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ALGM Allegro Microsystems

Participants
Katie Blye Investor Relations
Ravi Vig President and Chief Executive Officer
Paul Walsh Chief Financial Officer
Quinn Bolton Needham
Blayne Curtis Barclays
Gary Mobley Wells Fargo Securities
John Pitzer Credit Suisse
Vijay Rakesh Mizuho
Srini Pajjuri SMBC Nikko
Mark Lipacis Jefferies
Call transcript
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Operator

Good day and thank you for standing by and welcome to the Allegro MicroSystems Q1 Fiscal 2022 Financial Results Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ms. Katie Blye, Senior Director of Investor Relations. Please go ahead.

Katie Blye

Good morning and thank you for joining us today for Allegro’s first quarter results for fiscal year 2022. by Allegro’s and Walsh. Chief today Ravi Executive joined and Vig Financial am Allegro’s Chief President Officer, I Officer, Paul

will financial of quarterly review provide We summary a performance our and outlook. our

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

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

Ravi Vig

everyone. Thank you, good Katie and morning

our core Our execution, and our our markets with the expectations. gross the With outstanding, go in highest FQX a result basis. history strongest results revenue both quarterly achieved end for level it, and dollar to were we exceeding on percentage strong margin

reflecting business our also saw both sensors and expectations. revenue reached magnetic our target strength in in revenue achieved both ICs record demonstrating growth beating levels, diversified content EPS, industrial applications. We and significant for record increased across our Automotive we power and increasingly

continues result projections wins Our strong be a limited. demand to as of supply near-term be design and accelerating will our

the comes loosen capacity We supply half. in online growth as fiscal in year continued second the constraints expect second additional and of our to anticipate we wafer half

remarkable the of us win We strong us benefit the our momentum growth. on on puts our to the demand markets addition sustained to deliver business, growth trajectory. in position gives profitable, confidence In design differentiated believe recovery ever across outsized best near-term growing technology our in for long-term

our and outlook, will on over Paul color go I to I for detail business financials. the into the more turn Before on call the

Paul Walsh

time. line hit Ravi. XX% ordering sequentially. you, and be the patterns levels Non-GAAP continue start $X.XX. XX% income income was at addressing GAAP at is X.X% margin XX%. to EPS and non-GAAP $X.XX reached above near-term strong. the historic XX% Supply forefront very operating to gross margin terms ended by demand. EPS diluted to over Thank fiscal GAAP gross ‘XX. a Backlog non-GAAP QX to rose in remain constraints operating GAAP of and improved diluted Top to was XX%. great for growth first rose up

and to well QX. healthy quarter see However, another in expect to continue execute we

to begin gradually ease to as wafers we results of the from see TSMC. supply expect We ramp constraints the half early our of our in second

up by by represented expected XX% and industrial sequentially Our guidance. our of year-over-year well ahead million XX% up in other across of was Growth end declines demand and than and our markets was anticipated delivery better $XXX.X continued to XX% increased to QX $XXX.X driven revenue automotive Automotive XX% revenue business. offset of in in record a year-over-year. in strength million, QX demand

same again reflecting period, per the trend car vehicle declined to feature-rich and content Our global growth which Automotive favorably in toward fiscal our compared production, growth during vehicles. favorable the

on blue-chip million, Other of expense, $XX.X the sequentially margin to $XX.X and XXX guidance QX our revenue, a of or from to were fiscal legacy expenses XX% benefits continued inventory. result X% expense by GAAP the million. revenue $XX.X million, legacy customers, XX% business. the terminate QX. Thailand, points and SG&A at acquired across focus as million $X.X our related of inventory GAAP stronger of SG&A. there amortization and contingent transformation. points up Non-GAAP COVID-XX, expenses and top $XX.X XX.X%, visibility of R&D margin were XX gross customers consideration from Industrial believe asset growth non-GAAP intangible and of for removes million none XX.X%, million Gross revenue, of this module variable $XX.X revenue XXX of for basis was bottom represented sequentially. and on target stock basis up R&D demand very onetime an decision COVID-related was was and $X.X $XX.X sequentially broad XX% a diverse Non-GAAP of fiscal $X.X driven Thai and little was the channel. us strong level. compensation with of adjustments gross severance. our QX. Voxtel non-GAAP or improvements entity, and points increase million. legacy Other Voxtel margin adjustments another in also lines. manufacturing expense non-GAAP SG&A Total and exceeded ahead to GAAP R&D and is million. $X.X exclusively due portion was expense a million $X.X to sequentially Industrial expenses expense associated a operating in customers our XX% acquisition increased by basis $X.X $XX.X million include record. charge performance from wind-down and of GAAP were and compensation closure adjustments declined improvement was down have strategic of million, Non-GAAP top of the at reserve We reaching million the were in million million set for allows compensation expense that meaningful costs year-over-year. million business across The XX% and the our revenue operating Stock sequentially higher to primarily distractions represented The with outperformance sequential is of XX% Despite disti $XX.X in $XX.X

impressive income scale operating sales, XX.X% non-GAAP X.X%. we XX.X% top model for flat quarter $XX.X and significantly million expect of in million or GAAP the the outpacing increased top the our QX. about be growth sales. We operating increased rising of $XX.X solid underlying highlights XX.X% Non-GAAP an or operating This to expenses continue to to business strength the by line sequentially, as line. to of profitability of income

to million GAAP increased of XX% to $XX.X increased with $XX.X by income rate $X.XX fiscal $X.XX Non-GAAP Non-GAAP quarter XX.X% to QX $X.XX, an earnings in XX.X%. million exceeding increased of First tax net income effective to is expected per the share QX. net in the earnings diluted or effective share revenue. million diluted fiscal was non-GAAP quarter over GAAP per end rate guidance. by The XX% XX% million range and the diluted XXX.X be and ‘XX. is tax upcoming count increase was to to QX year. was to throughout XXX.X QX the expected fiscal our for of XX.X% share and

prior of sheet quarter. we Accounts was historic $XX.X and by consistent $XXX $X at flow million in receivable high. ended quarters. million QX quarter $XXX decrease We generated execution days, quarter balance million equivalents operating which strong DSO the sequentially with reflects a were cash business fundamentals. $XX million, end Net $XX the in to sequentially. Our million, million, at the inventory balances Cash in a of were XX ended with in up and

for model, I the shipments inventories to lows of the very I longer the strategic sell-through growth of to to made short-term term profitability objectives deliver both towards historic with progress target at channel will hover our now am with Ravi. balancing continue goals. quarter. the at back turn have we be demand while strong and dynamics Our on Channel at continue to sales into highs. was our pleased XX% POS historic call

Ravi Vig

the upside content expansion win the Paul. market. supports Thank particularly product The underlying was Revenue potential to continued industry automotive. in we tailwinds, our outperform our business, provides the in you, vectors diversity that to and lines to across momentum to multiple favorable of on alignment end strength our design and continue strategic and believe due growth FQX markets, anchored

transformation working and were quarter applications same of Power period supporting We revenue and R&D have all-time the line. ICs new in speed reached pipeline of year-over-year, quarter. Expansion XX% last our and QX. our up power are and product revenue in part ICs to and an existing representing been year. sensor our is growth market-leading of IC sensor XX% into the sensor the augmenting XX% revenue this our highs increased in in compared product penetration XX% on new ICs portfolio. the as represented growth Magnetic position ICs portfolios mix of hard Magnetic revenue strategic in

reflects design foundation in centers are such as our and and particularly year-over-year. IC up continued automotive. our areas cooling a share ADAS market-leading for across We portfolio increased at in markets automotive brushless in ADAS with xEV rate in driver ever xEV content for content Allegro And wins growth. in Customers DC than before, automotive in Strength steering continue systems, these data with differentiated sequentially applications faster XX% end awarding sensor technology. nearly as Automotive to our providing gain opportunity with we applications fans to revenue expand fan and strong a to high-growth such key cross-portfolio Revenue our us leverage continue power all our two braking. both both

in both the win customers well and As of our across our ahead transformative established new in and design we underway result of a applications business, are automotive geographies. shift targets

generation Korean our of secured ADAS locked a share. next for We more OEMs For sensors steering launched EV multiple xMR new businesses new for with crank a products. market global across power at And These both product example, expanding technology, major QX. our than vehicle transmissions. in business and We sensor we XX systems we expanded our OEM won for in advanced opportunities include GMR in the new models braking.

vehicles our safety, We applications comfort have – These a with wins one and adoption new automotive advanced in also lighting fastest-growing rates are our products. have today’s in in exterior power lighting convenience high features of secured and also continued of number the revenue.

vertical market. and ADAS true During the launched high in technologies products for capabilities also new to accuracy. to leadership new sensing strategic are including planar enable XDMAG we and cementing – with our the opportunities doors position ADAS precision These combining hall-effect ADAS, in innovations quarter, opening sensors, and XD

On readout front, achieved LiDAR leader of key the ICs in our systems. front-facing we and eye-safe LiDAR well-known to a photodetector a sampling milestone

built system we that our XD anything a our on scanned on market. and simpler customers a mechanically one the road map. play Additionally, early continues LiDAR by than be our is to on us, solution are Photonics encouraged progress of based long-term for the

position feature-rich in While upcoming significant systems component our path vehicle shortages, to to a a increase provides from more strong believe the key be industry-wide content and for limited continues we years. vehicles, per a we by auto production to shift benefit across

and factory been expectations design in and exceeded business, the centers, win automotive industrial enabling applications including growth meaningful charging industrial growth X.X, wins a automation and Industry advanced are of sustainability. in broad-based Like Our industrial battery improved systems diverse, our data our home our energy new as a activity efficiency product wins increased in accelerating. were increase EV products content manufacturing, for expanded to for new where in modern good QX securing green EV with result is lines. These multiyear manufacturing in has wins focus business development energy

low are EV battery across fact, xEV vehicle the In content full channel content chain. lines, station we factor inventories, in the and remains and positioned across xEV xEV growth manufacturing the increasing industrial to limiting the ramping with supply on benefit from business our Demand content, charging growth. value with constraints strong

growth However, are long-term industrial. new with believe combined our gains market continued increasing applications from and content we diversification the served in products potential the

challenges. declined Our as to other business supply result million $XX.X a sequentially some of

flat be will in QX. other sequentially expect We to down

the Looking I prospects ahead, about enthusiastic am for business. the very

We are delivering to differentiated products market. the

R&D have pipeline. We an exciting

and Near-term, well financial Our at working we are levels. continue objectives. record to in we design demand record our markets, our to wins see are revenue key backlog and are deliver hard accelerating executing on to

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

We in in flat expect we levels supply automotive as continue about manage high will QX revenue a after QX be chain. constrained record to

also the up expect business in be industrial QX. We flat will modestly to

expect We other down. to flat our business to be

to gross margin We expect about be non-GAAP flat.

We will range to $X.XX. turn expect share be of non-GAAP diluted back that, With will over the call in per earnings the I Katie.

Katie Blye

Thanks, will now Operator, and prepared remarks, questions. instructions review will open our we call Ravi. our you with That question-and-answer concludes please participants? the the for

Operator

[Operator Your of line the Bolton question Needham. first Instructions] comes from with Quinn

Quinn Bolton

on Congratulations the on on supply constraints. to ask so performance. the particularly nice and Ravi, guys. I the results Hi margin wanted

have constrained. manufacturing have Taiwanese obviously been You your know multiple wafer foundries partners. I

well? see some as from trying to But are relationship ramp Polar are wondering to You if starting with constraints your you also TSMC.

Ravi Vig

our have been from Polar. with actually benefiting We relationship

which more that allowed its – – support us received have capacity. in we to market continue expand service is making see the the investments have wafers, to And invest We to upside. Polar

we wafers out to But see So, we on has to plan. progress continuing source. continue from This been on especially will our Polar foundries, TSMC. are Taiwanese more our also wafer

We we projected our calls. have on stay plan prior ramp. it on in And discussed

Quinn Bolton

that market, And the about growth talk But seeing just I sort just constraints. terms the you then you upcoming near-term the business near-term you to flattish for what in that continue outlook there or ADAS in overall the affecting are portion of supply in automotive and and the supply segment of in business? are sort on of be the do for EV business demand of can quarter? of know constraints with that may grow the sort or line see Can

Ravi Vig

on focusing vehicles And these Well, vehicles. xEV to to ADAS or content high we – be be see more feature-rich based. to companies are tend that have car feature-rich tend tend

business. to in ADAS our we see strength So, continue xEV and

see design continue growth in in also to tremendous these segments. our We wins

xEV I last ADAS were emerging quarter wins think businesses. the in more our than design half of industrial our and

aligning So we alignment with see as that our them. great we to is market see as investments well the

Quinn Bolton

you Great. very Thank much.

Operator

And your with of line next Barclays. question comes the Curtis Blayne from

Blayne Curtis

Maybe my on June if follow-up question were the in I that to Good I morning. of some kind on you the right, heard taking get for Thanks able supplies. supply, was you just last a guess, question. upside

think or that should of kind that’s your supply? So products. internal or maybe grow. I sorry, can I I’m you understand you And coming said to the half guess, – mean, – then if trying Taiwanese just Polar in back curious, new I TSMC should be

that in you or just just I’m your that of foundries – are half? much to upside highlight more just got what So be revenue. coming the getting I you But on is be from the And if maybe supply? existing could I guess, it could wouldn’t the supply kind back expect you what TSMC

Ravi Vig

existing So we our foundries. continuing are to ramp

So they will we supply move help as forward. us with

inventory our mentioned has are Paul as think levels historic at I lows.

addition which ramping, run and to processes wafer are chains. our on so in strategy, But ramping And is our supply, TSMC are that part, Allegro that, foundries. we help stabilize at in multiple internal will own the is

ramp TSMC is transferring products that we the into are existing TSMC. So our on

Blayne Curtis

for gross guess of I Got more the you a had about look you it. of a And think the kind ramp I bit just these gross margin of as margin know I’m Polar external, year? then use curious as was drag you that. of fiscal when to as you at rest

Ravi Vig

that take you Do want Paul? to

Paul Walsh

Sure.

outperform this XX%. that QX, in or anticipate, of overshadow increase in guiding from quarter, transformation exiting We’ve we’ve guided any discussing we’ve Polar. continued a been range. strength – to while. of the a And the is XX% So discussing we some tended for gross as for margin, we’ve been That cost benefits year manufacturing that the in seen definitely or

we’re So well I way think on path. our on that

Blayne Curtis

guys. Okay, thanks

Operator

Fargo Your next Securities. line the Gary comes from of Wells question with Mobley

Gary Mobley

Good three each production of profiles question. ask my on for morning specifically the to presumably Thanks everybody. questions I double-click taking margin for mix wanted gross about suppliers. and

can you sourcing perspective. margin gross is So for think Polar, from we a margin all I lower generally agree

to upside seeing that are upside? minimum so is that on Polar got related you’ve ramps? the Is I’m met further your divestiture, timeframe for requirements of you. supply? then margin impeded the of you I revenue what or And gross margin profile that And UMC, chewing reported to from enhance higher as And with some revenue by that, to wondering just those TSMC with extent when the purchase volumes margin in being you’re quarter think, that gross requirements minimum minimum the going purchase part into the the the unaffected is Polar

Paul Walsh

mentioned does mix had Hi, also offset is in initiatives a Gary, we’ve Polar the But increase perspective, we’ve of cost that. is number or From help a wafer or take I’ll UMC internal to as higher than that. this an TSMC. Paul. have a past,

we demand, having then to maintain additional from the So and Polar of get able this XX% benefit supply to margin. service we’re

and as for for minimum hit When – issue. look we the an issue this any As that and look you – mean environment in where normalized TSMC those we – those won’t in environment – we where us. requirements where on exactly. Polar, head into be purchase even at it’s I that’s not – a UMC,

Ravi Vig

– line But perspective – we top these as to this top service sources growth. we’ve on our on, blend business, that wafer a appropriately will And remain we cost from momentum. win as about perspective. the that need the got business the The adjust. on, a great what top bullish comes focus is design And supply design line well on wins – are sources, way growth gross wafer think our both And us. they as driving design And way and of the margin And overall is as new are great to from come to them wins Ravi. line are also for allocating backlog. is the to our basis we

Gary Mobley

at Wanted a in of and guys you been that are that running you sales extent xEV Where Automotive what believe third to Appreciate all it, by the guys? from And you’ve your today? to us driven given past, stat increasing applications. color, for mix your I missed at about and ADAS percentage the is guys. a that’s get apologize I of that revenue. is if I

Ravi Vig

the our automotive for we as year-over-year. And business the said business year-over-year. overall quarter, XX% our XX% for at the although that Well, XX% and grew business grew about was quarter of xEV ADAS sales at

the clearly, business has the ADAS the and So business. xEV outperformed of rest auto

Gary Mobley

Okay, appreciate that.

Paul Walsh

Paul. is this Gary,

to Just future. a add percent is continue xEV we to to of auto as and for the improvements that balance mean anticipate that it foreseeable bit. from I ADAS. And we little the – a for see – sequential

Gary Mobley

Thanks.

Operator

next your And of line from John with question Pitzer Credit Suisse. the comes

John Pitzer

times In ever I the growth plus will SAAR how growth Good business, letting will year look so guess in for help into do Yes. right arrears year? year balance? us for do this things or distribution, And distribution. it this commentary you dampen you that where a build do some investors question. you with is at better think look But there’s the of think going be leverage what now have your supply been that, into sort concern type when next you has that’s now? going we see in understand got on as good only auto ask and you guys. that next can you can have content clearly, year we visibility you think I to are to inventory Thanks it’s and at me morning key you’ve comes once addition make end still maybe needs into or we demand to understand that that inevitably to lean inventory tight, inventory a right look Ravi, mostly

Ravi Vig

with outlook do to that we we reasonable today the sort a We continue. building our going that at our today what knowledge, our speaking customers of look predominantly constraint we supply we not will OEMs fairly to of issues, any end products of through this delivery the a have don’t the at customers we them And imbalance have And alignment, best year, from service into inventory our we that indication demand. at customers have rest right to keep views our and that perspective on supply the – are all etcetera. believe the is on shipping are – point – believing for inventory. up any the that the are And we’re supply-demand

this ADAS, design at that. in xEV given vehicles, to We the the applications, and doing etcetera. drive momentum share have see win indication that’s market And we point what gains, growth feature-rich no given our

referenced. Allegro, just will For SAAR math you outperform we continue the to that

John Pitzer

business. with design going I than year-over-year anecdotal is in if curious on to if assuming some a magnetic pipeline – That’s as going kind or stronger sensor. helpful. almost title where side you’re of sensors? magnetic Great doing you I’m itself there the can it the just to are system-level give then business, you in the us And is And of and power not by just at Ravi, power sort extremely growth But as well? the strong, power that like am of

Ravi Vig

Yes.

magnetic investments vibrant X This over really to transformation X we’re two that we our were and business. So the power excited a predominantly the a has businesses. is company. last company created years of the part sensor of great extraordinarily We in have

succeeded sensor the of that we’ve One the got in power business had of many business. – our is in we’ve aligning our applications ways strength

really and but we speed control, also provide drivers, is motion sensing, regulators. for So we torque on focused sensing, disconnect business switches for our sensors angle example, ADAS sensing, provide sensing, where [indiscernible] current

being as example aligned and So story. of of motion been focused is in segments is an that’s unique Power power focused on, leverages business very some under successful power. control the and have, But the our has in a very itself play was that which ADAS into part our of technologies. that system many this – – also business wafer hood the we sensor

of lighting. down in lighting, to we XXX of And with much we we it but systems. is one safety-critical differentiators think that don’t growing we which BCD about power tail Power that’s XXX-volt Allegro in believe the degrees state-of-the-art in – operates really LED also interior for that are in What about some more have headlights, for example, is the been the aligned our applications. really the speak centigrade. particularly speak lights that is We

So we’ve in fan. this really centers, take-through has great IP our These discussed fan, the BLDC but are predominantly previously it. the the solutions, with our centers Automotive. initially Industrial, data in rate, also three-phase include And on both in data control applications all now They associated which system-on-chip drivers. commutate had great secondary in take in

continue we remain in bullish to So power.

John Pitzer

That’s you very helpful. Thank much.

Operator

Mizuho. [Operator Your Vijay Rakesh of comes Instructions] from the next question line with

Vijay Rakesh

‘XX. Yes. great fiscal Hi, to and Ravi Paul, start

I LVP, the On X%, I think your SAAR EV is about pretty June given sequentially, which XX% was underlines leadership. up quarter, talked orders you strong down know probably

ADAS quarter? So pipeline some Also EVs, on too, the there? that the how similarly if June win if us pipeline sticking give the more give expanded on on color you design design has you color wins us on in could side, could some on

Ravi Vig

Yes.

So look quarters great design that the on chargers, we is chargers, etcetera. but our so focused EV, basically inverters see also we our onboard in pickup inverter we products we’ve xEV, from onboard at the what that last in we continue had spoken inverters. EV, win – in couple win of to that perspective a on, core seen systems about in – We growing and nicely. in in And

associated ecosystem technology EV infrastructure are see battery we in and industrial with both that also entire participating is in, – on factory that the factory EV. EV in We –

pretty EV So is story. holistic us for a

Vijay Rakesh

is a on how you between Got strong Could Thanks. pretty it. up track increased give you or Industrial, going historically or And been overskewed pickup you on it much the some sequentially I little split et Auto, how give splitting there? us on Does now. split bit, some seeing mentioned an us cetera? Automotive backlog just it backlog color know revenue has your are that’s

Paul Walsh

is Hi, Vijay, this Paul.

within to While a the of backlog we healthy into rate. xEV continues seeing growth very about or in within Industrial markets also ADAS details provides of visibility end of the the or and level well. backlog, lot medium-term then in specific near-term demand. like it provided submarkets And the the in these It today and at we’re in and a the markets all past grow Auto as haven’t

So how we’re excited And continue to look to very that. about at on visibility. we It’s that. address great ways

Vijay Rakesh

a Thanks awesome. Okay, lot.

Operator

line the comes Pajjuri Your of next Srini question SMBC with Nikko. from

Srini Pajjuri

Ravi Maybe first, for guiding A gross flow for gross roughly through Good takes? last XX% as about couple the and you XX% margin, think can way of Paul, Paul. but right you’re you. on flattish Thanks to I Paul gross of in the next about morning, questions. the the one is quarters. know sequential margin, the is some model kind of and margin you of quarters the talk few or if couple puts

Paul Walsh

will major growth within being the closure the we it of is about talked gross to benefit. Srini, And to in this is XX%. our get the a company major as had ability always phase, milestone the think company help into facility Manila the what favorable mix to I and product margin So past grows, the Thai the mix quarters, what you’ve other transformation seen absorb trends few – a in then the of facility. And

think I with and very So QX we’re see to in we pleased what what now. right continue saw we

factors I an absorption of one. into is think though, – – was that more trend, two growth the of of

Srini Pajjuri

might far of it. you is can then the – as any margin? have that impact and gross you left some absorption facilities and it can talk other the takes And factors do mix? about if puts if the you consolidation Got concerned still Is outside the of as the of any talk about

Paul Walsh

to in installed been up to things. and benefits. anticipated efficiencies to of costs, the but legal And had the From that’s wind-down we where Manila initiatives impacted. starting none So running, and the our see have perspective, internally has Thailand been some in we’re a gross everything once certain SG&A margin facility address perspective. that those of more we a a side now is we factory, number just closed, of see from on that’s Plus,

time For help cost that example, like significantly reduction test on front. that, can the and things

And that activity, and so already. ongoing and benefits some that’s of seen we’ve – an

Srini Pajjuri

for Got about the looks being strong then to getting be is the one very like aren’t from stabilizing time, At worse it. And is are guess the on your some next same supply still visibility I of a very tight. side. Ravi. peers Ravi, talking Things it things seem is supply here. bit still being and

wafer get So little might about and I get forward? what it’s the you just normal. availability to your change telling guess about going your to might back we Thank to seeing given terms inventory practices thoughts not forecast general? your then when or difficult to a side are customers supply lead disruptions, the want in I or are hear as you. their thinking you’re of times how we what on in you But how about might normal, back And

Ravi Vig

Yes.

So as Paul has record-level backlogs. stated, we have

visibility unprecedented the We for levels company. at have

the win is top The design momentum is So line that’s there. backlog our That’s there. coupled with visibility driving growth.

keeps towards company, that’s that on clear with to new is ADAS on feature-rich the trend also xEV existing It in really the Automotive. So which beneficial adding our coupled is vehicles business. projects to and

the really share or real supply at market as Allegro see continue to to dedicated inventory an continues that come it’s point. supply perspective, not And applications, from see that So growth, in expansion. to we our capacity comes service servicing that this on do that being on, it’s the we real increased as near-term

at us. perspective, from momentum given wins provide just point visibility the when this given So we will inventories Allegro that design an no have stabilize,

Srini Pajjuri

it. you. Thank Got

Operator

the line Mark And your with next from Jefferies. of question Lipacis comes

Mark Lipacis

companies. versus online number the out Hi, on behind order maybe by got for on capacity like of – extent think guys? you, and tell – about if your thoughts. do – you the you trends customers the that I business, what thanks what a demand appreciate your taking you you driven wondering appreciate for my maybe Paul, order some worked that on – drivers thoughts themselves us can your share secular a And reverse of ahead at of look course you the Thank semiconductor your you’ve bookings look kind to how was you. placing with this to your I kind kind all but you for question. of are coming for indicators – that And of shock? different on peaks to leading that at are or on

Paul Walsh

Thank Sure. Mark. you,

two into it categories. break I’ll So

end into side, mean, disties inventory customer. On distribution, many are visibility We semiconductor product is as levels – it have to lows. POS the I shipped the companies, to excellent we out they – do when Their what essentially, historic ship at inventory. there what is. as right the the for what to their disti really see have

medium-term. that have don’t issue we or near visibility, And so don’t anything to course, the happen. in – that see we that and you careful, there situation make sure are any doesn’t or doesn’t we But very that, that there described of we the foresee

are these were such production On industrial inventory side, just types alluded ramp. of types be many in their happening the earlier, these is conversations they they – – or customers inventory in that more non-disti they non-disti Ravi and a the to auto discussions that if if customers but was customers, had smoother side, anecdotal, the on with wouldn’t large this of

manage that, We also as lot we that us – look do to VMI. for a these and – way a another use of our we can and do see And that’s at lever their customers inventory, provides visibility. non-disti

my near-term but we peers our our and medium-term. supply-demand from what the when view from I mentioned see is think see the I balance, earlier don’t and Ravi know in that’s will we see think or I as customers and what between what the that – from end many internally, So not we

Mark Lipacis

Very Thank helpful. you.

Operator

no this for remarks. Katie turn Ms. over are to Blye at back further now closing time, And questions. We’ll the audio there conference

Katie Blye

Pauline. Thank us you, thanks Allegro. in joining for today’s you Thank and does conclude for That conference call. today, Okay. your interest

Operator

And call. thank you. This today’s concludes conference

You may now disconnect.