QRVO - Earnings call transcript Q2 2020

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Operator

Good day and welcome to the Qorvo Incorporated Second Quarter 2020 Conference Call. Today's conference is being recorded. At this time I would like to turn the conference over to Douglas DeLieto, Vice President of Investor Relations of Qorvo. Please go ahead.

Douglas DeLieto

Thanks very much. to XXXX welcome conference quarter and call. everybody Qorvo's second fiscal earnings Hello include involve from statements could call forward-looking This will that actual to expectations. cause results risk differ current materially management's our that factors operations SEC encourage may Report earnings published financial factors on filed the and associated Form to contained the business affect our the well release the Harbor XX-K today, Safe We statement because you and factors in with as our as these risk risk review results. our with Annual

In and GAAP today’s supplemental obscure performance. may we and or without to operating call, non-GAAP enable our performance in impact this trends financial of perform the to expenses, today’s other provide results of on items release analyze non-cash underlying provide and additional comparisons that financial both results. information to investors We certain

our statement income results. comparisons call, on items will and our non-GAAP During based primarily to comments be

non-GAAP issued our to of refer financial For please GAAP qorvo.com, at website today, complete earlier under Investors. to reconciliation measures, release available earnings our on

Products other today Sitting management Eric Financial Qorvo’s as Bruggeworth, Chief CEO; Murphy, President Mark Klein, Qorvo’s James as Qorvo’s Officer; and Bob with of Mobile President Defense well Products Infrastructure are; Creviston, members President Group; of and me Group; team. of

that, with Bob. turn to I’ll And the over call

Bob Bruggeworth

during for new Upside customers. Thanks operational results. largest discipline and management us. product Doug yield quarter Qorvo and cycles thank technology you consistent investments, portfolio joining was as our continue and quarter everyone delivered our attributable across another outstanding strong the to to

is are our design integrated the interaction challenges overcome technologies all ever. is smartphones with the faster in industry to products, their integration than our bring performance, enhance of securing more customers highly is market and XG content with Mobile system premium toward smartphones important enabling integration the our and significant modules, to driving In trend XG. Qorvo and

defense, IoT, proliferation well XG, station markets including In MIMO the of X and the trends broadband of in the IDP, are our Wi-Fi as deployment adoption the base advantages of and supported as of technology massive performance secular by applications. GaN

September participation Mobile by by segments. our a our we broad multiple as their expanded Qorvo's product market at across standout, mass quarter Samsung our robust solid Looking their us product chain portfolio was of in Products was performance customers of driven challenging business, and with coupled phones. all most to supply tiers problems a is enabling our technology in execution customers portfolio. and solve allowing

into mid-high our significant we're ultrahigh band end, with solutions XG that smartphones. in and enjoying largest their To our customers designing four upcoming low, traction China,

and In providers our leading launched Wi-Fi wins Wi-Fi with China-based OEMs. all Our MediaTek are broad-based X the support solutions Mobile and Qualcomm, SLSI, of HiSilicon. ramping are our chipset we smartphone are in applications, mated multiple recently FEMs including major

IDP, defense lead integration and to Turning U.S. in a advance in test. government participant are business, program an to RF packaging we our state-of-the-art

be We Ka-band are for also our In and Infrastructure, and defense the to choice. technology the XG. primarily ramp frequencies is Activity faster sub-X rolling appears GaN for the wins modules and radar of the the of communications secured we in GaN with front-end out Qorvo's integrated XG U.S. our amplifiers ramp increasingly is and X-band branch than increasing technology gigahertz GaN programs. of and opportunities

and power band higher solutions. widely and Unicom Qorvo's years. massive it's drive at amplifiers and accelerate GaN achieve deployments been smaller the MIMO published the gigahertz China need frequencies. that GaN to China drive favoring higher Among performance power XG During GaN This Telecom through broader operators share deployments. factors will sites for to enables development more wins will better sub-X form carriers, secured to quarter, new China-based we for multiple expected cell design span

for wins a is the and design IoT, solutions building. of are Wi-Fi X X In ratification for Qorvo's catalyst Wi-Fi industry the

FEM During applications, the CPE automotive, our X.X portfolio and our iFEM our world's gigahertz the the OEM Wi-Fi VXX for OEM for product first quarter, Wi-Fi launched X of platforms. module multiple shipments In network first filters expanding supporting top we selected operators. front-end for notably, for world's dual-band retail, X we shipping BAW And next Wi-Fi enterprise coexistence automotive were a by models calendar production year. commence automotive recently and

highly and With iFEMs the Wi-Fi continued with expansion positioned to advanced control, devices. SoCs uniquely reducing combine filtering to Qorvo smaller multiprotocol end market time X and of into smartphone IoT integrated devices solutions, and supporting is

enabling smart brushless all many D.C. is expect control of incorporate We In today's the the motors. entire these at of power assistance technologies, in-room to including towards products Qorvo forefront programmable multiple of home. gateway of trend the voice trends, devices and management,

of During applications. solutions motor the motor we control our expanded for portfolio quarter, integrated brushless

Our power that smaller, charges. lighter management enable faster with charge operate longer devices solutions and between

enables for product time-to-market. On customers and the design lower our programmability front, development costs reduced

light We drive and growth categories. goods, to industrial our to other equipment tools, expect leverage product in power scale

quarter Kinetics completed the acquisition of segments. expanding closed, after for scale RF to to We our we our technology and MEMS and growth optimize other smartphones Cavendish switching in leadership apply and Finally, technical intend the tuning. ultimately

activity Qorvo sustainable summary, strong December we products and as drive support next-generation we product and technologies to best-in-class is customers with excellence solid results. We're combining by customer quarter expect cycles. encouraged In operational our design the

September to December over provide I'll color and Mark quarter additional for it quarter. on the And outlook turn with our that, the to

Mark Murphy

guidance million second Bob Thanks the for $XXX the of good stronger $XX demand. was revenue our afternoon than above midpoint expected million, mobile driven and by quarter Qorvo's and everyone.

quarter. strengthening sequentially largest due to million year-over-year, was primarily customers of down that demand through revenue export the $XXX restrictions. effects of Mobile $XXX and million expectations of exceeded the IDP revenue our and

sales. through of last X% quarter the Huawei ended year Huawei at and of broader in Qorvo's revenue ramp the demand. mentioned on shipments expect recover X, customer expectations IDP September quarter, defense the quarter infrastructure XG we volumes, increasing sales As exceeded and Wi-Fi the to approximately at

September partially quarter offset charges. in share costs, income manufacturing the inventory than XX.X% higher $XXX and in million $XXX operating of with was diluted per $X.XX, were million with our over was expenses the the net guidance. by margin line gross end Non-GAAP September our better guidance. quarter midpoint of guidance Non-GAAP the earnings expected at $X.XX in range is Non-GAAP our

was million flow to flow the million, expect quarter and free September cash free from CapEx million. strong million cash was year. fiscal cash flow $XX $XXX operations And half free $XXX $XXX pace. yielding XXXX fiscal first record flow cash Qorvo's through of we is maintain on of

million stood notes our to repurchased EBITDA. issued quarter long-term of and stock capital. X.X XX-year opportunistically net the our quarter leverage million We After of to cost $XXX unsecured of lower at a end, we end $XXX at debt in net quarter

for the $XXX the of technology equity Following further quarter, Kinetics, MEMS in switches, remaining we purchase for also portfolio tuners, RF our other strengthening an million, the product and completed Cavendish applications. company

and of at share Turning $XXX Non-GAAP midpoint XXXX, quarter diluted XX% revenue earnings and $X.XX the million of at $XXX to our million third expect the we million the of midpoint. per non-GAAP fiscal in between guidance. $XXX or outlook, of gross margin approximately our

for outlook handset in robust December XG revenue increase sequential a demand for by to and supported an IDP. mobile Our continued volumes reflects growth return the quarter

integrated growth to with expect channel December strong healthy and sales solutions support demand. our to as and return quarter we Mobile, handset XG a year-over-year sequentially increase For launches

we defense XG broader higher X Wi-Fi increase business ramp infrastructure volumes IDP, and demand. to For December project a quarter customer sales on to

and is healthy, forecast near the term factors While outlook Qorvo's trade current challenges contributed are strong in and other outlook. channels and uncertainty

Non-GAAP our $XXX XG. charges. million quarter points product improved investment sequentially back per half due expenses of between operating of and recent margin, and in mix inventory growth to to acquisitions in costs were to gross is projected on On $XXX year up operating the costs December to related quarter and XX%, fiscal million the increased increase lower approximately it guide XXX basis are

Following our sequentially recent will interest million. issue, $X debt increase approximately expense

be and expect disciplined tax XXXX we adding or On towards to December We $XXX highly Spend fiscal less expenditures, remain this of improving capital and to capabilities. year spend capacity. than remains BAW quarter GaN and continue the on project weighted lower. X.X% non-GAAP our fiscal million rate

our and is defense other show, December XG, well as outlook As Qorvo strengthen. quarter markets of operating September and results Wi-Fi,

free new has Qorvo's As a outlook, repurchase program. cash result forecast our other operating a share Board performance, billion factors flow of authorized $X market and

I'll over that questions. operator the the turn for to call With back

Operator

come Instructions] Karl Ackerman first Cowen. from The with question will Please your question. [Operator with go ahead

Karl Ackerman

letting thanks afternoon, ask question. guess, if for two everyone. I may. me And good the Hey, I

how I should Huawei? First December? we on follow-up. Huawei, exclude or about outlook I associated think guess what's to implied guess revenue do think in have more infinity with appropriate a I And it's your for you

Mark Murphy

this Mark. Karl, is

with somewhat given So we call. consistent last what Huawei the on guidance had is

million related a of in variance quarter second to to So Huawei. million or on $XX fifth had was it $XX our guidance roughly we

sales. to would probably thought up rather Huawei X% than sales closer X% So we of ended being of what was be or X%

far quarter, said last by third expect ran quarter than run don't it we about, breakdown customer, X%. close the quarters on we we per less for what quarter, expect so what and to going we as at X% that be As Huawei forward point this Huawei typically to guide Huawei but to in second

half second the than less X% of expect or around sales We have X%. to Huawei at

still XX% year. Huawei less be compared of to to we than year, project last full XX% the of For sales

Karl Ackerman

set OEMs? high in handsets. clarity China's a appreciate Shifting band opportunity I to China on I more Mark. provide that your helpful. place today? you are to and these bit mid guess to That's handset contracts gears May sell PAD

the We those should the you only procuring or manufacturer also do other to night due factors be Are to handsets heard there China discussing not Thank you. consider? but OEMs, you strength OEMs tariffs, China's from demand. more of well think to but Korean the we last obviously the China strength of strong levered are will smartphone memory to some in ahead trade handset due favorable prove

Eric Creviston

Eric address I'll is that. This

quarter vast XG. seeing increase overall seen March going XG are forward, design they have being resources increase activity the particular but aggressively majority a Chinese in on we're of right portfolio planned for not are to with or a units We customers. significant phones XG put shifting from the or The R&D December And XG our on in now.

phones to XG the XG going the China, support in integrated they're go that. across to you to when fully solutions board, And

the higher requirements RF higher in addition LTE you support you integration the even and content and course than non-standalone so XG taking to Advanced of operation from bands increased had get the and content So, for Pro to due operation. XG levels forth expected and we multicarrier to additional new get of

on solutions, can the getting particular, mid-high the and it So, content and band, position vast to put comes all there; customer the flattish pleased with that see our leading how to the can when loin in units, we're even that business. integrated clearly, share particular, RF increase. Qorvo, really In you together in customer base we're of

Operator

Piper with Kumar for Thank Please question. Jaffray. question will the come Harsh you next go The ahead. from

Harsh Kumar

guys. do be for Congratulations is everybody significantly with and your it Are taking XG? guide appreciated -- hey coming share understand wanted I in some the it new of are just I've there strong perhaps on Yeah, taking results. note you're China the is significantly -- market, a in Halloween, very that terrifying. we and share got of where today thanks color from. models you're you better mostly U.S. benefiting would the Or think rising guys or on being in making a Hey is the for it? XG fun something Is and going in you're just to kind follow-up. guess both on very And outperformance you Street. not The than serious results tide

Bob Bruggeworth

Harsh your thanks I for that. commitments. appreciate

was said driven three in opening I largest quarter, it for really comments, As the September customers. by my

know at we'll it leave different largest so that. as customers in continents, three three So, our just you are

phones do needed then phones of we've XG key components share increased think being XG XG We answer talked we taking as think in able last also that was Eric's over felt is I couple about dollar China over calls there what's steps. I we're believe One in from phones. two as in for to players. the look are the and we discreet significantly some integration the question that and for where Karl's content XG going And guidance -- forward to on and it's the is is integrate

that's So, on. really going what's

really the driving. portion of seeing coming the phone, handset. the You're a plus together for dollars XG integration per XG that's what's in It's XG and

there growth very opening I And up lot their In tier the mass then Samsung. going about second we're to nicely business into great and talked we well. area And driving -- as year-over-year seeing phones are my is well. comments, that's expanding a of as second at be

Harsh Kumar

How XXXX, Thanks, XX.X think, put gross within gross do guys. for be And the we your margins December margin? from follow-up, spitting margin up of I commentary then, will higher was here. my think distance number. I in think that up gross your suggest you about

$XXX is, and September, the went And December, June but bit. up go that also kicking call jumping go a from something you when is margins also, in? going what's much, it September in in to to didn't up integration you new interesting quite from on? million just products Is XG there your they're Or else $XXX million that when

Mark Murphy

Yeah.

is question on around. I'll Mark. different answers this So, Harsh, this a provide few

sequential of unable we very older customer-specific quality quarter up some quarter one, the excess issue Two on charges call, parts second that. worth isolated – the repurpose a inventory I'll basis market. First, a we up to in then, were non-core portion three, third One, what products. drivers, Three had we $XX of handset the we driving had excess primary second points. generation around in to things inventory have XXX charges, a product. million quarter. Two, And

So, non-GAAP they're we those practice, in our results. as and charges took our

third up secondly, driver Second, to a favorable a third we One there have points. we're more is basis quarter, -- the XXX quarter. mix, And repeating. second then charge major not product inventory is

is, fourth typically third we quarter, Again, revenues. seen then, years opportunity that fourth this in of third XXX see to basis manufacturing – more. we'll we've the a is seasonal down lower to address or function to mix. quarter and quarter on as effects of this points fixed really Third just decrease what And costs previous see margin fourth we'll to see take gross I'll and

Harsh Kumar

you, Understood. guys. Thank

Mark Murphy

Harsh. Thanks,

Operator

Thank the ahead. come Ambrish The go BMO. question will question. you Please Srivastava from for next with

Ambrish Srivastava

with Thank may we'll of questioning you. continue line Mark, just the you.

So seasonal based would I follow-up to a and on than what in please. you've quarter, you expect the comments seasonal? worse December, done And be March March or be had a then,

Mark Murphy

top Ambrish, talking the line about I So, you're or… assume

Ambrish Srivastava

Yes.

Sorry, top line.

Mark Murphy

Yeah.

Ambrish Srivastava

the you gross margin. Because addressed

Mark Murphy

Yeah.

course, certainly for and is you China increasing There stabilize. we September December starting. over got reflected, from guide. a results in We've replacement see adoption -- quarter us clear in it Wi-Fi outlook a has So, X cycle the our in and to a demand. is of ago XG think improved I year picture and handset got The the seems

channels great got well. pull technologies, healthy. are is business And our defense IoT Eric growth this We've the Our various on doing point as in talk heard about. There's you lastly, markets. important

have challenges December the there right? yet, pace of we and we adoption aren't out, it's we so feel China taking admit, XG rate So supply source could and go The But over of if business. on will December situation into modulate as customer around disciplined uncertainty bleed confidence, a about we're that And further we and good that a trade, guide. are our demand. constraints concern in view are remains some to there very the expanding

that guide XX% did that line midpoint, we the see half you've in we decline slightly second So, around we roughly to being as the sequentially. now, a March using got of half. versus December seasonal what since be And right it, see in revenue first down would

Ambrish Srivastava

helpful. very That's sorry, ahead. go Yes, Okay.

Mark Murphy

strong detail at And basis here business it, won't margin in mentioned the then interest segment in into to more, Because I hoping gets tougher up quarter defense, points comments return have to see will be sequential in third growth strengthen XXX fourth growth gross it’s infrastructure the a on and to demand, down my and half and returned quarter, we'll higher talked for go am the And while see about then up seasonally sequentially again IDP sequentially is higher on and second year level, part. I mobile Wi-Fi, much year-over-year in I've IDP, which to decline. quarter I be broader the expected the the we're through our or then sequentially year-over-year. third but double-digits OpEx expense. typical down year-over-year, it'll that's but then growth very

Ambrish Srivastava

always. appreciate as Quick cash Okay. buy you've I been tie say to transparency on it been flow. Mark, back the you've was to Board, very well. as focused going but a really more, that lot just I for wanted And thanks one, on free since that's

to that, that you. a target please? then a there free are share cash you and for is is Thank buyback, year the So the there flow willing on give for timing

Mark Murphy

over shares. that time, million well is companies. we make have XX comments the timing far time, we've And There generated our over we've as repurchased deployed repurchased -- the historically free we've Over Yes. $XXX the no also over on months, free over million, just as I'll buyback. of over so purchases million flow XX% cash of And past some with flow. of $XXX $XXX this two cash

we generating to and amounts a we're free good job in organically So investing -- we're sizable certainly than returning doing more of been we're then smartly flow cash had shareholders. and

performance, the On cash have at capacity the comment were to the left, capital I'm given flow forecast, we'll say, Board new and a just our point much capacity this to operating other didn't a not to rate than at of we billion-dollar buyback point, market shares. outlook, return, program approved factors, free other so pace going we continue and out -- this

Ambrish Srivastava

Okay, that’s you good enough. Thank much. very

Operator

you go question. Goldman from next Thank will with the Toshiya question. with for come Sachs. question your Please ahead The Hari

Toshiya Hari

growth Hi, the obviously the smartphone big sizable think congrats in business overall guys, of been quarter. thanks on becoming down, smaller very a phase you at losing so significantly you and stock this year-over-year And a a the results. about the I fairly strong much Huawei Mark, customer talked unit’s in guys And basis. customer. returning question, your is, on taking mobile to for year-over-year obviously,

Samsung you -- a it guys something mainstream you I some all would driving a have some the Is having follow-up. growth? drivers I on If what's better the the year-over-year about is the talk question else? that quarter basis year-over-year of it great. Is for those at can it of presence be guess and XG? So, cues? Is Then

Mark Murphy

and but a really I I'll turn think technology it's XG mean, it's don't story I China it broad customer engagement. us over to and helps, for Eric.

Eric Creviston

of customers, know antenna and around just low a band but signals got list integrated main forth around path as transmit We've ultrahigh so in all modules including mid-high broad the elements, and antenna the From tuning elements. portfolio, from and across of those a our very lot go more activity, largest band as growing band come both Yeah. you also to two a opportunities and trying for customer increasing our well. evermore

I just applies opportunity, And that's board. think it’ so the an across

two, But really as be or to Samsung, traditionally very alignment for a has and alignment tier said the enjoying the with across, been a architecture we supply there. think got really of building of marquee also we're or or of got tier, we standout and I but but business out of strong again. handsets roadmap we've the and back product We out flagship back a their fully line there real in that the only pleased mass just cycle with have alignment not

Toshiya Hari

CapEx? And shorter you And and remind is the XX% you bridge are related that done to medium-term? Great. that the the job to great over executing Thank a on the to And Farmers place kind potentially can today that XX%, gets your what timing you guys you margins, impact if on several provide some in gross Branch perspective us thoughts the of Can margins. timeline us of from update how you then you. an past a give what then quarters, be have that, to hopefully can could Mark would on whatever are initiatives over great.

Mark Murphy

Yeah.

many at mentioned, to And XX%, just we at talk -- target. there's time as year. Harsh our reasons as XX% can that as working expect we're, growth volume but December We we achieve a guide the Toshiya last achievable believe would an obviously, I as it's remind mentioned or expect do So XX.X% Eric walk specific about, about volume as variables, many won't starting growth. and of And a with too I'll you far James this we're more. that think I baseline still for

we this the year, had better expect see our weighed capacity. had been I mix anticipated has we'd the so then certainly utilization. And of and in-house mean sort volumes lower originally to on than

larger effects year, notably and calendar largely fabs, of having and Next those will those Greensboro, will most we're closed Florida also complete our cost so into products rolled subside. quarter be mix Also a over time, consolidation IDP about. the I this at talked to Qorvo, to and of XX% December certainly part baseline we would expect a compared guide improve that be

as a well. And then we're lot doing of portfolio management product

that'll So our the that's investments. purpose and select and mix high-tech improve of that

Finally, be would inflation we're operating, and say I'd I we well better margin. drive as would have doing price say to ever we extent benefit us to allowing we even to that that's productivity were than above erosion as and before the are gross incremental

given As won't seen even following far the the our late and farmers at gains as calendar outlook efficiency farmers in we scale or branch that branch, view we've year. need next Richardson, current until year

As we've to that's we've to this York mentioned in us and our and manufacturing due whole and for what cost-efficient mentioned to Richardson well do for was branch to copy us yes, previously concept exact concept September, more fab. and be and I great And when think James it And idea flexibility Texas. from in area. single New the the in that we allows capital Dallas original be farmers' revisit long-term. fab allowed at a of and have us were It's the a the a positions of these we I gains going gone

Toshiya Hari

for the details you again. congrats and Thank

Bob Bruggeworth

you. Thank

Operator

next question. from go The your the JPMorgan. will question for you with with Peterson ahead come Bill Thank Please question.

Bill Peterson

Eric can thanks level us. results Yes, I letting nice ask I guidance. and for first the My and that sort a hey question in was set question is of guess on mobile. me hoping job And and guys

shape in how the you about feel the talk next the bit of be the think you as are grow XG should an year of a coming expected the the little $X TAM like a by billion. increasing But about I'm about for next TAM than talked sounds December. ramp. may in in give RF opportunities It trying RF year sooner You've some to

be then especially how about your the makers, well second think will shape in assumption help is it talked as four the of large you've to business that, that Our the China relates context we you if half weighted, set had, but XG? can -- about you it level wins within should how somewhat as and design Thank market your the business, you.

Eric Creviston

Bill. ramping. Thanks RF certainly going to in be looking than closer expected been Analyst $X unit. our conservatively we've content XXXX XXXX, probably Sure. Yes, had least And we $X weighted XG about at currently our much more more originally greater increase in the saying than billion from it since due and billion in view to that TAM between Day equally calendar we like to per it's and units expected it's

So we both factors it affecting significantly. pretty got

to And by China. really It's in going going be the we're released that very and of seeing rapid clear adoption there the driven are handsets switchover are near-term. are dropping in this be significantly really the from higher what to XG units the that handsets

they to XG Whether be going there's be coverage some at during that will not, or knowing phone. consumers time that that available network handsets buying time own are the

real So, they're it. a getting jump on

well Obviously, their XG to as include portfolio Samsung as transitioning content. rapidly

them. without as are market $XXX addition then to that other XG that going any way. cramming I also and the get years systems Board just a the part They're really fully is be of looks handsets couple handsets, well had to the so -- that, we XG inside in also far but it said, of going like into performance. so And that lot modeled a ago. mean there that, improves to above faster of so million functionality or it all But some these the across the get XG So, all these originally may integrated integration for number the I handsets increases of size.

Mobile also integration last content requirements China the trend the with and all XG the and so that has is content band adder forth for base from coverage. So

put And these XG and NXX being in so forth, the having requirements now signaling for example, for every single dual in every are so handsets. phone

had well that's increase total why all TAM above and together coming not So tuning to we see previously. the

Bill Peterson

for in return Okay. year-over-year rapid over and significantly have Huawei the to growth. the here last lower seeing I And obviously -- quarters of it sort James to is thanks of few you I -- talked mean that's really an But moving that guide. including accelerated potential the you guess businesses, your the wireless additional year think out as infrastructure we with growth customers defense have should prodding the you're did growth. progressing mentioned maybe but the next that Wi-Fi coverage how growth look customers, the year then X the And and that we next of you then we March -- given business infrastructure? in returning with to for

James Klein

Bill, our to is near-term. Huawei in restrictions James. grow And Thanks for of the the limited the question. this have definitely ability

direction to QX. hope with quarter-over-quarter in we take double-digit say, to growth that in Mark as year-over-year growth. return However in We're to going step QX a good

automotive that and trends IoT of adoption X the GaN and serve on the connected underlying and and different MIMO the several the about markets positive of and XG home. coming really markets, includes we massive adoption remain the we and both in the Wi-Fi Longer-term, and in

outlook. of the long-term our also that addition is And improved management power

grew business looked much very that and quarter-over-quarter on pace to prior fact at acquisition. XX% how we is In about the

growth is my So expectation return that into that years. we with all we combined mode down into will back double-digit get out as

Bill Peterson

Thanks.

Operator

you the Thank for question.

will Chris James. Raymond from your Please question. go ahead Caso question next Your with with come

Chris Caso

evening. Good you. thank Yes,

in RF that, components is access worried they discrete either in to particular to concerns the place OEMs some U.S. would since and that get that be future? solutions backslide able couldn't there's trade question because into because been in Huawei were restrictions they lingering were or put First the wouldn't Chinese the there

if you that don't a to integrated to concern? results domestic do And be that, that that you direction, China if phone chose you Do address even would integrated for without seem point components? it Your do highly in even in can feasible possible they highly also it's without Sub-X but to can address, XG think components? these

Eric Creviston

This is Eric.

example. seen any handsets customers experiments Those as content far build go trying with of there. as course solutions for and full even have without U.S. to discrete We out a experimenting are to connector

them in field. see You'll the

experiment was factor to to can't competitive handset fact the the U.S. it it really and without performing because think power-hungry selling validate further make degrades integration the is content. a I can't poor for the handset. compelling without you build going large really and handset fully that really that you using that enough solution size so And

it in thesis force. experiments generally the returning and integration So people are confirms to happen, full

Chris Caso

Well, thank you.

apply handset a restriction to is integrated perhaps could also? experiments only perhaps and actually we've As so solution? it the clarify Huawei did can And of on discreet both if you XG the refer XG XG, base to side, solutions, only XG does can't XG to the what ship that the suggestive of that you that, the it restrictions without and one in fully to use ship follow-up is you on the can't seen you station

Bob Bruggeworth

think ship best we phones. of Chris, complicated. legal this we this to that we are lot the ship we I addressed details. with could. given to that that that such export of a is the into lot as I components sure can't I all go the And into we restrictions. Huawei their And making restrictions It's Bob. requirements call wish of The spent able could comply in time a are get last quite We

but have is a bad and of good lot I ship. of components go on really to side, and infrastructure a people shipped serious that think what I can into lot their without into what from We help understanding is discussion get don't

is, the I ship them. important are to to think able thing we

that the We compliance required fully support restrictions them. with in are export are to

Chris Caso

Thank it. Got right. you. All

Bob Bruggeworth

you. Thank

Operator

your Please you next Thank question. Craig come the Morgan from Hettenbach Stanley. question with go with will for question. ahead The

Craig Hettenbach

and based In aerospace talked of kind just that broader a Can lot know Thanks. the touch IDP the infrastructure. kind of Great. opportunities then you IoT you're defense I scope about business, on today business kind business, seeing? of and the you've of that

James Klein

Yes. James. This is

We're the So of general have NB of ZigBee, different standards competing aspects maturing. IoT. Thread market market. different those is pretty Wi-Fi, in Several still positioned been across all well the and BOE,

strategy been home Our automotive space. title and the to connected effectively the supply in in is

year-over-year in this fact, quarter. the grew small, into very although business automotive and is clip at Our is growing current well range nice a double-digit in

Wi-Fi reported, a growth signs Wi-Fi and it's we business of sign our bit showing recovery. has we in soon. wins a standard a but been quarters into over we October think fueled weak second as have fairly great design in will very of X back last a release return that's that are row, that The the quarter couple strong and mode

Craig Hettenbach

Got on just it. some acquisition. Can revenue from a color perspective, settles share Thanks. And Mark. the a question just OpEx, of the MEMS you how for out? Appreciate with the that RF just follow-up

Mark Murphy

Yes.

both give I'll Craig both -- So acquisitions. update our an so on

business, MEMS accretive fiscal and RF financially guide. recent the not in reflected in XXXX that's on our that's So

OpEx So and it's income an in there's no increase accretion there.

revenue Power Programmable call, our and accretive. business, was I it XXXX the the On I fiscal last of $XX in million Management said, think slightly

in As delivered on It's business. track. our I James quarter on and around much mentioned, the expectations the previous guidance that's very September reflects guide that gave

Craig Hettenbach

it. Thanks. Got

Operator

your question. next from the will with Edward ahead question for Please question. you Equity come Research. Thank with The go Snyder Charter

Ed Snyder

lot a to rapid about talk year enough. Thanks Phase I Eric, high-end isn’t the experimental a China move the in you move to lot. know last X now. --

XG, mean, components mass and for expected. Is left yourself. because guess is not Huawei? volumes growing very in which Huawei be buy band? that -- this this products? by or on these the How these out being [Indiscernible] covered work a shift? does this of to to from are modules with I if the I Or if substitute here, to going they're like these is problem in mass are But you that handset have the toward Sounds poses

and And [ph] XX or X if Are Band more you're been former, in with the kind it's development of some And then, know and of now, years run? I these the you work? systems or a [ph] volumes Spy has color larger I many can guiding you up led give if defense, production these systems bit are stuff it like out but very some some GaN looking development you at could, on expand. is now call for in Gator with by this long-term. quarter, of James, large unit next

for play actually, out next then feel follow-up. how get to so. over next trying or defense I have Just the XX a will a And long-term, months

Eric Creviston

bands your part. while Huawei's the able completely ship handset frequency to and to regulations, And highly take question second Jim we're all modules first consistent export staying integrated Huawei across integrated to division. So highly with modules, will about

James Klein

defense Ed, solid business has so been for defense, growth engine the Yeah. for us.

Q-XX fuel about programs can -- But quarter that you going GaN with our I this that and think back read programs production arrangement system capability. talked you the really have it what half there related earlier. other Lockheed numerous to for are again was numerous production nice announced and a using the GaN Martin recovery, is. there are one on GaN. We

Ed Snyder

the talked then year, band Okay. I in looking what the XG, my expected. So the you to or the you plexus, we, of, added effect ultra-high bands could then getting talking that anticipated? back, Thanks. last that given when of XG than about on tuners you'd showing more around, is there of seeing say something section But things? and -- it's downs, about And halo you content talked you of on sort talking then, tear also XG dabbling kind XG content being the be additional about which for I'm see example, antenna Is wins, the higher here. XG know XG you're higher up about Eric, actually arms content just so you're pure faults

Eric Creviston

The contemplated. question, Ed. Great Yeah. with was affect XG largely halo

I think that's on most track for the part.

it keep transmitter standalone switching we was Even use in XG, Mobile, at signaling proper brands see the handsets, higher more a definitely an in don't Once China primary XG be and The that XG XG that just build carrier mode. non-stand-alone all of immediately by you out China more not dual had the They'll as for new seeing to XX on away. expected. acquired turned to than incorporated so transmitter we're to requirements all across But the way the is are take dual content into China going architectures XG that going to signaling the example. tuning have being are And than to think as same this into for time. if any Additional example, went we even operations more fully architectures, mentioned, on. with expected. was I like, data I RF the complex

to we blip don't onetime going forward. think from of So, content. this sort that continue to just a going here It's ratchet is up in

Edward Snyder

Thank Great. you.

Operator

Thank you will from the come question. question for next Timothy go The Arcuri with Please UBS. ahead.

Timothy Arcuri

a my not us lot. year-over-year quarter? you they us Thank -- Mark were first or And give question largest you don't didn't can to guess maybe want if a customer like they maybe talk much you the can I how big your numbers, sense how grow? of in Thanks give about grew you.

Mark Murphy

give quarter No, in the details specific customer's I Tim and one had can't that customer we growth. about XX%

Timothy Arcuri

big about and next be somewhere help we have if at Can Okay. for some about are obviously be any a forecast Thank about there people then things sort about about Awesome. do map, any global mostly sense XXX. have numbers builds the sub-six could you. you're for you XG? XXX what of how actually over you TAM so James for will you year? year And thinking XG a can talk The of next all the that is us in maybe think a global handsets sort think

Mark Murphy

infrastructure $XXX we chime earlier TAM in year that $X. handset and handsets the to mentioned had let the speak then was for baselined at side a billion in on XXXX million the and I'll the I $X calendar side. James around roughly

or that earlier. projecting in So, back even we're XXXX

what the $XXX And but little not so $X of well now being above units And approaching in maybe we're million, additional content worth probably terms likely. quite of -- $X $XXX as or a $X million content. seeing is

now and architectures we said So, see closer next customer that's to -- based ramping $X we forecast on to as much billion we're us the year.

James Klein

about of attributed XG of all and see to TAM On that with adoption billion added the it's And most of add-ons. being massive is $X base MIMO. associated the station said, we

over of before about content us the MIMO next those I've station stations. of use several years XXx somewhere the base about range will for one of expect talked the massive as of base each We in XX% technology. in deployed that's gain And

Timothy Arcuri

Awesome. so much. Thank you

Bob Bruggeworth

Thank you.

Operator

Gill & Please you. Needham Thank question Company. next with come ahead. from The Raji will go

Raji Gill

And I you. thank my congratulations. Yes, echo

XG to customers I've mentioned handset the guess in But actual You seen Chinese of a portfolio jump of the rather moving XG. in up. the -- from terms contents going a the fairly RF units I

we incremental the the question To maybe expecting to you're in XG just of if will result higher transition actually to do as we that wondering in cycle a to about market? this the increase like overall And expect unit think with see the I'm replacement TAM, units Chinese earlier result of handset how -- do also that? about growth start XG? to kind When the

Eric Creviston

not in of a the that we're bit a least. moving growth out being replacement last see of was drag So, cycles unit did now going an the at modeling increase for part time They're year. forward. over stabilized We

over If back. replacement We have shortening are modeling modeling be them go kicking necessarily up means and that cycles that we're units all. not got to

Raji Gill

primarily driven gains just to purely by RF new content XG is but also going be this So support bands? the to

Eric Creviston

right that's Yeah, exactly.

being XG versus handsets total the without hasn’t XG of going come to than number more So through. and XG more units then

Raji Gill

is and earlier for company. non-U.S. handset filter of follow-up my risk about the to OEMs And Huawei I guess, Chinese question other it then Okay. question. the using

back experiments been push are but a You’d results that that to there, solution. these are fact the RF next out the without look phones there locked Knowing year, these pretty integrated mentioned of same the that is XXXX, for designs is already there's some TAM much an you if architecture? at that move it power more amplifier potential will ID integrated OEMs risk in ID architecture a versus to there have

Bob Bruggeworth

make let's export well. as I sure understand Number China, understand the that to want phones we in one,

they're by. things phones obviously as we we you know, going And So for anything to others, exporting, battery with judge and so going consumers RF. they're buy to that the RF influence best recognized the life, sure Samsung calls, all as compete make dropped and they're does

that's distinction. So important

China performance we to that in Huawei, with brands suppliers seen and if can they U.S. any building sure ability they're and even willing tarnish that compete so Second, one have is to make and far not their buy the brand. sacrifice, they have their from want to to sacrifice

designs phone about. be products are second caution are many the I with in that that still direction is in to this there on you integrated least left half are seeing The and that the done still just their been want the of we're other year talking architectures we've to at thing

Raji Gill

you insight. Thank for the good. Very

Operator

We've for to the call the over question-and-answer like to management you comments. further closing the Thank or session. for reached any question. of end turn our I'd

Douglas DeLieto

quarter want good Thank to forward joining for night. you Thanks with investor you upcoming We thank again at results. tonight's you report again we speaking you when our look we everyone help third hope you. see We and a call. to to meetings us on have and

Operator: concludes today's you. gentlemen, this and Ladies Thank events.

may now lines. your disconnect You

Qorvo (QRVO) 31 Oct 192020 Q2 Earnings call transcript