ALGM Allegro Microsystems

Katie Blye Senior Director of Investor Relations
Ravi Vig President and Chief Executive Officer
Paul Walsh Chief Financial Officer
Gary Mobley Wells Fargo Securities
Michelle Waller Needham & Company
Blayne Curtis Barclays
John Pitzer Credit Suisse
Srini Pajjuri SMBC Nikko Securities
Mark Lipacis Jefferies
Vijay Rakesh Mizuho Securities
Call transcript
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Good morning, ladies and gentlemen, and welcome to the Allegro MicroSystems fourth quarter and fiscal 2021 financial results conference call. [Operator instructions] I would now like to hand the conference over to your host, Ms. Katherine Blye, Senior Director of Investor Relations.

Katie Blye

Good morning and thank you for joining us today for Allegro's fourth-quarter and full-year results for fiscal-year 2021. I'm joined today by Allegro's President and Chief Executive Officer, Ravi Vig; and Allegro's Chief Financial Officer, Paul Walsh. and outlook. performance quarterly summary provide our our of review annual and financial a We'll

the in Please SEC, most with in us earnings release projections. filed are other release obligation the no website. forward-looking to forward-looking call discussed earnings about we the recent and be note result, forward-looking the The Investor being Our filed within that information meaning that and and available our on February statements presented. Relations refer not to on factors financial materially that are webcasted, during are page issued page the on future and detail GAAP today documents include or available risk press X, today statements comments from XXXX. on company cause by and assumes prospectus our including other are uncertainties securities and of These our of of calculated any expectations vary shortly. could recording projections statements to laws. a the be made than include similar presentation by financial events results differently our used other non-GAAP may companies. replace a the This assumptions discussed IR risks a is accompanying call intended based current will are financial Please as tables to actual conference be that federal this and, results and measures Allegro's subject measures substitute The for update to

call is during today be CEO to in release, the now Ravi Vig. and IR our President ongoing press of to I comparisons will make may earnings it the which to referenced our Ravi? operations. page. call A turn enable results of financial of providing to core are We over found because highlight information non-GAAP core posted Allegro's the results operating measures clearly our supplemental meaningful reconciliation GAAP more this and can investors

Ravi Vig

exceeding forward to the I'll the look future give commitment review feature-rich customer imbalances with as another share record quarter wins the the in expectations company's fiscal the tremendous and outlook of Thank and our performance guidance due QX, strong industry-leading focus sequential due of global we financial the in growth the shareholders in in X% fourth you, to quarter supply on blocks the navigate and manufacturing year, morning, non-GAAP be Katie, up the and industry. status earnings markets and really data a model. resulted and gross couldn't approached across top-line to everyone. our per new more and we We like finishing the to all Consistent top This outlook part growth share core results. customers team's considerable our in strength fourth of our flexibility revenue us our program business businesses. further technologies, and recovery. and about with resilience the proud can We execution combined vehicle the after of our the the non-GAAP the These which content, 'XX revenue I'm alignment XX%, exceeded in outlook. optimism had to of and and business for ramps, in Paul? fueled with quarter with exceeded bottom good target long-term improvement design sequentially growth fiscal than line to electrification 'XX. pleased Profitability by confidence our XX% XX%. production more and by double growth. speaks start building asset-light transition increased more to margins, We're expecting centers the

Paul Walsh

X% across in an end QX X.X% sequentially order and auto our surge year million, million. Thank revenue year the Demand year. highs, visibility We to new with By sequentially increased up business and continues X% of was to $XXX.X with revenue well we fiscal sequentially our and record QX 'XX record fiscal a year primary increase in our both up Automotive to delivered industrial. fiscal revenue over now areas. Ravi. into year We $XXX.X year. levels market, million, focus of grew $XXX.X extends ended revenue core to core over you, for in business, 'XX. XX% over

XXX.X global revenue to the of X% up automotive over to This 'XX, growth in $X year compares fiscal the For the year. XX% XX% year over softness year, fiscal in quarter. period, our car impact declined the million, earlier. year, production, overcoming grew COVID favorably the million to alluded X% for fiscal that supporting Industrial 'XX million $XX.X sequentially reaching and vehicle which Ravi increased content per revenue early

industrial to For the million. full year, grew XX% $XX.X

grew sequentially business revenue to $XX.X year X% Our XX% other over million, up year.

Despite full to gross our end not highest end fiscal of we or have did the greater was meaningful for the the growth 'XX. other GAAP XX% top in quarter across the year. up level customers than XX.X%, in million. full XX% For again margin year, customers, at $XX any QX grew for sequentially

Total income, Non-GAAP operating for expenses Because about were of throughout fiscal end million variable margin million points operating year. For higher anticipated. our sequentially. the revenue, in or increasing was full quarter year. gross margin sequentially. sequentially. and made $X non-GAAP costs was of driven our XX.X% for related up GAAP points declining stock the on was by reflects compensation expense $XX.X include $XX.X was million. million, the adjustments $XX.X gross see to basis $X.X fees compensation. was operating for which compensation GAAP and the year, facility transition expense. line QX Thailand $XX.X consulting expense, expenses an improvement QX. constraints divestiture, margin million, stock-based gross we progress with Non-GAAP other R&D were excluding $XX.X Total million supply non-GAAP XX% and costs XX.X%. Non-GAAP the acquisition. GAAP costs the consideration XXX margin margin guidance the input outperformance on $XX.X the from compensation million down expenses were million, $XX.X we than by basis million, excludes of of improvement was of Thailand adjustment gross was despite charges This And for on facility, fees, manufacturing top SG&A and our stock GAAP XXX were associated of expense SG&A closure expenses transaction facility continued Polar pressures, Voxtel R&D sale transformation. and contingent XX.X% coming to the inflationary the the one-time and the of at QX improvement and expect planned impairment gain Non-GAAP a top

for an We million of million quarter operating expect sales, XX.X% range QX. increased rising or million by with top-line share to XX% 'XX. sales, tax $XX.X million of of non-GAAP per highest $XX.X to was an XX.X% or operating effective expenses GAAP to on to increased Non-GAAP XX%. were of GAAP growth income be in earnings rate operating the $XX.X Fourth-quarter diluted impressive X.X%. level fiscal income in income sequentially million GAAP $X.X net $X.XX. of the of the $XX

guidance. is increased was last QX $X.XX, The million. XX% quarter of up quarter to end and and XX% Fiscal Non-GAAP XX% tax with 'XX 'XX, $X.XX. income was GAAP to earnings benefit $XX.X $XX.X income per net the diluted for be GAAP top tax the per over million $XX was our a throughout million. fiscal to share fiscal effective For XX% Non-GAAP were of the net share earnings non-GAAP rate 'XX. expected range upcoming at in diluted and

to rise million Our is expected XXX.X QX for current in about XXX.X diluted share and to and count year. about is million the million XXX.X

consistent while reflecting sheet. supply. was from recovery. $XX investments POS up highs. and by Accounts to end strong QX finish to fundamentals flow capacity million, as the 'XX, $X at strong fiscal DSO we anticipated $XX million ahead Our And historic execution sell-through to continued generated of $XX million. hover cash $XX of in inventories million be made decreased Cash back-end the at equivalents at expenditures and by million in continue sequentially at were business days, receivable balances were quarter XX we in million in with quarter. $XXX ended Net our million. totaled quarter. We lows, with historic and capital demand the last operating tight Channel In inventory $XX strategic evident balance to

CapEx the to in revenue of fiscal X% expect increase business. to X% in to 'XX growth We support continued to

In across all expect We we cash fiscal with financial continued throughout strength results ended strong metrics. the flow 'XX in year. summary,

strategic Ravi look the continue to in from 'XX fiscal through expect toward the discuss achieved changes turn and the forward transformation. to Ravi? target call model making business highlights. I'll now to We to long-term structural our benefiting our back progress

Ravi Vig

toward Execution strong profitability transformation, progress to our was continued revenue say executed challenges transformation. of fiscal to the despite proud R&D four major effectively and which year manufacturing, a market of acceleration. strategy, and sales alignment, memorable we in make pandemic. Thank are COVID-XX strategy growth was you, areas We're and IPO year on Paul. It 'XX the strategic a driving our our

want As wrap year, into I we fiscal context. up put the to that transformation

schedule our First, plans in to back-end delivered footprint, ahead of terms our on streamline we manufacturing operations. of

while facility, record We gross our the in of the ramping negative in sharp the second-half recovery, a nearly a experienced we quickly volumes, support step In supported well-managed us impact supply levels ahead of also team revenue and announced new on Despite an parallel, particularly our with this important where time to areas, Thailand we focus planned chain our the pandemic's demand sale enhance inventory year margins. to up enabling suppliers. strategy, first-half responded and expected XXXX. a strategic

XX% our wins markets. 'XX markets, Nearly were step design fiscal strengthened another in function strategic business in we increase. Allegro's high-growth Second, in of

realignment customer than team over million customers sales revenue. XXX to our base Third, our of include $X increased more

in I'm grew and is technology cordless of xMR XX% business. industry's directly of automotive-grade, R&D in largest fiscal power industrial for our outsized R&D size our an opportunities. has for a xEV dedicated reached company growth in reflection a also presence funnel of strength growth impressive the total not benefit fiscal total Channel sensors patents new portfolio 'XX major and team proud areas, growth. XX% that total aligned profile products margin IP. never customers channel R&D drives progress to xEV. from but to strategic in innovations deliver the Allegro strategy. only the and bottom the line fiscal increasing 'XX, been our current products, on new the on and revenue at sustained growth leverage transformation Fourth The XX-volt COVID-XX to revenue successful to a 'XX. inverters growth to two-thirds transformational number Our new or of we of for our our through bringing recovery markets The contributed revenue to our record a with transmissions, roughly report released positions -- issued, better and xEV of the to in of solar high-growth record distribution for with In execution X,XXX, the from strong

products, the markets. record, all-time Now an reached also to reflected let pull-through of me This growing X% over in XX% quarter. business strong the in magnetic year turn our automotive year. sensor ICs fourth strength and but end Starting results with sequentially industrial

year, and ICs revenue. fiscal magnetic represented XX% full the For of X% grew sensor

from Our applications sequentially of also were impressive variety ICs expanding content revenue system year, benefited industrial achieving XX% in year a up and to automotive, through pull-through channel. established in beachheads ICs our contributing gains levels. power over an and X% Power record

XX% IC power year, represented of For products grew revenue. XX% and the

and than industrial embedded solutions centers, robotics sequentially: building quarter, double our center; revenue faster channel. up demand and In adopting and ramp extended from we rate and Throughout fueled was a anticipated. fiscal our energy. of drives factory energy business like tripling fan data data increased momentum building applications, -- 'XX. distribution the motors. industrial three-phase and demand for of transition And and stations. frequency business from fourth controllers replace Outperformance XX%, expectations. by Our are in resulting at security up And We're had In EV more with and in industrial and traditional variable with ahead also the demand for digits particularly customer auto revenue new from increased we our surveillance. increased, large architectures, factory to new three charging as applications, customers automation, nearly center the green well data for solar, was automation; customers record complex visibility well we benefiting in quarter warehouse green single-phase applications to as

grew year. coming QX sequentially up broad-based Lastly, industrial year a the full off and over strong XX% declined for significantly but was year

grow. to expect of we end industrial 'XX, major fiscal into Looking our all markets

outsized expect in X.X growth year-over-year We Industry applications.

industrial share channel. We to expect we continue a increase continue as growing at the broad-based benefit and growth data in we than center to expect content. a to And market pace our presence the momentum faster from end in business

Revenue X% and automotive excellent the market. new for Turning result business constrained supply to to industry the end an increased in by a sequentially environment. high

recovery from our and market leadership We are both demand benefiting position.

customers' shifting truck models, the strategy: reflects light given from Additionally, dynamics with important these in content is our our demand ADAS aligned strength Allegro SUV of market order higher demand a and which First, customer to exactly benefits car three platforms.

demand increasing features carmakers convenience products for to Second, maximize driving applications. across are our models and power ADAS sensor comfort value-added current and the on profit, and

the Combined, leaders. to of a and percentage in shift than and is as to are of fiscal revenue XX a seeing the more expected represented quarter We Third, meaningful to customer of xEV we globally, xEV 'XX. mix including automotive XX% all fourth market xEV. penetration the in customers ADAS our increase expanded

we you of the early bring been year expect stages to We're customer be we auto the able to to market. report have LIDAR are track products later progress sampling at acquired know, and fiscal design the As to interest is to this I'm and customers report year. high. working very last to win on automotive we pleased

in target to 'XX. continue automotive calendar We revenue lighter

strong growth growth continue For biasing share imbalance driven win our in by vehicle electrification increased vehicles. supply/demand see we driven continued to while by continue the feature-rich The mix investments toward gains coming and will our automotive market we but in production year, design near-term expect impacting rate, momentum. ADAS also automakers'

from in revert momentum norms. fiscal applications. Growth offset COVID-specific and example, end be Allegro's recovery, historical in benefited continue business peripherals, will we to coming 'XX the market in Finally, as other particularly IoT for to printers in the experienced year

other in business As the 'XX. be down fiscal would expect a result, we to

constraints resilient have of that the have get particularly constraints, tend challenges shifts before to we in for of quarter-to-quarter addressing worse In we believe Now the magnitude and chain. getting the immune, outlook. better. our course, demonstrated supply industry, facing we little foundry of not a We But a supply currently are mix. to product the experience,

we'll maximize the struggle decisions customer of satisfy on will to can to to to make fiscal we and customer that demand. the near-term For anticipate throughout both industry build business to We reason, invest intend capitalizing our versus 'XX. continue to meet desire real the inventory we demand potential And continue solely opportunities. where to long-term

the $XXX be at revenue fiscal QX, outlook Looking $XXX for expect we to million to in the of million. range

expect to the Given we supply up. business current automotive and be constraints, industrial

We expect other be to our business slightly. down

expect tight diluted chain. non-GAAP input increasing $X.XX anticipate about flat, non-GAAP per of to in earnings margin $X.XX. to costs reflecting supply gross We We a be share

the wins pipeline, we we from also differentiation process an to recent about good As of with a innovation our backlog new at deal be enter and we design. excited delivering terms and R&D our fiscal of visibility design ramp to high, have of all-time circuit the the year a impact in are

recovery, capitalize will foundation gross and be story. we content expansion and on the margin expect that Allegro's this acceleration As market technology, our of we share long-term

your happy will questions. be We now to Katie? take

Katie Blye

Thank review you, Ravi. will question-and-answer our Operator, the with you instructions participants? please


And your comes first Securities. Gary with Instructions] from Wells [Operator Mobley question Fargo


and mix manufacturing question. your between start year. Good morning, margin? to upside the taking and for finish your to perhaps impacting generate to of margin that had I on upside asking about us And can you main my Congrats if gross revenue allocation perhaps on quarter the want the UMC how industrial everybody. for fiscal the strong I and most that outlook. in your the give little contributing on on the believe the Thanks the your the margin you is Polar more maybe overall Was gross detail a gross industrial factor your impact side. quarter?


Go ahead, Paul.


this. take I'll

facility. chain we're this helps, as to cost at see the industrial this goes But a of and Polar Polar have quite our primarily. benefits. -- is So businesses That it to We then between the it's we the industrial benefits supply specific of in we supply, higher closure of the really Certainly, Gary, asset process to because or but an us. that relates cost environment, distribution Thailand with quarter, not all we began because don't as just than strength to in those a to transformation it provides point, -- was providing And differentials additional reduction. the UMC. see divestiture through bit auto our or actually -- manufacturing began what really little wafer benefits is it our have


to as you. ask up manufacturing to a you And I about at with follow-up, stand color. your the you respect Thank wanted bringing Appreciate TSMC. Thanks. where


Thank I'll you, Gary. take that, Paul.

on would full to We're TSMC. and of ramp on the that we on And color, at our previously the continue we year. that ramp by in we So we track. swing part continue had track. be stating us middle begin provided year, see next schedule. of be would to We're We later this


with Your next Quinn question comes Needham. from Bolton


is This for the on and guys. questions. Quinn. for Hi, my thanks nice Congrats Michelle results, taking on

one, Or the you be it margins. transition, previously I a are playing For that year? helpful. over be would there walk see color with a guess to step-up out Just us the to first guys XXX-basis-point Will should any expecting Thailand if linear progression? that a you to stated be believe how in through the there facility gross it just margins? could you you be XXX- benefit I more


throughout progression add a single-vacuum as internally What is transition be we've the coming a that anticipate we will that XXX points. discussed the Sure. We facility basis -- past, would steady to year. in about the

that really in almost is the good a evidence gross XX% -- QX by good getting basically to a of start So margin.


we a guys benefiting my than it's so the how the Polar previously follow-up, expected? we're asset you And But constrained more us may through with Polar in. facility, margin supply using helpful. That's during this strategic to the as expected that for impact you be just currently understand guys you Great. facility Okay. walk could but environment gross


to So add on I'll let I'll Ravi it. start, and

we're everyone a a are mix various that this pressures. increases. internal inflationary As the of But really that those initiatives are various way out we is some those Certainly, costs pressures offset And that. breaking seeing, adds have cost point, of to at at Polar there number at or specifically. input under lot of are stages not

-- to have that base. we number a as serve of So we to might see. we customer And a us this have feel we fortunate initiatives feel for again, to good our we supply internal offset cost any increases have


take on, And if just Michelle. that I could

I terms ramp think while but improve sources, to What in continue would respond that and U.S. would allow Asia, may the respond is other the a company us decline. to other to continued sources, provide this been to marketplace. in vectors to competitiveness industry we blended our I -- manufacturing these -- our also on additional say we've provide of think articulated, successfully the having costs the us other have us provide line. They And this And model. our as in Paul to companies challenged up demands the bring of able top speaks continue this growth supply other market to quarter capacity. especially in have of or supply, may to correctly I asset resilience extraordinary competitors satisfy the with and been sources


Barclays. Curtis Blayne from with comes question next Your


revenue. morning, and third you, for of question. thanks taking my mentioned and good ask ADAS I about a wanted Hey, being to xEV you

bit. increasing I And fiscal range I think guess, for then a in it's 'XX. that about, for talked you been

more much of 'XX? any just if it share? fiscal is like function of xEV? could I'm maybe perspective market a just So things how adoption that for Or on is change And curious, that



So Blayne, question. for thank you that

two the would and portion in includes steering So define business our that yes, business, is which drive is of we -- ways. as braking. the say the ADAS experiencing growth We ADAS, ADAS it,

is continue that and -- resulting in seeing is or -- add -- power an to in with driving, of both which We associated particular, drivers. continue SUVs to driving autonomous cars more trucks sensor and from vehicles, increase in content are light features which

So moving light a there -- -- vehicles also ADAS we to where production expect to increase -- story is a production, goes vehicle are story as to our continue from customers see for which year. to with in this, There is in a the from further we that car and trucks where add from continue customer direction. story. small on cars our the And moving ramping drives feature-rich acquisition this terms there's SUVs, content expect this production is mix business we new of see And to trend along products.


to it everybody the And tightness way some tightness? other wanted these than taking how it's on of is just your Thanks. quantify then the I supply go impacting tightness. might you? you need tightness. Or just even from that into I'm can mentioned tighter seeing kind you be circle growth. any fiscal year? that back Obviously, of for And is cars to components growth if curious; is that it that much Is


Yes. rates most order capacity. far we're in our companies experiencing outstrip Like that industry,

And cycle of we within as previously have in, a where time function demand come has that discussed, the orders times. of the in of has the our come been some this, lead

are address its And source its any see future on industry manufacturing manufacturing. the readjusting this. We the to on We believe to we industry not of intend The is pretty So forward. readjusting is add this. to do do of as based optimistic we automotive we're help that capacity continue the move we components.

supply continue best our We the have of -- with we wherever them supply to customers work challenges. to our service and the wherever abilities


from John question with next Your Credit Pitzer Suisse. comes


backlog enough June do on the do Yes, your about imbalance extending visibility or industry, fiscal-year when me sequential that question. just in suggest to to around the current if you wondering on industry as metrics? balance think And your level? at you well Thanks the we more good put morning, quarter? elaborate some think commentary context have I'm 'XX. could the up into letting guys. into beyond you some visibility with up ask supply/demand order a in you And get Ravi, for pick


So thanks, John.

So can just Yes, color that to take and it. backlog. add could the, I have we substantial if maybe Paul

have that quarters. way the substantial couple We beyond next backlog goes of

that have or We What visibility, their also visibility is. demand visibility visibility say great we our as on ship have limited some we what can to usage into products. our knowledge, are are that And the the inventory to aware our customer products to within and do we see floors we factory base. builds going not -- occurring we not the customers, right of is of

is acceleration So just impact coming really wins and wins. our demand from design great to on the design

think ramping our we spoken design point in the we're I had to that some this year. at time, wins, in be this up previous fiscal and quarter, about which record particular start through going would of

So very any quarter. good the about we you on more do backlog? color Paul, feel have the And



future. yes, end backlog, we We And We patterns of have carefully in the levels. in the highs. as the remarks, are at lows. orders inventories are look the or -- channel, are is supply The inventory the down primarily And the that at alluded out Ravi chain, at historic into in as a great POS instance, coming for to, the pull-through the the in visibility it's historic noted for customer ordering John. that are now further

serve end we'll So that. good And just feel we continue -- we demand to about the situation.


think Can being first charging past. three-plus unpack But today, talked like you years kind about talked curious then the you side. my lot with the a data That's Especially And out? helpful within which in unpack that auto I industrial, just of to equally important, of you've the coming the opportunity, wanted of could kind out some you your everyone a stations, center help today it opportunities when bills understands as two to if xEV of of about I then, look might what D.C. color. follow-up, And on bit? size EV opportunity that leverage the the the the little Ravi, I'm

For year a what kind couple of be infrastructure, for over you that might of guys period? green opportunity



exciting area are centers really for a So data us.

think much in both XX-volt product dampening the embedded had audible make they and and our design. are to These efficiency. I objectives noise fan offer dampening, spoken noise And we electrical meet we about customers of lines noise past also the electrical to controllers for that related that XX-volt dampening, products fans. the customers' simpler

So all the within why of becoming industry. are these these reason fans more are a rapidly adopted

We -- including providers are companies Microsoft, Amazon, like engaged data etc. and most currently with center

we're are engaged with supporting end large in that data manufacturers the most center now fan As customers, world these companies.

So -- patterns seeing continue these is customers. and that said Hence, seeing very business are sustainable. particular auto our we're from And visibility this this area. growth we we to us that guide that will for great good see in particular

XX-volt will to centers data products discussed continue expect will we on shortly. out -- to we have Our And drive that momentum. that coming be

in with It where when on xEV, chain So over onboard chargers, of we at fragmented engaged xEV. area. see space, pull-through inverters, a But not of great is growth it's the so within being vehicles, as We for of the battery strong us. in of about look area also for simply see companies a the associated xEV terms industrial area infrastructure charging etc. we in inverter XX with particular had the spoken we an are xEV chargers, both see we story supply in that we a terms us.

So voltage this various at of breadth in ship. of we breadth to and in And -- ranges. this infrastructure with sensing current discussed user-friendly provide past, the our user the terms currently solutions -- has the In us are in We've engaged extremely very current enabled our point portfolio multiple we of we customers portfolio. secure sockets.

infrastructure charging in well as in center, the a So is in xEV data industry side, trends, very side. as it's about whether the we the vehicle and whether or it feel side both good in xEV the


Nikko comes question with Srini from next Pajjuri Your Securities. SMBC


I you. Ravi, couple Thank guys. a longer-term morning, questions. Good have of

about X% volume. X%-or-so as business you auto in versus, decline grew First, your said,

of single suggests kind content in digits. XX% wins about high design that that also is increasing you So your target. And that are your mentioned

opportunity an through Or for to even high similar see single expect to we As go digits content the an years, few increase you? higher level? do should somewhat even you those next grow you


you, Yes. Srini. Thank

the year. we've a So good had --

the wins, I think strength strength low our of growth -- design single-digit of the market really X% growths one decline of market. of speaks this in to an particular this acceleration the over our

continue the now, monitor For to we market.

low we expansion kind believe story to of content us. that continue a a We single-digit -- high for have

that and expect with continues ADAS to comfort internal convenience offset and We combustion and story xEV.

do terms to mid- but resilient we is in the in expect high of we and story the are quite that single-digits So our still content robust future, targeting expansion.

we targeting in fiscal discussed, meaningful report business For continue is the And our some 'XX, on are XXXX, as 'XX we've calendar that. which expect to we'll revenue. LIDAR progress we for


Got it. least auto there in some I then the think in the just-in-time Ravi, supply moving given from about practices And discussion industry. JIT, industry, away at issues all the inventory is

I'm forward? out carry come might just supply front you indication we of how constrained going any customers levels customer's your how of business as of we environment that Any might to are as higher seeing come that your curious, change your looking kind of are -- to inventory and on discussions that So out kind that this forward? of going


question. Great

still that written. to so story has And be

for creating that base customers few in securing about So a at years. are there supply the are -- next discussions point, us with this secure

that allow engaged with those business developing customers conditions to fulfill their are We on requirements. us

automotive than capacity. car different occurring. I that semiconductors secure with builds -- a industry that their fulfill position given traditional of in I supply a on semi base think supply the large engagement given an this large very at to beginning point how recognizing the business are to the some expansion believe that's the They're content model. manufacturers inventory the are is don't

to the the over at that to will and what rates some run next half. the basically sure inventory. not we So some be be going year is sure a layering for phase I time, a of year, respond not There when, we're near design be and would that's But we able make customers to secure term. first wins point and in in to call think


Lipacis from question next Your comes Jefferies. Mark with


be to lot Thanks trending back. deemphasizing your distribution companies my of semiconductor question. distributor's the to strategy question on had for Hi. Good industrial for morning. taking you. distribution A kind a function markets seem of I taking the and

be the growth geographic they would helping Thank through a what the part help to That's of issues, think in as doing of Are we the versus Are your for supply maybe Are chain part industrial channel. through fulfillment? maybe here, particular about areas? get you. that, the I onion automotive doing creating this? you? they the had. you And seem demand? just distributors embracing us we once question they understand; once the markets of you just peel layer the You Can of we your think markets should we how all get second be should all how all -- are


Mark. Thanks

And do So of great channel is or company. at to gross that distributors team in They -- points that our know terms direct be business businesses would bring our touch larger in channel. company. the standard for margins as And valuable margins terms additional a our to look company We sales in achieve. opportunities; provide us for margins house. for customers they back the leverage they not the selling an able we are distribution bring extraordinarily competitors bringing us of

for have are do So we and and for fulfillment. distribution very channel. or not challenges, do us, have distributors inventories required, portion But local all We currency distribution distribution business use is profitable. cases, etc., of focuses on where value we areas may infrastructure. is our that have extraordinarily We that where in fulfillment an in exchange warehousing some

access touch us sales to benefit allows would something for of team. company difficult of that the size the customers, given distribution our extraordinarily size our Now a is small it be for us and


to there Is that? follow-on


you. Thank Yes.


Mark I have follow-up -- Sorry. did did a here? you



the of your is growth get should what we once The industrial markets automotive chain in seeing side. we how question think particularly the your the versus of through about second supply automotive we're the part issues,


think market, -- this So I a our growth spoken really really, it's on on anchored great before, vectors. good industrial about we've

data cetera. expect it's then range in So for industrial be basic to industrial -- that centers, expect within good be then move market. And starting electrification really to factory this automation. our we toward two-wheelers, -- et is on we going that And to the the anchored in industrial foundations, with you're double-digit

So opportunities great us. for

looking rates. double-digit we're the at think growth I


with question next And Rakesh Mizuho. Vijay from comes your


quarter and here. and guide Yes. Paul. Hi, Ravi Great

Just a the very question industrial there. Obviously, numbers on strong side.

data and growth x year-on-year growing XX% mentioned center year-on-year. You three

factory wondering and between data see Just out? side and you what center three energy automation you look and the how green the those growing mix was as


of Vijay, Yes, know, provide you we cycles many that within And level as don't these have detail. really all of them.

So a -- growth we see but vector. data centers great on strong the having long-term perspective, as

to just in expect three-phase We conversion from fans. market single-phase general data of because the to the outperform center

great worldwide. going and and et to manufacturing now proven -- see we've for a performance we us, recent I factory growth at that. So good right automation, you capacity cetera, being can that there's that as look investment vector see too. has increase on When our And --

is together, the is serviced And strong, industrial double-digit us, which growth. we being also I I'd for expect is industrial again, by say, Broad if all distribution our it business. strong. So pack


one wondering a just Obviously, on into you're traction seeing on the haul direction it. you I dominate, -- the mix again side. versus driver you legacy you good just or xMR just as any sensing markets that for mix key the a Got that? of either if for qualitative is do ADAS. company bigger Great. was in give And xEV in the question whole, quantitative the you, Thanks. at look and between bigger autos on and or xMR what's



we out generation as are So xMR current the to xMR opposed add in are technology We value on marketplace. the is xMR the silicon, focus segment us. products of which to an on elements, simple emerging where that for

sensing. We've released on wheel xMR reach. speed products been silicon, in transmission. extraordinarily terms working in its in Our of we is broad We believe,

for We tremendous are shipping. It's growth already us. a growth. It's year-over-year had vector long-term

this see But not near in to will products as continue term. area. will We announce we this a

invest We to continue particular And in this we continue this area. area. to secure in sockets


At no to Blye the time, remarks. are call for I will now there back closing hand this Katherine questions. further

Katie Blye

this joining us All right. today. you, call. And Thank for concludes our everyone,

Ravi Vig

Thank you.

Paul Walsh

you. Thank


conference Thank That you for participation. your call. concludes today's

disconnect. may now You