MaxLinear, Inc

Welcome everybody to the third day of Needham's 26th annual Growth Conference. My name is Quinn Bolton. I'm the Semiconductor Analyst here at Needham & Company. Thank you for joining us. It's my pleasure to host this Fireside Chat with Max Linear. Max Linear, as many of you know, is a leading supplier of RF analog and mixed signal semiconductors for the broadband and connectivity infrastructure and industrial markets. On stage with me is Dr. Kishore Singh Dripu, CEO and Steve Litchfield, CFO and Chief Corporate Strategy Officer, and also has Leslie Green in the audience who handles investor relations. So key short, Steve. Leslie, thank you for joining us. I wanted to start off, guys, with maybe some macro questions or just industry questions. Obviously, the entire semiconductor industry is facing inventory digestion, as you have, particularly in the broadband and connectivity business. But what are your latest thoughts on where we are in that inventory digestion process, and how long does it take to clear inventory in your various end markets?

So I think not much has changed since our last earnings call. We are burning through inventory, right? And we are undershipping demand quite substantially. And if you see what took our revenues down, it's really almost entirely concentrated in the broadband connectivity business. They're one and the same as far as revenues are concerned. But the remaining portions of a business, infrastructure, industrial multi-markets, don't have too much inventory, this thing. So broadband and connectivity, we've been tracking it, and we're vastly under shipping demand, even though the demand seems fine. So we expect that maybe second half of this year is when we will start seeing some recovery to happen. And, you know, it's like fits and starts. We're seeing some cases, some parts are in short supply and you see some bookings and others you don't see. So I think it'll really be the second half of this year. Regarding the infrastructure and industrial multi-market, we don't see, we didn't have that overshipping problem other than some exposure to the macro markets that are softening. So we expect softening in industrial and infrastructure markets in the first half of this year as well. But that's more macro. Macro than really any large-scale inventory issue that we are seeing in the broadband and connectivity space.

If you're right that broadband and connectivity, where you have the bulk of the inventory problem is, you know, clear sort of by the end of the first half and hopefully gets into a better situation in the second half. At what point would you start to expect to see bookings begin to pick up? Is that, you know, a quarter ahead of, you know, kind of the recovery? How far in advance would you start to see it in the order books or at least order trends becoming more consistent?