John Forsyth : Yes. Yeah. The foundry facilities are in the U.S. I think I’ll probably leave it there. We’re still in fairly early innings with them in the partnership. But yeah, as you correctly highlighted, we have seen geographical diversity become an increasingly important concern, along with the other things that we look for within our supply chain and foundry partnerships, namely technology leadership assurance of supply and a competitive playing field.
Operator: Your next question comes from the line of Christopher Rolland with Susquehanna. Please go ahead.
Christopher Rolland : Hey, guys. Thanks for the question. Mine’s around Intel reference designs. So first of all, I just want to make sure you are not in the Meteor Lake reference design. I would assume that you’re not in the Arrow Lake. And so the first one would be Lunar Lake. I guess, getting into a reference design, how does that change the profile of wins for this market? And I guess, tied to this as well, this power product. Can you tell us a little bit more about this as a power conversion? Is it DC-DC? What’s its actual function? Thank you.
John Forsyth : Yeah. Thanks, Chris. I would love to be able to tell you with confidence what it’s going to do for the design momentum I think — but we — the truth is we don’t know yet. I think it can only be a good thing. I think we’re certainly — we’ve been very excited in that collaboration with Intel and Microsoft about the vision for laptop devices, which are substantially more immersive when it comes to the audio and visual experience and thinner, lighter, more power efficient. So we’re very, very proud to be a part of that. How that translates in terms of adoption and what it means for designing of our components? It’s probably too early for us to say. I would say that, typically, I think you can expect pretty good design momentum on the back of being on the reference design, as you would expect.
And also, we’re excited that it looks like that, that laptop market may see a bit of a kick from the interest in the AI-centric devices and use cases as well. So hopefully, we’re getting to board a train that’s accelerating there. The Power Conversion product itself, yeah, that’s leveraging Switch cap power conversion technology, which originated with the Lion acquisition that we did. So it’s replacing a kind of a classic multiphase power controller, power conversion architecture. So it reduces the component count as well as really significantly increases the efficiency of the DC-to-DC conversion. So your heat losses are much lower, you’re able to effectively get more done using less power drawn from the battery. So that’s really going to be focused primarily on driving fanless and single fan designs, so thinner, quieter, more efficient products.
Christopher Rolland : It’s great. Nice to see that Lion acquisition come around. My second question is around gross margin. And in particular, as we think about laptop products mixing in, but also this new content coming in the fall. Is there anything that we should consider regarding gross margin between here and there?
Venk Nathamuni : Yeah, Chris, thanks for the question. This is Venk. So from a gross margin perspective, as I alluded to earlier, as it relates to the PC business, we do expect that to be in line or slightly accretive to our gross margins long term. As you know, our model has been fairly steady between 49% and 51%. And in some quarters, we come in close to the high end, some quarters right in the middle. And I think that’s driven by the fact that we want to optimize between revenue growth and profitability such that we still are able to grow the top-line at a fairly decent clip and maintain good profitability. Now overtime, our objective, obviously, is to improve the profitability across the board, and that’s driven by the fact that we want to improve the supply chain infrastructure and just boost efficiencies in general.
But I think for the next, at least a year or so, you can model it between the 49% to 51% range, and that’s inclusive of the PC business. As I said, with the PC business, we expect to be in line or above the corporate average.
Operator: Your next question comes from the line of Ananda Baruah with Loop Capital. Please go ahead.
Ananda Baruah : Hey, yeah. Thanks guys, for taking the questions. Good afternoon. And congrats on the really solid execution. I guess two quick ones, if I could. Maybe, John, just dovetailing off of your remark about GenAI a moment ago, it does seem like there’s an increasing commitment from sort of edge device makers, the phone makers, the PC makers to lean in to GenAI sort of config. And so I guess the question is, if that were to happen at some critical mass, the benefit to you, would it be a volume feature? Is there a mix component? I guess, any context you can share there on how it would benefit you guys. And then I have a quick follow-up as well.
John Forsyth : Yeah. Thanks for the question, Ananda. I think, I mean, there’s certainly a growing tendency for people to jump on the AI — edge AI bandwagon from a marketing perspective. I think there’s probably some substance there and that, in some cases, there may be less. In our case, when we think about AI at the edge, I really think it comes down to — the potential there really comes down to three things. One is that to the extent that it excites and inspires users, and I think end users do want a number of the features, you can see that with the adoption of AI services, then that’s exciting from a unit’s point of view. And clearly, when I talk about the laptop market, seeing that kind of coming over the horizon as a catalyst for unit sales, that’s very exciting.
