SYNA - Earnings call transcript Q2 2018

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Operator

Good day, and welcome to the Synaptics Second Quarter Fiscal 2018 Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jennifer Jarman. Please go ahead.

Jennifer Jarman

Thank you, Shannon. you conference us call. thank second on and XXXX quarter afternoon for today joining Synaptics Good With Bergman, and President on and me today's CEO; Wajid call Ali, are Rick CFO. and being section Relations the company's over is the synaptics.com. of broadcast at call accessed from also the This web can website be Investor live posted reminder have slide on a quick A we our presentation supplemental that Investor website. Relations add on SEC have an financial exhibit current and report as earlier our also the to with furnished Form color been slides filed results. supplementary The X-K on additional today our

issued In will other addition a for share-based on basis, results, the or to of after compensation, reconciliation the non-GAAP company's detailed results. release Please or excludes non-cash also a and market GAAP management items. close which certain results provide to non-recurring supplementary today and GAAP recurring acquisition-related costs refer non-GAAP press

you to statements. make the would remind of we will that, Additionally, Synaptics conference forward-looking this during call, like course

and statements financial expectations Forward-looking to of business. performance our results plans, our condition, give objectives, and future current projections relating operations,

that now obligation call June materially estimates believes this performance XX, forward-looking in prove of results Rick expressly important Rick? reports the number results information. in they reasonable, the subject SEC, and to are any with for beyond Synaptics to ended to We contained Synaptics from be including statements. the I differ for with XXXX, materially that, forward-looking statement. future you any the to those year and periodic Synaptics Form a factors filed update Although and Synaptics inaccurate. will And cautions be fiscal cause company's refer differ control turn may that XX-K current and to disclaims Bergman. over uncertainties to risk from forward-looking could actual the our may the any risks assumptions company's actual suggested their to

Richard A. Bergman

quarter of like our pleased total line in for $XXX.X I'm fiscal with I'd to everyone million to projected Jennifer. revenue Thanks, the to that report second was And welcome range. today's call.

of consumer total our expected, XX% the for during roughly revenue As period. IoT business accounted

the On with towards the share related tax great January. to line, of share our range. per December you non-GAAP end of diluted per one-time projected in a recent posted loss Day It law again we bottom $X.XX, CES changes, was earnings tax of reflecting was primarily while charges of the to $X.XX at our many high Analyst event and meet the at GAAP

better and portfolio that ahead of has understanding Our major starting Essentially, the goal to X.X are base transition already through this transformation company of and consumer a the and the customer boundless highlight was we our IoT. benefits to diversify see to to the us opportunities deliver Synaptics materialize. made of

from at for our fiscal businesses. the decline growth XX% year-over-year is mid-point being expected This by quarter over newly trends many to of anticipated the of weakest our have China. revenue year. X% is surfaced demand sequential of in we Yet, industry not recently our softer mobile heard you've immune counterparts, As seasonal than forecasting the from IoT fiscal acquired Synaptics are aided that QX, a only during

channel, profile. fingerprint market UD, automotive leverage Clear solution sales available consumer core further customer-based adjacent for in-display enhance new is primed now highly a of XXX around IoT innovation strategy success, a at the bringing and to this center witness the fiscal first human deploy bolsters Clear flagship intelligence on for CES. with and well-established which phones. positioned uniquely market our are this we our perspective, at Combined that gross products innovation ecosystem the mobile and ID partners. in and also Plus from of phone expect edge. our is technologies display the biggest the arguably growth opportunity very to is drive device ID new four Synaptics margin normal Vivo level we and smartphone, Reporters the technologies our world's of QX providing We days a was Synaptics PC, to infinity in and to believe in on feature mobile CES desired adoption resume such products. retail. what are from assets voice along with the the now our to growth, to due world we capitalizing swarmed AR/VR providing to these We new a of at sharp At and and the growth winning where continue have smart ramp the year, markets featured seasonality interface as scale our with business marketing clearly in crucial for key the booth showcased

In is get Synaptics fact, at to this to to in technology in to this product like be Vivo multiple with market, pause technology public launch was mobile XX positive OEMs. marquee exciting to to other hard won the phone award Show design XXXX. of the we effort. team engagements in groundbreaking the hundreds product market. Clear and all announcement driven extremely for expect garnered truly has And pioneer The it ID and Clear to calendar see in with the a of bringing Best substantial ID I'd interest headlines. work CES of proud our thank

Now, QX, the let's into with around starting our mobile business. specifics down drill

in us. we new solutions and Chip-on-film on chip-on-film Some of a LCD COF. the phones. newest creates TDDI enables infinity for DDIC the opportunity or technologies are displays growth It quarter our introduced

customers, part the the foreseeable for already major the have and inherently limited or this chip-on-film our infinity folding further the will Specifically, smartphone chip-on-film quickly extend chip in Synaptics bezels are remain DDIC displays an of display enabler points market which top for also OLED price a key of Chip-on-film market. future is in request capacities. LCD for is narrow itself as leader We engagements We of to existing into the important a panels light links XX to very underway. runway supply. manufacturers underneath a continue higher in panels, motivated believe LCD establishing be the panel. by LCDs, from TDDI LCD are as

is in production to volumes design quarter. deliver in meaningful expect September the first today, we and Our early

myriad orders. now the in manufacturers, which quarter, move business, have revenue initial speakers our (XX:XX:XX) IoT announced June proven panels the leverage also for technology CES, of expansion DDIC the design to company's whisper with best-in-class RXXXXX for up enhance first cutouts. we headphones XX of over solutions, processing AudioSmart, set-top we with the to and to I'll as for display a voice-enabled we packaging, for to DDICs the include of already and special state-of-the-art Key OLED well-timed, our trend products HD+ and with our At Both major our ImagingSmart particularly for on VideoSmart full the support be processing OLED into panels. solutions features displays displays. showcased RXXXXX from boxes. rounded smart market chip-on-film (XX:XX) XX:X the expected entry new IoT corners extra-long new of have extremely has portfolio received encompasses the products. mass notch and and to the production Synaptics available to smart and platforms. two are We QHD+ image just technologies consumer designed These both in

Cortana one is we electronics as years. on others. and to the that Skype. LINE well-poised global AudioSmart We on programs, jointly solution, to including for voice continues Baidu, voice intelligent announced voice home significant rapidly Google, Synaptics ecosystem, capitalize fast, all platforms, speakers, of an to growth DSP Synaptics Amazon, initiative with leverages those major automotive proliferate in mobile home service rapid and far-field opportunities AudioSmart most deployment Microsoft kits, market the cost-effective includes voice collaboration devices, are aware appliances, technology. of ODM The our solutions designs support key with exciting the development the Microsoft well beyond. This With Microsoft consumer inflection tuned that includes at point in facilitate recent and voice-enabled reference a You are trends representing to smart here partner with specifically Microsoft, PCs, Cortana including

Harman/Kardon selected Portable and that family. smart International far-field DSPs CES, Allure we announced Allure been the During also have Harman voice-activated AudioSmart for our by the voice speaker

lead in customer IoT XX and We with far-field consumer continue over devices, to of launches new expect integration QX. industry types into product calendar different the we

there a a set-top plug-in charger enabling Tencent. display. were home several tied box the powered Anchor by another streaming. are and collaboration also hands-free and television by integrating DSPs, First bar from sound includes During a This ASUS, diversification by smart assistant DSP Alert, for China, router voice. Alexa-enabled are with announced In that announcements two highlighting to of calling bathroom our by Polk, Kohler, alarm with and is a cars voice is Synaptics a One voice smoke products products CES, by Wi-Fi a for our a music with navigation, (XX:XX) ears

that focused on personal we range Pop, China, our earbuds, components. for Polaroid digital Regarding Goertek, our headphones canceling Snap active for CES, HP fun in companies are expertise and including a the of with family. technology for are announced with HP. partnering technology both large USB-C image and Sprocket a noise AudioSmart our and headphones. audio At new business instant our also adopted for Polaroid ODM we we based processing innovative and portable These showcased has printers, hybrid using the Goertek ImagingSmart cameras and acoustic and

Home SoC. provider ship significant VR. in from platforms IoT OTT IPTV continue PlayStation Sony of the side saw On for Also utilizes we to service quarter, digital the of our and ranging adoption and platforms, Google platforms, last our sell-through to and assistant personal platforms VideoSmart the solutions of business, which products a worldwide, number like Mini, a

in service also the We footprint provider market. our expanded TV

CANAL+ of satellite recently are solutions used TV one the for video multi-room Our Europe. in deployments. CANAL+ operators largest announced enabling the mini-decoder is

TV continued set-top announced using is their of including worldwide we Technicolor. enable by box our in adoption addition, manufactured who XK SoC In now to Ultra Australia, HD Android set-top recently Foxtel see boxes,

TouchPad, continue PC in market notebook with fingerprint solutions. and our to sensors Moving audio share business, our to we lead

Natural our models. and different in ID TouchPad and Acer, designs our Dell quarter products Lenovo Dell nine adopted ClickPad capacitive HP, have And New from Lenovo. solutions includes fingerprint solution and the on new on

business touch Let's making fingerprint display, leveraging now touch on our we are where strong in voice progress our technologies. automotive

While cycles in achieving momentum automotive long, are we're strong cycles. the design design

Investor pipeline who accelerating array to market, a this apart technology. our setting to and bring technologies auto to competitors have this revenue time uniquely Based horizon. of Analyst of the as quadruple able our broad is now we on share progress, to five-year a Synaptics us over consumer many we were from success market that a extensive from of expect Our our Day at because is don't positioned

We are the about the for growth picture as seasonality calendar we tempering and displays. began broader year, a calendar results first be to second at products in begun have little year to A talk in just in about the we a trends sampling XXXX. XXXX. infinity the smartphone calendar had lot we investments our half of While over excited ago, of look half in

we've the and stemming OLED become and in expect IoT the ramp in product production infinity begun half year. from mass of clear year. introductions chip-on-film, displays Coupled momentum production to in with investments the Now, calendar a initial the calendar expect second in our full second of strong we our mass to and consumer half

also at we As we XXXX. a organic growth billion fiscal are multiple among the vectors $X-plus said Day, reaching towards model Analyst by of believe these

hand new our the and diversification support well-positioned believe technology core growth we our to to of platform. sustainable achieve portfolio, investments, to and both meaningful Along With positive with products, we growth Wajid. in With of of both are company on in differentiated proper expect business to and EPS. a business resolute that, management alignment IoT expense a our transformation customers result and target we the – it strong along our continued consumer of within model model this cash substantial me our and with over let generation focus

Wajid Ali

guidance quarter for line $XXX.X our Thanks, Rick. in Revenue was million, the with December range.

IoT X% was sequentially, our Marvell our reflecting by acquisitions. in increase offset revenue was anticipated PC multimedia our down by Second again in in quarter revenues. revenue primarily of increase and quarter our driven mobile in declines PC and mobile from IoT primarily revenue product first Conexant December up business, revenues, and reflecting an product from quarter acquisitions partially offset the declines X%, the revenue partially Year-over-year,

threshold, revenue the XX%. During XX% at had quarter, the approximately we two above customers both

XX% of I'll IoT ago certain quarter. Revenue PC mobile, in the reflected of quarter. the high-level and XX%, materials products quarter. X% and compared results. presentation XXX% and X% products down mobile now corresponding PC XX% in from Revenue the year was sequentially in respectively, from year XX% quarter up non-GAAP of sequentially compared were December year-over-year. sequentially and this the GAAP XX% was with the revenue products a down from follow our As released call, provide down review from XX%, IoT Revenue results with and and advance was with will December ago

GAAP margin million, costs. million our share-based the million $XX.X were $X.X GAAP inventory and quarter, December severance-related cost $XX.X share-based compensation XX.X%, which was fair the of restructuring million, gross quarter of cost charges, asset intangible $XXX.X adjustment For value $X.X million, acquisition-related operating of and compensation of December $XX.X which amortization, of in expenses includes and includes of million. $XXX,XXX

million act. of In GAAP or of discrete share. quarter, one-time changes assets the foreign on a tax for impact had $XX the December per GAAP of earnings $XX.X for loss a loss Our tax a reflects deferred of and tax million law of both the the we write-down tax passed transition million $X.XX recently under charge quarter primarily for our tax the tax $XX accumulated

to our turning results. non-GAAP certain quarter December of Now,

Our and primarily the million our our $X of December reflects non-GAAP operating of Non-GAAP product XX.X% December mix. our the with end $XXX.X of expenses expenses The operating from the million, quarter. guidance reflects up preceding was operating the quarter in line increase guidance. primarily towards low businesses. margin were non-GAAP incremental in gross quarter overall acquired range came costs

down Our sequential non-GAAP on of the the excludes income $XX.X was share, Non-GAAP year-over-year. diluted December but quarter, for unchanged million increase, the quarter and per from XX% tax for X% an was our XX% tax transition impact our one-time $X.XX earnings. the foreign or accumulated net guidance rate

$XX our cash to flow $XX was quarter quarter. We during million increase by ended operations. of an sheet. the with quarter increase million from The cash from of $XXX the million balance Turning preceding cash, in primarily of the driven

the On to cash, result the expect as topic have tax our freer foreign of act. of we cash access a to

the been access tax be of restrictions business impact act utilization act. mechanisms to had the million that impact Capital were quarter were be end DSO's million, credits $XXX million included inventories that the tax years. million earlier, access we been $X for of over December and at $XX and to XX eight is depreciation were in GAAP was were expected churns value of to expenditures place $XX.X and subject while Further, While which have had foreign certain that will cash, million Receivables despite the eight $XXX days, the the after were under payable removed mentioned I million. inventory of tax adjustments. fair and $X.X cash about

the our make the mix, entering will on regarding outlook. of March be comments few customer million sell-through Now, as I quarter, a revenue in our and $XXX well quarterly for expected product we $XXX patterns selling March timing $XXX Based bookings, as of product quarter forecasts, the approximately million. backlog range million to to subsequent anticipate

March quarter from mobile, XX%, and expect in the and approximately XX%, XX% We respectively. mix the revenue products to consumer PC IOT be

range to our in a of GAAP $XX.X are return compensation the sequential quarter at include data. to fiscal expect stock-based million. restructuring $X be data in we non-GAAP to in of and provide March with $XXX range and second seasonally trough, be GAAP indicated, expected follow third million, million $X I'll will in expenses outlook $XXX be charges fiscal to to QX. outlook growth are in anticipate expected million million. the the the quarter charge now to We to the for low Rick As quarter March operating to quarter the million with $XX

intangibles sales. million to approximately reflected of be net expected is in operating GAAP March cost of addition, $XX non-cash In million we charges approximately $XX income of of for quarter which be amortization, expect will

inventory expected be be value fair sales to to are $X reflected cost addition, of in approximately In million. adjustments

the our we the I tax Finally, to outlook current to of quarter tax non-GAAP provisional for expect GAAP rate act March for our quarter any adjustments impact. now provide will next our reflect data quarter. estimate

XX% quarter be to to the We expect in margin March between non-GAAP XX%. gross

in our mid-November million approximately quarter-over-quarter to in million, quarter We cost $XXX operating restructuring from last expect to expenses $XXX reflecting year. the non-GAAP initiated of decline to savings March

in will for rate, our tax XX% XX%. we non-GAAP now range long-term our of maintain Regarding to guidance the

reduced, While reform tax has and muted existing tax by the been the potential will of structure. savings, provisions offset be some corporate are some there tax operating federal rate our will of savings that

$X.XX our in range solidifies, and of share quarter will our technical are tax pleased $X be March to of As the per Non-GAAP the guidance complete at act and To diluted for QX. non-GAAP for share. the results we interpretation will assessment with of per is conclude provide anticipated our net remarks, fiscal our QX outlook an my to rate we income time. and update tax that

incredibly are over Operator? roadmaps operator turn strong session. excited in creating start will are and to that, expected With for call our about the now the We the product customer the XXXX. we opportunity unfold, how calendar to success to Q&A

Operator

sir. Yes, you. Thank

We KeyBanc. will first John move to with Vinh

John Vinh

Hi. first for taking question. mobile. Thanks question is on my My

You've like your to looks be going it's down X%. outlook; about mobile talked

China, about in XX% you quarter. March peers the to you it than then about many talked to also better the there? being be off were of and XX% like offsets range, looks that expect Samsung weakness talk you've business got in the the in the have Given your Can mobile business your in falling what seasonal down China

Wajid Ali

So, actually let me start off.

down coming the So mobile down about by more sequentially business that. overall coming is X%. by was business The than actually

our a little expected bit we've So, a more products down to bit. capacitive but we expected that's than business new are that expected, to little come the got sequentially, probably offset

John Vinh

is And to follow-up chip-on-film question Thanks. my it. your then, business. Got related

types expect to you we your talking also of wanted sort of display Tier peers talked in what chip-on-film just is have phones driver you differentiation in phones these about can initial this a mid-tier phones? of production do that design COF? calendar of market many being competitive I business, be flagship mass customers, in of then kind QX fast or related Can Are types And on? in X where to your and wins just about Or you of followers kind talk You customers? the year. understand this also

Richard A. Bergman

John. a Thanks, happening or the Sure. is industry. that's In COF in initiative ways, very broad chip-on-film some

of all impacting of OLED, my because importance segments, questions all answer both and LCD almost display. on broad any given display the yes, to was the kind it's maximizing type screen of So, your of

your step as we're So to which on and mid-sized tend through with question, and kind of DDIC large both it well. as work LCD customers, well pieces we yes, as with customers your seeing different TDDI both of OLED to panels, closely

Now, it's mid-sized I in it as but one actually will in remark, expect course, and very a our calendar not smartphone XXX%, mentioned prepared real uptick early in business And production be of in now the OEM of meaningful. with business, we're mass QX.

to terms type of higher the to We'll complexities, are get out available solutions. in our you is Now price or add resolution of generally There chip-on-film differentiation, phones. additional some especially there. when OLED

the And as technology first so supply the chain preferred in capacity right we us potentially like to a from well a we're give as the relationships position establishing feel perspective.

John Vinh

Thanks.

Operator

We'll go Cassidy our take ahead Stifel. We'll and question. take Kevin next with

Kevin Edward Cassidy

through you for you maybe Can question. And the taking lift margin seeing XXXX? that little around us more Yes. might details gross my be thanks give

Wajid Ali

sure. Yeah,

margin be to XX% a level. So, profile Kevin, improve then time over our model we've at it in to XX% outlined near-term the and to for gross

well launching really some kind the two revenues, quarters, as the months come that the lot we've more proportion operating business products XX% new benefit or we're that from space. so. being structure that for in last known greater last of the our mobile to been a And – of as the for in a has IoT six probably our of of actually You've XX%

and quickly to quarters the remains and presented it how mid-term So, from the still kind model And what Analyst we've seen that new remain Day our moves the that near-term level certainly last of be to future, at at for couple our we But at hopefully that model least of now, as ramp. go the that's to the expect products been seeing we of foreseeable improving. in quarters.

Kevin Edward Cassidy

that you manufacturers the with are And LCD had. Okay. you Are on handset the working all other detail also? just Great. manufacturers they design maybe chip-on-film with wins or

Richard A. Bergman

with with displays life us infinity technology Kevin, – John, that facilities, with the Well, how Again, dependent. and they this the degree, Okay. I it's they capacity with LCDs. the of LCD with extend some In have answered, Conversely, to cases, to OEMs both. of – like type the it's and their they opportunity seen manufacturers worked when work LCMs to multiple work us bring their manufacturing some to solution. a of LCD certain on and through closely then

Kevin Edward Cassidy

Okay. Great. Thanks.

Operator

comes Rob Next from Stone with and question Cowen Company.

Robert W. Stone

guys. Hi,

segment thing is first about mix sort of The I in March. your guidance ask to wanted

IoT we the You up IoT a it, mix design of is of bunch win, volume to built? and sort bit announced of a the the here pattern meant terms step from stair see, for PC in those but down. a in wins call IoT little be seasonal from Should way

Richard A. Bergman

Rob, mentioned as XX% And I year-over-year growth. good in we question. XX we project had scripts, the –

pretty growing the Synaptics business number is business some IoT IoT our existing overall, growth. include. did acquisition-based had We that not strong. That's with So, which from

or design trying with pause we're our that learning and second after to be a half of would in this kicking And this expect I our natural then seasonal degree. up IoT calendar certainly growth to those is and the really to and products talked take holiday's then, for a see, But quarter business. So, based lowest IoT the some everybody's a as course, helping certain wins quarter, on IoT momentum strong of that still to the momentum we it QX. business purchases all business leading about out overall for a we

Robert W. Stone

to lower the be not the I in benefits in know I Came full for that take you just you're fiscal guiding again But giving question restructuring getting QX. down the reported, on could of for low you alluded A range at still Wajid quarter, Will expenses. OpEx you're Okay. and details this from end think for operating QX? rebounding revenues March. sequentially.

Wajid Ali

Yes.

can at of QX is OpEx. right about plan of fiscal kind little bit. our our But QX. So, for for fiscal a million exit a $XXX target basically That that's range to quarter now

restructuring Our impact the benefit second the the full because quarter in happened of restructuring didn't November. get

so And operating is of couple more expenses. then happening for you fiscal really we we're to enacting on plan that impact actually But a full at And impact planned $XXX things on more fiscal our million in QX enacting quarter P&L that of will we a a that have – in see favorably exit a fiscal is fuller what our the about QX. QX have quarter.

Robert W. Stone

Okay. Can I know quick You that squeeze several (XX:XX:XX)? Is fair adjustment. Can more let in just alluded value ongoing? one you inventory what's one? to times us

Wajid Ali

mean, Yeah. It's to I that's IoT the just the to related business. acquisitions. related

the had So, a them, acquired fair generally six to amortized inventory, months. and we when on value for step-up of nine gets that we

quarter it away before, should by little fiscal And all or go QX. but maybe that should a most so go likely away bit next

Robert W. Stone

Great. Thank you.

Operator

Next Rakesh question comes from with Vijay Mizuho.

Vijay Raghavan Rakesh

Yeah. Hi, guys.

if can and as wondering, there, about – yield how commentary what supply now looks. year your like the some you wondering just you that in-display, looks line. OLED tightness top ramp so update And on been full there's Just on ramp your

Richard A. Bergman

year. can and transition, about the OLED about talk overall I'll talk Wajid

ways So, we've been in target year-and-a-half year, at talking out last to much about the for terms least it's of OLED, or so. rolled what in some on pretty

mass And orders, of And purchase have to that OLED of is to also mass or to been also half couple means significantly very means we've ramping go prepared step. our we in samples a in qualified, which second also then those year. B, the panel two you partners, from a remarks now manufacturers QX, as in later prepared working them. production of which and generations calendar is significant now up are our the So, have heard OLED with been actually press release, multiple we providing

certainly So, and expected. we on Japan back as additional it XXXX. in China, we we're with half our kind OLED through rolling tightness go out certainly the as but year XXXX calendar opportunities well-positioned presents in we market, coming for panel and technology of of in suppliers feel then and Korea, that's is There the

Wajid Ali

Yeah.

So, Vijay, little question it's of with that got the QX, on regarding a transitions bracket your early other number occurring. year, to the product we've especially

remarks, and moved couple sequentially months had we fiscal As sizable some thought seasonal ago, lighter little prepared chip-on-film QX. because fiscal our fiscal over implementations QX that is of probably QX to QX. the a we than QX grow primarily in trough, our have said expect a from our to we we've what had It's

is So, just the the again, the fiscal we from been demand QX. of It's still to executing is well. there, little don't product into still is fiscal But there, a because because QX at shift see customer ramps. new bit want do to but growth QX, seasonality sequential bracket this point pieces, we've got moving of we some simply some and it a product

Vijay Raghavan Rakesh

Sure. it. Got

of the there. voice on list Just side, obviously, impressive wins design

of the coming voice with stickiness the to you well. there. and that you where is But Amazon looks like in Qualcomm wondering sticky of Just everybody roadmap Can Thanks. carpeted a connectivity mean, how talk there? kind got just guys some is solution business? I you as your Alexa, seeing are

Richard A. Bergman

Sure.

up a differentiation. we're it's over came the of from call I acquisition So, our our a end build that any Conexant lot at in our roadmap. audio good that's And algorithms and pretty on some not that certainly sitting still that's particular set-ups round environments call in certainly speaker. the don't decade different have All do areas. learn different competitors, what's a cancellation, been with some, not differentiating solutions. voice of there's of day, far-field to in want expertise these to, echo ways, it, provides ability communication companies the all things those the don't it, microphones and companies management voice, with you but some different But in processor strength bracket that It's overnight.

accumulating knowledge. again, has that so, And the team been

on I prolific depends years. stickiness, look refresh for They years, about and volume. they're voice to to the to of couple design known looking they many are two, that good solution terms industries, high annually. three that for as mentioned, it a other the things talked But of going there's certainly In want customer, some across mirror a becomes I

as but own not heard like get so off names those you design-ins, those Kohler well-known know rattle Polk, And they're very names, we in well, some the their huge industries. those of or assistance, volumes, digital once personal you me particular

got sticky. so And be there quite nice will that and lead it we will a –

Vijay Raghavan Rakesh

Thanks.

Operator

question Gill Next with Company. Rajvindra from comes Needham &

Rajvindra S. Gill

Thank a congratulations into. markets end all going products OLED. that on and new you question and new you're Rick, with these

kind the would That side, positioned capacity You question. to competitive display Japanese demand. or against Can the be about the competition first how you're panel the of there? Chinese non-Koreans, my merchant you driver ramping on support the characterize landscape talked Thank up you.

Richard A. Bergman

Sure, Raj. Great question.

Chinese the to capital the the OLED investment in Japanese be they're a going going seen from market vendors, As the to players lesser forward. we've and, from major extent,

technology the kind they as inventing they're go. of However,

And so, that working and technology work that, is some leader. have they acquisition they the to They with the OLED years experts Japanese of the technology as in go several exactly as cases, want our the want in what is, they ramp technology did display true ago, And in of innovation that visit displays, with known with work up. team. years in I And XX, XX we RSP thanks we want the to manufacturers drivers part understand Synaptics, the industry. to display;

facto up de manufacturing I right facilities. we're bringing of now companies are answer these would the their so, as And say, OLED kind

high-volume like production really position, I see coming the anxious XX and these to to get guys we're So, months. our over

Rajvindra S. Gill

lower can benefits is alternative when in handset offers fingerprint as it you a the say, on at the cheaper about displays, in-display facial a you seem in-display bezel would sensor the is larger remove And you the they feedback as to in-display same would fingerprint much that complementary? but but it lot that facial fingerprint get that you're maybe much OEMs with talk an But sense cost. recognition you have getting that ID the of sensor, implement or sensors, from could

that wondering demand So type just if that you're from angle. seeing of

Richard A. Bergman

Raj, you your question. kind own of answered

So, yes, that's we're a – solution. compelling the is getting it's feedback very

markedly fantastic. We that a quite a and display the is Vivo lower. have have it And other is production point have. I XXX – than phone, now, right bigger Plus solution bit The my price is

unmatched down has. on at point what I of security advantage when kind industry. talked so certainly talked by other in about about authentication we convenience, and we and least a is of right an the drill the technology that And really now is ultimately And in-display speed, price in-display solution any the the cost, think that to solution. But the by that's driven is

Rajvindra S. Gill

you. Thank

Operator

with Company. Charlie Anderson Dougherty move next & We to

Charlie Lowell Anderson

questions. Thanks in units Wonder a display lot also On things talk versus your of but then ASP could going you're talk there. expecting follow-up. standard LCD the – got drivers? exciting it lift sounds increasing terms content, what And like of for about on I've obviously taking my Yeah. chip-on-film, a you increasing if about

Richard A. Bergman

Charlie. Sure,

question specific the because getting answer me let about broaden then of and lot of we're kind it questions a chip-on-flex. So,

provides an it So, for with film. along delivering an because certainly – opportunity the with ASP DDIC lift the chip-on we're our

and opportunity do get XX%, it's But in want IoT ASP more solution targeted incremental into it's solutions the is growth, growth, growth, whether some well, to chip-on-film don't up consumer some of is. have I our in-display set set to nice so our for nice for only with the in a really that, business certainly we growth it's that resolution where then DDIC our number chip-on-film. OLED that also helps. along as tends our or second for But set So, with up XX% is is half, that terms up nice for not whatever little high be real certainly (XX:XX:XX) DDICs

Charlie Lowell Anderson

this of relates maybe Thanks. maybe competitive you you over year if the wonder plays it fingerprint to about talk just next competition, as sensor, then as And versus or I could course in-display lead feel are in you where the the two? out differentiation Great. of terms

Richard A. Bergman

Sure.

to hard what because competitor a So, we solution always is. know frankly, it's our get good

test anybody from top So, of it, know half can don't I been anybody a retail, to five it's qualified in worldwide at and in year. it say OEM. with and production else first that of be the play and the would now available that able

keep not So, we possible. That perspective. about want competition, that the fires burning mean course, as hearing customers of from alone competitive to design and, doesn't for considering OEM us wins that the stand we're certainly as hot are

of So, we sitting a underestimating this years We've in for the not business, so mobile competition. been we're number rodeo aren't in still.

feel, of and lead. we of well have have a to through a industry expect course fingerprints, perspective. have we next as solution the a But calendar compete or cost in nice a We And whole we best this and as the from display optical right we year. year little both technology from now, roadmap the

Charlie Lowell Anderson

Great. so Thanks much.

Operator

Stone We Rob from with a follow-up Company. will and take Cowen

Robert W. Stone

question optical glass that the the screen to the And of the being affect used? protector, and had I tuned the to case, color Rick, does (XX:XX:XX) going it that's the the end which that's Thanks. display about of if Yeah. a is, performance? in-display fingerprint a adds user sensor, if to thickness specifically have is be

Richard A. Bergman

of this – differentiation, from from the right one active about the a is more And our our my display screen I'll Charlie thicker, say the something the rigid and other cover knowledge from works solutions, at ultrasonic, with is in least, one really changes and solution especially material. solution there's and the maybe So, beauties much susceptible when displays. optical broadly thickness only this like through well ins the than just I'm a question to OLED that we're as is of solution, now, say got I that's can see optical robust more our with we you plays protector, reason as little any will if and you particular very include probably design glass

Certainly, those So, protectors? can screen screen well. we the as through with Yes, with work high-quality protectors. can sense we

Robert W. Stone

Thanks. Great.

Operator

over like to conference for back I'd further With management queue, remarks. no questions turn the closing to in

Richard A. Bergman

Okay. you, Well, everyone. thank

either exciting the us. look on you. you As calendar very forward once and of And road we to [XXXX] in got talking or see, the front you again, seeing (sic) for I on call, near XXXX to thanks Thank future. our can a participating you in

Operator

gentlemen, and conference. Ladies conclude for thank participation. that you today's you. Thank your We does

now may You disconnect.

Synaptics (SYNA) 7 Feb 182018 Q2 Earnings call transcript