Semtech Corporation

Yeah, I think if we look at APS, we saw some strong pulls, a little bit of digestion, you know, into that ramp for that smartphone, North American smartphone manufacturer. I think we'll see a little bit of pullback, but largely due to some seasonality, you know, that's really strong pulls up into the launch and then a little bit of pullback. So that's protection. Protection should have a baseline component that's going to steadily improve from here. So we've seen some nice stability in the base numbers, especially as it relates to the proximity detection. And so we'll see that slowly strengthen. I kind of look at a 13-week booking average by product line, and it's just been steadily improving, not really snapping back, but just steady improvements as those inventories come off. And our channel partners kind of anticipate some of those production runs. So SIP is a little bit of a digestion, signal integrity is a little bit of digestion on a really strong data center number. You know, we could probably see some surprises to the upside, but I would, right now we're anticipating, you know, our revenue being a little bit softer on that channel inventory digestion for the initial launch. They usually like to validate the hardware and the numbers that they're saying and then they kind of resume an additional schedule so protection and sip both kind of moving a little bit sideways at this point but slightly down thanks so much Paul appreciate and the next question comes from the line of Rick Schaefer with Oppenheimer and company please proceed with your question

I guess my first question, if I could just, maybe a high level, and Paul, I was just hoping that you could share a little more about your strategic, you know, kind of vision for Centec and what the company you think it's going to look like or you expect it to look like, say, in, you know, three years from now. I mean, what role do modules in particular play long term and You know, the growth opportunities there, I mean, do they justify the associated margin pressure, or do you see a path to maybe improving those margins, you know, demonstrably sort of more to kind of classic, you know, fintech, you know, corporate average?

So that's a good question, and you're putting me on the spot, so I certainly appreciate that. So what do we look like three years from now? There's no doubt that, you know, our core competencies really does kind of come from components. And I do think that it makes sense to move into module products as long as you can pick up additional stacking margins. So to have To produce a module that essentially has component content that you produce does make sense. I've participated in businesses before where a lot of times you have to produce a reference design. In some cases, it just makes sense to go off and sell that reference design, commercialize it, manufacture, and sell it. you know, this gets a little bit more complicated and that's generally speaking from a semiconductor standpoint, it gets a little bit more complicated when you start talking about IoT because of the diversity of use cases, you end up having to pull a lot, a broad range of technologies through in order to produce an entire solution. If I had to be a module maker in and of itself, today, the business model would be very different, and I think my investor base would be very, very different. So does it justify in and of itself the margin pressure? I think the answer to that is no, but if we can pull together a bit more of a comprehensive IoT strategy in which it becomes an enabling component on higher margin sales, then yes, I think it's quite possible that that can happen. It doesn't necessarily mean that we have to own it, you know, for the entirety of that three-year, five-year play. But, you know, cellular backhaul is always going to be a part of an IoT strategy. And I do think that we have a rather large IoT opportunity in front of us that we need to kind of reimagine that strategy and how we're going to capture that. in the marketplace. So if we can combine it and it becomes a part of the story along with software, along with components, then I think it's perfectly fine, makes sense. In and of itself, no, it doesn't justify the margin pressure. And we would look, in the meantime, we would look to continue to capture the opportunity. I do think that there's tremendous upside opportunity associated with modules. In some cases, when you're engaging with utility companies, they'll want an LPWA solution, or they might gravitate towards a private network like LoRa solution. So having the opportunity to do both is an advantage as well, as long as you build together a bit more of a broader product offering or solution and story. So hopefully that gives you a little bit of a color without, you know, specifically nailing everything down after five months.