Good day, and thank you for standing by. Welcome to the Supermicro fourth quarter and full year fiscal 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. Ask a question during the session. You will need to press star one on your telephone. If you require any further assistance, please press star zero. Thank you. I would now like to hand the conference over to Nicole Noutsios, Investor Relations. Good a- Please go ahead. Good afternoon, and thank you for attending Supermicro's call to discuss financial results for the fourth quarter and full year fiscal 2021, which ended June 30th, 2021. By now, you should have received a copy of the news release from the company that was distributed at the close of the regular trading and is available on the company's website. As a reminder, during today's call, the company referred to a presentation that's available to participants in the IR section of the company's website under the Events and Presentations tab. We've also published management's scripted commentary on our website. Please note that some of the information you hear during our discussion today will consist of forward-looking statements, including, without limitation, those regarding revenues, gross margin, operating expenses, other income expenses, taxes, capital allocation, and future business outlook, including the potential impact of COVID-19 on the company's business results of operations. There are a number of risk factors that can cause Supermicro's future results to differ materially from our expectations. You can learn more about these risks in the press release issued earlier this afternoon, our most recent 10-K filing for fiscal 2020, and our other SEC filings. All these documents are available on the IR section of Supermicro's website. We assume no obligation to update any forward-looking statements. Most of today's presentation refer to non-GAAP financial results and business outlook. For an explanation of our non-GAAP financial measures, please refer to the accompanying presentation or to our press release published earlier today. In addition, a reconciliation of GAAP to non-GAAP results is contained in today's press release and in the supplemental information attached to today's presentation. At the end of today's prepared remarks, we'll have a Q&A session for the sell side analysts to ask questions. I'll now turn the call over to Charles Liang, Founder, Chairman, and Chief Executive Officer. Charles? Thank you, Nicole, and good afternoon, everyone. I'm pleased to announce that for the first time, our quarterly revenue has exceeded $1 billion. For fiscal Q4 2021, we delivered year-over-year revenue growth of 19.3%. For the whole fiscal year 2021, our revenue grew 6.5%. We have gained much share and finally resumed faster growth starting from March quarter this year after the impact from the past 10-K delay and the COVID-19 challenges. The revenue growth was driven by some wins from large enterprise customers and large multi-nation high-tech companies. These customers choose Supermicro because of our green computing technology, faster time to market, and plug and play total IT solutions, especially in appliance, cloud, AI, and 5G markets. Let's look at some key highlights from the quarter. Our fiscal first quarter net sales totaled $1.07 billion, up 19.3%, both year-over-year and quarter-over-quarter, at the top end of our guidance range. This growth rate, I believe, is much higher than that of the industry. All our major geographies contributed double-digit year-over-year quarterly growth. Our fiscal first quarter non-GAAP earnings per share was $0.81, up from $0.68 same period last year. We saw a significant increase in sales from new and existing large high-profile customers. Our strong momentum is mainly driven by our business expansion from hardware solution to total IT solution. That consists of hardware, software, and service. We have doubled our software engineering resource in the past 24 months to allow us to swiftly execute this plan. Through engagement and close collaboration with strategic leading hardware and software partners, we have provided our customers full optimized, tested, certified, and ready-to-deploy reference architectures. As a result, large volume orders are deployed timely without customers having to go through complicated process of hardware validation, software compatibility, and supply chain disruption. It's a win-win for everyone. Earlier in fiscal Q4, we successfully executed the launch of Intel Ice Lake, AMD Milan, and NVIDIA A100 GPU-based product lines, and began to ship more than 200 application-optimized product solutions. They are all based on the strong foundation of our server Building Block Solutions. These optimized systems are created in-house, leveraging close to three decades of subsystem innovations, including module, enclosure, power supplies, and cooling technologies. Our security and management software empower customers to deploy, manage, and scale in a timely manner, from enterprise to hyperscalers. On the product side, our new Ice Lake-based X12 generation multiple node solutions gains great traction among customers who are looking to scale out their enterprise and cloud data centers, from SuperBlade, MicroBlade, to BigTwin, FatTwin, and the upcoming GrandTwin. All these resource-saving product lines support dense NVMe and Optane persistent memory, flexible GPU and FPGA configurations, providing optimized performance and a favorable TCO to a variety of customer workloads. Our GPU product lines are continuing their strong growth with the explosion of AI machine learning application demands. These new Ice Lake and Milan-based GPU product line support larger on-GPU memory and accelerated compute-intensive applications. Our 2U 2 -node GPU system has proven to be a top seller since its introduction, thanks to its optimal mix of CPU to GPU ratio and resource-saving features. Later this year, we will be introducing a brand-new universal GPU product line that will provide even more flexible configuration for many different CPU and GPU module combinations, further pushing the limit our system density and performance up to 50% when compared to competition. Announced in June during COMPUTEX 2021, our plug and play rack product lines is an integral part of our complete solution strategy going forward. These turnkey racks have undergone a thorough solution-level design and validation process, and are built securely for our AI, 5G telco, enterprise, cloud, and storage customers. Upon receiving these total IT solutions, customer only need to connect power and networking, then they are immediately ready to run their applications, shorten the time from making decisions to seeing results. To further improve sales and operation efficiency, we will launch our auto-configurator tool to enable B2B, B2C automation, which will be broadly ready to service our customers in the coming few weeks. This tool makes it faster to achieve product optimization, and more efficiently to leverage configurations among our sales, engineer, PM, and customers. We recently complete our Taiwan campus expansion. Now, with the total 3 million sq ft campus in Taiwan, we are equipped to deliver not only sufficient capacity, supply chain resilience, but also lower cost structure. Combined with manufacturing facility in Silicon Valley and Netherlands, Super Micro is well-positioned to grow market share with economy of scale, agility, quality, and rapid delivery time. To satisfy our customers' faster-growing demands, we are working aggressively across our global supply chain to improve our critical parts shortage. In summary, Super micro has been solidly transforming into a Total IT Solution company from a server hardware company. In addition to providing the greenest hardware total solution, our software and service products are now ready for large enterprise, cloud, AI, and telco customers. Second, our Taiwan campus expansion doubles our solution capacity and lowers our cost structure. If we decide to do so, we can start to reduce our expense in Silicon Valley headquarters if we select to by then. Third, our business automation program, including the auto-configurator and B2B, B2C systems, will significantly improve customer experience by streamlining a customer's configuration and order process, resulting in shortened solution delivery time with better quality and optimization. With the above summary, I believe our fiscal year 2022 revenue will reach at least $4.3 billion and start to grow much faster than our past four years. In closing, I'm pleased with the progress of our business transformation, which has started to speed up our business execution in fiscal 2021. As a total IT solution company, we are now able to grow business much more efficiently and achieve our $10 billion revenue goal quicker. Perhaps we are able to pull in from 2026 to 2025 or even sooner. With that, I will now pass the call to David Weigand, our Chief Financial Officer, to provide additional details on the quarter. Thank you, Charles. We continue to accelerate in all major areas of the company and exceeded $1 billion in revenue for the quarter, which was at the high end of our guidance range. Growth was driven by wins from large enterprise customers and key high-tech companies worldwide, continued strength across all major geographies, and solid demand for our products and services. Our fiscal fourth quarter revenue totaled $1.07 billion, reflecting a 19% increase both on a year-on-year and quarter-on-quarter basis. Looking at Super Micro's Q4 revenue in our three verticals, we achieved $672 million in the organic enterprise and channel AI and machine learning vertical, $366 million in OEM and large data center vertical, and $31 million in the 5G telco edge IoT vertical. Systems comprised 78% of total revenue, and the volume of systems shipped was up year-over-year, while the nodes shipped were down year-over-year. System ASPs increased year-over-year and quarter-on-quarter. Performance was strong across all major geographies this quarter. On a year-on-year basis, Asia increased to 25%, U.S. increased 21%, and Europe increased 13%, while the rest of the world decreased 3%. On a sequential basis, U.S. sales increased 30%, Europe increased 14%, Asia decreased 1%, and the rest of the world increased 7%. From this point forward, unless otherwise noted, I will be discussing financial metrics on a non-GAAP basis. Working down the P&L, the Q4 gross margin was 13.7%, down basis year-on-year and 10 basis points quarter-on-quarter. We expected our Q4 gross margin to improve 70 basis points, primarily due to discrete costs incurred in Q3. As expected, those costs did not repeat in Q4. However, expedite fees and higher shipping costs increased by 50 basis points quarter-over-quarter. As reported by many other companies around the world, supply chain pressures related to the resurgence of variants of COVID-19 persist. Turning to operating expenses, Q4 OpEx on a GAAP basis was essentially flat quarter-on-quarter and decreased 7% year-on-year to $106 million. The decrease year-on-year was caused by a decrease in incentive bonuses, offset by higher headcount this year, which was primarily in R&D. On a non-GAAP basis, operating expenses increased 4% quarter-on-quarter and increased 9% year-on-year to $99 million. The quarter-on-quarter and year-on-year increases were related to headcount and other personnel costs as we continue to invest in human capital to address our growth opportunities. Other income and expenses included interest expense, which was a $2.1 million loss as compared to a $1.4 million gain last quarter. The sequential change is mostly related to FX. This quarter, our tax benefit was $1.6 million on a GAAP basis and an expense of $1.8 million on a non-GAAP basis. Our non-GAAP tax rate was 4% for the quarter. Lastly, our share of income from our JV was $0.6 million this quarter as compared to a loss of $0.3 million last quarter. Q4 non-GAAP diluted earnings per share totaled $0.81 as compared to $0.50 in Q3 of fiscal 2021 and $0.68 in the same quarter of last year. Cash flow from operations totaled $64 million, compared to cash flow used in operations of $124 million in Q3. CapEx totaled $13 million, which is flow of $50 million. Key uses of cash during the quarter included increases to inventory and receivables, while key providers of cash included an increase of $144 million in accounts payable and $12 million in deferred revenues. The increase in deferred revenue was due to higher sales of our service contracts. We also used $12 million to purchase shares this quarter. Our closing balance sheet cash position was $232 million, while bank debt was $98 million, resulting in a net cash balance of $134 million. Turning to the balance sheet and working capital metrics compared to last quarter, our Q4 cash conversion cycle was 80 days, which was down from 86 in Q3, beating our target range of 85-90 days. While the absolute level of our days of inventory at 96 days decreased, days sales outstanding was 37 days, while days payables outstanding totaled 53 days. Now, turning to the outlook for our business. We expect net sales in a range of $900 million-$980 million, which results in GAAP diluted net income per share of between $0.16 and $0.36, and non-GAAP diluted net income per share of $0.28-$0.48 for the first quarter of fiscal year 2022, which ends September 30, 2021. We expect gross margins to remain at similar levels sequentially in Q1, with upside potential as we continue to manage supply chain costs and maintain price discipline. Over the upcoming quarters, we expect to achieve margins within our target model as we further scale out our Taiwan operations and begin to gain traction from our new product offerings and auto configurator B2B and B2C solutions. GAAP operating expenses are forecast to be approximately $110 million, and includes $7 million in stock-based compensation expenses and $1 million in other expenses not included in non-GAAP operating expenses. We expect other income and expense, including interest expense, to total roughly $2 million and expect a nominal contribution from our JV. Non-GAAP operating expenses are forecasted to be up quarter-on-quarter from continued investment in R&D, a lower NRE expected, and higher personnel costs. The company's projections for GAAP and non-GAAP diluted net income per share both assume a tax rate of approximately 16% and a fully diluted share count of 53.7 million shares for GAAP and 55 million shares for non-GAAP. The outlook for Q1 of fiscal year 2022 GAAP diluted net income per common share includes approximately $8 million in expected stock-based compensation and other expenses, net of taxes, that are excluded from non-GAAP diluted net income per common share. We expect net sales in a range of $4.1 billion-$4.5 billion, GAAP diluted net income per share of at least $2.60, and non-GAAP diluted net income per share of at least $3 for fiscal year 2022, which ends June 30th, 2022. The company's projections for GAAP and non-GAAP diluted net income per share both assume a tax rate of approximately 16% and a fully diluted share count of 55.3 million shares for GAAP and 56.5 million shares for non-GAAP. The outlook for fiscal year 2022 GAAP diluted net income per share includes approximately $30 million in expected stock-based compensation and other expenses, net of taxes, that are excluded from GAAP diluted net income per common share. We expect CapEx for the fiscal first quarter of 2022 of approximately $14 million to $16 million. Nicole, I'll turn it back to you for Q&A. Operator, you can open the line up for questions. Thank you. At this time, I would like to remind everyone, if you would like to ask a question, please press star then one on your telephone keypad. To withdraw your question, press the pound key. Your first question comes from the line of Mehdi Hosseini with SIG. Your line is open. Yes. Thanks for taking the question. I have a couple of follow-ups. If I were to take the midpoint of the guide range for fiscal year 2022, it seems like maybe there is a little bit of a leverage in the operating profit. In other words, maybe 200 basis points of improvement to get to $3 of earnings. What I want to understand is, what are the key assumptions for component costs? Is this a base case or very conservative case? I have a follow-up to that. I would rather say it's based on conservative base, because our supply chain continue to be very tight, although we have a good relationship with all of our supplier, anyway, it's a global shortage problem, it's a conservative base. Because our operation now able to dramatically expand to Taiwan, that will lower our overall cost. Right. What segment of the supply chain are you experiencing the most shortage? What are the key components that you relatively have the most difficult time procuring? IC chip, especially IO chip. Okay. Question on the cash flow. What was the depreciation amortization for the reported June quarter, and what should we assume for FY 2022? I'll have to get back to you, Mehdi, on that. Okay. Given the CapEx growth in fiscal year 2021, almost $60 million, and the build-out of a Taiwan facility, should we expect CapEx to moderate from here? Absolutely. Yes. Because our Taiwan operation is pretty much ready. We added about 200 staff in Taiwan in the last 12 months. All of the people have been well-trained. They just moved into the new building last month. Other than that, our business automation, as we just mentioned, for B2B, B2C, and auto configurator, we hire people and train people, and they are about all ready and start to offer our service to certain customers. We will further apply to all our customers in the next few weeks. Okay, great. I'll get back to you. Our investment has been there. Charles, are you implying that the CapEx should decline in fiscal year 2022? Maybe because we are growing. I mean, 2022, 2023, 2024, we expect continued growth. I guess the operating expense won't shrink, but may grow very kind of consistently, but limited growth, because we already invested there. Okay. All right. Thank you. I'll get back to you with queue. Thank you. Your next question comes from Nehal Chokshi with Northland. Your line is open. Yeah. Thank you, and congratulations on strong results, especially the free cash flow. We were expecting a drain based on commentary from last quarter, and generated very nice free cash flow. It looks like the big delta relative to our expectations was in increasing days payable. Given this environment of a constrained component environment, how was this pulled off, basically? Nehal, we did have a lot of inventory that came in near the end of the quarter. That's what caused accounts payable to rise, and with a resultant rise in DPO. Okay. Now I consider it positive to keep kind of a high inventory, because we strongly believe a customer needs those products. And so- Great. by the way Yeah. Go ahead, sorry. Please. I was going to say, you can tell from our revenue forecast that our sales are not dipping as they traditionally do in Q1. Therefore, we needed to have more inventory on hand, which was why I alluded to the challenges of cash flow for this, projecting cash flow for Q4. We ended up in a good position. I see. I guess, because you built up the inventory at the end of the quarter to satisfy the strong demand you're seeing in the September quarter, the balance sheet is showing up as increased days payable. What you're saying is that your days payable terms actually didn't increase, it's just simply the timing in which you received the inventory. That's exactly right. Got it. Okay. Understood. Okay. I don't recall the last time you guys gave full year guidance. I'm not sure if you ever have before, but certainly I don't think you did during fiscal year 2021 or fiscal year 2020 or past few years when you were in 10-K filing delay hell. What has changed to give you visibility to guide on a full year basis, and importantly, almost 10% above the consensus estimate? Not much reason, but pretty much because we have a successful expansion in Taiwan and also our business automation, including auto configurator and B2B, B2C tool. Also company expanding from a hardware solution company to a total IT solution company. We saw it's a good idea to offer the market kind of a more completed picture for the whole year and in the future. Okay. All right. In this midpoint, 20% growth guidance for fiscal year 2022, is this tied to any sort of industry growth expectation? I'm sorry, what was the last part of your question? Is it tied to what? Is it tied to server industry growth, any sort of server industry growth expectation, or is it independent of server industry growth? Not quite. As we mentioned, we had returned to a faster growth business model. If you remember, before 2017, before our 10-K delay, our growth always had been 2x-4x faster than the industry. We believe we have returned to that faster growth being this model now. Start from March and June last quarter, we start to outperform the industry. I believe we will start to outperform the industry growth rate, maybe double or triple or even more, looking for more. We are gaining- So- market share in the other world. Yeah. Undoubtedly, clearly. Is there a particular industry growth rate that you are expecting in order to drive that 20% year-over-year growth, i.e., 5%, 10%, 2%? Care to provide thoughts on that then? We believe the industry may grow 5%-10%, right? Our growth rate should be double to quadruple of that, hopefully. Okay, great. My final question is that the minimum $3 per share, does that correspond to the low end of the revenue guidance or to the midpoint of revenue guidance? I would rather say it's a conservative number. Okay, great. Thank you. I'll cede the floor. Thank you. Your next question comes from the line of Ananda Baruah with Loop Capital. Your line is open. Hey, good afternoon, guys. Thanks for taking the question. Congratulations on the strong revenue execution and the visibility to put out a long-term or a fiscal year rev guide here. I guess a couple from me, if I could. David, could you just walk back through the components that you spoke to on gross margin? I just want to make sure that I'm straight on those. Then I have a quick follow-up as well. Certainly. When we finished last quarter at 13.8%, we had about 70 basis points of discrete costs, which included some shipping costs as well. Mainly, it was principally some discrete costs that we didn't expect to occur. This quarter, those did not occur, but we did have 50 basis points more of shipping costs. It was really caused by our directed effort to deliver product to our customers on time, because that's what our customers expect and demand. That's really the reason that we were not able to raise the margin up higher. I got it. these. Yeah. Yeah. I got it. Cool. If you lost the 70, so that took you to 13.1. I got it. Sorry. You lost 70, you gained 70, so that would take you to 14.5 or so. You had 50 more, so that would've taken you back down to 14. I think I'm doing that math right. Correct me if I'm wrong. Was there an incremental 30 basis point headwind that brought it down to the 13.7? Well, there was. We had two things. One, we had deferred revenue that we added to our balance sheet of about $12 million. We had to carve out some income for our services. The rest was just product mix, Ananda. Got it. Okay. What are the sort of the pushes and the pulls? You made mention in the remarks that you expect in the coming quarters to move up into the 14%-17% range. What are the pushes and pulls there? If there's any way to give them by order of magnitude, that would be helpful also. We realized that with the Delta variant, it's hard to say that COVID is over. Therefore, we expect to continue to have challenges on the supply chain shipping costs. However, we do expect our other initiatives, such as our transition over to Taiwan and our new product offerings, especially in those verticals that have more attractive gross margins, as well as our B2B and B2C configurator. We expect the benefit of those things to start to come to the business in the upcoming quarters. In the short run, we know that Taiwan has gone online. However, it's going to take a couple quarters to start to realize benefits. I'm sure I'm not the only one being sort of intrigued about this. Any chance can we get you to give us some sense of, for fiscal 2022, what the gross margin could look like? We've given guidance on the top line and the bottom line, but other than the fact that we expect gross margins to improve, we're not giving further guidance. I got it. It's not unreasonable to think that you would be in the range by the end of the year, end of fiscal 2022. Yeah. Our target is to go, and I think this is in the notes, our target is to be back within our range. By during the year. Okay. Our range, by the way, was 14 to 17, yeah. Yeah. Appreciate it. I'll get back in the queue here. I appreciate it. That's really helpful. Bye. Your next question comes from the line of Aaron Rakers with Wells Fargo. Your line is open. Yeah. Hey, guys. Thanks for taking the questions, and congrats on the quarter. I'm just curious as the industry, not just you guys, but the industry in whole, deals with supply chain shortages, semiconductor IC shortages, et cetera. I'm curious on your side of the business, have you been able to invoke your own customers to provide you with extended lead times? Has that provided you with better visibility? On the heels of that, tied to that question is the guidance for this current quarter assuming that you would've actually outperformed that number if you were able to get all of the supply to meet demand? Put another way, are you able to meet demand, as you see it in the current quarter? Very good question. Although we try whatever possible we could. Still, we cannot get whatever we want. We cannot ship all the demand to our customer. I would like to say, we can ship most of that. Maybe customers still had to wait longer than regular time. The good thing is we have lots of repeat customer, old customer. They understand the global difficulty. Longer lead time, yes, people don't like to see that. Basically, they are cooperative. We cannot ship whatever customer need. Basically, customer are happy with our basic service. What is your current view of expectations of when that normalizes? Does your fiscal 2022 guidance reflect the view that the tightness in the semiconductor supply chain starts to normalize through this fiscal year, or do you think it's out further than that? Just curious of what your thoughts are. Yeah. As I share before and now, traditionally our growth rate was double to quadruple faster than the industry. I believe we already get back to that momentum, double to quadruple faster than the industry. Because of the global shortage, that impact our growth a little bit for sure. That's why we are humble to say maybe $4.3 billion. If not because of big shortage globally, I believe our growth will be much better than that. Yep. The final quick question is, there's a lot of architectural things going on in the server and the universe around semiconductors and so on. I'm curious of what kind of growth that you're seeing in GPU-accelerated server platforms, and do you think that there's a longer term narrative that we're at the point where actually the richness of the server configurations can really drive a positive upward trend in blended ASP for foreseeable future? I'm just curious to how you're seeing compute architectures evolve that maybe benefits you guys from a growth perspective. Yeah. As a technology company based in Silicon Valley, we like a technical challenge. We like new technology. That's why lots of different CPU, lots of different GPU, lots of different platform, that's a big change to us. That's why I just mentioned we will introduce GrandTwin, a brand new architecture to the market very soon. We also are designing a universal GPU platform, and that will be ready by end of this year. All of those is to provide a much more flexible to support on multiple different CPUs vendor, multiple different GPU vendor, and different form factor. All our platform in here will benefit our customer. Thank you to our Building Block Solutions. We are able to skillfully optimize all our different configuration by our new architecture, and especially GrandTwin and universal GPU solution. We are very happy, very excited to see the opportunity. That's great. Thank you very much. Thank you. Your next question comes from the line of Jon Tanwanteng with CJS Securities. Your line is open. Hi. Good afternoon, guys, and great quarter, and also the outlook is pretty impressive. I wanted to drill down on one previous question just on how you have confidence in that $4.3 billion in revenue. Is that a bottoms-up analysis with qualified customer leads, indications of interest, contracts that may have already been signed, or is there more orders that you actually have to go out and get before you can achieve that? I'm wondering how you built to that. It's both bottom up and top down. From both directions, we see the growth will be very strong. If not because of global shortage, our growth should be much better than that. With better products, with our Taiwan operation, and with also many more new engaged high-profile customers we achieve in the last six months and currently. We feel pretty optimistic over that. Okay, great. I was going to ask, how do you feel about your ability to pass price through in this environment? You talked about expedited shipping. I know that you were doing air freight last quarter just to get things to customers on time. I would think that everyone knows at this point that it's impossible to get things without paying for extra shipping charges. I'm wondering if you're planning on surcharges or other pricing methods to be able to pass that through to the customer, then if so, are they receptive to it? Very good question, and a complicated question, too. We try, wherever possible, to communicate to customer. Overall, we had to absorb, I would have to say, at least 50% of that. Well, maybe past 50% to customer. We try to provide a customer a very competitive way, so that we can grow market share as well. Okay, great. Maybe just 1 final one on pricing. When do you think you can catch up on pricing to the higher input cost? Is it a quarter or is it two? How should we think of the lag time before you are able to absorb all of that? It's a complicated question because of the pandemic Delta variant still going on. Once the COVID-19 end, I believe we will recover to normal. Before that, we are getting able to pass those overhead extra cost to customer. That's why I say maybe 50/50 in last quarter, and we'll be getting better. Hopefully COVID-19 problem can end very soon. We will get back to normal automatically. Okay, great. Thank you, and congrats again. Thank you. Your next question comes from the line of Jon Lopez with Vertical Group. Your line is open. Thanks very much. Can you hear me all right? Yes. We can hear you. Oh, great. Sorry. That's great. I had phone trouble. Sorry about that. Thanks, David. I guess I have two. I wanted to come back for a second to the fiscal Q1 guidance, and maybe to come at it this way. I thought in some remarks you made, you referenced not declining in fiscal Q1, but I guess as we calculated, it's actually a bit below your normal seasonal trending pattern, and that's after being pretty comfortably above that pattern in the last two quarters, so both fiscal Q3 and fiscal Q4. I guess my questions are, 1, are we looking at those numbers differently than you are? Maybe just step me through what you meant when you said not declining. Then two, is there any constraint on your revenue guidance relative to component or logistical issues? Perhaps if you could quantify that. Thanks. Sure. I think what our range does is our range allows for the struggles that we face in the supply chain. Therefore, we feel like we provided a broad enough range that we can overachieve, but we feel comfortable with that range. I guess the other factor is that because last year, COVID-19 reason, we did not adjust the employee's salary that much. This year, we have a much bigger salary adjustment for employee. That's why you see Q1, Q2, you may see our expense grow. One of big portion because of salary adjustment. Also Taiwan expansion. We hire people in Taiwan and train people, but they will be ready to contribute to our revenue and profit very soon. Okay, thanks. Yeah, I guess that helps a bit. I guess my other question, just to come back to the gross margin for a second. To arrive at this $3 figure or north of $3 figure, especially based on what you're referencing in OpEx there, Charles, the gross margin does need, I think, to be pretty close to 15% as we get out of calendar Q3 and into the remainder of your fiscal year. I guess, do any of these things feel as though you have line of sight to them ending as we look beyond calendar Q3? If not, are you committing that you get to $3 some other way? Will you rein back on OpEx? Just maybe walk us through the interplay between why you might have comfort in the $3 number if you don't have visibility to some of these logistical issues or cost issues abating. David, how about that? Sure. One of the things that helps our cost structure, again, is the movement of our production over to Taiwan. We expect that to give us benefit, as well as the traction in our new product offerings, which we expect to bring higher margins than the traditional server business. Those are the factors that we have insight into and give us confidence that in spite of supply chain challenges, which we've managed to meet, and in spite of higher costs, in terms of shipping and air freight, which we've continued to deal with, we still believe that through price management, that we can achieve the margins which will allow us to deliver the targets that we are forecasting. The other way to answer your question more directly is that we expect our growth will be significant in fiscal year 2022 and 2023. We are very confident to see that happen. If in case it did not happen, then that means we have too much resource now, so we may reduce some resource in USA headquarters. I hope we don't do so, but if we have to, we will, and we have that option. That will help reduce our operation cost for sure. I hope we don't go for that way. Okay, understood. Thanks for the thoughts, guys. I appreciate it. Thank you. You have a follow-up question from Mehdi Hosseini with SIG. Your line is open. Thank you. Just a quick follow-up. I want to get your view on current memory prices. How do you see the trend over the next one or two quarters? I'm asking you about availability and the pricing trends. A very complicated question, but very good question. Yes, it's hard to predict. At this moment, we see the availability is getting better than last quarter. The price changes should be less than before. As to when the price will stop growing or the price will going down, we watch very carefully. Sure. At this moment, no clear date, but at least we feel it's better than last quarter. Sure. Okay. Very much better. Yes. Yeah. Thanks for the color. I know it is very difficult to look beyond a couple of months. As you think about your FY 2022 revenue guide, how should I think about incremental opportunities? There are a lot of AI-type projects that hyperscalers are expected to ramp. Do you think your FY 2022 revenue guide captures some of them, or should we wait for FY 2023 to see a more meaningful material contribution? Good question. I mean, for AI, we grew very well in fiscal year 2021. In year 2022, I believe we will continue to grow very well, maybe more than 50%, I hope. Right. For telco is another territory. We grew very well last year, and I believe this year, 2022, our telco business will grow much better than even last year. That's two very strong areas for us. Sure. As to hyperscale. Yes. Yes. As to hyperscale, with our Taiwan operation now is ready. We have a chance to start to service some hyperscale customer if we select to. I believe we will be very selective. For some very good customer, when we can provide value, we will. Charles, when you talk about AI, does that include kind of the Arm-based ASIC CPU, or do you lump that into the hyperscaler segment? A very huge question. Right. Yes, we have some Arm design as well. If a customer really prefer Arm solution, we have some solution there under development. Okay. When you talk about AI, it's not necessarily an Arm-based solution. It's more general. No. Right? Many still Intel and AMD-based. Intel, AMD, GPU, NVIDIA. Sure. When you reference hyperscalers, that's predominantly Arm-based solutions? Not necessarily. I mean, hyperscaler still 86 mainly. Okay. All right. Got it. Okay. We can't really isolate it because perhaps it's just too early to determine independent Arm-based solution, right? When customer need that, we will be ready. Got it. Okay. Thanks for all the details. I appreciate it. Thank you. For the last question, we have a follow-up from Ananda Baruah with Loop Capital. Your line is open. Hey, thanks, guys, for the follow-up. Yeah, just wanted to ask any context you can give us about how to think about revenue seasonality through fiscal year 2022. Will there be a seasonal pattern or will it be, I mean, there will be a seasonal pattern, but will it be different than usual and fairly ratable on a year-over-year basis? Thanks. Yeah. As you may know, right, September always our weak season. This year, no exception. Right? Although, we have a strong demand, but global shortage. That's major reason we try to be conservative when we share the number with you for September quarter. Charles, through the rest of the year, should we just assume typical seasonality to get into the guidance range? Yeah. Basically. Traditionally, December and June, always our good quarter. Awesome. Okay, great. I appreciate it. Thanks a lot. Thank you. Thank you. This concludes today's conference call. Thank you for joining. You may now disconnect.