Greetings, and welcome to the Semtech Corporation conference call to discuss The Third Quarter Fiscal Year 2023 Financial Results. Speakers for today's call will be Mohan Maheswaran, Semtech's President and Chief Executive Officer, and Emeka Chukwu, Semtech's Chief Executive Vice President and Chief Financial Officer. Please note that this conference is being recorded, and at this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. I will now turn the call over to Semtech's Vice President of Investor Relations, Anojja Shah. Thank you. You may begin. Thank you, John. A press release announcing our unaudited results was issued after the market closed today and is available on our website at Semtech.com. Today's call will include forward-looking statements that include risks and uncertainties that could cause actual results to differ materially from the results anticipated in these statements. For a more detailed discussion of these recent uncertainties, please review the safe harbor statement included in today's press release and in the Other Risk Factors section of our most recent periodic reports filed with the Securities and Exchange Commission. As a reminder, comments made on today's call are current as of today only, and Semtech undertakes no obligation to update the information from this call should facts or circumstances change. During this call, all references made to financial results in our prepared remarks will refer to non-GAAP financial measures unless otherwise noted. A discussion of why the management team considers such non-GAAP financial measures useful, along with detailed reconciliations of such non-GAAP measures to the most comparable GAAP financial measures are included in today's press release. With that, I'll turn it over to our Chief Financial Officer, Emeka Chukwu. Emeka? Thank you, Anojja. Good afternoon, everyone. In Q3 fiscal 2023, in line with our guidance, Semtech delivered a Q3 net revenue of $177.6 million, a sequential decrease of 15% and a year-over-year decrease of 9%. We face a challenging macroeconomic environment and see sustained softness in the consumer market and overall weakness in China. We are beginning to see signs of stability and several bright spots. Our focus on regional revenue diversification is showing signs of success. We see accelerating adoption in North America and Europe for Tri-Edge, for LoRa, and our broad-based industrial and automotive protection business due to our targeted growth efforts with end customers. Overall, Q3 shipments into Asia, North America, and Europe represented 71%, 15%, and 14% respectively. While this represented the ship-to addresses for our distributors and customers, we estimate that approximately 35% of our shipments are consumed in China, 28% in the Americas, and 21% in Europe and the balance over the rest of the world. Looking at our end markets, our infrastructure end market grew 5% over the prior year, declined 17% sequentially and represented 39% of total net revenues. Net revenue from the industrial end market also grew 7% year-over-year, declined 13% sequentially and represented 41% of total net revenues. As I previously mentioned, we continue to see softness in consumer end markets, where net revenues for high-end consumer decreased 43% over the prior year and 15% sequentially and represented 20% of total net revenues. Approximately 10% of high-end consumer net revenues was attributable to mobile devices, and approximately 10% was attributable to other consumer systems. Our sales channel remains consistent, with distribution representing approximately 83% of shipments and direct 17% of shipments. Our distributor POS declined during the quarter but remained balanced, with approximately 38% of POS coming from infrastructure, 33% from the industrial segment, and 29% coming from high-end consumer end market. Far in Q4, we see signs that our POS is stabilizing and no longer declining. Q3 bookings decreased sequentially and represented book-to-bill of less than one. Bookings were generally weaker across all regions and end markets. Just as in POS, we are beginning to see stability in bookings over the past month. Our gross margin remains resilient. In Q3, gross margin increased 30 basis points sequentially to 65.5%. This is a new quarterly record, driven mostly by a lower mix of consumer revenue. For Q4, we are projecting a small decline of gross margin to 64.5% at the midpoint, driven by lower absorption due to the softer overall demand environment. We expect gross margins to hover at current levels ±100 basis points until demand recovers. Q3 operating expenses decreased approximately 5% sequentially to $68 million, as we took steps to respond to softening demand. For Q4, while maintaining our investments in new products, we will take additional measures to reduce operating expenses by approximately 10% sequentially in response to the weaker demand environment. Managing our cash flow is a focus in these challenging times. In Q3, cash flow from operations was unusually low at $18 million or 10% of revenue, reflecting elevated use of working capital as accounts receivable increased due to timing of shipments, and as we continue to pay for prior period long lead time materials. We expect our cash flow from operations to rebound in Q4 to normal seasonal levels. Cash, cash equivalents, and marketable securities increased approximately $256 million to $618 million. The increase is primarily due to the $319.5 million in convertible notes we issued to help fund the proposed Sierra Wireless acquisition, slightly offset by a $23 million payment on our existing line of credit. The convertible notes resulted in net cash proceeds of approximately $280 million after expenses, sale of warrants, and the cost of the convertible note hedge transactions we entered into in conjunction with the issuance of the notes. These convertible notes carry an interest rate of 1.625% and will mature on November 1, 2027. The conversion price of the notes, including the hedge transactions, is $51.15. On a non-GAAP basis, there will be no dilution below this price. In Q3, we did not repurchase any stock because of our pending acquisition of Sierra Wireless. We have approximately $209 million remaining in our share repurchase authorization. Going forward, we expect to primarily use our cash to pay down the expected debt from completing the Sierra Wireless acquisition. In Q3, accounts receivable increased 13% sequentially due to the timing of shipments, and days of sales increased nine days to 39 days. In Q3, net inventory in absolute dollar terms was up slightly sequentially, and days of inventory increased 27 days sequentially to 150 days as we continued to receive previously committed long lead time materials despite the decline in demand. We expect net inventory to be flat to slightly down in Q4, reflecting the weaker demand environment. As we look forward to the pending acquisition of Sierra Wireless, we remain excited about the growth potential of the two companies when combined. Sierra's reported revenue is consistent with our expectations. When complete, the transaction is expected to be immediately accretive to Semtech's non-GAAP EPS. In summary, our business continues to be adversely impacted by the broad slowdown in China and the sustained weakness in the consumer market. Maintaining our financial health is paramount during these uncertain times. We have a management team that has experience managing through industry downturns. I'm confident that the proactive actions taken, our focus on new products, design wins, working capital management, and geographic diversification will strengthen Semtech and prepare us well for the recovery. I will now hand the call over to Mohan to share more details on the business. Thank you, Emeka. Good afternoon, everyone. Let me begin by providing a brief update on our proposed acquisition of Sierra Wireless. I will then share details of our Q3 fiscal year 23 performance by product group, and then provide details on our outlook for Q4. With regard to our acquisition of Sierra Wireless, as previously announced, we received a second request from the U.S. Department of Justice. We are cooperating fully with the DOJ and providing them with their requested documents. In parallel, together with Sierra, we have made significant headway with integration planning and are prepared to close immediately when approval is accomplished. We continue to be extremely excited by the transformation we can drive in the entire IoT industry by bringing together the ultra-low power, long-range sensor benefits of LoRa technology together with the low latency, high bandwidth network benefits of cellular technology. Our goal is to enable IoT deployment simplification through end-to-end connectivity and deliver a cloud-to-chip IoT services platform that will accelerate our customers' digital transition to the Internet of Everything. We continue to receive very positive feedback from our customers as they start to recognize the disruptive potential of the combination of the two companies. The combination of optimizing LoRa and cellular technology is a highly strategic opportunity that will position Semtech as the clear leader in the fast-growing ultra-low power IoT market. Turning to our Q3 performance. Our Q3 net revenue was $177.6 million, slightly above the midpoint of our guidance range. We posted record non-GAAP gross margins of 65.5% and non-GAAP earnings per diluted share of $0.65. Despite the challenging macro environment, we continue to execute well, have solid new product releases and new design in momentum, and are very excited by our future growth prospects across all our target market segments. Let me begin with our signal integrity product group. Revenue was up 2% from Q3 of fiscal year 2022 and represented 44% of total revenues. As expected, the weak economic environment in China is impacting infrastructure demand negatively. Our hyperscale data center business slowed in Q3 following a strong first half performance. Despite the softer demand, our FiberEdge revenues doubled over the previous quarter as we increased our PMD penetration in the 400 G active optical cable segment. In addition to solid FiberEdge momentum, our Tri-Edge platform continues to make excellent design and progress in global data centers, predominantly in North America. We are pleased to report Tri-Edge has been selected by a major North American hyperscale data center provider in a new high volume multi-year program to enable low power, low latency, and low cost interconnects within their data centers. We expect to be in production on this project in the second half of fiscal year 2024. The benefits of Tri-Edge align well with the long-term goals of hyperscalers focused on lowering the power and cost of their interconnects within their data centers. Tri-Edge and CopperEdge are starting to gain traction in advanced data centers in North America that are focused on leading edge artificial intelligence or high-speed computing applications, where both low cost and low latency are critical requirements. In addition to our current FiberEdge and Tri-Edge momentum, we continue to invest in new higher performance solutions that will enable further system-level innovation within the hyperscale data center market. We recently demonstrated our first 200 G per channel PAM4 FiberEdge platform. This innovative PMD platform will be used in 800 Gb and 1.6 Tb optical modules deployed by hyperscalers. In addition, we also recently introduced our ultra-low power 50 G per channel Tri-Edge solution for both ultra-low power 200 G and 400 G optical modules. We are starting to see great interest in our new CopperEdge redriver platform targeted at 100 G per channel copper interconnects. We expect to announce more significant CopperEdge, Tri-Edge, and FiberEdge design wins throughout FY 2024. We remain confident that our full portfolio of data center platforms, including ClearEdge and Tri-Edge CDRs, FiberEdge PMDs, and CopperEdge redrivers, will enable us to continue to rapidly grow our hyperscale data center business nicely over the next several years. In Q3, our PON business also declined sequentially due to weakening demand in China, but was up approximately 36% on an annual basis and is on track to deliver another record year. We continue to see relative strength in 10 G PON OLTs and ONUs, while gigabit PON demand is weakening. While most of our PON revenues today are from China, we are starting to see increasing deployments of 10 G PON outside China. In addition, we are actively engaged with leading PON system providers globally who are focused on higher bandwidth PON deployments. We expect global PON deployments to continue to accelerate as demand for higher access bandwidth is expected to increase in the future. While weakness in China is a major headwind at this time, we remain confident this business will grow nicely over the next several years as other regions deploy PON solutions and as our China business recovers. Revenue from our wireless base station business was down in Q3, both on a sequential and year-over-year basis. This was mostly driven by economic weakness in China, which negatively impacted 4G and 5G deployments. Our 5G revenues grew 75% on an annual basis as European customers start to expand their 5G footprint. In Q3, we announced the production release of our Tri-Edge 5G base station platform targeted at 50 Gbps PAM4 front haul links. This Tri-Edge platform is a bidirectional analog PAM4 CDR with an integrated differential driver offering ultra-low latency and low power, and enables the use of low cost 25 Gbps, per second optics to operate at 50 Gbps. We already have numerous 5G base station design-ins with both our ClearEdge and Tri-Edge platforms, and expect continued adoption throughout FY 2024 and initial production revenues in the second half of FY 2024. While overall macroeconomic conditions continue to delay the rollout of 5G infrastructure, we are seeing more global deployments driven by European 5G vendors, which will provide more geographical balance in this business. As a result of demand weakness and excess inventory in China, we expect the infrastructure market to remain weak, and expect our signal integrity product group revenues to decline in Q4. However, we still anticipate that our signal integrity product group will deliver record annual revenues for FY 2023. Moving on to our protection product group. In Q3, our protection revenues were down 27% sequentially and represented 22% of total revenues. Extreme softness from the high-end consumer market negatively impacted our business. Lower revenues from our Asian smartphone customers and broad consumer weakness offset record revenues from our North American smartphone customers. We believe we are very well positioned in the consumer protection market with a strong USB-C protection portfolio, which is expected to be the high-speed interface of choice across most future consumer segments. Our broader industrial protection business, which represents a wide range of end markets across all regions, showed resilience in the Americas and Europe markets. We are seeing continued positive traction in the automotive segment as our EthernetShield, DisplayShield, and AntennaShield products are all gaining momentum as our customers integrate more advanced lithography technologies with higher speed interfaces into their vehicles. Our ProtectionShield solutions also have solid design win momentum at several of the top global EV makers, which is the fastest growing sub-segment of the automotive market. We recently announced our new Hot-Swap platform for industrial and communications applications. This truly innovative system protection platform provides new protection features that will safeguard systems, prolonging the lifespan of electronic devices and reducing electronic waste. As the overall macro environment improves, we remain well-positioned to grow in the broader protection market with a well-rounded protection portfolio for high-speed interfaces such as 10 G Ethernet, USB Type-C, touch displays and antennas, and expect our broader industrial protection business to deliver record revenues in FY 2023. While we are starting to see demand levels stabilize, due to high consumer inventory levels, we expect the protection business to further decline in the fourth quarter. Turning to our wireless and sensing product group. In Q3, revenues from our wireless and sensing product group declined 3% from the same quarter a year ago and represented 34% of our total revenues. Our LoRa-enabled revenues grew 36% annually, driven by growth from the smart building, industrial IoT, and smart city segments. LoRa revenues increased nicely in North America and Europe, but remained weak in China due to ongoing COVID lockdowns and general economic softness in the region. LoRa continues to be utilized across a broad range of exciting use cases, and we are seeing increasing global adoption of LoRa due to its ultra-low power, long range, and low cost connectivity. Here are a few exciting announcements from this past quarter. Exeger is integrating LoRa Edge with their unique solar cell technology for indoor and outdoor asset tracking and global supply chain logistics. Combining Semtech's LoRa Edge asset management platform with Exeger's Powerfoyle solar cell technology significantly extends the battery life of asset tracking and environmental sensing devices. CWD introduced a new module combining LoRa and Bluetooth to bring the LoRaWAN capabilities to hazardous work environments such as oil rigs, mines, and construction sites, where employee safety is the first priority. These easy to deploy IoT modules enable the tracking and monitoring of employee safety. Intent Technologies announced its LoRa-enabled smart property solution, which enables improvements in the operating performance of a building, is being adopted by Nexity, a leading real estate service provider, to optimize performance, improve quality of service, and reduce the carbon footprint in residential and commercial properties. Their platform has already achieved a 10% savings in overall building operational costs. Kiwi Technology introduced a new fully autonomous LoRaWAN-enabled network control unit for gas metering. This new comprehensive NCU will enable multiple remote meter reads per day and allows customers access to their real-time and historical gas consumption trends, to identify cost savings and discover waste reduction opportunities. The NCU also anticipates and remotely shuts off gas in potentially dangerous situations. Kiwi Technology expects these meters to remain fully autonomous for 10 years. This week at AWS re:Invent Conference, we announced that Amazon Web Services is integrating our LoRa Cloud geolocation capabilities into their AWS IoT Core platform and launching a new service to simplify asset tracking solutions using AWS. Customer adoption is already beginning, and we expect this will enable the broad expansion of our LoRa Cloud geolocation services and our LoRa Edge Silicon platform in the future. LoRa's global adoption continues to make very positive progress, and our metrics dashboard indicates solid momentum. These metrics include, the number of public LoRaWAN network operators grew to 178, up from 173 at the end of Q2. In addition to public networks, private networks are also experiencing significant growth, as evidenced by many new use cases and applications. We expect approximately 180 public LoRaWAN network operators by the end of FY 2023. There were 5.6 million LoRa gateways deployed at the end of Q3, ahead of our FY 2023 target of 5.5 million. This was driven by growth in Amazon Sidewalk gateway deployments, which were up 14% sequentially and up 120% annually. Private network gateway deployments, which increased 13% sequentially and 45% on an annual basis. Macro gateway deployments also increased 10% sequentially and 33% on an annual basis. We expect these global gateway deployments to drive an acceleration in end device attach rates over the next several years, as numerous new use cases increasingly adopt low-power sensor networks. The cumulative number of LoRa end nodes deployed increased 15% sequentially to 280 million at the end of Q3. We expect this number to exceed 300 million cumulative end nodes by the end of FY 2023. With the increased interest in adopting digital technologies to monitor and preserve our natural resources and to help mitigate climate related issues, we expect end node deployments to accelerate rapidly over the next three to five years. Excluding China, we expect our FY 2023 LoRa-enabled end nodes to increase on an annual basis by approximately 60%, confirming the increasing attach rate of LoRa end devices to installed gateways globally. Our LoRa opportunity pipeline at the end of Q3 was approximately $1.1 billion. We anticipate that on average, 40%-50% of the opportunities currently in the pipeline will convert to real deployments over a 24-month timeline. Over 82% of our LoRa opportunity funnel is currently from regions outside of China. In Q4, we expect our wireless and sensing business to decline, as weakness in China and a weak consumer business negatively impact both our LoRa and proximity sensing businesses. Driven by record LoRa-enabled revenues, which we expect will grow approximately 39% in FY 2023, we anticipate our wireless and sensing business to deliver another record revenue year in FY 2023, despite very weak consumer revenues. In Q3, we released 12 new products and achieved 2,189 new design wins, positioning us very well for future growth as macro trends improve. Looking forward to the fourth quarter of fiscal year 2023, we see continued demand challenges in China, resulting in weaker than normal seasonality. We are starting to see signs of stability in both demand and POS, including from China. We expect our Q4 net revenues to be between $145 million and $155 million. To attain the midpoint of our guidance range, or approximately $150 million, we needed turns orders of approximately 27% at the beginning of Q4. We expect our Q4 non-GAAP earnings to be between $0.44 and $0.52 per diluted share. I will now hand the call back to the operator. Emeka and I are happy to answer any of your questions. Operator? Thank you, sir. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes from the line of Tore Svanberg with Stifel. Please proceed with your question. Yes, thank you. The first question is on your turns, number there for the January quarter. I think last quarter, I think you expected 0% turns, obviously now quite a bit higher. Does that mean, Mohan, that kinda like the supply and demand is back in balance? Because I think historically, you turn about you know 20%, 30% on any given quarter. What gives you the confidence that you can actually achieve the 27% turns? Yeah, I think that is correct, Tore. It's, supply lead times are starting to normalize and get back to what they kind of historically have been. There's also inventory in place. You know, meeting short lead time orders is not going to be as difficult as it has been in the past. I think also with the POS stabilizing and the general feeling that consumer, for example, has been extremely weak for a long period of time, and starting to see some improvement in bookings there gives us that confidence. As you point out, yeah, historically, we've turned, you know, 30%, 40% a quarter fairly frequently. Very good. As a follow-up to Emeka. Emeka, when you talked about OpEx next quarter, you mentioned a 10% number. Is that total OpEx down 10% sequentially? Would this sort of be the new run rate going forward for as we model the rest of the year? Yeah, it is 10% down sequentially. As you know, Tore, maybe when we start a new fiscal year, there are additional expenses that will come on, right? Higher taxes and things like that. The operating expenses, I would expect that, you know, going forward is probably gonna be a little bit up in the first quarter and the first half of next year. I think the run rate is going to be significantly down from what it was for fiscal year 2023. You know, as a matter of fact, we'll probably expect the quarterly run rate to be about $63 million-$64 million a quarter. Very good. Just one last housekeeping one. You mentioned, 82% of the LoRa funnel is outside of China, which means 18% in the funnel is China. What would that be, currently as far as revenue is concerned? Revenues are closer to 45%-50% of total revenues are from China. Tore, obviously, I think in the last quarter, it's probably a little bit lower than that, but I think it's still a lot of the revenues are from China. The funnel obviously takes time to transition into revenue. The important point there is that we are seeing a lot of success outside China. China also is still doing very well and LoRa is growing in China, and I think it will continue to grow in China. There are other regions, particularly North America, has taken a while to catch up. I think now if the funnel, you know, if we execute on the funnel transition to revenue, then we'll start to see a little bit more balanced geographical business for LoRa. Very good. Helpful. Thank you. Our next question comes from the line of Rick Schafer with Oppenheimer. Please proceed with your question. Hi, this is Wade Mock on the line for Rick. Thanks for letting me ask a question. In regards to your agreement to license LoRa Cloud to AWS, was wondering how this affects your end node forecast and the long-term 40% CAGR? Is this already embedded and could we see an accelerated growth in your 40% CAGR? Thanks. Well, you know, it's kind of embedded in the 40% CAGR, I think, because it drives a lot of end use connectivity. The whole goal here is to use AWS's channel and market power and presence to go out and drive more end node connectivity and more assets that need to be tracked and managed. We feel pretty good about, you know, the combined company's efforts here and the thinking here and the platform. Certainly, yeah, that's the expectation. Obviously it will drive in addition to LoRa Edge end devices, it will drive cloud services revenues for us, and that's significant. Great. Thank you. My second question is on LoRa spectrum. Is there any way you can help parse out how big LoRa is for the unlicensed sub-gigahertz spectrum, and how does this compare to the 2.4 GHz variety? Thanks. Majority of the revenues are sub-gig. The 2.4 G is relatively new. I would say, yeah, 90% and above is probably sub-gigahertz at the moment. Yeah. Thank you. Our next question comes from the line of Harsh Kumar with Piper Sandler. Please proceed with your question. Hey, Mohan and Emeka. I've got a couple. Mohan, I'm looking at your commentary. Both you and Emeka talked about signs of demand stabilization. When I sort of square that against your commentary, I kinda concur that both industrial and infrastructure are down. My question is: If you're seeing signs of stabilization, where are you seeing them? Do you think this is happening because of some of the new products that you guys are launching, like Tri-Edge getting some traction and Copilot getting some traction? Are you seeing sort of broadband or sort of broad-based, you know, sort of pickup in demand, which suggests that maybe you're on your way up from here? Yeah, I think obviously, Harsh, we got it down for Q4. Any, you know, bookings, POS, demand stabilization is really gonna impact the first half of next year, right? As we start to look at it, I would say that the stabilization is more on the existing business. The existing business in China looks like it's going to recover starting to recover in the first half. The existing consumer business, which has been down a good part of the year, looks like it's starting to bottom out here. Hopefully Q1, maybe Q2, we'll start to see a pickup there. Now you add on top of that some of the new growth engines that and design wins I talk about, we're starting to feel pretty good about certainly the second half of next year, from a growth standpoint. To answer your question, the comment on the stabilization is more on the existing revenues today. Understood. You talked about a couple of growth rates for LoRa, so I just wanna understand. You talked about Mohan, I think you said all in all out, you end up with about a 39% growth rate for LoRa for this year, which I think is pretty respectable given you're exposed to the China and what's really happening in China. You talked about a number ex-China of 60% that I didn't catch. Maybe you could clarify that. How are you thinking about... The real question is how are you thinking for growth for next year? Yeah. The 39% is our estimate for this year's growth, that's correct, for LoRa-enabled business. The 60% refers to end nodes, and I simply commented on the fact that if you extract China, if you take out China where the growth has been a little bit slower, end nodes would have grown 60%. End nodes are growing 60% in North America and Europe. Actually it's about 17%-20%, including China, so it's still pretty good. I think, you know, it just shows that the acceleration in other regions is quite good. Next year, you know, a lot is gonna depend on the second half. I mean, obviously China is continues to be weak. We have some, you know, very good things going on, like the Amazon announcement we just made, we think Sidewalk and some of that is, some of those areas are starting to get some momentum. We have a few headwinds. I mean, really what happened in the last couple of years with the Helium Gateways is gonna give us some, be a little bit of a headwind for growth next year. Still, we haven't given up. We think next year should still be a reasonably good growth. It won't be close to the 40% CAGR, but I think if we can get some momentum on some of these other use cases, I think we'll still see good growth. Hey, Mohan, very helpful. If you don't mind, I'll ask another one, and I promise I'll get off the line after this. Had a question on the deal. You got a second request, so that changes the timing of the deal. I guess my question is, where do you think the timing of the deal will lie? For Emeka, $319 odd million raised, do you think that's enough to close the deal? Were you looking at converts the entire time, or were you looking at straight debt and then given the interest rates, you sort of pivoted to convert? If these are converts, would you have an intent to buy these bonds back so they actually don't convert and dilute? Let me start with the timing, Harsh, which is, you know, obviously out of our control to some extent. I can tell you what we're hoping, which is that towards the end of the year and early next year, we will be closed, and we're ready to close, and we're ready to move to the integration. We're very well prepared for that. We're excited about doing it. So far, there's no indications that timeline shouldn't be achievable. Harsh, with regards to your question, we do have the financing that we need to close the transaction. We have, you know, a combination of a line of credit from our commercial banking partners. We have a term loan from our commercial banking partners, we do have this convertible debt in addition to our internal cash. The financing is pretty much in place for the acquisition. In terms of what we were looking at, we were looking at all the options. We were looking at everything, We had to make decisions that we thought was best in terms of the cost of capital and things like that. With regards to, you know, being able to retire the debt, we just have to see how things play along here. We do have a lot of options on what we can do with regards to the convertible debt, but we'll make those decisions at the right time. Appreciate it, guys. Thank you. Our next question comes from the line of Quinn Bolton with Needham. Please proceed with your question. Yeah. Hi, this is Trevor on for Quinn Bolton. Thanks for letting me ask a question here. Given your comments on demand stabilization, does this mean you see fiscal 4Q and fiscal 1Q 2024 as the possible revenue trough with a step up in the second half of 2024? Thank you. That is the hope. From what we see today, we certainly see the second half as being, you know, sequentially up from the first half. If you look at FY 2023, we had a very strong first half. Looks like it's gonna be a relatively weak second half. As you see from our comments that we expect FY 2023 to be a record year for us. You know, when you look at it, as a total, it looks like a pretty good year. Now, going into next year, we know the first half is gonna be relatively weak. The question is, you know, how strong is the second half going to be if it comes back and how it comes back. You know, the main drivers of the weakness have been China and consumer. There's some inventory build up, I think, from the very strong first half. As those bleed through and China comes back and consumer starts to strengthen a little bit, you know, we could hopefully see a stronger second half next year. Awesome. Thank you. You spoke about relative resilience in North America and the EU and broad industrial. Do you expect this resilience to continue moving forward? Is automotive playing a big role in this as well? Well, automotive is one of the stronger segments today, for sure, and we expect it to continue to be. I would say the other industrial markets in North America and Europe are holding up relatively well. You know, it's all relative. Consumer has been extremely weak, particularly Asian consumer business. I guess it's well documented that China consumer and Samsung as an example, have been very weak. I would say that the broader consumer market and computing market, PCs, laptops, tablets, is also very weak. China itself is definitely, you know, going through some challenges economically and through, still through COVID issues. Demand is weak. I don't anticipate those will remain, but, for sure, at the moment, North America and Europe are stronger regions. All right. Thank you. Our next question comes from the line of Craig Ellis with B. Riley Securities. Please proceed with your question. Yeah, thanks for taking the question, and appreciate all the transparency on what you're seeing in the markets and with the different products group, guys. Mohan, I wanted to start just digging a bit deeper into China to understand what you're seeing there. You were early in flagging the weakness that started in China back in August. In interpreting your comments, I'm trying to discern if the signs of stability that you may be seeing in consumer really related to Lunar New Year builds, and therefore more of something that might be near-term oriented versus something that might be related to product cycles that would be up beyond that. Can you just go a little bit deeper into what's actually happening in China and the confidence that you have in consumer and elsewhere that we're near a bottom there? Yeah. I think, I would say the key thing to remember, Craig, is that you know, it's come down significantly, right? Consumer and China, across the board has come down quite significantly in Q3. Comes down again in Q4, so we guide down in Q4. The indications are that Q1 will start to stabilize, and we're seeing demand stabilization. Demand has started to level off. We're also seeing POS starting to improve, and also bookings. I would say it's fairly broad. I wouldn't say it's one specific thing, but just remember that it's off a very low base, right? The hope is now we'll start to see I think inventory consumed. I think that's the key. POS increasing and, you know, some of even our customers' inventory starting to flow through over the next two quarters. Then we'll start to see kind of more of a real, you know, demand supply environment, I think in the Q2, Q3 timeframe, hopefully. That's helpful. The second question is more of an intermediate term question. As you look out over the course of calendar 2023, really fiscal 2024 for the company, what businesses in the portfolio do you have confidence that can grow year-over-year? We clearly have a challenging start given where we exit fiscal 2023. As you look ahead, it seems like LoRa would be set up for good growth. You talked about some real momentum in Tri-Edge. What are the businesses that you think are gonna be year-over-year growers next year? Yeah. I do think for us, the data center business has a good chance of being a very strong grower next year. Obviously, second half driven, but we mentioned the significant win, wins actually we have in both Tri-Edge and FiberEdge in my script. If you look at that second half can certainly drive growth in data center. On the wireless side, it's been fairly muted. You know, I think the question there is really more of a macro kind of comment on 5G base station deployments and some of the 4G stuff coming back. China is a key player in that could certainly grow. It's been very weak this fiscal year. Next year could be a strong grow up. PON will have a record year in FY 2023 for us, not sure we'll see the same level of growth. It will grow, but probably it'll be a smaller, a lower grower, lower growth rate versus the other segments. The consumer is the big question because I think it's had such a poor fiscal year 2023 that, you know, one has to believe that that has a good chance to come back in FY 2024. That includes our protection business and our proximity sensing business in Asia particularly, and Korea. Of course, LoRa, you know, as I mentioned, you know, if you take out the Helium challenge that we have, the business should grow. Craig, I also think our broad-based industrial and automotive protection, which is a record, which is expected to have a record this year, should also grow next year. That is the anticipation. Great. Then my last question is for you, Emeka, and it's just a follow-up to comments made three months ago around the capital costs or really the debt interest costs for the Sierra Wireless deal. I think three months ago you were thinking 5%- 5.5% would be a reasonable blended interest cost. Is that still the expectation or has it changed? I think it's kinda moved slightly because of all the increase in the rates. At this point, you know, depending on where the rates are at the time we close the transaction, I'll probably expect it to be between 5.5% and 6%. Pretty close, but a little bit higher. Got it. Thanks, guys. Thank you. Our next question comes from the line of Christopher Rolland with Susquehanna. Please proceed with your question. Hey, guys. Thanks for the question. Either of you guys, you know, perhaps you can illustrate the weakness we're seeing in China, perhaps you can illustrate it for us. I think, for the full year, you're expecting 34% of end consumption to be in China. I guess the first question is what's a more normalized number, and then where do you think this troughs in Q4? Are we talking, like, 20%? Is it less from that? How sort of deep is this? I guess that's my first question. With regards to the consumption by region, you know, it is an estimate, right? We currently have it sized at 35%, and it is still at that range. Maybe we just have to see how the POS and everything continues by the end of the year. Chris, my gut feel at this time is that it is probably going to be at that level or maybe slightly lower, but I, I can't really give you a number at this point. Okay. Maybe you can talk about, I think you mentioned inventories in China. I don't know if that was for a specific product or not, but can you talk about that, where you think inventories are? I know you've talked about demand weakness, but inventories, is that coming into play here as well? The reason I mention that is April, I think the April quarter for you guys can go either way, up or down. If there is some inventory being chewed through here, do you think that would indicate perhaps some positive sequential into April? Yeah, I think so. You know, I have to look at it by product group. For sure in our infrastructure business, and I'm just referring to China now. You know, we had a very, very strong first half across all of our businesses, and I think particularly PON. PON has perhaps a little bit more inventory than the other segments. That's reflected in a in a weaker Q4 expectation, I think. Yeah, I would say in China, it's infrastructure data center and PON, mostly. A little bit of 4G wireless, I think there. Then on the consumer side, again, that's both for protection and proximity sensing. you know, again, we had a pretty strong previous fiscal year, and I think what we are seeing is that consumer's been, you know, fairly soft for the whole year, but particularly I would say in China and Korea. Those are the two main areas. On the LoRa front, you know, there's obviously there's some excess inventories from the Helium drop off there, but I think that will eventually be utilized. The, the Helium gateway chips are the same chips that can be used for other gateways, so I'm not so concerned there. It's just more of a macro softness kind of thing for China, so we'll see how that plays out. Thanks so much, Mohan. Okay, at this time, I'm not seeing any further questions. I'd like to turn the floor back over to management for any closing remarks. In closing, our global teams are executing well in a challenging economic environment. While we are facing more macroeconomic challenges in Q4, Semtech is a very resilient company and I'm confident that with the solid progress of our exciting growth engines and the diversified nature of our business, we will successfully manage through the headwinds we currently face and deliver yet another record year in FY 2023. With that, we appreciate your continued support of Semtech and look forward to updating you all next quarter. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.