The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Atif Malik - Citi - Analyst
: Matt, in terms of the market outlook, your revenues troughed last December 2023, and you've seen some good consecutive sequential recovery
for the past 1.5 years. Before diving deep into share gains and prior cycles, could you share with us what you see in the end market demand now?
Question: Atif Malik - Citi - Analyst
: Okay. Going back to the June quarter, did you guys see any kind of pull forward in demand or in your bookings pattern, anything that will make
you think things could normalize more in the second half?
Question: Atif Malik - Citi - Analyst
: So Matt, yesterday and today, a couple of your peers talked about weakness in China on the auto side. You guys don't have any exposure on the
auto side. But just curious if you're also seeing some sort of weakness in China, if you just could talk about the regional sentiment.
Question: Atif Malik - Citi - Analyst
: Okay. Can you touch on the competition in China? Some of the weakness in the auto side is because of the indigenous competitors and -- but on
the microcontrollers and IoT side, what sort of competition you see in China?
Question: Atif Malik - Citi - Analyst
: And with respect to the recovery that we have seen so far in your businesses, is your sense that this is still kind of inventory replenishment or now
you're starting to ship to real demand?
Question: Atif Malik - Citi - Analyst
: Well, let's put cycle aside. I mean, cycles matter to you guys. But fundamentally, you guys are a product cycle story to us where you have good
design win momentum on Series 2, and you're talking about Series 3. So let's talk about that design win funnel, where we are in terms of the
adoption on Series 2, and then what are the aspirations for Series 3?
Question: Atif Malik - Citi - Analyst
: All right. Matt, which end markets are you seeing the most traction on Series 2 products?
Question: Atif Malik - Citi - Analyst
: And coming back to outgrowing the market, I remember a few years back, this is pre-COVID, your goal was to grow like 1.5 times the market growth.
And so what are the aspirations these days on outgrowth?
Question: Atif Malik - Citi - Analyst
: Yeah. The Edge AI is coming. Are there opportunities within the data center for any of your products or mostly on the edge?
Question: Atif Malik - Citi - Analyst
: All right. Let me pause here and see if there are any questions in the audience.
Unidentified Participant
(inaudible - microphone inaccessible)
Question: Atif Malik - Citi - Analyst
: Thomas, I was curious if you guys are breaking this out, the Wi-Fi versus microcontroller, that you used to do in the past. Are you breaking out the
business and giving us the percentages?
Question: Atif Malik - Citi - Analyst
: Okay. Great. Tariffs, could you talk about the impact of tariffs you've seen so far to your business? Understand it's not material given you only
shipped 100% within the US, but what is the impact of tariffs?
Question: Atif Malik - Citi - Analyst
: Great. And then gross margin, they're expected to trend higher in the second half towards the high end of the target model. Is this a sustainable
level we should look at going into next year?
Question: Atif Malik - Citi - Analyst
: Perfect. On the manufacturing side, your partner, TSMC, is regularly raising pricing on the leading edge. But on the nodes that you operate at, are
you seeing any impact to your margins from the pricing increase from the manufacturing side?
Question: Atif Malik - Citi - Analyst
: And Matt, you touched on this earlier, the use of machine learning and AI. I think you guys were the early adopters of machine learning to add to
your Series 2 and 3 products. So when we look at the bigger competitors like TI and others, just trying to understand the level of the moat that you
have in your markets, how sustainable that is as these large incumbents also start to incorporate ML/AI.
Question: Atif Malik - Citi - Analyst
: Both.
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SEPTEMBER 04, 2025 / 8:50PM, SLAB.OQ - Silicon Laboratories Inc at Citi TMT Conference
Question: Atif Malik - Citi - Analyst
: Great. Two questions on the capital allocation. You guys used to be a lot more acquisitive historically, and you guys have kind of slowed down.
And we're just curious in terms of your strategy. Is this a function of the macro, the cycle or is--
Question: Atif Malik - Citi - Analyst
: Yeah. Obviously, we're a big fan of all your products, and that I&A piece that you sold to Skyworks was also a good piece. But are there areas within
your current portfolio that you could divest to improve profitability or everything is fine as it is?
Question: Atif Malik - Citi - Analyst
: Great. We're almost out of time. And thank you, Matt and Thomas, for coming to Citi conference.
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