Maxim Integrated Products, Inc.

Good day, ladies and gentlemen, and welcome to the Maxim Integrated Second Quarter of Fiscal 2020 Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Kathy Ta, Vice President, Best Relations. Please go ahead, Kathy. Thank you.

Thank you, Jonathan. Welcome, everyone, to Maxim Integrated's Fiscal Second Quarter 2020 Earnings Conference Call. Joining me on the call today are Chief Executive Officer Tunch Deluge and Chief Financial Officer Brian White. As a part of our usual process, we have posted a supplemental financial presentation to our external Investor Relations website. The information in this presentation accompanies the financial disclosures in our earnings press release and on this conference call. During today's call, we will be making some forward-looking statements. In light of the Private Securities Litigation Reform Act, I'd like to remind you that these statements must be considered in conjunction with the cautionary warnings that appear in our SEC filings. Investors are cautioned that all forward-looking statements in this call involve risks and uncertainty and that future events may differ materially from the statements made. For additional information, please refer to the company's Securities and Exchange Commission filings, which are posted on our website. Now I'll turn the call over to Tunch.

Thank you, Kathy. Good afternoon to all our participants. We appreciate you joining us today and your interest in Maxim Integrated. Let me first summarize last quarter's results and our outlook. Our December quarter results met our expectations while also maintaining lean inventory levels. Looking forward to the March quarter, we expect a return to revenue growth for the company from the same quarter last year, driven by growth in communications and data center, industrial, and automotive markets. We continue to be cautious given the persistent macro and trade uncertainty, but demand is improving. Let me provide some color by end market, starting with automotive. In the December quarter, our automotive business was up 5% sequentially with double digit growth in our secular growth areas of BMS and driver assistance systems. Our revenue growth in our overall automotive business fared better than the growth of global car production. We see ample content growth opportunities for Maxim in ADAS applications in power management and point-to-point serial link data communication products. At the Consumer Electronics Show, we held a large number of customer discussions on our BMS, driver assistance, and power management solutions. Our latest generation automotive serial link products transport video, audio, and data at 12 gigabits per second. In recent quarters, we grew our serial link business from Chinese OEM customers. At CES, we showcased our wireless BMS technology and new families of high voltage automotive power solutions that efficiently control and supervise the hundreds of watts of power required for advanced driver assistance systems. In the March quarter, automotive is expected to be strongly up sequentially. We also anticipate automotive revenue to be up from the same quarter last year, driven by driver assistance and infotainment content. Let me next turn to the industrial market. In the December quarter, industrial was up 7% from the prior quarter. We experienced sequential growth in factory automation and automated test equipment markets. Days of inventory in the channel remained relatively similar to the prior quarter. In the March quarter, we expect industrial to be up sequentially. Industrial is also expected to be up from the same quarter last year, driven by automated test equipment, financial terminals, and core industrial, including factory automation. Let me next discuss communications and data centers. In the December quarter, comms and data center was up 25% sequentially. We experienced a strong ramp in demand for 25G optical products for base stations and 100G optical products for data center applications. We are excited about the rapid deployment of our analog laser driver products. Hyperscale data centers and 5G base station uplinks need to move more data while staying within their already constrained power budgets. Maxim's transmitter products address both challenges within the power and cost constraints of our customers. In the March quarter, we anticipate comms and data center revenue to be strongly up from the prior quarter. In the past, our optical business has shown large demand fluctuations based on customer CapEx deployments. We are currently enjoying a period of strong demand. Comms and data center is expected to be strongly up from the same quarter last year in 100G optical for data center and 25G optical for 4G and 5G base station applications. Finally, let me turn to consumer. In the December quarter, consumer was down 15% sequentially with expected weakness in smartphones, and seasonal declines in other customer electronics. The peak of holiday shipments for consumer electronics had occurred in the September quarter. In the March quarter, we expect consumer to be flat sequentially. Gaming grows, new flagship phones ramp, and other customers are expected to be seasonally down. Consumer is expected to be down strongly from the same quarter last year. To summarize, we have built Maxim to be resilient and to position the company to outperform as conditions get better. Market demand is improving and we expect revenue growth in the March quarter compared to the same quarter last year in communications and data center, industrial and automotive. We are executing on our strategy to grow revenue with new design wins in long-lived products in automotive and industrial. Our analog business model and flexible manufacturing strategy enable consistent company profitability and stability. Now I'll turn the call over to Brian.