Texas Instruments (TXN) 23 Jan 252024 Q4 Earnings call transcript

Company Profile

Participants

Haviv Ilan	executive
Rafael Lizardi	executive
Dave Pahl	executive
Toshiya Hari	analyst
Christopher Caso	analyst
Ross Seymore	analyst
Christopher Danely	analyst
Harlan Sur	analyst
Christopher Muse	analyst
Joshua Buchalter	analyst
Thomas O'Malley	analyst

Call transcript

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Operator

Welcome to the Texas Instruments Fourth Quarter 2024 Earnings Conference Call. I'm Dave Pahl, Head of Investor Relations, and I'm joined by our Chief Executive Officer, Haviv Ilan ; and our Chief Financial Officer, Rafael Lizardi.

For any of you who missed the release, you can find it on our website at ti.com/ir. This call is being broadcast live over the web and can be accessed through our website.

In addition, today's call is being recorded and will be available via replay on our website. forward-looking TI's involve from results expectations. include that and management's will cause could to call statements risks that uncertainties current This differ materially encourage description. as TI's forward-looking recent SEC notice earnings We a published most review more for in complete release well contained the regarding as today filings to you statements the

what we On X, we at to XX I would information done opportunity some call. February provide we've our ahead. that's important management Central capital the progress past, Tuesday, and Time, will and the like to to have capital as your our summarize our for Haviv, calendars. will I in a.m. allocation approach Similar prepare Rafael to share

we'll on, following Moving today, provide the updates.

of the quarter. will Haviv First, overview start with quick a

fourth revenue results of revenue market. provide by Next, Haviv with respect our into of he'll we're what then end insight summary breakout details will annual to markets. with seeing end the some provide quarter

results quarter lastly, and it Haviv. And the for me XXXX. over that, of the turn to Rafael let guidance our With will cover financial first

Haviv Ilan

Dave. Thanks,

a the ago. with sequentially X% of a quarter quick the overview decrease Revenue and quarter. Let me same $X start of was a X% fourth from billion, year

quarters Analog quarter. XX%, from revenue the X% of year-over-year year Other segment decline. X grew Embedded declined ago our Processing after and grew

provide I'll by some Now insight market. into revenue our quarter end fourth

X our more last automotive, time. and is industrial were this which sequential markets, as results focus I'll quarter, to largest on declines. at modest overall Similar from sequential Our informative it saw performance

digits. Personal mid-single industrial market The down down First, mid-single automotive digits. market single digits. grew was the low electronics was

digits. communication declined equipment Systems low And Enterprise single grew upper lastly, single Next, digits.

our year, end the each calendar revenue do end In addition, I'll we at by as market. of describe

revenue systems, communication a for personal X%. XX%; XX%; X%; electronics, industrial enterprise XX%; equipment, and X%; was XXXX, percentage was Other automotive, of As

our combined see about markets, TI's opportunities in made industrial XX% XXXX. of We revenue, all industrial In place emphasis and additional good XX% strategic from up in automotive on of but XXXX, we and up automotive.

turning increasingly power. analog reliable, make more end Our their customers and lowering products technology to to embedded are all across more regions affordable

application Rafael This growth, review in automotive. now likely or management profitability, secular drives growth continue content our industrial capital cheap drive to will will and faster outlook. growing which per content and

Rafael Lizardi

Haviv, afternoon, good Thanks, and everyone.

As and fourth of Haviv XX% revenue. revenue billion. quarter the was lower $X decreased to reduced profit $X.X profit loadings. primarily mentioned, gross in factory or higher was depreciation due Sequentially, revenue, quarter billion Gross

and and X% points. was margin billion $X.X decreased year fourth a in expenses quarter revenue. Earnings were or per billion down was in ago was expected. profit XX% expenses XX% share. of On Operating Net for in a that the XX-month $X.XX were trailing not or quarter of original from $XXX the a items Gross about or XXX quarter. $X.X our the a XX% Operating income $X.X share ago per guidance. million, profit profit included in basis as year operating revenue, benefit from billion up quarter were basis, $X.XX

our cash $XXX paid with Cash quarter. In was $X.X the Let the stock. the billion me $X generation. dividends $X.X quarter. in in we and were starting billion of capital expenditures management from our now in flow on billion results, repurchased our quarter, comment operations Capital million

consecutive X% We the marking year per dividend in fourth by share also quarter, our XXst increases. increased of dividend our

to $X.X months returned In past have billion the in owners. we XX total,

outstanding quarter. Total billion Our of debt the short-term strong was balance the average of at with $X.X with investments a sheet weighted billion $XX.X X.XX%. fourth cash coupon and end of remains

days the were billion, XX quarter, $XXX and up Inventory prior from at end days quarter the $X.X of up the XXX, was million sequentially.

$X.X were was these at of $X.X flow In operations billion, XXXX, from the look expected. year. cash capital results for let's some billion, as expenditures Now and

customer nearly of through capacity or at X-year cash for deliver to to cycle complete, uniquely dependable meet TI that, revenue. once Free XX% scale billion low-cost was position XXX-millimeter XX% $X.X elevated We're demand. a CapEx will flow XXXX

cash model of assets Our cash as our our flow of our maximize decisions XXX-millimeter long-term in objective to to is the inventory invest as value. primary believe the business and reflects which share, overall to well strength manufacturing per flow support free free driver we long-term

the outlook to for Turning quarter. our first

We in the of $X.XX to rate for Based the long In tax about areas earnings closing, we will be add range that law, of $X.XX $X.XX XXXX to billion revenue billion be per share in $X.XX. stay on the effective expect expect to the current and TI XX%. value term. we tax range now in our to focused in

in invest and our advantages, technology, positions. to product of portfolio, our diverse manufacturing and are broad competitive our long-lived continue We and channels which reach

free through We will best continue the enable cash over share per these on we focusing opportunities, will term. the continue and to by capital deliver us to strengthen advantages disciplined flow long allocation growth believe to which

let that, back Dave. With it turn me to

Dave Pahl

Thanks, Rafael. a opportunity as for limit an of to yourself question. After provide single now our lines you open an additional follow-up. Operator, Operator? the possible In as your to for ask order can many you an to opportunity provide response you please will questions. questions,

Operator

Instructions] [Operator

from line Sachs. first comes with Our Hari Toshiya question Goldman the of

Toshiya Hari

by on you're think you Haviv, maybe sequentially. I was X% for could what revenue sequential market, hoping a guiding color some provide I you're basis. one to end down, QX First X% seeing

quarter, diving in guys you're cetera. automotive, were into et China, seeing last deep what helpful quite cetera, et You

the color, any relative be or would what's standouts So any upside typical helpful. seasonality downside to to very

Haviv Ilan

Thanks, Okay. Toshiya.

the which show as X%, seasonal will say QX. I what descent for did QX a I PE. as QX, is you pretty decline a usually that QX, would is, a seasonality. in we for personal And have do typically, I see just So it describe again, significant about market would sequential, we decline, think, for electronics said, quite

there. industrial, like be decline I markets pronounced So that's And look what typically, should there. automotive, think the we less you at expect if the also,

add So that's on I kind markets. specific of that my expectation. would Nothing

color the QX seen in little more especially and behaved changes. and a I some small provide in main also bit QX, think, similar industrial our company in bit similarly they maybe what but automotive, overall we've to on again, little markets, with a QX, will I X like

that larger industrial is that has we'll -- and at half of declines, are especially still see So first not that. to the if bottom, the of the found it's, the bottom, and the still there last I industrial call, 'XX I as with infrastructure couple then are a what found think maybe planned the sectors market, energy start showing sectors I of market of most described, at during the that the believe, automation, have for I kind hovering bottom, are

outside automotive see to China. with a pretty kind on significant QX, And the similar market, maybe -- we maybe weakness, the of did of

So about sequentially. the what which we've U.S. little pronounced but China in it would outside less and pronounced. and -- it be QX, was very decline China bit in seen Europe, X% more Japan, but QX declined mid-single my maybe was That China digit, QX. grow, enough not high-level of the But in the declines similar of did and a growth for was is summary to to kind the about offset

Dave Pahl

you follow-up, a have Do Toshiya?

Toshiya Hari

be sequential for it kind primarily that, of QX, you there. behind Haviv, I a decline earnings there's sort loadings of revenue. some is the under margin? past we helpful. to Is to in X% on would I is drop-off the was X% a of additional Any increase Or provide below of context on drop a that continued depreciation, the could dynamics outlook saw gross The for higher OpEx? color XX in same sort do, Anything some basis over EPS pretty And months? off it QX line? significant Dave. in for it the hoping QX,

Haviv Ilan

Sure.

Rafael, other part revenue, cover there. covered I you think I the maybe

Rafael Lizardi

to. happy Yes,

Okay.

me GPM, then I'll with income to let maybe OpEx, is time. go and relevant and start line, I'll to which then the this So other go

mind in on all. So first is increasing, of gross that depreciation keep margins,

is has Second, we an factory impact. we depreciation That are Then And is are reducing order manage loadings. increasing. then decreasing. in well, inventory, to -- revenue

going some but in that in fourth first reduced quarter, reduce those of We've quarter. further we're to

increase decrease that of to increases few OpEx in basis increases the quarter in happened I comment first, on to a addition and probably quarter. OpEx seasonal we're me points to will hundred let to making. fourth kind So overall fourth GPM Then on first X% OpEx. to quarter expect in that do normal first that's percent X% investments

cash relevant time, interest short-term on interest our And is sheet, this invest about decreasing. The that, reason and that cash. it's we by million. happening our income is balance cash are also the Beyond that's decreasing, where $XX rates decreasing is that levels are

and So drop you rates combination cash other of lower interest a income. significant a in gives lower

going about million $XX less in for first that's, case, ] to quarter. So this -- [

Operator

Research. Chris of line the from comes question Caso Wolfe next with Our

Christopher Caso

embedded of business. going the the with Yes. Can the businesses, there sharp margins. margin first reason question be we're I on the in the would and what's those between regard between decline a and to give X you the guess for seeing some embedded analog explanation business the particularly And embedded side. on divergence

Haviv Ilan

margins let words side, and I'll few revenue on let say the about there. talk Chris, just over me a Rafael the

or we behavior embedded a again, little the bit seeing markets, So are a phenomena and like analog -- see between X sequence geographies, these regarding we markets. many of

embedded business 'XX grew Analog As in double business you XXXX, our our remember, declined embedded digits. while in

in decline the we in grew. actually QX year peak a about right see that's analog -- embedded, reason they a saw a So on when later sharper now embedded later we

I behavior. year ahead think of maybe about a cyclical So embedded on terms analog is the in

related you go. I'm profitability, Elfa, to it's sure Regarding but Rafael,

Rafael Lizardi

That's absolutely right. Yes.

embedded is analog on now, because factory is going disproportionately. the and and embedded. is embedded underutilized from drops, So disproportionate impact profitability. impact effects revenue serving a takes And has analog, serve that Utah, first is an that in that it as it revenue both both factory since the that LFAB, embedded than underutilization serves to second due that different it's while is right disproportionately embedded to But but Lehi the loading profitability taking factory, part clearly that it's hit and embedded

Dave Pahl

Do Chris? follow-on, you have a

Christopher Caso

be going on on follow-up right Yes. That's I some what's Got now. would in China guess it. update the helpful. question

is You auto had spoken business, about, the I again, there. guess, stronger

how rest talk that could take may that share term. industrial near kind us in of know actions of the your lost on were we example, been the may lead some numbers taking be some that of update the you have to and some seeing and when of you the business for longer. in Could back affecting give you that times the about China in an business, that the you're Perhaps you've

Rafael Lizardi

Sure.

level, high So grow that in business. both first, in QX or China area China our year-over-year, mid-teens also entire was did for but the think it I business sequentially,

We're do well. to the continuing customers it talked think strength, are about seeing automotive last I the quarter. we phenomenon, meaning same

a China, for which And there higher tax share is in bigger EV vehicle has content. the

on the also up see it were side. that we China also in main secular during mentioned some had China So us automotive But was of the we short. electronics growth I and think we in helping previous is in supply -- suffered when market the market the and personal you that calls the cycle one limitations

again market sequentially have the our year-over-year, in are but main also market this markets grew in growing businesses. electronics U.S., and the nicely It seeing in China are we these QX, significantly We China. grew also in that that

overall So in business is overall, China healthy. right now again,

cyclical asked we industrial the start the geographies. seen across about growth our all You of yet again industrial, in haven't of

China mainly China U.S., let and not low were sequentially. me say, automotive from describe is coming and rest strength digits. the Asia down just of -- Japan So and And would really I electronics. Yes. double really Europe add here little a personal it more is flat, color. from,

if mentioned, by declines was Haviv XX% in you of growth XX%, kind that As the you offset China regions. the and other see U.S. in look range, overall year-on-year, and that up

Great.

and Okay. the next we'll Thank you, Chris, go please. caller, to

Operator

question comes Deutsche Seymore next line of the Our with Ross from Bank.

Ross Seymore

ask the in to environment about want pricing general. I

would of Rafael way, or gross Just any embedded that, be certain discussions in the your either update any about that But or on You geographies? any versus that if just wondered or or margin didn't helpful. competitive mention analog meaningful sequential Haviv any front environment weakness. of the in changed in has

Haviv Ilan

the in versus we QX environment seen -- In in change can pricing not any Yes. is level, high we've not XXXX. what

I think we've expected.

pre-COVID what said I like-for-like the the And did where decline that's behavior, previous single low think for as beginning digits year or will pricing in per 'XX pricing less of year. that go it in part will we XXXX ended. back to

right? change part market Of the did provide price, PE 'XX big XXXX, and a we to be revenue market. 'XX in behaved has geographies. XX% all is some The So have on comment It as that because And that of changed, has like-for-like I'm and XX% not And color will, different if was industrial grew from that's mix, 'XX. course, of I has think in in if XX% across changed and I XX% declined by selling the to mix to revenue. in a 'XX expecting expected, But will. to what seen. you that's go the in you

Dave Pahl

you Do have Ross? follow-on, Yes,

Ross Seymore

A being do. company bit for measured maybe Haviv, little points. I markets of longer-term Yes, and a about share has historically, question your talked in basis losses gains in the

XX, up, points course, basis sorts of kind supply I XX, year, the things. a it would what nature aspire of go think was It can, XX kind you of or down shocks, given fragmented for guess, to. of I those reasons, of it,

would supply. forward? have be you there But plenty now that, like historical pace has going different share that of any world Is gain seems reason that supply, it the

Haviv Ilan

way So not would we up, to the or the almost needing measure approach. mismatch, behavior of, anxiety only it Again, was say, the down supply/demand there over behave, but the a been yes, when right? run lot about shock really That's our I, share think the way of always customers It That's COVID. is company. and was almost I I That's long way we during of parts. only we wave talk term. a

between and across it I I see see geographies. business So think wouldn't increase say I business. this done. think embedded analog was still sectors We markets see it's it differently in even out. behavior inventory across industrial. built. still it We that And between We internally is our playing

level, of supply -- and to it, to where things tell we one time say are. kind it's about now these right excited we have support I I -- inventory will the am growth. the had that -- of So fact but right the the

I'm encouraged progress the our market. about in analog

points our year-over-year was business growth. As about we But on prepared a of mentioned it grow a remarks, of did X quarters in the I QX, in perspective decline. after analog couple of

to the market and we is especially customers. and longer we've grow the industrial and forward the look I product think continue right portfolio when capacity to think level And importantly, in I'm to -- most about strengthening. And have I convinced And we you growth that I'm business, it's term. that secular the our that there. improving our will convinced of automotive, that inventory mentioned, support

market I share grow So will continue obviously, compete expectation team the it. the to tie-up is for and for

Dave Pahl

please.. Can caller, Thank we you, next Ross. go to

Operator

Citi. Our question comes from the line of Chris Danely with

Christopher Danely

better, I a the bit expect the strength Haviv, or in not would sort end you a seen little or talk on you've change months, of any And markets? markets. Maybe about guess, drill year? the expect like conditions -- would last strength have down you over relative really? you seen say of by How business worse not just X you to things end play out where this would

Haviv Ilan

course, coming our you Yes. call, mentioned are happen and, met, have even I the real call aging capacity us level for we meaning are the tell I inventory even because I we see almost it are Chris, high and customers short. this do we for of waiting is happened, what exactly think running or we business as it's for support you time it, very of the because quarter, last during second when now right demand we I and think told I the last last growth. turn further for before what lead time tell it times fulfill you Customers what we can hard order, make right they call simply will to

think, And the deep We the it to really that over by even communications saw upturn, 'XX say think PE and growth the found and in nice I we would we i.e., already I They there. seen business, in then center it seeing I sequentially QX grew markets, in cyclical are we've are QX. saw in driven and will growth I that since returned of bottom. it say XXXX. data joined, and I on of and year-over-year think some through enterprise, somewhere, the that it

least these is or our nothing that industrial if they into changes automotive. think of expect think big are us also question is And for that at to -- the major So upturn. don't I XX% -- markets XX% I our in and business of XXXX. on X I XXXX The continue business

bottom haven't we here, And seen yet. the

it of, point given clear industrial that. there time, we'll I've when strength. kind on have side at and how it, just very we'll is be out. from. of Let's last of China it, to at position said we say the about I kind wait do believe a We're an of great It's least points see grow we'll do example. see Chris. year But the seeing to that play wants level. to And when hovering low see But as it. as to have I course, a

Dave Pahl

Chris? follow-on, A

Christopher Danely

Sure.

on quickly Just Embedded.

have margins? and a something looks like embedded it restructured to changed talk to be the needs over it like Or there an maybe So of level or lowest that. you to back need some adequate done sort margin? there margins to get what about of guys I appreciable think get of be Does decade level to an something to or

Haviv Ilan

Yes.

going little Chris, will high-level take more a there. on quick what's me Rafael Let give answer, a and bit

I excited -- getting every am I'm -- more business Chris. think I'm about transition, a growing quarter. you're in I embedded seeing

we I are winning think our portfolio and is strengthening, business.

the and be free are going going to are we We great on especially per convinced the But that contributor is a puts that transition, through to manufacturing flow on embedded cash pressure margins. side, strategically a share.

about answer your what's anything. some color or Rafael, The more provide can you going there. short answer question so restructuring the is maybe no. And on on to

Rafael Lizardi

a said the One main I what ago. is the in to similar few add, factor. calls just is a questions I'll -- No. revenue Yes. few

seen about place, LFAB, Embedded So into get Embedded trough, to because the you if did. a impact other about or it taking they're is decline same analog is a longer earlier analog in the right? took the to at from But Haviv As the And the sharp talked LFAB reason downturn than underutilized. has amount of pick having then look call, embedded. disproportionate

let the stress me on takes But just it to that away, you other end. like it gives

So that. better we through -- we ramp external even but like and internal, as fall move really to going LFAB, from the ramp you're we do as flow -- cash GPM, both free to when to to we as

in to results. So embedded it's the we're transition. other like when going on Avid side, said, the is that we're And

Operator

question of line with the Our comes from Sur Harlan next JPMorgan.

Harlan Sur

at One we normalized on then the pushouts, And cycle coming customer levels, of to the of we the in I of activity the of of levels? level gauge another -- metrics you at And health as of the look or cancellations, right, at customer inside forecast well? as know, that expected remained on relative Has kind Haviv, the it's maybe turns about is changes, big of look at quarter. rescheduling to metric said prior number quarters orders. high is backlog this is but maybe

Haviv Ilan

Yes.

second I'll with of the me Dave the start first part. question. Let about let part comment the

QX the what all Look, higher the came of we turns of at we side So the the from in came close That the call top range. business. range to

in the clog the real didn't quarter see we it beginning So that time. in of came and

continues see So next into the of beginning year -- of that, this that year. need we to

a we phenomenon, a it's QX. have but rather anything Of one it's just the in very that business quarter now. -- Year Chinese right very, not that New turf And looks see good trend course, to but there is is than

Dave Pahl

cancellations. continue seen be Yes. other ago, you very and indicators And levels. at you quarters they low like had those when several those drop brought look to at We up Harlan,

us Haviv remain in If [indiscernible] very see are you that's things typical earlier, the through like that. for to revenue And mentioned short. times at quarter revenue lead look linearity,

have We of that our web for immediate of all the via products essentially availability we shipment. available sell

follow-on? they customers product So have got. have can can confidence Do that behave the a and that that we've you get

Harlan Sur

Yes.

chip [ August, had you think, free capital number your of was in contemplated remember That in grant some So to allocation, stock calculation billion. your I stock ] back per release, share update flow management not cash before December, those I preliminary articulated in attached -- chip just was this in guys press you the dollars. milestones the the graph solidified, $X.X and received

before going what drives like XXXX in cash those looks versus share flow grant actually, $X.XX it or out incremental you in And an billion [ that's many per milestones executed be of of $X.X sort your free XXXX. that to of potentially are analysis. ] And laid in dollars, scenario

billion for XXXX, $X.X try profile that Texas grants on out in have question. Instruments? So per mapped to view cash the maybe better me and you updated potential flow over let have an free share stock chip So answer that XXXX,

and Commerce new you in help First, our to, kind awarded with Utah. fabs the Department under construction chips for geopolitically of provide ITC will alluded This wafer up in Texas to of of $X.X direct of help us billion processing Act come. bigger will XXX-millimeter This picture, us coupled supply funding. funding, support as and embedded dependable CHIPS the to analog X a years

and the cash the details Over the direct we payments funding. this life expect is point continue. of point expect received the on over of at related funding, billion those program billion have $X.X the receive share. we that We've between don't most life happens, -- any XXXX and important ITC in specific to total. will But to $X.X in XXXX maybe and the of share We some beyond direct the to the to already as to the

related, well. shell, in the in is 'XX, I [indiscernible], that X it's yet, are installations Sherman and visibility, milestones in is problem, construction done right? clean math it's which the to I not tools the And incorrect, but will -- said, well. I we is on of moved it as tonic -- add cash we timing which also we when the mentioned we think, about a summer moving just think, free room flow, just is and SMT, depends talked -- the started there so not we of the are cash you we, don't as have the in the but -- and get that So construction that

Utah. talk room [ more ] is part This clean is LFABX. other and X where The in LFABX. for It's construction about we installations

starting the on will how over that still LFABX. timing execution. continue see as are that to we there, groundwork in is now only quite a bit of And we So works right? forward we But there execution move now

just one have Let we we $X.X sheet. me awarded that more balance been officially already given on thing add at our billion, that booked

So we have receivable. a billion $X.X

that's You our of that the factory balance $X side to of net of decreased because because can see is liability built. on already but going depreciation. sheet, deferred that factory actually the -- built decrease other that and it's PP&E bottom the that, related our a where $X.X that that's I'm billion expected ] a this that's to going is already [ related not -- line, is to

you you me Depreciation should update expect let give that, an XXXX, depreciation. to $X now with billion. $X.X to So billion for

That's X.X ], at the I'll slightly the on depreciation [ to for range we down of of same, from the half that X.X be X.X you X.X expect previous XXXX, to but [ [ that [ that range. ] expectation, be expectation. lower lower ] tell keeping And to the That's ] the end to range. we're

Operator

line Fitzgerald. Our comes next of with C.J. Muse from Cantor question the

Christopher Muse

gross for I guys a are talk loath you could beyond the framework the hoping margins March but about quarter. was know us I thinking about you quarter, beyond give to

what's helpful. on for just start there planned depreciation. low March? is to the gross kind quarter margin very That's of Would be March utilization helpful. thoughts optimal the and, You therefore, higher? your inventory us And would very that of thoughts Any tracking hear beyond should we gave love kind

Rafael Lizardi

what with No, to that. Yes. before, be said similar but to do starts all going happy It's revenue. I've to it very

margin, percent revenue -- the forward. gross both #X going of and you is driver dollars So

you your -- given that that, increases. already if model have the And I works it future. fall you to you to than revenue, quarter. you term so then full the You through And any better depreciation XX%. adjust gave much you at in XX% for rather then then after that the and long over do depreciation years This and numbers, you do can model do

I but that, mentioned, loadings the Right factory it's quarter, sometimes as other that on hit just that And on a is I a now, -- go underutilization. a you first benefit that from other factor depends the And way. the is expect have revenue we as in hit -- when but expectations. or is

revenue then we to with that materializes tends the doesn't lower in and the that expect So range. the continue, ramp that that of looking then the And the and range. we to factories at towards high helps loadings of end to the future, up if end that that you're happen, and XX% XX% take

Haviv Ilan

you of And to the last touched note, and I before think execution. related is our

expect is XXXX, complex. have of automotive business, takes a in have a bunch step forward a other So Lehi. in little of course, what call faster it the foundry it post safety transition revenue, we bit we But than the especially our said have definitely, executing objective. usually a do business little we LFAB stack hand, that into more want they our a that to That's execution, I And our to longer. we want are on to grow market. our [ it. bit the from It always just call ] right? We

But we from are expectation us, prefer well. is it's moving on the team again, course, our margins and And Lehi, capacity. byproduct of get execution. and, my lower parts well way the a as of on And commitment a helps that out to cost for that the as as to customers dependable meet they our

Dave Pahl

follow-on, a have you Do C.J.?

Christopher Muse

QX, to Dave. normal that of into Rafael, we do loading in just assume to loadings just kind line go top we back should QX? would Yes. one, assume seasonal If question. the quick a your Yes, higher move QX, pattern for

Rafael Lizardi

going more -- at levels this quarter one say, way. We be we billion I'll it have forecast that. a would It's want this a not But of draining at me -- planning the $X.X put also maybe those of we time revenue not as to, healthy alluding and to to you're point. I'm stick inventory. so with let level We're then inventory,

enough that maybe think to gives So you about.

Dave Pahl

of line the Joshua Our with comes Buchalter question from TD Cowen. next

Joshua Buchalter

previous I guess follow up the wanted on to I one.

$X.X the mentioned necessarily levels. not wanting the inventory to drain levels below You billion

though, days $X.X think medium a several how to we are target be and know thinking manage about how last now to we As XQ demand. billion a you're thinking I level as with to you're about term years. the should end near I there on about that's the Because that the I'd it about? obviously comfortable chipping curious thinking through closer you're basis is more and inventory is acutely, ask evolved this sort you're going be guess of to we

Rafael Lizardi

Yes.

give First, picture, here, levels the you high inventory. the obsolescence picture, let while we of I big But to maintain goal specifics. the you service, big objective customer is inventory, and a will give of minimize some me

at target goods sell that have the We the at finished XX,XXX the parts different level, for markets. we end in chip levels

rigorous in basis. part-by-part And a done that is very a disciplined and way on

how very, for in look to last it. that's many many, long we And low. cycles. is years These many, this sell risk very the life many customers They at time. on part of So Solesence very a parts long for

that in inventory levels now, you million, had, given I $XXX of million we're at level that Now a would the stabilize the point expect quarter, to going the running potentially how around into then plus first specific but further probably that increase and factories $XXX level. right

Dave Pahl

follow-on, have you a Do Josh.

Joshua Buchalter

change sockets and I earlier Yes. I not curious I'd gotten specifically longer pricing. Thank couple in were up, follow are on to as through to be lapped But have over of competition. picture, some want to about there of any to wanted peers some competition, open necessarily are related. Yes, color, if competitively about the you I pricing of LTSAs, guess your for ask for questions NCR bigger in sort Rafael. or have in backdrop hear and about you noticed change competitive of to last shipping the there's a number that no the quarters. the

Haviv Ilan

the career a It in any I it's I of seen same seen down all And The And of in down to that's market couple and same haven't to there change all significant the competitive a stable. is a are change. last cycle. still feels your it's gets -- again we geographies, I but my more kind remember mean I question. cycle. markets, now. in the me, throughout direct quarters haven't across significant

Dave Pahl

-- one please. last you, for time we'll and Josh, caller, Thank we've got

Operator

line of Our last question from O'Malley with Barclays. the Thomas comes

Thomas O'Malley

is This for Rafael. or Haviv

different to of Just highlighted in to ranges I those entirely you revenue kind know response credits the at grants depreciation as the at depending and the different just lower on capital And you're intention there depreciation function guide you But Is a wasn't guys of a and entirely some the of that or? a grants? us updated updated is lower potentially that on well. day, ITC Or CapEx management being CAGRs. just of today the giving the revenue. CapEx function function tax guide end, or the

Rafael Lizardi

It is function CapEx. not a of lower

the of as XXXX second the billion. depending to the $X be on for continue billion $X half more call, last billion And expect on between CapEx expectations. we to And that in We at in we'll further XXXX, year. said clarity to $X have

Haviv Ilan

we a very it. not obvious Yes. this like Phase on. as I, you disciplined is and plan. revenue of is be is the And to I based -- environment executing again, We shouldn't We're I still will see expect mean, move in This Phase I look going But Phase right to add, in what at into us the always -- factory well. II, we from going plan very in now, what's as said we our I foundries is external how on change our Utah. I terms plan described, serving

analog the very future. is we side, than, power for And that The our of are important II Phase we well. rather shutting [ our most down. example, on ] fab that's going on also X-inch planning for And want XXX

complete are [indiscernible]. in to Sherman going we line qualification the So

build We so going us or shell phase the set to X so in Lehi, shell and are so customers. flexible are give build that we shell about, a and capacity can in excited this Sherman the a it are also

room Once grow going only capacity the also engage they into, but that with to enough to understand clean them. not they have behind they be qualification is us, fully will

example, without new already path or a in business with very, Sherman go us So are in to new and gives recall fabs a parts having through and Lehi, grow for suppliers. their that to very running, or them their easy

and execute it. very that see I plan to you will customers continuing well, in story into are of August, have a we probably have that we our said, And a flexibility think XXXX a similar So we to couple do I that to we is in and but and serves as especially in slide want weeks, the always say plan, the plan, XXXX.

Dave Pahl

Right. Tom, you a got follow-up?

Thomas O'Malley

this, on give end so respond. a chance to broader it but just one the on to and I call, to want I do. you hate Last

talking on out that statement product in articles So a about market. China dumping

ongoing China there? longer in think public the debate the part guess there's question can I this you around of just term. you've address just seen an what is sustainability I of

growing of And obviously year-over-year then China. that, you're in kind the derivative of

You're in auto. strength China seeing

But are whole ability competition seeing there addressing of in to any highlighted your debate. ship the product of You that. just change the you outside dynamic that, in terms

Haviv Ilan

China And an what high China. again, I'll XXXX in the debate, market. By want market. we world play our you of important about I'll business to probably and less start in or was XX%. And in at not settle I'll the level just a way, Yes. XX% see. It's GDP, China in represents you tell that more with

over kind And or kind we our right underpenetrated commitment it's just in are not of to So XX%. our of at is customers. China,

it, supplier. get of want the our want Our to a TI to ambition rely the customers global on They parts. service. highest is And They they in have China, is want right? their quality. products. to good best players, on And They to have best top be

because but a to they end supplier headquarters geography. want sense, of And a the they that is sell to China, maybe great part their are any player. we global equipment So in TI in are

footprint that's their and needs. We for have great a diverse structure. fit manufacturing a support And of

Now as continuing be. you and has end know, competitive and to news, I always been the China is think this it's not market

our competitive position capable, continue reach of our our own us whether value industrial it's TI. technology. We our fact want to do I with know we to we And very automotive to that also manufacturing really they to and think in customers broad want portfolio, allows that's that the the own TI But fast-moving motivated, advantages and compete, and that the of compete, competition. are business the channel and

across have general-purpose our entire we part. portfolio, the think I low cost to whether it's AUP right compete structure

So our compete very see a application. integrated to and are select. specific ASSPs for I there, tailored want that that. to that. customers our We continue sophisticated And appreciate across don't sub need We to portfolio

kind as question, an about and your notified business usual been this time, between and we our it's investigation, haven't to China. us Specifically of in at customers

Dave Pahl

capital of Good to Great XX thank asking available for everyone . Thank you. tonight. shortly at you, X, our We look will be that Time. Thank forward for else, replay call management Tuesday, And a.m. you question, on call on Central evening. February sharing A Tom. joining this our us website.

Operator

today's And you. at your concludes this and Thank your participation. you conference, lines for time. disconnect Thank this you may

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