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Operator
taking the questions so the first thing I want to ask you guys about is the guidance for your IOT is very impressive for next quarter it seems like you guys are well underway with design wings and long-term plans with your portfolio diversification but looking forward do you anticipate IOT to continue to be a larger portion of revenue larger than mobile going forward and beyond this guidance yeah Jameson good question so we
Splaylink
rolled out earlier this year a vision of actually driving our IoT business to the largest component of our revenue contribution going forward. This is the first quarter that we've gotten there that IoT has actually exceeded our prior mobile position. And we are going to continue to focus on IoT. That's where we think we have the greatest growth potential. It's where we can garner the most gross margin and profit potential going forward. So in short order, yes, we do see IoT continue to be the larger portion of our revenue going forward.
Operator
Perfect. And then in follow-up, just looking at your guidance for mobile of around $120 million, this would imply that mobile is going to be down year over year, I think, even excluding TDDi. So I'm just curious on why it's down sequentially. When seasonally it's tended to be up, is this mostly due to the TDDI divestiture? And if so, how should we think about mobile seasonality going forward as well as the longer-term trends?
Splaylink
Yeah, so I alluded to it in the prepared remarks on an adjusted excluding TDDI for a year-over-year basis. Our mobile business is actually up 25%, so I think we're on the right trajectory from a year-on-year look. But we do have a little bit of transition between OLED touch controllers versus, more historically, the LCD display drivers. So there's a bit of a transition right now, but there's a nice base for us around these LCD display drivers, which has a nice, stable revenue base that we can grow our touch controllers from.
spk01
Okay. Thank you.
Chris
Thanks, Jameson.
Jameson
Next question comes from the line of Christopher Roland from Susquehanna. Your line is now open.
Christopher Roland
Hey, guys. Congrats on the nice quarter. My question is around display link. You guys broke out the contribution or the revenue run rate for 2019. But I was wondering if we could get an update with one quarter to go maybe on what 2020 is looking like. and what kind of growth we've seen year over year there. And then also, I think you talked about the Splaylink. I think you bought it for $305 million, but I just read the 10Q quickly, and I think it said $443. I just wanted to reconcile that and make sure that I read that correctly. Thanks.
Splaylink
Yeah, first, Chris, let me just give you a quick accounting one. So, yes, the purchase price was $305 million. On the queue, it'll say the 443, which is the difference between the one-for-one cash purchase that was actually part of the company when we acquired it. So think about it as market cap versus enterprise value difference on the cash that we acquired when we closed that business. So that's the basic bridge. I think in the queue, you can see that breakdown. On the display link in sort of growth updates, That business continues to do well. It's on par for what we had expected when we announced the deal transaction. It's too early for us to say what a full year contribution might be. It, of course, is in this dynamic around work from home and PCs and how that market evolves, which is a bit volatile from our perspective right now. As you can see from our PC, you know, quarter and Q1 and then how we're guiding into Q2, there does seem to be a little bit of volatility within that PC market. And, of course, that display link business is, you know, somewhat attached to a PC market. So I think it would be a little early for us to sort of give guidance on what that full year looks like. But we do feel good about it.
Chris
Yeah, I remember, Chris, Our fiscal year starts July 1st, so we're actually, you know, only one quarter of the way through. You said, you know, year-end December, we've got a little bit of ways to go. What I'd say about the display link, in addition to what Dean said, is we've got these interesting set of wins that have developed around these video conferencing panels that are appearing everywhere. We talked about it in the prepared remarks. People like Polly and Bose are launching video conferencing panels and the video compression technology that DisplayLink offers is perfect for those kinds of applications. So we've certainly seen very, very good strength in the traditional docking station business. And then we've seen this new layer as we get into more video conferencing-like applications where DisplayLink technology is a nice fit and We didn't quite appreciate the number of design wins that the team had won when we acquired the business, but it's fairly appreciable.
Christopher Roland
Great. Thank you. Thank you, Michael, and appreciate that clarification, Dean. As a follow-up, just on the PC side of things, you guys talked about a temporary component constraint. Perhaps more detail there, is this a PC OEM or is this something more – in the supply chain itself. And then also, Michael, you talked about PC dollar content today and that increase when we go to things like haptics, for example. Where are we today and where can we go on that side? Thanks.
Chris
And maybe I'll take the second part of it. Dean can talk a little bit about the supply chain issues. You know, in certain instances, we will sell the entire touchpad to a PCOEM. And a traditional sort of, you know, two-inch by three-inch touchpad all in maybe somewhere in the $8 to $10 range. As you get into these larger pads that we described with haptics and force involved, you're talking about ASPs that are on the order of three times higher. So it's a significant step up that we could get. Those are very prevalent today in MAC. We don't participate in that business at all. But you can see that that set a trend that the other PCOEMs are trying to follow. And in that context, we feel good about an increasing attach rate. And in that increasing attach rate, we think we can step up our content by, you know, somewhere on the order of three acts. So it's a pretty big step up for us. And again, attach rates are very, very small right now, but we think that'll increase.
Splaylink
Yeah. And Chris, on your question around the PC supply chain, We did notice that we had what seemed to be a couple of component shortages on the OEM side within their supply chain. It was mid-quarter in the September quarter where we noticed a lot of softness where it seemed like they were having issues getting all of the components that they needed relative to our initial expectations. What I will say is In recent weeks and at the end of our September quarter, that business really took off again, and our backlog continues to remain strong. So we think there was probably just a transitory component that was causing them short-term issues.
Christopher Roland
Great. Thanks so much, guys. Thanks, Chris.
Jameson
Next question comes from the line of Harrison Barrett from RLA Research. Your line is now open.
Harrison Barrett
Hi. Thanks for taking my question, guys. So you mentioned a move into some Chromebooks coming in calendar 21. Is this an opportunistic move, or are you going after significant business here? And then if we take that along with your existing business in PC, which is clearly staying stronger for longer, do you think that puts your stable PC run rate much higher going forward when all the dust finally settles?
Chris
Fair question. I think historically, you know, we have not been indexed heavily to consumer notebooks in general and Chromebook in particular. And we see the Chromebooks now, particularly as sort of a segment of the market that that are trying to pick up higher performance components, touchpads in some degree, fingerprint sensors, and that represents a growth opportunity to your point. That coupled with what we talked about with Chris on the last call, the larger touchpads and the haptics and force, we do think that there is an opportunity for us to gain market share. I'd say Chromebook is going to be a market share gain because we haven't historically played there and then increased content in our existing base, which is primarily commercial notebooks. So in a dynamic where we do believe that PC will eventually settle to a new normal, we have opportunity to grow off a base that, you know, could be changing in the back half of the year, potentially, potentially not. I mean, it's, we keep calling it as something that's declining so far. We, We see no signs of slowing. We just feel like it won't continue. So we've been cautious in terms of providing color. But in that cautiousness, certainly unique to us, there's some growth dynamic Harrison.
Harrison Barrett
Thanks. That's very helpful. And then just as a follow-up, looking at the December quarter guide, you're seeing OPEX pretty much flat. When do you think this ticks back above 90 million? Or do you think you can keep it down at this level going forwards? And then just looking at the implied EBIT margins from there, you're looking at 25% plus at this stage. Is there a road to 30%?
Splaylink
Yeah, so on the OPEX question, yeah, it stays down below 90 is sort of our view. We've done a great job since Michael and I joined, and even prior to Michael and I getting on board, is actually starting to rationalize the cost structure of the company. We've gotten it down below this 90 mark. Before the acquisitions, I think we hit the 80 mark. And now that we've been in a position to absorb these two recent acquisitions, we think we can continue to hold it down below this 90 mark, and we don't see that changing anytime soon. And you're right, the operating margin for the EBIT on the non-GAAP side is roughly 25 points at the midpoint, if you sort of do the math, plus or minus. I would say going forward, can we drive to a 30% as part of your question? That's really going to depend on can we get the IoT revenue and the scale around the company to get there. I think if you look across the semiconductor landscape, there's not many companies that are at the 30% EBIT level, and those that are have significant scale. And so we would look to grow specifically our IoT business, which comes with higher gross margins and faster growth rates, to get us there to that scale level.
Harrison Barrett
Great. Yeah, thanks for the questions. Thanks, Harrison.
Chris
Thanks, Harrison.
Jameson
Our next question comes from the line of Martin Yang from Oppenheimer. Your line is now open.
Martin Yang
Hi. Thank you for taking my question. First, on your Chromebook opportunity, you mentioned that you can attack at this market with a reasonable margin. Is that due to your operating efficiency improvement, or was that more due to a different design for Chromebook products?
Chris
Martin, it's both. I would say the lead headline is operational efficiency. We've done a good job in our operations team focusing on the cost of these pads and taking cost out not only of our IC that drives it, but all the other componentry that goes around it. So I'd say that's the lead headline. but we also came up with a more cost efficient design for Chromebooks and that's helped as well. So it's a little bit of both, but I'd say for the most part it's been cost that we've been able to take out on an operational basis.
Martin Yang
Got it. And also another question on potential component constraints and supply chain bottlenecks. Do you see any potential affecting Other of your segments, like mobile or IoT?
Chris
So far, I would say external component shortages we've not seen. We definitely, in the semiconductor supply chain, there are some tight spots, and we continue to work around that. Our guide obviously contemplates some of the tight spots that we've seen. in the semiconductor supply chain itself, but external factors, and I think that's the gist of your question, Martin. I don't know if Dean has any color, but I don't think we've seen anything other than the blip that Dean talked about in the PC segment last quarter.
Splaylink
Yeah, we don't see anything that we'd specifically highlight, but if there are other shortages that were out there from an industry landscape, It wouldn't necessarily surprise us, given what we can see on the semiconductor supply chain side right now. Got it.
Martin Yang
Were you able to tell us how December looks like for PC without the constraints?
Splaylink
For PC specifically, we factored in any constraints that we know of today. into our December quarter guidance. From what we are able to align with all of our suppliers and vendors, we think we can fulfill the demand that's out there for the PC for the December quarter.
Martin Yang
Got it. Thank you very much.
Splaylink
Thanks, Martin.
Jameson
And as a reminder, to ask a question, please press star 1 on your telephone. Again, to ask a question, please press star 1 on your telephone. The last question comes from the line of Jason Getz from Mizuho Securities. Your line is now open.
Jason Getz
All right. Thanks for taking my question. I just want to follow up on a couple comments from earlier. You had mentioned your flexible OLED moving from the premium down to the mid-tier SKUs. I was wondering, as you move down that SKU stack, if you're seeing any ASP pressure there and any impacts to gross margins that may have.
Chris
Yeah, I mean, there is a little bit of ASP pressure as you move down the SKU stack. You know, we've done well, as I think we've characterized in previous calls, our gross margin in the business overall is good. So even with the pressure, I think we're holding up relatively well. But yeah, as you move down, you're moving down into more cost-sensitive areas and there's going to be a bit more pressure on ASP than you see in the high-end phones.
Jason Getz
Great, thanks. And then as a follow-up, I think last quarter you had mentioned you expected the DisplayLink and Broadcom businesses to add about $30 million to the September quarter top line. It sounds like it came in a little bit better than that, but was wondering if you could give an idea of where they came in for September and kind of how you see that mix versus legacy Synaptics going forward.
Splaylink
Yeah, we're not breaking out the numbers specifically in our guide and going forward. What I will say is we broke it out last guide, given it was the first time that these businesses had been incorporated. We had closed on these businesses, I think, a couple of weeks just prior to our announcement. And for the September quarter, they came in right at where we expected. I mean, we weren't surprised sort of either way. What we are surprised on is going forward, we do see actually these businesses on a combined basis doing a little bit better than what we originally expected. So I would say only good news from our vantage point.
Jameson
All right, great. Thanks.
Splaylink
Thanks, Jason.
Jameson
Thank you for all the questions. I'll now turn the call over back to Mr. Michael Hurston.
Chris
I'd like to thank all of you for joining us today. We look forward to speaking to you at our upcoming virtual investor conferences during the quarter. Thanks a lot.
Jameson
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Thank you. Thank you.
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