Q2 2023 Synaptics Inc Earnings Call

February 2, 2023

Okay.

Good day, and thank you for standing by and welcome to the Synaptics, Inc. Second quarter fiscal year 2023 financial results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

To ask a question. During this session you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please press star one one again please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today <unk> Shah.

Vice President Investor Relations.

Thank you Josh and good afternoon, everyone and thank you for joining us today for Synaptics second quarter fiscal 2023 conference call. My name is Joshua and I'm. The head of Investor Relations with me on todays call are Michael Hall, our President and CEO and Dean Butler our CFO .

<unk> is also being broadcast live and.

It can be accessed from <unk>.

Mr Relations section on the company's website at Synaptics dotcom.

In addition to a supplemental slide presentation. We have also posted a copy of these prepared remarks.

Relations website.

In addition to the company's GAAP results management will also provide supplementary results on a non-GAAP basis.

Share based compensation acquisition related costs, and certain other noncash or recurring and nonrecurring items.

Please refer to the press release issued after market close today.

Detailed reconciliation of GAAP and non-GAAP results, which can be accessed from the Investor Relations section of the company's website at Synaptics Dot com.

Additionally, we would like to remind you that during the course of this conference call Synaptics will make forward looking statements.

Forward looking statements give our current expectations and projections relating to our financial condition.

Operation plans objectives future performance and business.

Although synaptics believes our estimates and assumptions to be reasonable they are subject to a number of risks and uncertainties beyond our control and may prove to be inaccurate.

Synaptics cautions that actual results may differ materially from any future performance suggested in the company's forward looking statements.

We refer you to the company's current and periodic reports filed with the SEC, including our most recent annual 10-K.

Our report on Form 10-K, and current reports on Form 10-Q for important risk factors that could cause actual results to differ materially from those content in any forward looking statement.

<unk> expressly disclaims any obligation to update this forward looking information.

I'll now turn the call over to Michael.

Thanks, Mitchell I'd like to welcome everyone to today's call our fiscal second quarter financial results were within our guidance range a good outcome given the dynamic macroeconomic conditions.

Our financial performance would have been at the midpoint of guidance or better say for one deal in our Iot product group that did not close in the quarter as expected.

<unk> will provide more details regarding this later in his remarks.

Let me start with an overview of the macro conditions and how it's impacting our business given our exposure to a wide range of end markets. We have seen different facets of our business experienced headwinds at different times.

We first saw weakness in mobile phones, followed by PC. Thank you.

Consumer.

Now beginning to see softness in our enterprise business, which is our second largest end market.

The good news is that recovery is also expected in phases, and we have already seen early signs of improvement.

In mobile and PC.

In general the biggest issue we're facing is an accumulation of inventory.

Our visibility into channel partners indicate sell through exceeded our sell in during the December quarter in many product areas.

We anticipate we will continue to under ship natural demand in the first half of <unk> 2023, as we clear inventory.

While we remain uncertain as to the precise timing of recovery. Our best estimate at this time is calendar Q3, given current rates of inventory bleed off.

With that said, we continue to innovate and focus on our three biggest market opportunities all of which are in our Iot product area.

The first of these is our innovation initiative to drive wireless Workspaces.

At this year's CES, we showcased the first wireless documentation from our partner Lenovo.

The product features or Wi Fi video conversion and video decoding Ics.

The next phase of growth involves enabling high fidelity wireless monitors.

Ultimately, we see a clean desktop with no wires at all in.

In addition, we can enable advanced video conferencing hubs, where the base system is connected to monitors wirelessly saving corporate it departments time and money.

All of this is possible with our advanced low latency video compression technology.

While wireless workspaces represent the future. Our president is also strong as we continued to dominate the current generation of docking stations and are already beginning our move into video conferencing systems.

Our latest chip Navarro will.

Bring a new level of performance to universal docking stations, enabling to 8-K R for four K monitor simultaneously.

In addition, we recently introduced our latest video conversion device Carrara with industry, leading <unk> technology optimized for USB for version two.

And display port to one that brings both video and graphics to high definition monitors.

As an early sign of success in video conferencing, we added key $10 plus design win and Hp's New presence system that was named one of the best inventions of 2022 by time magazine.

Our second large opportunity is in wireless connectivity, our design wins and pipeline of opportunities continues to increase giving us confidence to target $1 billion in annual sales over the next three to five years.

We offer the broadest portfolio of wireless technologies, among all our Iot competitors, including Wi Fi Bluetooth Brian .

Brian Zigbee U L E N G NSS.

Our latest combo chip design win.

Wins encompass large customers, such as Amazon and Google kitchen appliances, and wearable cameras.

Our Wi Fi Bluetooth combos.

Started.

<unk> success in new market segments, such as enterprise, operator, healthcare and even smart cities.

Are you elite technology has been an entree into customers such as ADT, driven and very sure we're able to sell a litany of products, including video decoders for hubs.

Wi Fi for security cameras and.

The edge AI devices for blast bike detectors.

In GFS, we recently announced the availability in the $47 78, a chip design in seven nanometer Cmos and offers customers up to 80% more power efficiency.

This monumental step function improvement in power savings is particularly important for any product depending on a small battery such as wearable.

Despite our recent speed bump in terms of significant inventory buildup, we remain confident in our wireless business and expect it to return to outsized growth in the calendar year.

Our third major growth driver is automotive at CES, we introduced a new product Smart bridge.

Device replaces an existing protocol conversion device, but adds a feature dumped local dimming.

Local gaming greatly increases the contrast ratio and automotive displays making a typical LCD display look and perform like OLED.

The smart bridge increases our content per vehicle to 25% to $30.

Addition, we continue to benefit from the rapid conversion of discreet touch and display circuits to TDI and the infotainment display.

We will look to expand our automotive footprint through both M&A and organic development.

Other notable parts of our Iot portfolio include enterprise telephony and audio headsets enterprise telephony, we continue to expand content with both wireless and video decoding for small screen conferencing.

An audio headsets, we continue to dominate in enterprise class products, particularly with that connectivity.

Turning to <unk> revenues were in line with our expectations, but down sequentially as customers work through their inventories we are shipping below the reduced and demand are seeing signs of an improving inventory situation.

As it stands we expect the March quarter to Mark the low watermark for revenue and measured improvement thereafter.

In the meantime, we're pursuing content and Tam expansion.

We are gaining traction with our presence detection technology and announced wins with both Dell and Panasonic.

In fact, all major customers are engaging with us for this technology, which saves battery life by using AI algorithms to determine when a user is not actively engage with the laptop.

Presence detection has use cases beyond the PC, which we intend to pursue aggressively.

In conclusion, we are working with our customers to reduce inventories in the channel.

We're managing our expenses, while continuing to invest in growth areas of the business.

We'll focus on things, we can control such as timely new product introductions.

<unk> Roadmaps and design win conversions.

Heather It gives me confidence in our long term growth potential.

Let me now turn it over the call to Dean to review, our second quarter financial results and provide our outlook.

Thanks, Michael and good afternoon to everyone I'll start with a review of our financial results for the recently completed quarter and then provide our current outlook.

Revenue for the December quarter was 353 million towards the low end of our previous guidance.

December quarter revenue from Iot, PC, and mobile or 68%, 16% and 16% respectively.

Had one customer for our processor product that did not complete certain milestones during the quarter, which resulted in lower Iot results relative to our prior expectations.

And now expect to complete these deliverables in the March quarter and have included in our guidance as such.

Year over year consolidated December quarter revenue was down 16%.

Driven by double digit declines in our mobile and PC products.

December quarter, Iot product revenue was down 8% year over year and was down 30% sequentially due to an accumulation of inventory at customers and channel partners.

A single deal that was delayed all of their customers performed in line with our prior forecast.

And PC.

Our December quarter revenue was down 13% sequentially and down 32% year over year in line with our expectations, reflecting a weaker PC market as customers drive to reduce inventory.

Our higher commercial mix generally leads to a more stable performance.

It is not immune to economic downturns when enterprise it spending is curtailed.

We are seeing early signs of PC inventory clearing and expect demand to begin recovering by June .

Our December quarter mobile product revenue was up 43% sequentially.

Declined 25% year over year.

The December quarter outperformed our expectations as customers took delivery of products before the calendar year end.

It's likely comes at the expense of our March quarter forecast.

We view this as an unanticipated timing benefit versus a fundamental change in end market demand.

We believe customer inventories are coming down in this area.

And we see signs of stabilization.

During the quarter, we had one customer greater than 10% of revenue and approximately 11% and distributor servicing multiple Oems.

For the December quarter, our GAAP gross margin was 52, 9%, which includes $23 3 million of intangible asset amortization and $1 million of share based compensation costs.

December quarter non-GAAP gross margin was 59, 8% and was negatively impacted by the delay of the Iot deal previously mentioned.

GAAP operating expenses in the December quarter, or $140 6 million, which includes share based compensation of 29 million intangibles amortization of $8 9 million amortization of prepaid development costs of $2 5 million and transaction related cost of <unk>.

$1 8 million.

December quarter, non-GAAP operating expenses of $98 4 million were down from the preceding quarter and towards the low end of our guidance, primarily due to lower personnel related costs as we begin to slow the rate of new investments.

Our GAAP tax rate was 44, 2% for the quarter and non-GAAP tax rate was 17%.

In the December quarter, we had GAAP net income of 22 million or GAAP net income of 55 cents per diluted share.

Our non-GAAP net income in the December quarter was $88 5 million a decrease of 38% from prior quarter and a 33% decrease from the same quarter a year ago.

non-GAAP EPS per diluted share of $2 20.

It was above the low end of our guidance range as the impact of lower revenues and gross margin was offset by lower operating expenses.

Now turning to the balance sheet we.

We ended the quarter with $859 million of cash cash equivalents and short term investments on hand.

A decline of $53 million from the preceding quarter with cash flow from operations of $48 million.

Offsetting by $18 million of cash used for payroll taxes related to our equity compensation program.

$16 million used for acquisitions and $61 million of cash used under our share repurchase program.

Cash paid for capital expenditures was $9 1 million and depreciation for the quarter was $6 4 million.

<unk> at the end of December were $255 million and days sales outstanding were 65% consistent with the prior year.

But up from 57 last quarter.

Days of inventory were 112 above 96 days last quarter and ending inventory balance was $177 5 million, which was slightly down from $179 four last quarter.

During the last quarter, we have actively reduced our orders to suppliers and expect our inventory next quarter to decline further as we work to bring down our inventory to more normal levels.

We bought back approximately 634000 shares during the quarter for an aggregate cost of roughly $61 million.

Restarting our buyback program in September and through today's call. We have repurchased approximately 1 million shares for 100 million and have an additional $477 million available under our current authorization.

Our capital allocation priorities continue to be unchanged.

Our balance sheet is healthy and we have sufficient cash to execute on tuck in acquisition opportunities that will enhance our product portfolio and help us expand further in our target markets.

We plan to continue to utilize our excess cash flow for share repurchases and debt pay down absent any M&A activity.

Now, let me turn to our March quarter outlook.

The macro situation remains challenging and opaque our customers continue to react to the macro environment with their forecasts and are focused on reducing inventories. We continue to work with our customers and channel partners and mutually beneficial ways to manage pushups and cancellation requests.

We anticipate revenue for the March quarter to be in the range of 310 million to $340 million.

When shall decline of approximately 8% at the midpoint.

We expect our revenue mix from Iot PC and mobile products in the March quarter to be approximately 72%, 15% and 13% respectively.

We are seeing early signs of inventories being worked down with sell in greater than sell out excuse me sell out greater than sell in for most products.

We expect customers will continue to deplete their inventory throughout the first half of calendar 2023, before returning to more normal run rates of consumption.

As previously communicated we expect to maintain our strong gross margin profile with GAAP gross margin for the March quarter expected to be in the range of 52% to 55%.

We expect non-GAAP gross margin in the range of 60% to 62%.

An improvement from the previous quarter as we expect to close the previously delayed deal during the March quarter, adding approximately 100 basis points.

We continue to believe that non-GAAP gross margins will tend toward our long term target of 57% as we progressed throughout the calendar year.

We expect GAAP operating expenses in the March quarter to be in the range of 139 million to $144 million, which includes intangible amortization prepaid development cost amortization and share based compensation.

We expect non-GAAP operating expense in the March quarter to be in line with our December quarter results and be in the range of $98 million to $102 million.

We remain committed to our focused investment areas and we'll continue to monitor our spending levels, but believe our current levels balanced both near term pressures and long term growth opportunities for the company.

As a result, GAAP net income per diluted share for our March quarter is expected to be in the range of 20 to 50.

And non-GAAP net income per diluted share is anticipated to be in the range of $1 65.

To $2 <unk> per share on an estimated 40 million fully diluted shares.

As a result of the increase in the interest rate on the variable portion of our debt and partially offset by the increase in interest income on our invested cash we expect non-GAAP net interest expense in the March quarter to be approximately $9 million.

Finally, we expect our fiscal 2023 and long term non-GAAP tax rate to remain unchanged in the range of 16% to 18%.

This wraps up our prepared remarks I'd like.

I'll now turn the call over to the operator to start the Q&A session operator.

Thank you as a reminder to ask a question. Please press star one on your telephone.

Wait for your name to be announced to withdraw your question. Please press star one again.

Our first question comes from Kevin Cassidy with Rosenblatt Securities You May proceed.

Yes, Thanks for taking my question congratulations for working through such a tough environment we have.

But I guess I'll ask the obvious question first.

The processor customer.

The milestone not hit was it the product wasn't qualified in time wasn't completed in time.

Now, it's ready to ship or is there was there something else involved with that.

Yes, no I don't think it was any more complicated Kevin then just completing the deliverables that were deal. We had originally anticipated completing those deliverables in the December quarter.

Unfortunately, those didn't quite make it.

Which which now will be in March.

So it's not really any more complicated than just deliverables not quite being met.

Okay.

Maybe we're all trying to figure out the inventory correction.

Going into this year.

Can you say for your Iot business it seems to be that.

Of course, your biggest portion, but a little harder to track exactly where your exposures are can you say, where the inventory is highest as a consumer related products.

Or industrial or maybe on your first remark you said.

The cycle is kind of improving in the PC and handsets now clear we're the first to go down.

Thats, how youre seeing it rollover.

Yes, I think the.

We sort of see it as a bit in waves.

The products that are closest to call. It retail consumers saw some of the corrections first meaning some corrections and demand a buildup in inventory, but also we think those are the first set of markets that likely come out of it as days sort of reacted first if you will on the time.

Why.

The more consumer facing applications.

I've seen some of the bigger impact and therefore, some more of the inventory and then now only recently a few of the other markets such as enterprise that we talked about corporate enterprises. That's just starting to roll out you see sort of corporate it departments cutting some budget says people sort of tightened the belt and that is the effect.

A few of those products that we didn't see prior.

Okay. Thanks, I'll get back in the queue.

Thank you one moment for questions.

Our next question comes from Alexander Raj Bindra Gill with Needham <unk> Company you May proceed.

Yes. Thank you for taking my questions I appreciate it just a question on the gross margin so the margin.

You're guiding to 61%.

To factor in that.

The benefit.

Pushed out into the March quarter.

But then you kind of also indicating that margins will kind of drift to the.

A floor of 57% throughout the year.

If I if I read that correctly. So how do we think about kind of the cadence of that that drop in margins and are there any.

Potential opportunities too.

Have margins above the 57%.

As a floor.

Yeah, what I would say Rajeev, one I think we've been pretty clear over the last several quarters that we sort of do you see margins eventually sort of trailing to our long term.

Right now we're still in <unk>.

Last quarter December is essentially 60 guiding 61 here.

I don't think Theres any step function that we see coming I think over time I do think that that's probably the right target for the company to continue to operate sort of consistently.

And so I think youll likely as sort of a gradual move in that direction.

Okay. That's good to know.

And the shape of the recovery you talked about potentially in the third quarter starting to see a recovery.

That is is it fair to assume that that June could be kind of flat off the march quarter.

And then we start to see sequential growth.

That's the case.

What's driving that confidence you do have.

You mentioned the consumer part of the business is the first set of the markets that will come out of this correction, but you are mentioning some softness on the it departments.

I noticed your best guess.

And with that timeframe, but just kind of.

Walk me through your thought process in some of the puts and takes for that that shape of recovery. Thank you.

Hey, Brian It's Michael.

I think you kind of got it right I think in general.

We sort of see this as a low watermark I'd say.

So we're not providing any any guidance I would say I wouldn't expect a big bounce up in June it's probably.

Bubbling along the bottom and then as Dean said with inventory bleed off with.

Some early signs in mobile and PC that we're coming off the bottom I think <unk> characterized it well in his comments in mobile we saw a nice bounce in our mobile business, but I wouldn't yet call that a trend line, but certainly we feel a little bit better about kind of the macro and concern.

<unk> and the macro in PC, and so I would say that.

Although everybody nobody has a perfect crystal ball I would say our best guests continues to be that things get better.

And the back half of this kind of local minimum that you are seeing.

Great. Thank you.

Thank you one moment for questions.

Our next question comes from Anthony Stoss with Craig Hallum, You May proceed.

Hey, guys Michael.

Michael Love to hear your thoughts on if there's any particular geographic area, that's more weak than others and also.

A lot of the other semi you have been talking about China stabilizing maybe not really moving up I'm curious your view on your sales into China, and then I had a follow up after that.

And Tony I mean, I think our comments would be consistent with others that we've seen China.

Is driving a big portion of our mobile business as you know in our mobile book business definitely saw a bit of a balance here.

And I still think that.

We're coming off kind of a low water market, our mobile business as you know.

It's too early to call that we're absolutely on the on the road to significant revenue increases there I think we as Dean said in his remarks, it's sort of a.

We definitely saw a little bit of a balance, but again too early to call I do think that we have limited exposure in the rest of China outside of mobile.

Business there is relatively concentrated so it's harder to give a macro view.

I think that where we're starting to see sort of early weakness as we indicated in our enterprise business, which is now a pretty big part of what we do.

And that's primarily U S customers.

So we're seeing just some early softness there. So our guide certainly is in line with the cautiousness that seems too we're trying to take a cautious approach that we're trying to take.

Got it thanks for that.

Follow up Im curious if youre seeing any change in behavior from your competitors on price and then secondly.

Maybe you guys haven't talked about this in a while but I think you've got a pretty decent roster of design.

Design wins Im curious your view on kind of when that comes to fruition.

Yes, maybe I'll take the second one first I mean, I think on the VR piece. Unfortunately, that's where we've seen a lot I think Raj you asked the question before a lot of weakness in our VR business that was a big story for us in the first half of calendar 2022.

And from a design win perspective, we're still doing great.

Winning virtually every goggle that's out there the problem is that particular consumer facing segment just isn't selling through.

As well as we did in 2022.

We're simply not seeing those results in 2023 despite.

<unk> to win almost everything that there is.

Dean I don't know if you want to comment on the first part of the question now, but maybe just let me add on VR for a second Tony I think where synaptics is in a great position when that market does bounce back and we are believer that actually in these early markets do take a little while to develop we're actually in really great position. So I think what VR.

It comes back you'll see Synaptics.

As a big Participator in that.

Thanks for the color guys best of luck.

Thanks, a lot.

Thank you and as a reminder to ask a question you will need to press star one on your telephone.

Our next question comes from Chris <unk> with Cowen You May proceed.

Hey, guys. This is Eddie for Chris Congrats on strong results in light of a challenging environment just touching on the gross margin question. How should we think about the delta between the 61% you guided for March and 57% long term target how much of that is due.

Due to higher input cost and how much of it is due to weaker demand environment.

Yeah, Andy I would say I mean input crossed is definitely a factor I mean without precise quantification input cost is not insignificant.

We are in the face of the.

Rising input cost, which I think.

Place, where we're probably a little bit more limited than we were the last couple of years I'd be able to pass all of that alongside do think there will be a little bit input cost that we end up getting caught with on the cycle.

As far as competitive pressure I mean, certainly there is there is some but it differs by technology area. There are certain areas that we.

We compete very heavily there are certain areas, we have a pretty dominant technology lead where we don't have to deal with was such competitive pressures.

And then in general I mean mix as well so we continue to evolve the mix pushed the portfolio forward.

A lot of our designs come in both consumer facing and then also enterprise facing so as we continue to move the portfolio forward balancing the mix between the two.

You do see different growth rates between those two different dynamics, so hopefully that sort of helps get some color on it.

Yeah that does thanks, a lot guys. Good luck.

Yeah. Thank you.

Thank you.

Our next question comes from Christopher Roland with Susquehanna You May proceed.

Hey, guys. Thanks for the question and I joined a little late so sorry. If this was asked I heard something there about VR.

I wanted to know about your opportunity in a R.

Whether you think you have one.

And the size of that.

Or if you could potentially size that for US and then also the opportunity for set top box I don't I don't know if we've talked about that too much of late.

Thank you.

Yes, Chris I mean.

I think it depends there's sort of two different classes of <unk> I think with our glasses.

Strict pass through honestly, our opportunity is fairly limited and display drivers to different type and it's realm.

Relatively simple.

There is opportunity in Wi Fi and audio in those those are glasses, but.

The core business and where we've been very dominant in VR not so much there are mixed goggles that are coming to the market. There. The display drivers are fairly similar to what we would do for VR and we would expect a very similar opportunity again, depending on that market size.

We would expect to do relatively well in kind of mixed AR VR goggles.

I think there was a second part of the question was yes.

Set top box OTT boxes.

Yes, <unk> set top box has been kind of mixed for us I mean, I think the good news for us with the wireless asset that we got some time back we've been able to increase content per box that actually story has gone relatively well.

I have been a bit disappointed as our ability to pick up overall share we've kind of held the sockets that we've had we've held.

<unk> gained one or two so we've been pretty pleased with our ability here and there, but generally speaking I would say that.

We're not doing as well in terms of picking up share as we would have anticipated two years ago had you asked the question.

Cause some I always thought that was a good yeah. Sorry go ahead. The other thing I would I would share Chris I mean, we talked about this set of deliverables on a processor piece of business, that's actually engaging with an operator and market. So thats sort of the set top box.

Processor technology. So it actually is progressing I think what we find ourselves in new year. Some of our comments. It just doesn't grow as fast as some of our other opportunities in automotive and wireless and some of the video user interface devices.

For sure. Thanks, Dean for a second question and again I apologize if this was asked.

But around connectivity a lot of others have kind of just describe this shortage situation moving to glut fairly quickly for lack of a better word and a potential inventory overhang and potential price at pricing pressure even more.

Moving forward here would you guys kind of describe that similar situation or do you see something different.

Yes for sure Chris the inventories a big problem I mean, I think we highlighted this in the last call our wireless business in our Iot area I'd say right now we've talked about two problems. One is VR demand just simply isn't there.

As Jim said, I think we're positioned well when that recovers wireless is very much an inventory problem.

There was a lot of shifting going on into various phases and remember in our business. We depend on module partners to service a long tail. So we have an extra step in our supply chain. We go from <unk>.

<unk> to a distributor to a module guide to an end customer and that created some visibility challenges for sure inventory. There is high I think we are less subject to some of the pricing pressures because remember our products compete in this very high end, where we're doing video trans.

For were empowered sensitive applications like wearables. So the pricing challenges there we're in a little bit about a little bit of an island from a competitive standpoint.

We've heard so looks like you are that wireless is seeing competitive pricing challenges, but we have a bit of a safe harbor, there, but inventory very much as part of our story.

Awesome. Thank you guys.

Okay.

Thank you.

Our next question comes from.

Kevin Cassidy with Rosenblatt Securities You May proceed.

Yes, Thanks for letting me have a follow up question just.

When you're talking about your suppliers.

When you first came over to us.

Synaptics and started making the changes one of the things are going to do is consolidate your number of suppliers and of course, we had the shortage hit can you say, where you stand with that now is there an opportunity for cost reductions by consolidating suppliers again.

Okay.

Yeah good.

Good question I think that.

What we've done Kevin.

We basically.

Concentrated all of our starts with one supplier so any new product is essentially going to the largest.

Manufacturer in the world and for the most part we've stopped engaging with the long tail of suppliers that we have now that said it takes a long time and we still I think we have gone from 10 wafer partners to nine so our supply chain and operations guys have.

A lot of problems and as we become a diminishing part of these supply chain. These various suppliers, we're obviously subject to.

Pricing increases because we were just not meaningful to them. So when Dean says hey this.

A big part of what we forecast out in the next.

Next quarters is a glide path down to this 57% gross margin, that's very reflective of input prices more than anything.

Certainly some competitive pricing dynamics in there, but the long pole is has to do with costs.

As we concentrate right now we're not seeing that that pricing benefit that we would get from the one supplier where our starts are concentrated.

I'm optimistic that we're going to get some help there and if that does happen then perhaps our outlook changes but.

Right now what we are seeing and what we're forecasting is.

Serious increases from places, where we're a de minimis customer and not a lot of help from the place where we're a meaningful very meaningful customer on a go forward basis. So.

Hopefully that answers the question Kevin.

That's a great answer. Thank you. Thank you for all that detail.

Thank you.

Our next question comes from Martin Yang with Oppenheimer You May proceed.

Hi, Thank you for taking my question.

Michael I have a question regarding your wireless roadmap.

At the time of acquisition from.

Broadcom you did have mentioned that they have access to true roadmap products can you give us update on where you are today with robot products and what's your plan or after.

The two products.

After you have exhausted the.

Two roadmap products.

Yes. Good question. Thank you Barton I would say the fines. So so on the <unk> roadmap products, both our sampling and one is nearing production. So we've got both of those products in our hands, we're actually pleased with the performance of both.

Both are in 16 nanometer, which we think gives us a pretty good competitive footing, particularly on our power.

From a power standpoint.

And in parallel we brought up our own engineering capabilities. So we've actually taped out our first set of products that are done with our internal engineering team.

And we expect that part of the.

The vision that I am outlining here is we really want to become a major player today, we've got a very small share I would say in this Iot landscape as it relates to wireless.

We have really retooled our road map and I think part of what Youre going to see is very targeted shifts. So litany of very targeted chips coming from different segments of this Iot market that will be done by our internal team. So we've adjusted our spend to make sure that our wireless opportunity.

As well serve because we believe this is actually the biggest Tam that we have in front of us.

And if we execute to what I believe we can I think we're going to be in really really good shape. So.

Wireless is a big part of our story. We've had this bridge that we got from these broadcom designs, but we're beginning to really hit the ground running with our internal capability and I'm pretty optimistic that we will we have a plan to really make this thing into a big big business for us.

Thank you Michael.

Q2 2023 Synaptics Inc Earnings Call

Request a DemoDemo

SYNA

Synaptics

Earnings