Cirrus Logic Inc at Stifel Cross Sector Insight Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tore Svanberg - Stifel, Nicolaus & Company - Analyst : <_ALACRA_META_ABSTRACT>Good morning, everyone. We're going to get started. Welcome to the Cirrus Logic session here at Stifel 2024 across the Cross Sector Conference. My name is Tore Svanberg. I'm a senior semiconductor analyst. I cover analog connectivity and processor companies, and it's my pleasure to introduce Cirrus Logic with us from the Company. To my immediate right here is John Forsyth, the Company's Chief Executive Officer and in front, you probably also have Chelsea Heffernan, who runs investor relations and also of Harbour mine, who is also on the finance team. The particular format for this session is basically a fireside chat. And as some of you know, if you're familiar with Cirrus Logic, I mean on they have a very large customer. And John, sometimes not comfortable talking about that particular customer, but I'll trying to dance around the questions as well as I can. So, we can get some information out of it that would get started. Thank you, John again for coming on. Maybe we could just start with a very general introduction for those investors that may not be as familiar with Cirrus Logic.

Question: Tore Svanberg - Stifel, Nicolaus & Company - Analyst : Great. Thank you for that on. So maybe I can just start talk a little bit about the industry, John, because it's been a crazy few year in the semi cap industry. I know there's always a degree of volatility in your business just given your customer concentration, but how did these last three years without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 04, 2024 / 12:35PM, CRUS.OQ - Cirrus Logic Inc at Stifel Cross Sector Insight Conference impact Cirrus Logic from a strategic direction perspective, what are some of the things that the company did right when it came to trying to fill up all that demand? And then how does the company sort of react when he started falling off the cliff a little bit. Obviously, Cirrus Logic did not have that same element of cyclicality of the industry, but it was still a very unique time, so I want to hear from you what the company did. Right? And perhaps what could have done better?

Question: Tore Svanberg - Stifel, Nicolaus & Company - Analyst : I mean, I know you have some exposure to China smartphones, but I mean, if you would have it higher exposure, you've had a much rougher time. That's for sure. So that's pretty clear. So John, you've been CEO now for several years. And when you came in, I think there's always been kind of without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 04, 2024 / 12:35PM, CRUS.OQ - Cirrus Logic Inc at Stifel Cross Sector Insight Conference pressure at least from shareholders to diversify the business, especially when it comes to customer concentration that when you came in, you basically say, well, you know, you want to do diversification, but you did it more by technology?

Question: Tore Svanberg - Stifel, Nicolaus & Company - Analyst : I mean, when you came and it was predominantly an audio company, you've invested heavily in mixed signal the last few years. And of course, you've seen great results from that. On what I wanted to ask you when you came in, you know, kind of foresight that you have because when you think about things like camera controller, or mixed technology. You think about power. There's a lot of other companies out there that have those capabilities. So I mean, did you get sort of signals from your largest customer to start investing in, but IP or did you say, You know what? Here's a great opportunity for us because we have the underlying, but we can build the underlying IP and technology to be very competitive?

Question: Tore Svanberg - Stifel, Nicolaus & Company - Analyst : Great. So, let's shift gears and maybe make you a little bit uncomfortable, not very uncomfortable, a little bit. So, and related to what you just talked about, you know, there's years when you have new product ramps for your largest customer. You know, you have some content expansion. You know, remind us for this particular year, obviously, there's the new smart codec, new boosted amps. But remind us where we are for sort of content growth this year. And, you know, can you maybe give us a bit of a preview for what you're expecting there?

Question: Tore Svanberg - Stifel, Nicolaus & Company - Analyst : Great. And not to sort of overhype things, but I mean, you know, everything is about AI these days and, you know, everybody thinks about NVIDIA's poster child for AI for obvious reasons, you know, Microsoft. Very few people have actually talked about your largest customer in the context of AI. I personally think that they are going to be a leader in AI for edge devices. And I think they intersect really well with your IP, right, because the ultimate interface for AI for a device will be voice, which obviously means a lot of audio and voice technology and IP. But there's also clearly an intersection with AR/VR. And, you know, that's where your camera controller is an essential IP block. So, again, without pre-announcing what your largest customers are working on, at least just from a big picture perspective, can you talk about how AI and AR/VR in devices, whether it's laptops or smartphones, could potentially impact your business going forward?

Question: Tore Svanberg - Stifel, Nicolaus & Company - Analyst : Right. We only have few more minutes. I want to make sure I address any questions from the audience before we wrap things up. Any questions? So just a few more, John. So interestingly enough, the company before you here at the stage was Texas Instruments, and they were talking about how you know, the reason why they do manufacture themselves is because they worry about the cost curve of the foundry industry. And, you know, TSMC is your largest foundry. I know you also have North American foundry that you work a lot with. How do you how do you see the supply side of the economics for fabless companies going forward? Because, you know, there is sort of a thesis that wafer pricing is going to remain inflationary it was very inflationary, obviously, the last few years. It's going to remain inflationary. Then, obviously, you know, you have one large customer and I'm sure they obviously would expect some sort of price declines over time. So, how should we think about those dynamics?