Qorvo Inc at JPMorgan Global Technology, Media and Communications Conference (Virtual) Transcript

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

Question: William Chapman Peterson - JPMorgan Chase & Co, Research Division - Analyst : Yes, Mark. As it's really top of mind for everybody is just the impacts of supply constraints. And it looks like the team is managing these fairly well. You do have silicon providers, but you also have internal capacity as well. But then there's also just, in the broader sense, maybe supply constraints that your customers may have from other component makers. So I guess how does the current supply constraints impact your current business? And how does it, I guess, impact your view on -- you gave a soft guidance for September. How does this all play in with the various supply constraints that exist throughout the ecosystem?

Question: William Chapman Peterson - JPMorgan Chase & Co, Research Division - Analyst : No, that's really constructive. And that kind of addresses -- there has been some, I guess, rumors or chatter about order cuts in the Android space, and you -- I mean, it pretty much sounds like you're still seeing your business very strong and you just mentioned bookings through the year. So it doesn't appear that you're impacted by that, if there is such a thing. Is that a fair assessment?

Question: William Chapman Peterson - JPMorgan Chase & Co, Research Division - Analyst : Yes. Why don't we move on to some of these newer opportunities? I mean there's so much to talk about in mobile, but I think we have NextInput, this bio opportunity you talked about, the ultra-wideband, all of these opportunities. I guess maybe starting with the oldest one, which means the Decawave, what are the target markets long term beyond smartphone? It sounds like -- I know your competitors talk about multiple markets. Are there plays in some of James' target businesses as well as, of course, Eric's?

Question: William Chapman Peterson - JPMorgan Chase & Co, Research Division - Analyst : Maybe another -- I mean, again, you guys have so many different technologies. It was, I guess, you, maybe 2 quarters ago, talked about the Qorvo biotechnologies, the Omnia COVID-19 rapid antigen test. You have the emergency use authorization. Can you share more about this opportunity? I mean obviously, COVID is still with us. You referenced earlier about India and so forth. I mean what are the economics here? And I guess beyond COVID, are there additional market opportunities for some of the base technologies? And how should we think about this part of your business as we look ahead?

Question: William Chapman Peterson - JPMorgan Chase & Co, Research Division - Analyst : Yes. The latest one in this line is NextInput, and it really just closed, I guess, $173 million. Maybe you can -- what of that TAM and where does this come in, in terms of the market opportunities, the -- what -- it seems like smart -- it seems like it's across smartphones and some other consumer tech. But where is the market heading? And what are the key differentiation points for this business you acquired?

Question: William Chapman Peterson - JPMorgan Chase & Co, Research Division - Analyst : Okay. Great. Maybe coming back to some of James' core businesses. You've provided a framework for the year. It's certainly kind of being held back, it appears, by infrastructure this year with the market down. I want to dive in that a little bit. Obviously, I'm sure, long term and over the next few years, you're excited about the opportunities, including GaN and small signal. But I guess, how should we think about the shape of the market, the mix of the various regions? You mentioned that there's mix impacts with the 64x64 MIMO versus macro. Can you remind us of the content opportunities? And how should we think about this market, not only, I guess, into the back half of the year but over the next few years?

Question: William Chapman Peterson - JPMorgan Chase & Co, Research Division - Analyst : Before going back to Mark to close out with maybe a few model questions. Just, James, a lot of the other business -- parts of the business are going strong and looked like they should continue: WiFi to WiFi 6, WiFi 6E. I think you have some new opportunities in automotive, defense, you mentioned. I guess just to quickly summarize just your outlook as we look out over the next, say, 12 to 18 months, just maybe outside of just the pure infrastructure.

Question: William Chapman Peterson - JPMorgan Chase & Co, Research Division - Analyst : Yes. Understood. Mark, gross margin performance has been great. I know there's been some positive tailwinds, but you guys have also done a lot of great things under the hood that should continue, I guess. And I know that -- then you have op margin, free cash flow margin. I know you're focused on all of these things. But I guess, starting from the gross margins, how much further benefit from productivity improvements? But then you have puts and takes of maybe pricing normalizing or inventory charges. Obviously, on the op line, you're investing in a lot of these businesses. How much leverage do we have in the model? And how should we think about just your free cash flow margin trends over time?

Question: William Chapman Peterson - JPMorgan Chase & Co, Research Division - Analyst : Well, that was a great way to end this call. Thanks again, guys. Terrific opportunities ahead of the team. We'll look forward to following the progress. Thanks a lot.