SYNA - Earnings call transcript Q2 2019

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Operator

Good day and welcome to the Synaptics second quarter fiscal year 2019 conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Jennifer Jarman of The Blueshirt Group. Please go ahead

Jennifer Jarman

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

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

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

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

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

Rick Bergman

positing handedly to as right Revenue everyone X% range our another by to to year-over-year non-GAAP which a we inch consecutive we were I within gross half XXXX. to driven of non-GAAP guidance mark, This Thanks was EPS sequentially. quarter and our improvement XX%. the Jennifer first like today's positive of am was strong quarter posted for on call. our that XX%. growth continue sixth year up up I the points medium-term report fiscal target basis and pleased in very period welcome ago projections of closer towards would margins and over XXX our Synaptics our of

further Our X.X impact financial company of favorable performance results. our our positive operating provides validation the of strategy Synaptics and the on

us smart on reliance more We we and amplify steadily allowed margins decisions to mobile diverse and transition IoT. have to focus This as company made business has and boosting our model. into improve disciplined earnings our with profile power, greater profitability shifting a decreasing our

As of we the we current enter certain our the this evident is light business. of affecting conditions of the more new even year, transition believe areas in significance calendar

softness significant mobile, others widely not of chain, is demand. in leading in trends. Synaptics these publicized wildly from OEMs reported in supply couple have the As a Like insulated

efficiency industry's This customers somewhat However, higher-level to with that and for TDDI. is touch growth to the position are the our deliver impact. strong remain key ability OEMs be In customer low-power, and first continue AudioSmart customers. OLED field nanometer the clear excited our across the market DDIC, our lessen purpose-built China solution to providing in XX the helping integration. to value generation next to base for highly as we sampling leader voice solution IoT, cost of innovation value several is continue that diverse post We to and a the we

market. IoT seeing are we noted, previously As weakness broader consumer near-term the in

pipeline for catalyst the remain addressing up wins. multiple and a the opportunities we for success growing continue and are design attractive growth with across set to strong we of very leadership ourselves power market The in and PC where staying have of mature investments and our is Synaptics generating a growth been market, time. even innovations a bright for year-over-year the we long demonstrates operating spot for However,

While we industry, solutions. capacitive to across rates immune are from benefiting component we the increased attach for PC through our shortages content per not fingerprint are growing

excited downward automotive, Lastly, on we our remain to we Armed to business, solutions invest our customer support remain including very broad remain by better to we where under platform where IoT, the continue X.X, and revenue our and XXXX. Synaptics double main trajectory navigate well-positioned a premium market of about drivers very to base. we growth ability cycles with in OLED the automotive,

as are products we strong execution of four we will addition, review our progress markets. which we across now laser focused discuss our next-generation on recent deliver key as I In

accessories in with proliferate to begin division. and high-end smartphones. headset Let's digital to IoT from bars and sound devices our areas cards, to continue set-top Synaptics-powered high-fidelity voice-enabled speakers and boxes smart

it's fact, office products to now common your home, by multiple Synaptics car. In powered in and have

learning series in at at new the a family speakers car partners include customers devices interface Bolt. now Google of Anker interacting QX. processor powerful appliances, nanometers incorporates rapidly is hubs, our first our AudioSmart continuously system ASXXX is home from CES, XX voice variety security fiscal and The on-device Drive Edge new intelligence key of Our Ensuring the with the a cloud. is SyNAP and and solution send reducing and Recently the and element security leveraging need These high voice Targeting proprietary this ASXXX implementation. Voice architecting wake by word including fundamental highly-advanced enhances expected with product far-field two processing. engine, world's the becoming far-field first greatly consumer network privacy the differentiator of of our Wi-Fi to repeaters, to comprising to voice-enabled solutions the level the of every system integrated data engine. device and machine SOC solution, is to sampling JBL a SOCs a acceleration, Roav new fully AudioSmart products. preferred LINK Smart product neural our with a launched set smart broad of ranges begin personal shipping This accessories devices. dedicated Assistant for the

Another in AudioSmart VideoSmart to Broadband have leading million in launched the This four is technologies by where considering there Android that includes Android will XX% year be IoT analysts with XXXX in that Industry service VideoSmart worldwide power over in partnership fastest growing its market position our Synaptics' as software TV to success by operators be XXX devices of IPTV Korea and and over devices are technologies shipped the B a a SK selection consumer industry the platform. space services for in next-generation subscribers. a to report segment Android OTT upcoming adopted million TV have TV. XXXX. providers expected calendar of

to HDR security added In technologies, family AI set. addition and the VideoSmart to XK differentiating video our has its feature latest

AudioSmart their DSP being to and Our consumers adopted TV to home use for voice also automation voice technologies far-field services. providers control are their by TV enabling

to division. turn let's Now our mobile

OLED Our grow strategic market smartphone investment continues in off and the as timing and paying materialize. of product to as begins to capacity broader really displays rapidly rollouts TDDI are

been has smartphone OLED Clearview or OEMs. display leveraging adopted COF driver Our several by widely packaging chip-on-film flexible major

displays immersive OLED highlighted version. bezel-free now consumes largest including XX% over and projects believe with the OEMs. the brilliantly solutions, evolution mass already generation the production and towards innovative our Synaptics next both infinity DDIC, industry's the power of are into by move less than lead we we that COF continues smartphones XX prior for which LCD we in the sampling lowest world's As designs, to OLED power

Korea and Our OEMs smartphone China, close panels. with across arming partnership whether with key or display Japan OLED touch display are all LCD and manufacturers state-of-the-art in resolutions, technology global

showcasing toward phones TouchView COF the TDDI are and our rapid mature to to feature-rich our flourish technology. discrete enabling trend with a the built and bezel-free in early chain have smartphone We vivid market DDICs address supply innovations displays

TDDI adopters as Huawei, the latest of selected as XX other for multiple five well Lite TouchView who Some our the technology the PXX, models, include X and Synaptics including models. Honor of

Synaptics' OPPO phones. Vivo also in new chose for wins three new led including leadership Vivo OPPO addition, from and two touch several has and OLED to TDDI models In FX its VX discrete our for new new models. its

with eliminate for latest of to XK reference is RXXXXX the be solution QUALCOMM existing headset The sent also Our traction over the resolution screen selected resolution our like helps protocols content effect enables door Type-C. portfolio VR DDIC our being design. higher data gaining and USB

another had the year, prior of say were adoption also in panels wide display the and growth Synaptics' across transform let's in market automotive several larger solutions display Japan, area, using move we design industry now integration. pleased Tier touch key is automotive, full manufacturers by Synaptics' booths. their demonstrating Now I likewise which received am China Europe, several displayed recognition talked into trends automotive efforts Synaptics and and technology, In at panels building car multiple We were of displays. to that wins CES seeing TDDI display more are about the OEMs solution. Xs this to and strength by towards we U.S. driving in-cell quarter, OEMs TDDI those connected well the and where

first this the Synaptics using month. we addition, In TDDI production panel OEM up lit

We year towards expect end lines cars the assembly Synaptics of calendar rollout TDDI with to of XXXX. technology

strong and let's our and business share business continues fingerprint to our strong our command where touchpad turn leadership to PC division, is market growing. Now PC

shipping be leading quarter. our PC fact, in In will OEMs solution products this Match-in-Sensor newest starting fingerprint

in Our also footprint includes technologies. display PC interface codecs certified audio and Skype

to new along the OEM/ODM with leaders newest Clear announced technology PCs. and our standards quarter, continue FIDO variety optical SecurePad Microsoft, single An a in of globally. a global notebook brands, AMD, define merges new that Gamma cutting-edge touchpad key module such series. for OEMs for of Clevo, manufacturer integration ID the Our fingerprint for glass-based sensor In Clevo SecurePad these high-performance OXi-based several areas PC state-of-the-art featuring notebook of as the roadmaps leadership into Intel Synaptics' consumer Synaptics' its partnerships is notebook industry as with technology leading first, a such Gamma we with

to models to demo one glad CES. be of are these at We able

partnership You company user pleased proprietary from optical Technology, are announced technology. we development sensing interfaces. fingerprint and solutions The a optical may to new unique patented of new in developer an recall, combining see Shanghai-based we each accumulate starting in the technology exclusive collaboration and OXi to XXXX, the of innovative includes with in

I for company. another well over like transition On CFO financials, to the would Board, of publicly his years several discussion today like him to decided would behalf him a level to Synaptics his wish we to opportunity with to held move I contributions venture. next and has numerous the last an announced thank of executive the address as pursue we the Wajid Before at

has been Controller, time announce long of CFO. been nearly and We Finance Officer has to our for VP years, VP, promoted are with who pleased that company Interim to Nolan, Corporate and Corporate XX the Accounting Chief Kermit

have like also new a search words. to I say would that, opportunity to We give few begun an a for CFO. With a Wajid

Wajid Ali

to This Rick. am privilege faith lot CFO. introduce Synaptics thankful results the the as made to truly very in professional work and transition opportunity I the It's transformation as potential. during personal to pleasure I development Interim talented a with my utmost outlook. of role executive these with from a growth a been decision quite company's walk past financial is profit a four him the to play you me sense closely a such QX it's standpoint. very abilities tenure for makes bittersweet and years, through pursue Having now and team. that in here, Kermit my a his I worked Thanks And expanded have with an to along And

Kermit Nolan

Synaptics the Wajid at everyone. of hello support Thank confidence solid guidance sequentially. for and revenues up $XXX.X midpoint posted quarter and range you with and X% million results of second our your

XX%, the presentation products down materials from this was X% year-over-year compared mobile the PC products products reflected Revenue was and X% IoT mobile, revenue released sequentially. from up year Revenue we sequentially. advance approximately XX%, IoT in from respectively. with up X% XX% As in ago call, and quarter up and XX% of that was and

down end a investment X% sequentially. growth to IoT shifted fiscal dollars have of enable we we of Revenue will the and from portion last in-display evident more stronger discussed As believe become products IoT we year-over-year year. up was the mid-term, fingerprint from to our the large quarter, towards PC X% which over of

revenue During XX%. the of above at XX% we customers XX% quarter, two and had

costs $XXX.X amortization million intangible of restructuring of quarter, $XXX,XXX the was were million and GAAP December For which asset of million compensation operating which million. costs. margin compensation includes million, gross expenses the XX.X%, of our in related GAAP intangibles primarily and share-based $XX.X December of transitory compensation and consisting program $XX.X some $X.X amortization quarter includes expenses share-based $X.X acquisition costs of

quarter, XX.X% high million quarter non-GAAP million quarter which and mix. Our the our the GAAP share. non-GAAP non-GAAP of GAAP On diluted end gross margin operating was the the range reflects our we end December $X.XX near guidance December our were was XX.X%. rate of product below a tax $XX.X had $XXX was quarter In December per overall net for primarily range. low of guidance expenses or income second of basis,

For share the $XX.X fiscal year. last per diluted second million tax the net XX% with our December year-over-year the quarter quarter diluted income Non-GAAP non-GAAP share, of of $X.XX was XX%. increase $XX.X rate was of per compared or December million quarter, $X.XX in for

of cash, of quarter, million used net million to an of balance quarter flow XXX,XXX We from which $XX million shares the increase preceding reflects to approximately the $XX the million $XXX during sheet. quarter. $XX Turning our cash repurchase operations, approximately of from ended with

continue be and million million. Inventories backend our was loaded repurchase basis We million were regard program. DSOs Capital expenditures active turns for quarter. reflecting were were inventory $X.X were stock days, X.X. and an $X.X and the December on expect XX $XXX end million with to opportunistic depreciation $XXX of at to a quarter the to were Receivables

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

We IoT PC XX% mobile, We to be non-GAAP expect and stock-based $XX.X now XX% outlook $XX.X for data with follow to GAAP in outlook approximately I compensation range quarter the respectively. from be to XX%, million. will the March the million the in mix anticipate our data. and provide products revenue quarter of charge will third and

million In sales. non-cash $XX addition, March amortization, will GAAP will related include be expenses $XX cost in to approximately reflected approximately of which intangibles quarter of million charges of

Finally, the year. XX% March XX% expect be rate to revenue overall now be account fiscal gross of to mix, and our for we XXXX for tax the our March outlook in for will our quarter. fiscal range XX% we margin non-GAAP provide I expect between into data XX%. GAAP to non-GAAP the Taking in quarter

profit we greater gross we to the anticipate as fiscal to anticipated fiscal per operating in that $X.XX and be our comments, for March $X non-GAAP per rate of operating to year. profitability would out non-GAAP within range the million to quarter are income operating net continue expenses we at and the to point share. is model the long-term in to range in for closing like mix of the In to diluted diversify expect to product Non-GAAP with $XXX We quarter be the of for $XXX our XXXX XX%. my margins range in million. tax short-term on March I share our maximizing We XX% focus look be

is you historically quarter calendar of As year with the generally seasonally period know, being the much back the our stronger. March lowest half

the eye quarterly maybe continue model patterns that, focus I call economic factors, an Rick. will volatile While to hand And to more due short-term mid-term. to the with on global our towards with we back

Rick Bergman

Kermit. Thanks

markets pressing diversifying we of our investing in While disciplined and to ahead we Ultimately, continue customer base which other gyrations equipped are can't product investments market under Synaptics to with weather the areas win. our to the and portfolio targeted strategy us our while we voice better in broader has conditions, by control business. growth march expanding and X.X our forward

Synaptics areas we As shown and CES, numerous expand intend in number at our to one key our is across technology portfolio share.

in IoT We on as strategic solutions to firmware are hardware leaders. key for vertically leadership and and integrated market well-positioned with a based supplier software,

with strong touch. in lead OLED mobile the TDDI opportunities to LCD, innovate and across display and continue market We and growth

to the a a drives are car automotive in strong expect growth displays. leading benefit the in we connected revolution are the forging as We TDDI the where for path need and transition

Lastly, to touch and voice innovate solutions. PC opportunities remain we through as market growth leader on and we audio the additional the where in continue capitalizing fingerprint as in are well

with and profitability. are the rapidly Our Operator? as box. markets well now our Q&A we to the investments With will as operator product technology product start financial increasing leadership driving dollar over that, executing focused expanding and to high-growth on roadmap, content are our session. per carefully turn we developing in the call targets our to successfully margins By

Operator

Kevin take Cassidy our go we question Stifel. first ahead. will Instructions]. from from And [Operator Please

Kevin Cassidy

for Thanks the inventories what us slightly, I channel you of know maybe and idea results in questions had you good would snapback TDDI situation like? and mentioned even we Can on the see the good luck, give wafers? Maybe quarters. what taking Wajid. coming on congratulations my a don't it And kind an are

Rick Bergman

Sure Kevin.

business, and your of additional we we as have. opportunity. manufacturers. the that with which have kind any There, leads But guidance into very TDDI. us any of there's second inventory the certainly that of display the And think part, the most as have the us. business smaller where in majority indirectly for for past, IoT the and some a mobile new of we huge play bigger the our customers, our role We bigger of a But it. discussed for kind very, lean. certainly, And forward, are I a We isn't we effect accounted is start channel for of we march comfortable that is companies manage is concept. in idea question, for that our you certainly to So for

pass meet And unfortunate this out meeting of from We the can we we to that are to had we there. demand adequate business. a demand. supply fall it's opportunities somewhat our several to ready we though, believe continue if have have otherwise support we at is But juncture, So I now, this rolling because had with say, sources grow the on last we point, would at few that and supply. wafer be forward

Kevin Cassidy

gross expansion Okay. gross to be is even driving room maybe very Great. IoT it seems margin there that? And Is just margin And holding for a up weakness. well still? with

Rick Bergman

six and to that if hit because it. we to share. for are and in on we company focused per every we Kevin, out committing to we continue is that a to work have we row going going XX% put up the at goal there, not I Yes. have are the get will to we ultimately, increasing earnings are And quarter,

As up. you going that the can tell gross percentages, from just number anymore I it's isn't two our IoT one would say, the is things. margin reason

have Our product internally the all been that has is just incredible that three and second gross margins on mix across the we somewhat want go continue we the And to then company. the across focus that to have businesses. up factor favorable recognizing need

Kevin Cassidy

Okay. Thanks. Congratulations again. Great.

Rick Bergman

Thank you.

Operator

Instructions]. [Operator

move ahead. to Rakesh will Mizuho. on We from Vijay go Please

Vijay Rakesh

Yes. quarter a here luck, of I guess, best Wajid. and good and guide

I looking could is inventory wondering more Just [indiscernible]. us how side, inventory on color on you the little give was a if

Rick Bergman

thanks for line Vijay, the broke inventory please? and a bit. you first quite kind said repeat the part. it question, the but heard Could you we of up And

Vijay Rakesh

at channel the the in inventories Just distributors?

Kermit Nolan

channel the in distributors. at Inventory

Rick Bergman

in about asking are or we have channel you If the distributors. do at inventory

that for answer Kevin. Someone question

business exception business IoT We We portion we for run semiconductor that of have do aren't customers, stock a the lot large the with smaller with distributors. of like the lean which of pretty our international that inventory. peers our a

lean through is the through of do ability TDDI because winter. manufacturers. have meet example, an a our market as to we display of channel But with very right Now the now demand somewhat the

to for or speak, channel general already the fairly inventory we overall, that so Synaptics. have is lean So sold,

Vijay Rakesh

be executing appears on margin And gross obviously are it the it. just side, Got well. you guys to

you rest the at you how the year? plays of gross look see the margin As XXXX, do out through

Rick Bergman

said, Sure. down some of I still, start A comes and will then lot mix. add as to well. to Kermit if it as I wants comments

to see look year a be start business we that of to second so of our we business. tends through And as seasonality. kind hopes and for And big year, calendar the half calendar the out have you IoT

we continue margins. gross So to the will work

our Kevin's forward. mentioned inch continue And a our will focus to best it do for as saw up guidance we from You I as move this the to quarter. on question, perspective, company

Vijay Rakesh

Got it. Thanks.

Operator

a [Operator Please Instructions]. go it looks from Stifel. from have ahead. Kevin And we question like Cassidy

Kevin Cassidy

Hi. Yes. my Thanks for taking follow-up.

it one-time like looks was Just Can it that changes some we going expect Or forward? are on good the very control. OpEx, there? there

Kermit Nolan

our Well, OpEx I think, actions the our over in last taken two-and-a-half again, with line have bring we years revenues. to

this the this that keep is of also definitely are anticipating to I to But maintain like in in investment we the million. Obviously for that. we there's million quarter range million $XXX will We would to that down $XXX be expectation to think OpEx and will quarter into IoT. range, quarter my $XXX sure. next hopefully million $XXX

Kevin Cassidy

And maybe also? follow-up, mentioned well just for maybe work out driving Or cost advantage performance? devices. for a a as cost, Does Okay. Great. XX you Rick, give the that as as now but nanometer maybe you law more Moore's

Rick Bergman

which recognize there's devices. consumer in devices of Yes. Kevin, we cost we pressure those on type always are

also we quite some XX we technologies SOI in so and power the sweet notch to the global talk costs ratio us integrate. when you there. nanometer, other point because the then of XX and continue well up We felt nanometer the than forth. a the process performance which XX CMOS it better nanometer process of out XX darn which But type an a from to mass really selection, it's wafers some especially right pretty cost was gives performance where is and right not that as spot, really felt or So foundries the power gave node expensive was as what ability made

Kevin Cassidy

you. Thank Great. Okay.

Operator

Company. and go Needham from ahead. Shusterman Please Ari is next Up

Ari Shusterman

is Needham Hello. Gill, Rajvi for question and Ari. this Company. am taking I This

what right new for to are your home. And goes partners same So for IoT auto, partners trying now consumer who to you are smart IoT within platform? your consumer attract key for and

Rick Bergman

me automotive. is partner key let So in, with our start

some now with with a three really X to Tier they manufacturer these and classic-branded about understand And entities. display can't car is products meet the until display imagine, who important OEMs. different manufacturers the starting combination. go In them. will them, you of to are announced, with bit Xs. I As of to One some We a connected they are. really technology more like so But or into they the have are want at. display other go can in it's and directly to look they use We cases, a more is will cases, where Tier meet and to it's

We Xs cetera you It's have work product designed AUO, display et are the or Tier know, And LGD, those that to with there. market. it's the display manufacturers names manufacturers participate to in. the in who Samsung, get out imagine all BOE, in the world our can automobile whether you

As to the it's more key all much a of players. we IoT, ecosystem ecosystem and fragmented work with we shift

have Google anything. and smartphones their globally, course, what just or initiatives it's a is strong done they Of support been a around we big of customer whether and have Android

Amazon IoT, solutions certified then work move we their course If the one as based work Tencent, voice. with, shift market. reasons. And available of Baidu, technology you you on with third-party partners also that into China, of with out work for see similar also you there. provider When there's the into, on of also are server many Amazon We Alibaba, who our

platforms in presentation, server website. there that out guess, I of the our we you CES a of go are if Relations and in we and provider customers But presentation a are ways all asking question, those broad some did Investor you kind worldwide. list partners the out providers at to So many

Telecom. a call. it's audience, mentioned So We worldwide particular SK on this quite Broadband Bouygues

those So of that's that we spaces. with a smattering partners the two in work

Ari Shusterman

can When color more your and map? a quick then road you one Thank bit the updates for you just Okay. follow-up. some on comes give to it OLED, And answer.

Rick Bergman

as that's much As publicly available.

then We So marketplace. can well levels the panels. OLED sampling devices with to have innovate power of HD. today a has that or Full and begun And us as now solution the used done quality, those be a can those of lower as very painted And flexible script beyond in which a rigid integration. have around version either QHD power you that, higher we display strongly continue in expect to we for OLED

Operator

And Anderson next have Charlie we Company. Dougherty from &

Charlie Anderson

Yes. for I am my taking calls between hopping here. Thanks questions.

So has sorry been of this if asked. some

looks so is XX% the down in on IoT, it quarter will December, if right. March or or like after you in math where the guiding be Just maybe my are so XX% to down

So potentially business I I turning And then see different had bunch what am changes? within how bought it you curious you IoT. around, guess around? know Marvell of gross products, of I the I specifically the very business as am you curious know the bought just that profile margin turns new kind I have as margins. you and Conexant

that see margin? when of growing is the terms follow-up. as on in So I margin, a that you helpful do gross And then have a got

Rick Bergman

Okay. Thanks Charlie.

few weakness kind down what And business there there we should why persisted came lot from factor. smart our just then kind had is to we year reasons is grow I and it kind a news a year-over-year. the kind our other kind fantastic of the of so the just expected you last into two We hit am persisting shoot and weeks. that of the from of as Two as was growth. QX, have out here. whole QX. the of more one just so about factor think of lower factors kind is That's sure I said it of IoT Those and slower, guidance of to year-over-year examine QX it's broadly no there. ways, some kind market is in as business So speaker in heard of the it's

our our boost. XX mass certainly As with in I the a will in prepared mentioned us production fiscal littler gives my that of to tend higher products seasonality They ASP the QX remarks, be year-on-year we And and much in in half nanometer the be will as think back swing compares I then favorable. be more into a year, products. we more nice

so business that forward. to expect grow going And certainly we

margins Marvell our Conexant forward. Charlie, to you were of are bit a a The a XX% where out gross to margin. terms higher. going of That's than were we above operate XX%. expect right. In business kind We gross continue margins gross margin, bit lower balanced bit IoT

Charlie Anderson

of Okay. Rick, picture sort then, Great. a question. just big And

You have LCD invest exposure your in am on of and are you are what consumer Thanks. as terms OLED seeing in shifts changed Has the sort LCD curious need OLED also real-time of side internally? what just to a I and the anything you from taste people exposure after? of in then side. of the view sort perspective what on versus

Rick Bergman

Sure.

previous to again caller, marketplace non-Korean in presentation being the displays mentioned the at the a this terms a XXX in we where as Relations our the we best of suppliers at of little we OLED, the Investor less actually showed I look So than with between did year. million two site percent trends have CES

nothing to out change past month. over So the

for of continues smartphone excited OLED will it that a next phones. And points are terms are think we be a percentage we So at continue least to couple of really years. versus OLED about the higher LCD in that think want substantial price the cost displays, I Kind consumers to marketplace. ramp and of and of higher course, their the balancing though, speaking have they of advantage for

kind sticking are of going that we forward. mix with So

our you rates investment growth position the can to in also more maintain our because higher share while and market. OLED, of we want imagine, are to shifting LCD As dollars we there's there

Charlie Anderson

so Thanks Great. Okay. much.

Rick Bergman

be as majority that's add in automotive next investment the for vast be well, of we independent LCD picking will I of up certainly guess, our And, Charlie automotive will I decade. where there are should that

Operator

[Operator Instructions].

go on ahead. We Brett to Simpson will from Arete Please move Research.

Brett Simpson

million grow will us had And mind a for TDDI give underway? XXXX, on think Yes. mobile calendar Do Thanks proportion if a very in units at this a what seeing OLED is and ramp today out a market TDDI this OLED much. transition play side, you sort your I give in the a us XXXX, But sense think sense of this you just us don't XXX share opportunity anything sort out? of OLED is that non-Korean to just you or very the business. you It's know help year? or Rick, see projections think out plays helpful. and to it bearing you how for course you of year. helpful can that the would any just over there where market follow-up positioned size could be business how OLED you will on as are mobile then figure knowing just calendar can the I you how are us help like

Rick Bergman

Sure.

see of me each if address those I Let questions. can

bigger On clearly market will in than side, the XXXX be XXXX. the TDDI

in we XXXX. one challenges, a of course, share have Now we the had good pretty of is,

segment, the segment. change a example, going HD of a of to TDDI the Full for The But the very huge that to And is Today, we is as still discrete type everybody grow that TDDI in HD finally. market is quickly mix is it And share to opportunity driver for business calendar the so of still goal but won't as be growth the year-over-year. best in of benefits our that's XXXX solutions. a we see can. getting maintain most us,

opportunity which the the is, our I presentation relatively math a to pretty I a the small, quick as myself, pieces still some a it's area in here, in results. our Maybe in the is remind mentioned talk of what about. what business most well, OLED, And display tend bit couple to drivers part have percentage even there OLED. the TDDI. quarterly shift. as I lower that. of little the One doing of on sorry company think five of we view than to am So is market On or I percent rapid have That's that

As we X% The be to display with comment. that higher. of driver course the we move expect forward,

participate course, I in markets. That of Of example. OPPO OLED with wins talked the design than about. all the the mentioned more had we display, I bigger sell that we broadly is and with And controllers there X% Samsung even an category three those and business much touch as And we kind Vivo. are that

participant OLED So the we are a fairly in market reasonable sized today.

Brett Simpson

that. on just Great. follow-up And Rick, to

the year? that the opportunity, as give the you unit market that for to How do how business display, you plays sort XXXX, market playing through can the go as year out? you share us at described? that how non-Korean calendar a look OLED think million of out you do XXX OLED your we evolves sense you And see As that in

Rick Bergman

Well, year, on various will the course, are of bringing it ramp suppliers through capacity. as these

when you if But market, bit line, in kind the can our number. in give that than me percent have I it's especially is hard I for XX-ish And share. as don't of historically a will of early this down is I to stages. QX less market again are the we know a best is tell. been in QX we it and type units this really small say market display So particular million XXX peg we as on the product share, can

Brett Simpson

Right. much. Thanks helpful. That's very Cheers.

Operator

further no And it questions. looks last clarifying answer? I Instructions]. further apologize. you apologize, I that that [Operator are there I there -- interrupted. mind that looks Would It no sorry,

Rick Bergman

just display it part Emily. manufacturers. non-Korean SAM Sorry the is or of I It wanted clear. OLED our to make

Operator

like it you. Okay. Instructions]. closing no remarks. back are further [Operator Perfect. there would turn to And questions. management Thank I for to over

Rick Bergman

We us Okay. soon today. part the on Thank Congress latter forward Mobile again seeing look joining some you month. the World call the to everyone you Goodbye. of at in of for

Operator

And this you concludes call. your participation. Thank for today's

disconnect. now may You

Synaptics (SYNA) 7 Feb 192019 Q2 Earnings call transcript