal pattern of behavior that we've always operated in and always had to navigate. I think that's where we're getting now. We have always been in an ultra-competitive market from a pricing perspective. We see that out there, and that's exactly the reason why we didn't change our margin model during the supply crisis because we expected it to be temporary. That's market forces. We're navigating it. We don't see any changes. We expect continued competition and pricing pressure, but nothing that changes our long-term outlook or commitment in the space. I just don't have anything to add, Roger. Appreciate it. Thank you. The next question comes from Blayne Curtis with Barclays. Please go ahead. Hey, morning. Thanks for taking my questions. I had two. Just curious by segment, you actually saw similar declines in both segments in March. To just help us with the outlook, it's not down much, but I'm curious if there's any difference between the two segments. Blayne, we would expect I&C to perform better than Home & Life in the second quarter. Is what we see. Then I'm just trying to understand the difference in the weakness in the disti channel at the end of the quarter. I f it's just Asia, it seems like you're saying it was fairly small. I'm looking at the big build-in inventory and trying to reconcile the two. Can you just give us a perspective on that magnitude and, you know, was that size of inventory build purposeful or was it more you were hoping for a bit better in June, September? S ure. Blayne, this is Matt. First of all, we didn't expect it to go up as much as it did in Q1. W e did expect it to go up, as we entered towards the end of the quarter, the POS went down a little more than we expected, it ended up higher than we expected at the end of the quarter. It's not alarming to us, just very openly, as John said, we want to build internal and external as we prepare for ramps. T he world has changed in terms of being able to be ready for these ramps and supply, as we all know. Because it's as high as it went, we do plan on working that down in Q2, and that's influencing our guide, as you can see. We'll bring it down modestly, and that's baked into the guide in Q2. Thank you. The next question comes from Gary Mobley with Wells Fargo. Please go ahead. Hey, guys. Thanks for taking my question. I want to drill down on Blayne's question about distribution inventory. Did I hear correctly that it's 79 days? I understand that the normal range is 45-55 days. If we work that distribution inventory days down to the upper end of the normal range, does that imply that you have to digest roughly $45 million in inventory before we're back in the normal range of 55 days? Gary, this is John. Understand your logic there, and you are recalling some of our prior commentary on this. We are operating as we are with our internal inventory above target. That is by design. The level of increases Matt just articulated is more than we expected in first quarter. We're indicating this morning a modest decline in DSI, but nowhere near the magnitude of what you're describing to get all the way down to, say, 55 days. That's not what we're indicating this morning. Okay. In China, indigenous demand, if I recall correctly, that has historically been somewhere in the low 20% range of your total sales. More recently, it's probably been in what? Roughly the mid-teens percent, clearly more than 500 basis points off pace. Can you speak of the tailwind that China may represent as a geography when it is Things begin to normalize there? Sure, Gary, this is Matt. Big picture, those numbers are right. If you go way back a couple of years ago, I think China was around mid-20% of our business. A s we've shared last year, we saw that go down significantly, closer to around 15%. We continue to see that decline even in Q1 of this year. I think China was down around 10% of sales. T hat decline has continued. We're, you know, not calling it in terms of that's the bottom in China, but all the indicators say that, you know, we're seeing encouraging signs of strength and recovery there. A s we've been consistent with, it's not baked into our plan, but that could be a tailwind if we start to see some more strength, but haven't seen it yet. Thanks, guys. The next question comes from Matthew Ramsay with TD Cowen. Please go ahead. Thank you very much, guys, for letting me jump back in for a follow-up. Matt, it's around some of the pricing commentary that you made. A few things happened in my inbox during a couple of your comments, so I wanted to clarify something. I don't think it's a big surprise to a lot of folks that the pricing, the relative pricing environment might return towards normal as you described. There was a lot of commentary during the pandemic and the supply shortages that we were sort of entered a new era in semis where there weren't gonna be price downs. I think a lot of us were skeptical on that, and it sounds like you'd agree that we're gonna go back to some normalcy. The question I got from a few folks was, given that the input costs have gone up as much, I wouldn't expect those input costs to revert back quickly. Are you talking about pricing from here at these elevated levels going back to modest year-over-year declines on a go-forward basis? Are you talking about pricing going back to levels where we were pre-pandemic? I just wanted you to be precise on that and walk through those dynamics. Thanks. I got it, Matt. It's the former, not the latter. It's that we expect, you know, pricing pressure on the levels that we're at, and we expect that those will continue, you know, as they always have. We do not expect pricing to revert to those pre-pandemic levels. That wouldn't be possible. The cost structure wouldn't support that. That's right. Got it. We're back to the old days on a relative basis off a much higher base. Is that a fair assessment? Yes. That's exactly right. F or every major customer, every major market we go after pricing is a key component along with everything else that we bring to the table, and we expect that'll continue. That's exactly it. You got it. All right. Thanks, guys. Appreciate it. The next question is from Tore Svanberg with Stifel. Please go ahead. Yes, thank you. Tore from Stifel. I just had a follow-up for John on OpEx. John, OpEx came in quite a bit lower than we had at least modeled. I'm just wondering if there's sort of any seasonality or any 1x that we should be aware of or, is this kind of the baseline for the year and perhaps going forward, you know, OpEx will be flat to up? Tore. It is not affected by one-time items. We did manage our OpEx carefully in the quarter, primarily around slowing the rate of hiring and reducing our discretionary spend on outside services. And, we're, you know, pulling that down a little more in the second quarter, by $1 million. You got it right. This is a new base. We'll see how the year progresses, but with, you know, with growth in the business, it's safe to assume modest growth in OpEx commensurate with that. It's just a reminder that our long-term financial model remains our compass, our North Star of how we're operating, and we're ahead of that now and, you know, strive to continue to operate ahead of it. It's a guardrail, but that is, that is a compass that we operate by. Tore, just a reminder that last year I think everybody expected that the strength of the market that we were in couldn't continue exactly the way it was. We had been very aggressive given the strength of our Series 2 portfolio and our ability to give customers assurance on supply to go win as much business as we could. You saw that come through in the greater than 50% year-over-year growth in our design wins. T hat was by design possible because of the portfolio strength and supply, but it positioned us well going into this year and next year. At the same time, we did, to the extent possible, make our OpEx growth as flexible as possible. Going into this year, we could adapt as the market and the year unfolds, and that's part of what you're seeing here as well. You know, not perfect, but hopefully, we have as much flexibility as possible, navigating this environment. Great. Thank you again. The next question comes from Rajvi Gill with Needham & Company. Please go ahead. Thanks for taking my follow-up question. I appreciate it. Just a question again on the full year and the shape of the recovery first half versus second half. You know, you indicated that, you know, we could see some normalization in the Asia channel. We could see some normalization with the customer inventories. But to grow this year, it's gonna really imply double-digit growth in the second half versus the first half. Any color there in terms of how we're thinking about the second half? I know you only guide one quarter out, but any color there would be appreciated. Thanks so much. Rajvi. It is a one-quarter guide we're not gonna provide annual guidance this morning. What we're trying to indicate is that there are positives in our demand profile around factors that you mentioned, as well as major greenfield opportunities that are represented in new customer ramps. That's a third item in addition to the ones you mentioned. You know, a lot of it depends on the macro, and we're not immune in either one of our business units from the macro. We'll just have to wait and see the shape of that. We've got some positive drivers, but also we have the macro effects that we have to be mindful of. Appreciate that. Thank you. I will now hand the call back to Giovanni Pacelli. Thank you, Betsy, and thank you all for joining this morning. This concludes today's call. Thanks. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.