Silicon Laboratories Inc at Citi Global TMT Conference Transcript

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

Question: Atif Malik - Citigroup Inc - Analyst : Matt, I want to rewind what has happened this year. Your revenues troughed last year in December quarter, and you've seen some sequential recovery in first half going into September quarter. Are you seeing clear signs of demand recovery and path to getting back to the $200 million plus sales per quarter? And what are the kind of the goalposts you're looking for the signs of recovery?

Question: Atif Malik - Citigroup Inc - Analyst : Matt, just that topic, are you seeing this recovery typical of past cyclical kind of corrections? Or are there things that are different about this setup?

Question: Atif Malik - Citigroup Inc - Analyst : Okay. And I thought it was interesting you mentioned that the next kind of goalpost is the design win activity and ramp. And can you just update us in terms of your design win funnel -- you guys had a very strong momentum on Series 2 and even Series 3 going into the upturn and -- so what is the typical kind of a time frame for the design win to translate into revenues?

Question: Atif Malik - Citigroup Inc - Analyst : Okay. Then just on the product side, can you talk about early customer feedback on Series 3? How does Series 3 differentiate from Series 2, as they're both in the field? And also touch on the AI aspect of these products, how is that innovation panning out? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 7:00PM, SLAB.OQ - Silicon Laboratories Inc at Citi Global TMT Conference

Question: Atif Malik - Citigroup Inc - Analyst : Yes. Can you provide some examples on the use cases of Series 3 where it's getting more pull end markets?

Question: Atif Malik - Citigroup Inc - Analyst : And then recently, you disclosed a significant win in continuous glucose monitoring or CGM -- can you talk about the overall size of this market and other design wins you have referring to this space?

Question: Atif Malik - Citigroup Inc - Analyst : Any kind of update on electronic shelf labeling, smart metering end markets that -- what's the health of those markets?

Question: Atif Malik - Citigroup Inc - Analyst : Great. On Bluetooth, it has been a success story for Silicon Labs. Can you give us a sense of what the contribution to your current revenue is today from Bluetooth?

Question: Atif Malik - Citigroup Inc - Analyst : Great. Now just going back to the cycle, are you seeing any differences in destocking or restocking in the two segments, industrial and commercial versus home and life?

Question: Atif Malik - Citigroup Inc - Analyst : Okay. And the question we get a lot on pricing. And correct me if I'm wrong, I think earlier this year, you talked about some pricing pressure for one of the larger analog company in the US. But how have the pricing trends kind of progressed through the year with the rate?

Question: Atif Malik - Citigroup Inc - Analyst : And what are you seeing in China and the your recovery and where you see your kind of normal exposure to China over the long period? And are you seeing any substitution on IoT parts in China from domestic China suppliers?

Question: Atif Malik - Citigroup Inc - Analyst : Let me pause here to see if any questions in the audience. Unidentified Participant The earlier comments you made about the 10% of revenues. I mean we're talking about CGMs. Was that CGM specific or health care as a whole?

Question: Atif Malik - Citigroup Inc - Analyst : Yes. And if you all want to ask, I can just repeat it, if you don't need the mic. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 7:00PM, SLAB.OQ - Silicon Laboratories Inc at Citi Global TMT Conference Unidentified Participant Just curious on the ESL, I'm just curious about like what's the current penetration rate right now? Like how much is the adoption right now retail...

Question: Atif Malik - Citigroup Inc - Analyst : Do you expect to kind of raise your long-term gross margin?

Question: Atif Malik - Citigroup Inc - Analyst : And on the cost side, I remember during the opportune you guys did a pretty good job in kind of transferring the higher wafer cost for your customers and your foundry partner, TSMC and they're talking about raising pricing for next year as well, maybe not on your geometries, but help us understand the cost part of the gross margins, like -- is that fully kind of baked into your outlook for second half?

Question: Atif Malik - Citigroup Inc - Analyst : And one last one on M&A and divestitures. You guys sold your I&A business from Skyworks a few years back. And are there other opportunities in your portfolio for kind of tuning in terms of improving profitability or -- and I'm sure you've assessed this during this downturn already. But are there other areas where you can improve the either margin profile or decide not to be in those markets?

Question: Atif Malik - Citigroup Inc - Analyst : And one last one on AI on the edge. I get asked this question a lot. I feel like we all have been waiting for AI on the edge to happen. And when you look at either smartphones or garage door openers and IoT other assets, are there like killer applications or markets where you see a very strong case for AI in the industrial side or product side. And we'd love to get your thoughts on where you think AI and the edge will be the first to take off?

Question: Atif Malik - Citigroup Inc - Analyst : Great. On that optimistic note, we can wrap up our fireside chat. Matt and Thomas, thank you for coming to the Citi Conference.